Your humble blogger had the privilege some years ago of serving as  Legal Fellow at the Salzburg Global Seminar in Austria.  This unique organization was founded in the ruins of WWII to serve as a sort of “Marshall Plan of the Mind” and a critical element of recovery from the war.  At our session (Lloyd Cutler was the Chair and Justice O’Connor was on the faculty), the theme was transnational legal institutions, at a time in which the EC was evolving into the EU.  A frequent question to us was to explain and describe the relationship between U.S. states and the federal government. And part of our remarks went to the the application of federal or state law, and painting a picture of the role of the federal courts in predicting state law and applying state law as a state supreme court has interpreted it.

That brings us to today’s case, in which the Seventh Circuit reversed a verdict against various paint makers in a trial of claims that lead-based paint pigment caused brain damage to the plaintiffs. Burton v. E.I. du Pont de Nemours & Co., Inc., 994 F.3d 791 (7th Cir. 2021). The reversal was based on the trial court having improperly expanded Wisconsin tort law, and in particular its version of the so-called risk-contribution theory.  In Wisconsin, the rule had its origins in Collins v. Eli Lilly Co., 116 Wis.2d 166, 342 N.W.2d 37 (1984) a DES case. And indeed the few courts that have recognized some version of this rule excusing plaintiffs from proving product identification (that the defendant made and sold the product that injured them) have done so in the DES context.    The goal of this burden-shifting procedure was to create “a pool of defendants which it can reasonably be assumed could have caused the plaintiff’s injuries.” Id. at 52. The court acknowledged that the risk-contribution theory could result in liability for innocent defendants, but it accepted this possibility as “the price the defendants, and perhaps ultimately society, must pay to provide the plaintiff an adequate remedy under the law.” Id.  You can see why we think it is a dangerous notion.

In Thomas ex rel. Gramling v. Mallett, 2005 WI 129, 285 Wis. 2d 236, 701 N.W.2d 523 (2005), the Wisconsin Supreme Court extended the risk-contribution theory to white lead carbonate pigment. The court rejected the manufacturers’ argument that white lead carbonate—which came in three different chemical formulas—was not fungible. because it was supposedly functionally interchangeable; rejected the argument that Collins should not apply because lead poisoning had multiple potential causes and did not produce a “signature injury.” and rejected the argument that Collins should not apply because the pigment manufacturers were not in exclusive control of the risk that their product created. Yet, a plaintiff’s burden was relaxed “only with respect to establishing the specific type of DES the plaintiff’s mother took, which, in this case, translates into the specific type of white lead carbonate Thomas ingested.” Id. Two Justices dissented, expressing dismay that the pigment manufacturers could be “held liable for a product they may or may not have produced, which may or may not have caused the plaintiff’s injuries, based on conduct that may have occurred over 100 years ago when some of the defendants were not even part of the relevant market.” Id. at 567–68 (Wilcox, J., dissenting); see also id. at 590 (Prosser, J., dissenting) (“[T]his court has now created a remedy for lead paint poisoning so sweeping and draconian that it will be nearly impossible for paint companies to defend themselves or, frankly, for plaintiffs to lose.”).

In Godoy ex rel. Gramling v. E.I. du Pont de Nemours & Co., 319 Wis.2d 91, 768 N.W.2d 674 (2009), the court rejected Godoy’s argument that the product in question was actually “residential paint pigment.” Id. at 682.  Plaintiffs in products liability cases, the court explained, “must—at minimum—identify the product alleged to be defective.” Id. “Doing so puts the defendant on notice and allows the defendant to begin building a defense.” Id. More fundamentally, the product at issue could not be residential paint pigment because the risk-contribution theory applied only to “fungible and identically defective” products. Id. In Thomas, that product was white lead carbonate pigment. The court made clear that it had never applied the risk contribution theory to “residential paint pigment,” or to “paint containing white lead carbonate.” Id. at 683 & n.10. On the merits, the court rejected Godoy’s argument that white lead carbonate was defectively designed.  “A claim for defective design cannot be maintained where the presence of lead is the alleged defect in design, and its very presence is a characteristic of the product itself. Without lead, there can be no white lead carbonate pigment.” Id. at 685.

In 2011, the Wisconsin legislature passed Wis. Stat. § 895.046, which effectively overruled Thomas while preserving Collins. The statute reinstates ordinary causation principles in all products liability cases, while carving out a narrow exception for plaintiffs who have no other remedy and whose injuries stem from a “complete[ly] integrated product” produced in “chemically and physically identical” forms and sold in generic packaging. § 895.046(4).

And that is where the error started to creep in. Each of the defendants was both a white lead carbonate manufacturer and a manufacturer of finished paint products at various points in the twentieth century. The risk-contribution theory, as it evolved in Wisconsin, applies to them only in their capacity as manufacturers of white lead carbonate. In Thomas, the court invariably referred to the defendants as “pigment manufacturers.” The court used this term when setting forth the elements of Thomas’s cause of action.  701 N.W.2d at 564. At one point, the court even drew a critical distinction between “pigment manufacturers” and “paint manufacturers.” The pigment manufacturers in Thomas had argued  that they should not be liable because they “were not in exclusive control of the risk their product created …” Id. at 563. In other words, the pigment manufacturers attempted to shift the blame to paint manufacturers—the companies that sold lead-based paints directly to consumers. The court rejected this argument. In doing so it analogized paint manufacturers to DES drug prescribers: while paint manufacturers mixed white lead carbonate into paint, they “did not alter the toxicity of the white lead carbonate anymore than the pharmacist did by filling a prescription.” Id. If anything, “the paint manufacturers actually diluted the white lead carbonate’s toxicity.” Id. (emphasis added). “[T]he inherent dangerousness of the white lead carbonate pigment existed the moment the Pigment Manufacturers created it.” Id. (emphasis added).  994 F.3d 791, 812–13 (7th Cir. 2021).  And the plaintiffs could not dispute that the key feature of DES and white lead carbonate—fungibility—does not carry over to paint, so the core rationale of Collins and Thomas is inapplicable to paint and paint manufacturers. [Fungibility was a legal question. If fungibility were a fact question, then Thomas would not have held that white lead carbonate was fungible; it would have held instead that there was a fact issue as to fungibility that precluded summary judgment for the pigment manufacturers.]

For years, thus, the defendants had litigated under the (valid) assumption that they were liable only in their capacity as pigment manufacturers. Less than six weeks before trial, however, the defendants learned for the first time that they were also subject to liability as manufacturers of paint products containing white lead carbonate. The court’s last-minute, legally incorrect ruling left them scrambling to adapt their defenses to the plaintiffs’ newly enlarged theory of liability.  994 F.3d 791, 814–15. One defendant’s potential liability went from narrow seven-year period (1917 to 1924)  to a nearly fifty-year period.  Another’s window of liability expanded from a 37-year period in the first half of the twentieth century (1910 to 1947) to a 90-year period (1880 to 1969). Id. at 815.

These errors shaped the trial and impermissibly expanded the defendants’ potential liability. Along with a separate error in the admission of certain expert testimony (which we don’t get into today), these warranted a reversal of the judgments and a remand for further proceedings.