City of Milwaukee v. NL Industries, Inc.

• Citation: 691 N.W.2d 888,2005 WI App 7,278 Wis.2d 313
• Decision Date: 09 November 2004
• Docket Number: No. 03-2786.,03-2786.
• Parties: CITY OF MILWAUKEE, a municipal corporation, Plaintiff-Appellant, v. NL INDUSTRIES, INC., a foreign corporation, and Mautz Paint, a Wisconsin corporation, Defendants-Respondents.
• Court: Court of Appeals of Wisconsin

278 Wis.2d 313

2005 WI App 7

691 N.W.2d 888

CITY OF MILWAUKEE, a municipal corporation, Plaintiff-Appellant, v. NL INDUSTRIES, INC., a foreign corporation, and Mautz Paint, a Wisconsin corporation, Defendants-Respondents.¹

No. 03-2786.

Court of Appeals of Wisconsin.

Oral argument September 27, 2004.

Decided November 9, 2004.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Ted M. Warshafsky of Warshafsky Rotter Tarnoff Reinhardt & Bloch, S.C. of Milwaukee and Richard S. Lewis and James J. Pizzirusso of Cohen Milstein Hausfeld & Toll, PLLC of Washington, D.C. There was oral argument by Richard S. Lewis.

On behalf of the defendants-respondents, the cause was submitted on the joint brief of James T. Murray, Jr. and Michael J. Wirth of Peterson, Johnson & Murray, S.C. of Milwaukee, Timothy S. Hardy of Denver, Colorado, Elizabeth L. Thompson and Jennifer Heisinger of Bartlit Beck Herman Palenchar & Scott LLP of Chicago, Illinois for NL Industries, Inc. and Frank J. Daily and Jeffrey K. Spoerk of Quarles & Brady LLP of Milwaukee and Charles H. Moellenberg, Jr. and Jennifer B. Flannery of Jones Day of Pittsburgh, Pennsylvania for Mautz Paint. There was oral argument by James T. Murray, Jr. and Frank J. Daily.

Before Fine, Curley and Kessler, JJ.

¶ 1. KESSLER, J.

The City of Milwaukee appeals from a judgment and an order dismissing its complaint against NL Industries, Inc., and Mautz Paint (collectively, "defendants"). The trial court dismissed the City's claim for public nuisance, concluding that the City could not show that these particular defendants caused their lead-based paint to be applied to any of the specific buildings included in the alleged public nuisance. The court also dismissed the claims of restitution and conspiracy, concluding that these claims are tied to the public nuisance claim.² We conclude that genuine issues of material fact preclude summary judgment in defendants' favor. Therefore, we reverse the judgment and the order and remand for trial.

BACKGROUND

¶ 2. According to the City's complaint, childhood lead paint poisoning is a severe public health problem in Milwaukee. The City alleged that one in five Milwaukee children tested in 1998 showed blood lead levels at or above the Centers for Disease Control threshold for lead poisoning. According to the City, "[t]his extraordinary incidence of childhood lead paint poisoning is linked to Milwaukee's old housing stock." Specifically, the City alleged that childhood lead paint poisoning is caused when children ingest lead-based paint dust and chips.

¶ 3. The alleged main source of this dust and chips is lead-based paint on old wood windows in homes in which children live. The complaint states: "Windows are exposed to weather that causes the paint on them to peel, crack, or chalk, and are subject to friction when they are opened and closed, all of which generates lead dust." In response to the problem of childhood lead poisoning, the City has undertaken a window abatement program in two target areas of the city. The complaint estimated that the potential cost of this abatement program could exceed one hundred million dollars.

¶ 4. The City asserts that defendants are responsible for these damages because their conduct in marketing and selling substantial quantities of lead pigments and/or lead-based paint in the City of Milwaukee during and after the construction of these dwellings, when they knew the hazards of lead poisoning related to their product, was a substantial factor creating the public nuisance at issue in this case.

¶ 5. The City asks that defendants pay the costs associated with the City's abatement program. Specifically, the suit seeks: (1) compensatory and equitable relief for abatement of the toxic lead hazards in Milwaukee homes, especially in the target areas; (2) restitution for amounts expended by the City to abate the toxic lead hazards in Milwaukee homes, especially in the target areas; and (3) punitive damages. The theories of liability are: public nuisance, conspiracy and restitution.

¶ 6. After the parties completed significant discovery, defendants moved for summary judgment. The trial court granted the motion. It dismissed the public nuisance claim because it concluded that the City could not prove causation, i.e., that these particular defendants were a cause of the alleged damage. The trial court dismissed the conspiracy claim because it concluded there was no underlying tort upon which a conspiracy could be based. Finally, the trial court dismissed the restitution claim because it held that the inability to prove that defendants were a cause of the nuisance meant they could not be responsible for paying for the abatement. This appeal followed.

