Retroactive tort liability and the First Amendment

Last year, in People v. ConAgra Grocery Products Co., the California Court of Appeal held three companies liable for hundreds of millions of dollars to investigate residential lead paint in the state's 10 most populous counties, and remediate any dangerous conditions they found there. 2018 DJDAR 10796 (Nov. 14, 2017). Because the potential harm caused by deteriorating lead paint is a known public health problem, why were these three companies singled out to pay the enormous bill for this "public nuisance"? Because in the first half of the 20th century, they promoted the use of then-lawful lead paint.

It wasn't that the companies sold lead paint; or that anyone claimed an injury from lead paint manufactured by these companies. No, these companies simply engaged in the legal promotion of a lawful product that, decades later, was removed from the market. And while incidents of lead poisoning have been steadily decreasing overall, potential dangers remain in homes built prior to 1951 that contain interior lead paint. The California courts think this is a problem modern paint sellers should solve. As the saying goes, hindsight is 20/20. But liability need not follow.

The First Amendment protects the dissemination of truthful and non-misleading commercial messages about lawful products and services, even when those products may later result in harm to someone. For example, the U.S. Supreme Court struck down laws forbidding brewers from disclosing the alcohol content of beer or the price of wine. Rubin v. Coors Brewing Co., 514 U.S. 476 (1995). These statutes were intended to discourage consumers from buying beverages with a high alcohol content or low cost because overindulgence can result in any number of social harms. The First Amendment protected the manufacturers' and retailers' advertisements.

Astonishingly, the California court flatly held in ConAgra that "lead paint promotional advertising and participation in trade-association-sponsored lead paint promotional advertising were not entitled to any First Amendment protections." The court issued this broad declaration even while acknowledging that "a large number of these advertisements did not promote interior residential use of lead paint." Moreover, many of the advertisements were not even placed or subsidized by the paint sellers, but by non-party paint stores and hardware retailers.

The implications of this novel ruling extend beyond lead paint and even beyond the amorphous notion of a "public nuisance."

The First Amendment serves an especially important purpose to encourage study to challenge and expand existing scientific understanding. Scientific research is not characterized by perfect theories, flawless studies, and desired results. Rather, the hallmarks of scientific research are continuous inquiry, testing, debate, disagreement, and revision. As the 7th U.S. Circuit Court of Appeals explained in Underwager v. Salter, 22 F.3d 730 (1994), "More papers, more discussion, better data, and more satisfactory models -- not larger awards of damages -- mark the path toward superior understanding of the world around us." The decision below penalizes speech by applying more recent scientific discoveries to previously accepted understandings that turned out to be wrong.

This retroactive imposition of tort liability based on speech that was lawful at the time it was made impacts industries far beyond lead paint. For example, in the 1940s, breakfast cereals with added sugar were touted as beneficial for children as the sugar energized away the morning dullness. More recently, of course, public health advocates disdain sugared cereal as contributing to obesity among children. The decision below invites "public nuisance" lawsuits against cereal manufacturers for touting the effects created by the sugar content of products long since discontinued or reformulated.

The problem is particularly severe when the product itself is not harmful when initially purchased and used as directed, but instead causes potential dangers when it deteriorates over time. For example, when the cost of copper wiring skyrocketed in the mid-1960s, residential contractors sometimes substituted aluminum wiring. While lawful and effective at the time the homes were built (1965-1973), aluminum wiring weakens over time, creating poor connections that can result in overheating and fire hazards. Under the decision below, a home developer's touting of the cost-effective use of aluminum wiring, when it was known that copper offered greater performance, would be retroactively considered a public nuisance.

Of course, people injured by malfunction of aluminum wiring or any other product may bring a traditional tort claim based on duty, breach, causation and damages. But to saddle modern retailers and manufacturers with retroactive tort liability only because they spoke in favor of a product that, with the passage of time, became a potential danger, violates the First Amendment and cannot be a proper rule of law.

Pacific Legal Foundation which filed an amicus brief supporting Conagra's petition for writ of certiorari with the U.S. Supreme Court.