Wildfires and lead paint reignite Capitol’s ‘tort wars’

For decades, what political insiders dubbed “tort wars” raged in the Capitol.

Business and professional trade organizations and their insurers battled incessantly with personal injury lawyers over rules governing who could sue whom and collect damages with untold billions of dollars at stake.

Highlights – or lowlights – included Gov. Jerry Brown’s signature on a 1975 law that limits pain and suffering damages in medical malpractice cases; the infamous “napkin deal” in 1987 that imposed a five-year truce in the wars; a ballot clash over auto insurance in 1988; a successful insurer-backed referendum to repeal a lawyer-sponsored “bad faith” law in 2000; and still another ballot battle in 2004 that curbed unfair business practice suits against small business.

The tort wars have been relatively quiet recently, with occasional skirmishes like one this year over a lawyer- and union-backed bill that would prohibit mandatory arbitration in employment disputes. But two incidents this year reignited them.

One is a series of devastating wildfires for which the state’s investor-owned utilities could be held liable, and the other is an appellate court decision, upheld by the state Supreme Court, making paint manufacturers liable for a “public nuisance” by selling poisonous lead-based paint during the first half of the 20^th century.

Both utilities and paint companies want to erase, or at least limit, their financial exposure and, true to historic form, are once again doing battle with plaintiffs’ attorneys.

Pacific Gas and Electric is leading the charge on wildfire liability, since it’s at risk for as much as $15 billion in damages from the fires that swept through Sonoma and Napa counties last year.

Pending lawsuits target PG&E under the legal doctrine of “inverse condemnation.” Its lobbyists counter that because of climate change, wildfire damages are mostly beyond its responsibility.

In March, Brown and legislative leaders declared that they would consider updating liability laws for utilities and last week, the Senate passed a bill by Sen. Bill Dodd, a Napa Democrat, that may give them some protection from future liability if they follow approved safety procedures, although it would not apply retroactively.

Retroactivity is precisely what three paint companies are seeking in a proposed ballot measure.

The initiative measure, for which signatures are now being gathered, would authorize $2 billion in state bonds to clean up lead paint contamination and other deficiencies in housing and overturn the 2017 appellate court ruling (People v. ConAgra Grocery Products Co.) that holds the firms liable for lead paint.

The suit against ConAgra, Sherwin Williams and NL Industries was brought by 10 local governments and the “public nuisance” decision would technically only apply to them. But if not overturned, there’s little doubt it would be extended statewide and to more manufacturers and potentially more products.

The companies argue that they stopped using lead in their paint decades ago, when laws required them to do so; that the public nuisance law is being misused and, finally, that the ruling could mean individual property owners could face lead paint liability.

The latter allegation is legally dubious, but could be a powerful campaign theme. Company representatives and legislators clashed sharply during a hearing on the proposed measure last month.

“Instead of the perpetrators paying, this would be the people of California paying,” Assemblyman Mark Stone, a Scotts Valley Democrat and chairman of the Assembly Judiciary Committee, snapped at one point.

Company representatives clearly want legislators to forestall the ballot measure by taking legislative action with corporate attorney Antonio Dias urging “alternatives to initiatives,” but legislators seemed unwilling to act.