People v. Conagra Grocery Prods. Co.

17 Cal.App.5th 51

227 Cal.Rptr.3d 499

The PEOPLE, Plaintiff, Cross-defendant and Respondent,

v.CONAGRA GROCERY PRODUCTS COMPANY et al., Defendants and Appellants;

The Sherwin-Williams Company, Defendant, Cross-complainant and Appellant.

H040880

Court of Appeal, Sixth District, California.

Filed November 14, 2017

Orry P. Korb, Galt, Danny Y. Chou, San Francisco, Greta S. Hansen, Jenny S. Lam, Kavita Narayan, Meghan F. Loisel, Lorraine Van Kirk, Office of the County Counsel, County of Santa Clara, Donna R. Ziegler, Andrew Massey, Office of the County Counsel, Alameda County, Mark J. Saladino, Robert E. Ragland, Andrea Ross, Office of the County Counsel, County of Los Angeles, Charles J. McKee, William M. Litt, Office of the County Counsel, County of Monterey, Barbara Parker, Wendy M. Garbers, Office of the City Attorney, City of Oakland, Christopher Kee, Jan I. Goldsmith, Daniel F. Bamberg, Paul F. Prather, Office of the City Attorney, City of San Diego, Dennis J. Herrera, Owen J. Clements, Erin Bernstein, Office of the City Attorney, City and County of San Francisco, John C. Beiers, Rebecca M. Archer, Office of the County Counsel, County of San Mateo, Dennis Bunting, Office of the County Counsel, Solano County, Leroy Smith, Eric Walts, Office of the County Counsel, County of Ventura, Michael Rubin, Stacey M. Leyton, San Francisco, Altshuler Berzon LLP, Joseph W. Cotchett, Burlingame, Nancy L. Fineman, Brian M. Schnarr, Cotchett, Pitre & McCarthy, LLP, Peter G. Earle, Law Office of Peter Earle, LLC, Fidelma Fitzpatrick, Robert J. McConnell, Motley Rice LLC, Mary E. Alexander, Jennifer L. Fiore, Sophia M. Aslami, San Francisco, Mary Alexander & Associates, for Plaintiff, Cross-defendant and Respondent.

Raymond A. Cardozo, San Francisco, Margaret M. Grignon, Long Beach, Anne M. Grignon, Kasey J. Curtis, Los Angeles, Reed Smith LLP, Allen J. Ruby, Jack P. DiCanio, Patrick Hammon, Palo Alto, Skadden, Arps, Slate, Meagher & Flom LLP, James P. Fitzgerald, James J. Frost, McGrath North Mullin & Kratz, PC, LLO, for Defendant and Appellant ConAgra Grocery Products Company.

Donald E. Scott, San Francisco, Andre M. Pauka, Jameson R. Jones, Bartlit Beck Herman Palenchar & Scott LLP, James McManis, William Faulkner, San Jose, McManis Faulkner, Richard A. Derevan, Todd E. Lundell, Costa Mesa, Snell & Wilmer, LLP, for Defendant and Appellant NL Industries, Inc.

Robert A. Mittelstaedt, San Francisco, John W. Edwards II, Paul Michael Pohl, Charles H. Moellenberg, Jr., Leon F. Dejulius, Jr., Jones Day, David M. Axelrad, Lisa Perrochet, Burbank, Horvitz & Levy LLP, for Defendant, Cross-complainant And Appellant The Sherwin-Williams Company.

Ingrid M. Evans, San Francisco, Evans Law Firm Inc., for Changelab Solutions et al., as Amici Curiae on behalf of Plaintiff, Cross-defendant and Respondent.

Paula Canny, Burlingame, Law Offices of Paula Canny, for California Conference of Local Health Officers as Amicus Curiae on behalf of Plaintiff, Cross-defendant and Respondent.

Dario de Ghetaldi, Clare Capaccioli Velasquez, Millbrae, Corey, Luzaich, de Ghetaldi, Nastari & Riddle LLP, for American Academy of Pediatrics, California as Amicus Curiae on behalf of Plaintiff, Cross-defendant and Respondent.

Michael E. Wall, San Francisco, National Resources Defense Council, for Environmental Health Coalition and Healthy Homes Collaborative as Amici Curiae on behalf of Plaintiff, Cross-defendant and Respondent.

Timothy Sandefur, Christopher M. Kieser, Pacific Legal Foundation, for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and Appellants ConAgra Grocery Products Company et al.

Phil Goldberg, Amir Nassihi, San Francisco, Shook, Hardy & Bacon LLP, for NFIB Small Business Legal Center et al., as Amici Curiae on behalf of Defendants and Appellants ConAgra Grocery Products Company et al.

Fred J. Hiestand, Sacramento, for Civil Justice Association of California as Amicus Curiae on behalf of Defendants and Appellants ConAgra Grocery Products Company et al.

Mihara, J.

