PHILADELPHIA – Oral arguments in the extended standoff between the Sherwin-Williams Company and a Pennsylvania county hoping to use private lawyers to sue it over lead paint will take place today before the U.S. Court of Appeals for the Third Circuit.
After a dismissal at the district court level, Sherwin-Williams is fighting to oppose what it believes are violations to its due process and federal constitutional rights – while Delaware County calls the company’s efforts “a speculative request for an advisory opinion.”
In 2018, the company filed in federal court to block possible litigation filed by Pennsylvania counties. This was done in the wake of the U.S. Supreme Court leaving intact a $400 million ruling in California that kept ConAgra, NL Industries and Sherwin-Williams responsible for paying for lead paint abatement in California.
The case considers the issue of “public nuisance,” rejected in similar lead paint cases in several states, like Ohio and Rhode Island, but was received favorably by California courts in a lawsuit that lasted 18 years.
A trial court in 2013 found the three companies to be responsible for the lead-based paint in houses built before 1981. An appeals court largely upheld that decision, though narrowing it to those constructed before 1951. The Supreme Court of California refused to review the lawsuit, leading to its appeal to the U.S. Supreme Court.
But, the U.S. Supreme Court decided on Oct. 15, 2018 not to take up the case.
In Pennsylvania, Montgomery County’s lawsuit was filed just 11 days before the SCOTUS decision, and Lehigh County’s contract with law firm Anapol Weiss was signed on Aug. 28, stipulating a contingency fee for the firm of 33.3 percent.
It is that same one-third contingency fee that Sherwin-Williams said is at the heart of the motivation behind the current legal wranglings.
“Their financial incentive may explain why counsel has solicited the County to pursue litigation rather than public policy alternatives; defined the purported public nuisance in the broadest way possible, even though Pennsylvania law precludes such a claim; identified as defendants companies with the 'deepest pockets,' regardless of these companies’ actual contributions to the presence of lead in the County,” Sherwin-Williams stated in a Feb. 19, 2019, filing.
“[They] disregarded the legal obligations of landlords to maintain their properties and protect their tenants from lead hazards; ignored the interests of owners and tenants whose residences would be declared to be public nuisances without their participation in the lawsuit; and sought a remedy that has a large financial payout, regardless of whether this remedy is in the public’s best interest.”
Last year, Lehigh and Montgomery counties filed their lead paint lawsuits through lawyers in the Philadelphia office of Anapol Weiss. In its own lawsuit, Montgomery County sued Atlantic Richfield, ConAgra, DuPont, NL Industries, PPG Industries and Sherwin-Williams.
Anapol Weiss has also pursued other counties as clients, like York, Erie and in the instant matter, Delaware.
Sherwin-Williams argued there is a financial burden being placed upon it because it faces several lawsuits and added private lawyers are “misleading county government officials in filing these suits in order to achieve financial gain for themselves.”
The instant action involving Sherwin-Williams and Delaware County was dismissed on Oct. 4 by U.S. District Court Judge Nitza I. Quiñones Alejandro and subsequently appealed to the Third Circuit four weeks later, on Nov. 1.
Now, the parties are appearing before the federal appellate bench.
“In June 2018, officials from Delaware County executed an agreement with private outside counsel and approved those attorneys, on a contingency-fee basis, to investigate and bring public nuisance claims against Sherwin-Williams. Private financial motives in such public decision-making offends due process, and the presence and influence of those motives here is inflicting ongoing harm on Sherwin-Williams,” the company said in its pre-argument brief.
“Sherwin-Williams faces additional, imminent injury because Delaware County – whose outside counsel also represents two other Pennsylvania counties in public nuisance suits against Sherwin-Williams – will seek to impose liability on Sherwin-Williams for decades-old, constitutionally-protected First Amendment activities.”
In asking for a reversal of the District Court decision and remanding there for further proceedings, Sherwin-Williams argues that U.S. Supreme Court precedent “makes clear that parties are allowed to seek pre-enforcement declaratory and injunctive relief to safeguard affirmative federal rights” and that the District Court “erroneously relied on a dissenting opinion that the U.S. Supreme Court majority expressly rejected.”
Delaware County feels the District Court decision should be upheld.
“SWC’s complaint is structured solely as a reactive pleading that does nothing more than speculatively raise a host of anticipated affirmative defensives and factual deflections concerning a civil action that the Delco parties have not yet filed and thereafter requested that the District Court adjudicate those factual and legal issues now, thereby preempting any lawsuit any county in this Commonwealth could file against SWC based upon the question of whether lead paint is a public nuisance,” the county stated in its own pre-argument brief.
“The viability and merits of SWC’s claims are quite literally dependent upon events that have not yet occurred, upon filings not yet transmitted, and upon legal arguments not yet made. Worse yet, SWC’s only claims for relief relate to anticipated claims by the Delco parties that admittedly can only arise under Pennsylvania state law.”
U.S. Court of Appeals for the Third Circuit case 19-3561
U.S. District Court for the Eastern District of Pennsylvania case 2:18-cv-04517
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com