DISCUSSION

[1-3]

¶ 7. This appeal involves issues decided pursuant to summary judgment. We review the grant of summary judgment de novo, applying the same standard as the circuit court. Firstar Trust Co. v. First Nat'l Bank of Kenosha, 197 Wis. 2d 484, 492, 541 N.W.2d 467 (1995). "[S]ummary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." M & I First Nat'l Bank v. Episcopal Homes Mgmt., Inc., 195 Wis. 2d 485, 497, 536 N.W.2d 175 (Ct. App. 1995); see also WIS. STAT. § 802.08(2) (2001-02).³ We will reverse a decision granting summary judgment if the trial court incorrectly decided legal issues or if material facts are in dispute. Coopman v. State Farm Fire & Cas. Co., 179 Wis. 2d 548, 555, 508 N.W.2d 610 (Ct. App. 1993).

A. Public Nuisance Claim

[4, 5]

¶ 8. The City asserts that childhood lead poisoning is a community-wide public nuisance in Milwaukee. "A public nuisance is a condition or activity which substantially or unduly interferes with the use of a public place or with the activities of an entire community." Physicians Plus Ins. Corp. v. Midwest Mut. Ins. Co., 2002 WI 80, ¶ 21, 254 Wis. 2d 77, 646 N.W.2d 777 (citations omitted).

The number of people affected does not strictly define a public nuisance . . . . Rather, the court considers many factors, including, among others, the nature of the activity, the reasonableness of the use of the property, location of the activity, and the degree or character of the injury inflicted or right impinged upon.

Id. (citing State v. Quality Egg Farm, Inc., 104 Wis. 2d 506, 520, 311 N.W.2d 650 (1981)) (footnote omitted).

¶ 9. The City argues that to prevail on its claim for public nuisance, it must establish that: (1) harm occurred to the public; (2) defendants were a substantial factor in causing the harm; and (3) abatement of the cause of the harm was reasonable. Although numerous Wisconsin cases discuss public nuisance, no single case explicitly lists the elements that must be proven when one is alleged to have created a public nuisance, rather than maintained a public nuisance. Based on our review of these cases, however, we believe that the City is essentially correct.

¶ 10. In Brown v. Milwaukee Terminal Ry. Co., 199 Wis. 575, 224 N.W. 748, on reargument, 199 Wis. 588, 227 N.W. 385 (1929), the court held that the basis for liability in a public nuisance case "is the damage done by or danger inherent in the creation or maintenance of that which constitutes a nuisance." Id. at 589 (emphasis supplied). The court added, "[i]n order to establish liability for a nuisance it must be found that the nuisance was the cause of plaintiff's injuries. The damage that may be recovered in actions based upon nuisance must always be the natural and proximate consequence of the danger created by the nuisance." Id. at 591.

¶ 11. Seventy-three years later, in Physicians Plus, our supreme court discussed what must be established to prove defendants maintained a public nuisance. See id., 254 Wis. 2d 77, ¶¶ 2, 19-32. Relying on Brown, the court held:

[L]iability for maintaining a public nuisance is based on the following elements, plus public policy. First, the existence of the public nuisance itself; second, actual or constructive notice of the public nuisance; and third, that the failure to abate the public nuisance is a cause of the plaintiff's injuries . . . . We also look to public policy considerations because we conclude that similar to liability for negligence, liability for maintaining a public nuisance can be limited on public policy grounds.

Physicians Plus, 254 Wis. 2d 77, ¶ 2. The court distinguished cases involving the maintenance of a public nuisance from those involving the creation of a public nuisance. Id., ¶ 24 n.19. It noted that cases involving the defendant's creation of the public nuisance do not require proof that the defendant had actual or constructive notice of the hazardous condition that later developed. Id.

[6, 7]

¶ 12. Although Physicians Plus dealt with the maintenance of a public nuisance, we conclude that the same legal standards, modified to accommodate the difference between creating and maintaining a public nuisance, should apply. We hold that to establish a claim of creating a public nuisance, a plaintiff must prove that the defendant's conduct was a substantial cause of the existence of a public nuisance and that the nuisance was a substantial factor in causing injury to the public, which injury is the subject of the action. Finally, public policy considerations must also be considered because, similar to liability for negligence, liability for creating a public nuisance can be limited on public policy grounds. See Physicians Plus, 254 Wis. 2d 77,

¶ 2.

¶ 13. For purposes of summary judgment, defendants assume that a public nuisance exists and that the City suffered damages. Defendants assert, however, that "[t]he real question is whether the Circuit Court properly applied Wisconsin causation law to the evidence before it in dismissing the City's claims." They also argue that public policy concerns preclude liability.

1. Causation

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¶ 14. With respect to causation, ...