Gibson v. American Cyanamid Co et al

Filing 196

ORDER signed by Judge Rudolph T Randa on 11/15/2010 granting 135 Motion for Summary Judgment; granting 141 Motion for Summary Judgment; granting 145 Motion for Summary Judgment; granting 150 Motion for Summary Judgment; granting 157 Motion for Summary Judgment; granting 192 Motion for Leave to File oversized memorandum. This matter is DISMISSED. (cc: all counsel) (Koll, J)

G i b s o n v. American Cyanamid Co et al

D o c . 196

UNITED STATES DISTRICT COURT E A S T E R N DISTRICT OF WISCONSIN

E R N E S T GIBSON, Minor, by his g u a r d ia n ad litem, SUSAN M. GRAMLING, and M I L W A U K E E COUNTY DEPARTMENT OF H E A L T H AND HUMAN SERVICES, P l a i n t if f s , C a s e No. 07-C-864 -vsA M E R I C A N CYANAMID Co., A R M S T R O N G CONTAINERS, Inc., E .I . Du PONT de NEMOURS and Co., M I L L E N I U M HOLDINGS LLC, N L INDUSTRIES, Inc., A T L A N T I C RICHFIELD Co., and T H E SHERWIN WILLIAMS Co., Defendants.

D E C IS IO N AND ORDER

O n June 15, the Court granted summary judgment for one of the defendants, Atlantic R ic h f ie ld Company ("ARCO"). The Court held that the imposition of liability under the " ris k contribution" rule adopted by the Wisconsin Supreme Court in Thomas ex rel. G ra m lin g v. Mallett, 701 N.W.2d 523 (Wis. 2005) would violate ARCO's substantive due p ro c e s s rights. Gibson v. Am. Cyanamid Co., -- F. Supp. 2d --, 2010 WL 2465498 (E.D. W is . June 15, 2010). The remaining defendants now move for summary judgment. As the

Dockets.Justia.com

C o u rt accurately predicted, the logic of the Court's decision applies with equal force to all o f the defendants in this case. I. T h e plaintiff, Ernest Gibson ("Gibson"), alleges that in January 1997 his family m o v e d into a residence located at 2904 West Wisconsin Avenue, Milwaukee, Wisconsin. G ib s o n contends that he sustained an injury caused by ingesting paint containing white lead c a rb o n a te pigment at that residence. Gibson's residence was constructed in 1919. L ea d pigments are granular lead compounds that impart color, toughness, and texture to paint. Historically, painters and paint manufacturers prized white lead carbonate pigments f o r their strength, durability, flexibility, washability, brushability, and bright color. In the e a rly 1900s, some states, including Wisconsin, enacted consumer protection laws requiring p a in t labels to disclose lead content to prevent consumers from unknowingly buying inferior p a in t with non-lead pigments. From the early 1900s through the 1960s, federal, state and lo c a l governments, including the City of Milwaukee, required the use of lead pigments in th e ir project specifications. Eventually, the residential use of lead paint was banned in v a rio u s forms by the federal government in 1972 and 1978. Wisconsin banned the use of le a d paint in 1980. Thomas, 701 N.W.2d at 530. G ib s o n brought this action against seven "Industry Defendants:" ARCO, E.I. du Pont d e Nemours and Company ("DuPont"), NL Industries, Inc. ("NL"), Armstrong Containers, In c . ("Armstrong"), American Cyanamid Company ("Cyanamid"), The Sherwin-Williams

-2-

C o m p a n y ("Sherwin-Williams"), and Millenium Holdings LLC ("Millenium").1 Plaintiff is u n a b le to identify the specific manufacturer, supplier or distributor of the white lead c a rb o n a t e he allegedly ingested. Moreover, Gibson did not sue every company that

m a n u f ac tu re d white lead carbonate pigments and sold them in Milwaukee or Wisconsin. S o m e of the companies that manufactured white lead carbonate pigments are no longer in e x is te n c e . D u P o n t began the manufacture of white lead carbonate pigment in 1917 when it a c q u ire d the Harrison Works, a plant located in Philadelphia, Pennsylvania. The Harrison W o rk s plant was the only place that DuPont ever manufactured white lead carbonate p ig m e n t. By December 31, 1924, DuPont had discontinued the manufacture of white lead c a rb o n a te pigment. DuPont announced that it ceased the manufacture of white lead

c a rb o n a te pigment in two separate trade journals on three separate occasions in December 1 9 2 4 and January 1925. T h e National Lead Company was organized in a consolidation of various white lead ca rbo n ate pigment manufacturers in 1891. National Lead created the Dutch Boy trademark in 1907, and made and sold white lead carbonate pigment for use in paint through its Dutch B o y division. National Lead was a major manufacturer of white lead carbonate for many ye a rs , but it was only one of several major manufacturers. In 1971, National Lead changed its name to NL Industries, Inc. ("NL"). NL sold its Dutch Boy division in December 1976.

