Sherwin-Williams wins preliminary injunction decision in first case invalidating contingency fee agreement on due process grounds
Clients Sherwin-Williams Company, The
The Court of Common Pleas (Lucas County, Ohio) dismissed the City of Toledo's lawsuit against a group of former manufacturers of lead pigment and lead paint, including Jones Day client, The Sherwin Williams Company. The City claimed, among other things, that the defendants' conduct, in selling and promoting lead pigments decades ago when lawful, was tortious, and that the defendants should be held responsible for funding educational and medical programs related to lead paint exposure and removing all lead paint in buildings throughout the city. The City alleged five causes of action, including public nuisance, unjust enrichment, concert of action, indemnity and punitive damages. In dismissing the City's claims, the Court found that the heart of the complaint -- the public nuisance claim -- was subsumed by Ohio's Product Liability Act and barred by the Act's statutes of limitation and repose or, alternatively, was barred by the Ohio Supreme Court's holding in Sutowski v. Eli Lilly, which requires a plaintiff to identify particular tortfeasors (which the City did not do in its pleading and was unable to do). For similar reasons, each of the City's remaining claims were dismissed. Bob Walker argued the dismissal motion, and John Lewis and Sandra Gammie worked on the briefing.
The Toledo lawsuit was one of eleven municipal lawsuits that had been filed in Ohio courts in the past twelve months against a similar group of defendants, including Sherwin-Williams. In addition to the Court's dismissal of the Toledo lawsuit, the cities of Akron, Athens, Canton, Cincinnati, Dayton, East Cleveland, Lancaster, Massillon and Youngstown have voluntarily dismissed their lawsuits prior to motion to dismiss rulings in those cases.
In a related proceeding, Sherwin-Williams also achieved a partial preliminary victory in its federal constitutional action against the Ohio cities that had sued the company in public nuisance lawsuits. See Sherwin-Williams Company v. City of Columbus et al., Case No. 2:06-cv-00829 (S.D. Ohio). Based on the unconstitutional nature of the Ohio cities' lawsuits, in particular the due process concerns over the cities' use of contingency fee counsel to prosecute a public nuisance claim, Sherwin-Williams filed a three-count complaint against the cities in federal court in Columbus. After facially reviewing the contingency fee agreements at issue as part of a preliminary injunction proceeding, the federal court held that in some instances the cities had failed to "preserve the public authority" by allowing fee-minded private contingency fee counsel to prosecute the cities' public nuisance claims, which historically have been viewed as criminal actions brought to protect the public. Noting that certain fee agreements at issue did "not preserve public control over litigation involving the public interest," the federal court held that certain fee agreements would be invalidated if they were not amended promptly. The preliminary injunction decision in favor of Sherwin-Williams marked the first time that a federal court had invalidated a contingency fee agreement on due process grounds.
The Sherwin-Williams Co. v. City of Columbus, 2007 WL 2079774 (S.D. Ohio)