After a lengthy court trial, the People of the State of California (plaintiff) prevailed in this representative public nuisance action against defendants ConAgra Grocery Products Company (ConAgra), NL Industries, Inc. (NL), and the Sherwin-Williams Company (SWC).¹ The trial court ordered ConAgra, NL, and SWC to pay $1.15 billion into a fund to be used to abate the public nuisance created by interior residential lead paint in the 10 California jurisdictions represented by plaintiff. ConAgra, NL, and SWC (collectively defendants) challenge the court's judgment on many grounds. They contend, among other things, that the court's judgment is not supported by substantial evidence of knowledge, promotion, causation, or abatability. Defendants also challenge the judgment on separation of powers and due process grounds, claim that they were erroneously denied a jury trial, and assert that the trial court made other prejudicial procedural and evidentiary errors.² We conclude that the trial court's judgment must be reversed because substantial evidence does not support causation as to residences built after 1950. We also direct the trial court to hold further proceedings on remand regarding the appointment of a suitable receiver. We reject the remainder of defendants' contentions.

I. Plaintiff's Evidence at Trial

"[L]ead is a toxin and causes irreversible brain damage." Childhood lead poisoning is "the number one environmental health problem for children" in California. "Childhood lead poisoning at the level at which it is occurring is definitely an epidemic in California." "The most common source of lead exposure to children in California is lead-based paint and how it contributes to soil and dust contamination in and around housing."³ Experts have reached a consensus "that lead-based paint is a predominant source of childhood lead exposure [in] pre-1978 housing."⁴ Children in pre-1946 housing are subject to "three times the percentage of elevations in blood lead level" as those in post-1978 housing. Lead in homes accounts for at least 70 percent of all childhood lead poisonings. Lead paint is a major contributor to blood lead levels because the lead content of paint is high, while most other lead sources have only trace amounts. And the most common type of lead paint contains white lead carbonate, which is highly absorbable. Between 1929 and 1974, more than 75 percent of the white lead carbonate produced in this country was used in lead paint. Through the 1940s, lead paint contained as much as 50 percent lead.

"Children are exceptionally vulnerable" to lead because "they explore their environment with typical hand-to-mouth contact behavior." Lead paint chips "taste sweet," which may explain why children ingest them. Young children are at especially high risk from residential lead paint because they spend the vast majority of their time in their homes. Infants and young children also absorb much more lead than older children and adults. Because children are smaller, lead intake has a proportionally larger impact on their bodies, and children absorb lead more easily. Children are also more vulnerable to the toxic effects of lead because their biological systems are still developing.

The "brain effects [of lead exposure] in children are irreversible," so the "only option is to prevent the exposure in the first place." There is "no safe exposure level" for lead "[b]ecause no measurable level of lead in blood is known to be without deleterious effects, and because once engendered the effects appear to be irreversible." Blood lead levels less than 5 micrograms per deciliter (mcg/dL)⁵ can cause children to suffer impaired intellect and behavioral problems.⁶ "[E]ven among children with the lowest levels of lead exposure," studies suggest that "there is ongoing harm down to the lowest measurable levels." "[B]lood lead levels below 5 micrograms per deciliter are associated with decreased academic achievement, diminished IQ scores, or intellectual abilities, cognitive abilities, attention-related behavior problems and antisocial behaviors ...." Lead exposure as a child continues to impact the body when the child becomes an adult. It "has reproductive effects, it has impacts on things like birth weight, and even fertility, delays fertility," and it can be associated with cardiovascular disease.

Even intact lead paint poses a potential risk of future lead poisoning to children because lead paint surfaces will inevitably deteriorate. "[A]ll paint eventually deteriorates. On certain surfaces it deteriorates more rapidly than others[;] mainly those surfaces are high-use surfaces, such as windows and doors." Paint deteriorates when it is exposed to ultraviolet light, water, fungus (such as mildew), friction, or abrasion. More than one-third of pre-1978 homes nationwide with intact lead paint have lead dust.⁷ In contrast, only 6 percent of homes without lead paint have lead dust. Lead in soil adjacent to homes generally comes from lead paint, not leaded gas emissions, because post-1978 housing has no soil lead.⁸

Most of the housing in the 10 jurisdictions was built before 1980, with the percentages ranging from 51 to 83 percent and is therefore presumed to contain lead paint.⁹ Pre-1940 homes are three times as likely to have lead-based paint hazards,¹⁰ with 86 percent having lead-based paint hazards and 67 percent having "significant" lead-based paint hazards such as "deteriorated lead-based paint."¹¹ "[H]omes with lead-based paint are 10 times more likely than homes without lead-based paint to have dust lead levels on floors and on window sills above the federal limits." And "homes with lead-based paint are more likely to have soil lead levels on the exterior of the home above the EPA [ (federal Environmental Protection Agency) ] criteria limits." Even when lead paint is "intact," soil levels can exceed EPA limits. Lead paint creates soil lead "by the friction and impact surfaces, opening and closing windows...