Millenium is in Chapter 11 bankruptcy. Pursuant to the automatic stay of proceedings against Millenium, G ib s o n 's claims against Millenium are dismissed without prejudice. The Court previously determined that the Milwaukee County Department of Health and Human Services is properly aligned as a plaintiff, not a defendant. D. 111 a t 13; Gibson, 2010 W L 2465498 at *6.

1

-3-

O f NL's 48.63 million outstanding shares, almost none are held by shareholders who date b a c k to 1976 when NL sold its Dutch Boy business. Today, NL is a holding company with o w n e rs h ip interests in business that had nothing to do with NL's former lead pigment b u s in e s s . A rm stro n g is an entity that allegedly succeeded to the liabilities of the John R. M a c G r e g o r Lead Co. and the MacGregor Lead Co. ("MacGregor"). MacGregor

m a n u f ac tu re d white lead carbonate at a single plant in Chicago, Illinois from 1938 to mid1 9 7 1 , when it sold the plant. Until mid-1971, MacGregor manufactured and sold lead-based p a i n t for exterior use under the brand name "Scotch Laddie." MacGregor's paint business w a s limited to the manufacture and sale of "Scotch Laddie" paint for exterior use. White l e a d carbonate manufactured at MacGregor's Chicago plant was used as lead pigment in M a c G re g o r's Scotch Laddie brand exterior paint. C ya n a m id first manufactured white lead carbonate starting in June 1971 when it p u rch as e d white lead manufacturing assets from MacGregor, including MacGregor's m a n u f a c tu r in g plant in Chicago. Cyanamid acquired the MacGregor assets to expand its p la stic s additives business, specifically, to sell lead products to other companies that used the p rod u ct as a heat stabilizer in making plastics. Cyanamid had no interest in MacGregor's " S c o tc h Laddie" exterior paint manufacturing business; that business line was excluded from C ya n a m id 's asset purchase and continued in existence and operation. The asset purchase, h o w e v e r, included Cyanamid's agreement to a "requirements" contract under which C ya n a m id would supply to MacGregor white lead carbonate at a specified grade at a

-4-

s p e c if ie d price. The requirements contract set a maximum quantity that MacGregor might p u r c h a s e during each year, but it did not obligate MacGregor to purchase any minimum. L e ss than two months after MacGregor sold its lead chemicals business to Cyanamid, M a c G re g o r sold its paint business to another Chicago paint company, Elliot Paint & Varnish. T h e time period in which Scotch Laddie paint might possibly have contained white lead c a rb o n a te made by Cyanamid is limited to approximately eighteen months ­ from the June 1 9 7 1 asset purchase date until December 1972. S h e rw in -W illia m s was founded in 1870. Sherwin-Williams focused on selling highq u a lity "ready-mixed" or "prepared" paint. Sherwin-Williams began manufacturing white le a d carbonate pigment in 1910 as part of its vertical integration strategy. Sherwin-Williams u s e d almost all of the white lead carbonate it produced in its own paints. Sherwin-Williams c o n f in e d its entire white lead carbonate production to a single facility in Chicago, which o p e ra te d from 1910 until 1947. None of Sherwin-Williams' interior-use wall paint contained w h ite lead carbonate. II. U n d er Rule 56(c), summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a m a tte r of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The "plain language of R u le 56(c) mandates the entry of summary judgment, after adequate time for discovery and u p o n motion, against a party who fails to make a showing sufficient to establish the existence

-5-

o f an element essential to that party's case, and on which that party will bear the burden of p ro o f at trial." Celotex, 477 U.S. at 322. Gibson does not dispute any of the facts that are re lev a n t to the defendants' motions for summary judgment. T h e Court presumes familiarity with its previous orders in this case. Gibson, -- F. S u p p . 2d --, 2010 WL 2465498 (E.D. Wis. June 15, 2010) (granting ARCO's motion for su m m a ry judgment); Gibson v. Am. Cyanamid, No. 07-C-864, 2010 WL 3062145 (E.D. Wis. A u g . 2, 2010) (denying ARCO's motion for entry of judgment and denying Gibson's motion f o r reconsideration). As relevant here, ARCO succeeded to the liabilities of a company that m a n u f ac tu re d white lead carbonate pigment at a plant in East Chicago, Indiana from 1936 u n til 1946. The Court found that the "potential imposition of liability [against ARCO] under th e risk contribution rule violates the constitutional bar to retroactive liability expressed in" E . Enters. v. Apfel, 524 U.S. 498 (1998). Gibson at *7. E. Enters. was a fragmented opinion, s o the Court conducted an extensive analysis of Justice O'Connor's plurality opinion, Justice K e n n e d y's concurrence, and Justice Breyer's dissent. Even though the plurality (Takings C la u se ) and the concurrence (Due Process Clause) in E. Enters. disagreed on the appropriate co nstitutio n a l framework to analyze whether retroactive liability passes constitutional muster, th e rationale employed in the two opinions is "`strikingly similar.'" Id. at *13 (quoting S w is h e r Int'l Inc. v. Schafer, 550 F.3d 1046, 1059 n.12 (11th Cir. 2008), citing United States F id . & Guar. Co. v. McKeithen, 226 F.3d 412, 420 (5th Cir. 2000)). "The bottom line is that f iv e of the justices [in E. Enters.] (indeed all nine of the justices) generally agreed upon a s u b s ta n tiv e standard that should apply to retroactive liability . . ." Id.

