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Wisconsin Supreme Court Rules for Defendants

A win for the paint industry in the latest consumer product litigation scam.

Jane Genova reports:

Today, MEALEY’S LITIGATION REPORT issued a special e-mail bulletin on the long-awaited Wisconsin Supreme Court ruling in “Ruben Baez Godoy v. E.I. duPont de Nemours and Co., (DD) et al.”

MEALEY’S editor James Cordrey reports, “The Wisconsin Supreme Court today unanimously affirmed an appellate court ruling and held that lead pigment is not defectively designed, dismissing a lead-poisoned boy’s claims for strict liability and negligence against the former manufacturers of white lead carbonate pigment.” The appellate court had affirmed the circuit court’s ruling.

As the defendants have kept declaring in this litigation, the Court agreed that “the Circuit Court correctly concluded that the complaint failed to state claims for defective design. A claim for defective design cannot be maintained here where the presence of lead is the alleged defect in design and its very presence is a characteristic of the product itself.”

Cordrey points out that WI SC also said that even though the feasibility of an alternative design can be considered when evaluating a design defect claim, it isn’t a requirement. He goes on to explain that when the ingredient can’t be designed out of the product, the Court noted that the Restatement [Second] of Torts instructs that although other claims may be asserted, the proper claim is not design defect.
Cordrey will expand on this analysis in the July edition of MEALEY’S LITIGATION REPORT: LEAD. Meanwhile copies of this and all other litigation documents are available for a fee from MEALEY’S.

I had for a while held Sherwin Williams (SHW) shares and was encouraged when they were finally victorious in the Rhode Island litigation. But as housing continued its decline and the legal environment in other locals became more questionable, I sold my shares. Shares have held up very well considering the potential litigation risk (think asbestos). My assumption is that investors agree that the litigation on its face is a farce BUT, that does not mean that plaintiffs can’t win one here and there. Any win of any significance could lead to a cascade of private suits.

As State’s suffer extreme budget shortfalls, I would not be surprised if more suits are filed in a “lottery mentality”. AG’s have nothing to lose and everything to gain especially if they can force settlements. To this point paint makers have resisted and fought tooth and nail very successfully for the most part case by case.

Sherwin is clearly the class of the group from just an operational perspective. It is a great company with great management. The current legal environment for it, and others (think Altria) seems to be turning and not in a good way.

Other public companies usually involved in the suits would be NL Industries (NL) and DuPont (DD).


Disclosure (“none” means no position):None