Major Public Nuisance Ruling by California Court of Appeals

On November 14, 2017, California Court of Appeals affirmed liability findings in $1.15 billion judgment ordering three lead paint manufacturers to abate public nuisance in 10 counties and cities containing homes built before 1978 (when lead paint was outlawed). The complete opinion is here (143 pages). (The critical issue was whether lead paint manufacturers “created or assisted in the creation of the nuisance” by the “affirmative promotion of lead paint for interior use.”).

The appellate court did not accept the entire scope of the original judgment, however. It found that substantial evidence does not support causation regarding residences built before 1950. As a result, the judgment was reversed and remanded with instructions to (1) recalculate the amount of the abatement fund to limit it to the amount necessary to cover the cost of remediating pre-1951 homes, and (2) hold an evidentiary hearing regarding the appointment of a suitable receiver.  The total reformed judgment on remand estimated by defense counsel to be $400 million.

Defendants pledged to appeal current decision to California Supreme Court before remand to trial court.

This decision will probably encourage the plaintiffs who are pursuing public nuisance litigation in California and other West Coast states regarding for PCB contamination and energy companies for climate change damages. It may also encourage those who seek public nuisance recoveries in other states, particularly on the West Coast.

Nevertheless, the decision conflicts with at least two major California Supreme Court decisions that reject public nuisance judgments because of problems of “standardless liability.” People  ex rel. Gallo v. Acuna, 929 P.2d 596, 606 (Cal. 1997) (“The legislature’s lawmaking supremacy serves as a brake on any tendency in the courts to enjoin conduct and punish it with the contempt power.”); People v. Lim, 118 P.2d 472, 476 (Cal. 1941). (In a field where the meaning of terms is so vague and uncertain, it is a proper function of the legislature to define breaches of public policy which are to be considered public nuisances.”)  see also Richard O. Faulk and John S. Gray,  Public Nuisance at the Crossroads: Policing the Intersection Between Statutory Primacy and Common Law,  15 Chapman L. Rev. 495, 528-531 (2011); Richard O. Faulk, Uncommon Law: Ruminations on Public Nuisance, Mo. Env. L. & Policy Rev. 1, 8-10 (2010).