-6-

A c c o rd in g ly, pursuant to E. Enters. and its predecessors, the Court analyzed whether th e risk contribution rule threatens to impose (1) severe (2) retroactive liability on a (3) lim ite d class of parties that (4) could not have anticipated the liability, and whether the extent o f that liability is (5) substantially disproportionate to the parties' experience. Id. at *14 (c itin g E. Enters. at 528-29). All of these factors were satisfied as applied to ARCO. Stated a n o th e r way, and perhaps more simply, the risk contribution rule violates due process b e c a u s e it imposes retroactive liability in a manner that is arbitrary and irrational. By " e lim in a tin g the traditional causation requirement in tort for those who were injured by white le a d carbonate pigment, the risk contribution rule imposes a burden that is unrelated to any in ju ry that was actually caused by ARCO and bears no legitimate relationship to the g o v e rn m e n t's interest in compensating the victims of lead poisoning for their injuries." Id. a t *16. A s with ARCO, the foregoing factors are satisfied with respect to the remaining d e f en d a n ts . It is unnecessary for the Court to proceed through the entire analysis once again. A ll of the defendants (or their predecessors-in-interest) stopped manufacturing white lead c a rb o n a te pigment years before the risk contribution rule could have been anticipated, if it w a s even possible to predict such a development prior to the ruling in Thomas. All of the d e f e n d a n t s face substantial liability through the cumulative effect of multiple lawsuits, in c lu d in g those that are currently pending and those that could potentially be re-filed. And b y eliminating the traditional causation requirement in tort, the only potential connection b e tw e e n Gibson and the defendants under the risk contribution theory is that the defendants

-7-

(o r their predecessors-in-interest) produced or marketed white lead carbonate for use at some p o in t during the relevant and expansive time period: the duration of the houses' existence. G ib s o n at *16 (citing Thomas, 701 N.W.2d at 564). Each defendant participated in the m a rk e tp lac e for varying periods of time, and not all of the market participants are even in e x iste n c e to be brought into this suit, which means that each defendant would be subject to l ia b ility for more harm than they actually could have caused. Accordingly, the imposition o f liability for injuries caused by white lead carbonate pursuant to the risk contribution rule is disproportionate to the defendants' experience in the marketplace, arbitrary and irrational.2 I I I. G ibson's opposition to this new round of summary judgment motions largely rehashes a rg u m e n ts that the Court already considered and rejected. Gibson does raise some new a rg u m e n ts that are worthy of discussion. F irs t, Gibson argues that the defendants cannot escape liability on substantive due p ro c e ss grounds because they did not allege the deprivation of a substantive constitutional rig h t or that available state remedies are inadequate. "In cases where the plaintiff complains th a t he has been unreasonably deprived of a state-created property interest, without alleging a violation of some other substantive constitutional right or that available state remedies are in a d e q u ate , the plaintiff has not stated a substantive due process claim." Wudtke v. Davel, 1 2 8 F.3d 1057, 1062 (7th Cir. 1997); see also Lee v. City of Chicago, 330 F.3d 456, 467 (7th

ARCO's status as a successor to the liabilities of a company that participated in the marketplace was not n e c e s s a r y to the Court's disposition. Gibson at *15. The risk contribution rule is unconstitutional when applied to c o m p a n i e s that actually participated in the relevant marketplace or merely succeeded to the liabilities of such a company.

2

-8-

C ir. 2003); Doherty v. City of Chicago, 75 F.3d 318, 323-26 (7th Cir. 1996). Gibson o b s e rv e s that there are numerous ways for the defendants to escape liability under state law, e v e n though Thomas dispensed with the requirement that a plaintiff's injury be connected to a product manufactured by the defendant. For example, the defendants can argue that the o t h e r elements of Gibson's prima facie case are not satisfied. Thomas at 564 (listing e le m e n ts for negligence and strict liability claims). Defendants could also attempt to escape lia b ility post-verdict on public policy grounds. See Behrendt v. Guld Underwriters Ins., 768 N .W .2 d 568, 577 (Wis. 2009) (listing six public policy factors that can preclude liability for n e g l ig e n c e ) . T h e cases cited by Gibson all involve plaintiffs bringing claims for affirmative relief u n d e r the rubric of substantive due process. Here, of course, the defendants are asserting due p r o c e s s as an affirmative defense to liability. The defendants' challenge to the use of the risk co n tribu tio n rule presumes that even if all of the other elements to establish liability are s a tis f ie d (aside from the individual causation requirement cast aside by Thomas), the im p o sitio n of liability would be unconstitutional. A defendant is not required to exhaust all o f his other affirmative defenses, keeping the due process defense in reserve as a last resort. S u re ly, due process encompasses a party's right to avoid the burdens of trial if such would b e a pointless exercise. G ib s o n also argues that application of the risk contribution rule would not impose re tro a c tiv e liability because a tort is not complete until the tortious act or omission results in h a rm . Abraham v. General Casualty Co., 576 N.W.2d 46, 53 (Wis. 1998). This argument

-9-

m is c o n stru e s the relevant constitutional framework for analyzing retroactive liability. The f o c u s is on what the defendant could reasonably foresee at the time of the conduct which u n d e rlie s the attempt to impose liability. The risk contribution rule imposes retroactive liab ility because it "attaches new legal consequences" to the manufacture and sale of white le a d carbonate pigments. Landgraf v. USI Film Products, 511 U.S. 244, 270 (1994). F in a lly, Gibson insists that the Court erred when it extracted a governing principle f ro m the various opinions in E. Enters. "When a fragmented Court decides a case and no s in g le rationale explaining the result enjoys the assent of five Justices, the holding of the C o u r t may be viewed as that position taken by those Members who concurred in the ju d g m e n ts on the narrowest grounds." Marks v. United States, 430 U.S. 188, 193 (1977). E v e n if the Court erred by disregarding the traditional Marks approach, the various opinions in E. Enters. are, as Gibson concedes, persuasive authority for how to approach the im p o s itio n of retroactive liability in the instant case. Swisher, 550 F.3d at 1057 n.8.

M o re o v e r, as the Court demonstrated, there is substantial overlap between the analyses under t h e Due Process Clause and the Takings Clause. Gibson at **12-14. Therefore, if

s u b s ta n tiv e due process is not the appropriate method of analysis, the Takings Clause stands a s an alternative defense to the imposition of retroactive liability by the judicial branch. Cf. S to p the Beach Renourishment, Inc. v. Florida Dep't of Envtl. Prot., -- U.S. --, 130 S. Ct. 2 5 9 2 , 2602 (2010) ("the Takings Clause bars the State from taking private property without p aying for it, no matter which branch is the instrument of the taking") (emphasis in original).

-10-

IV . T h e Court also found that the imposition of liability pursuant to the risk contribution ru le would violate ARCO's due process rights by imposing "damages for the wrongful c o n d u c t of others." Gibson at *18 (citing State Farm Mut. Auto Ins. Co. v. Campbell, 538 U .S . 408 (2003) and Philip Morris USA v. Williams, 549 U.S. 346 (2007)). Once again, the l o g ic of this alternative rationale applies to the remaining defendants in this case. Gibson o f f e r s no new arguments to oppose the entry of summary judgment on this basis. V. A lte rn a tiv e ly, Sherwin-Williams argues that it is also entitled to summary judgment b e c au s e the risk contribution rule violates its procedural due process rights and the dormant c o m m e rc e clause. U.S. CONST., art. I § 8, cl. 3. It is unnecessary to address these arguments in light of the foregoing disposition. Gibson argues that the Court should impose sanctions u n d e r Rule 11 against Sherwin-Williams for the dormant commerce clause argument. S a n c tio n s are not warranted because the argument is not frivolous and Gibson did not comply w ith the safe harbor provision in any event. Fed. R. Civ. P. 11(c)(2).

-11-

N O W , THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY O R D E R E D THAT: 1. T h e defendants' motion for leave to file an oversized memorandum [D. 192]

is GRANTED; 2. T h e defendants' motions for summary judgment [D. 135, D. 141, D. 145, D.

1 5 0 , D. 157] are GRANTED; 3. G i b s o n ' s claims against Millenium Holdings are DISMISSED without

p re ju d ic e ; and 4. a c c o r d i n g l y. D a te d at Milwaukee, Wisconsin, this 15th day of November, 2010. S O ORDERED, T h i s matter is DISMISSED. The Clerk is directed to enter judgment

s / Rudolph T. Randa HON. RUDOLPH T. RANDA U.S. District Judge

-12-