Ernest Gibson v. American Cyanamid Company , 760 F.3d 600 ( 2014 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 10-3814
ERNEST GIBSON,
Plaintiff-Appellant,
v.
AMERICAN CYANAMID CO., et al.,
Defendants-Appellees.
Appeal from the United States District Court for the
Eastern District of Wisconsin, Division.
No. 2:07-CV-00864 — Rudolph T. Randa, Judge.
ARGUED JANUARY 9, 2012 — DECIDED JULY 24, 2014
Before FLAUM, KANNE, Circuit Judges, and CHANG, District
Judge.*
CHANG, District Judge. The plaintiff, Ernest Gibson, filed suit
in Wisconsin state court against former manufacturers of white
*
Of the Northern District of Illinois, sitting by designation.
2 No. 10-3814
lead carbonate pigments.1 This pigment was used, before the
federal government banned it in the 1970s, in paints, including
paints applied to residences. Gibson brings negligence and
strict liability claims against the pigment manufacturers, but
because he cannot identify which manufacturer made the
white lead carbonate pigment that injured him, he relies on the
“risk contribution” theory of tort liability fashioned by the
Wisconsin Supreme Court. Thomas v. Mallet, 701 N.W.2d 523,
564 (2005). Under the risk-contribution theory, plaintiffs are
relieved of the traditional requirement to prove that a specific
manufacturer caused the plaintiff’s injury. The district court
held that risk-contribution theory violates the substantive
component of the Due Process Clause, and granted summary
judgment in favor of the defendants. As we explain below, in
light of the broad deference that the Constitution grants to the
development of state common law, risk-contribution theory
survives substantive Due Process scrutiny, as well as the
manufacturers’ other constitutional challenges. We thus
reverse the judgment and reinstate the plaintiff’s case.
I.
Because this is an appeal from the grant of summary
judgment, we review the district court’s decision de novo,
meaning independently, and draw all reasonable inferences of
fact in the non-movant’s favor (here, Gibson). Bennett v.
1
Although Gibson is a minor, and thus ordinarily should be identified only
by his initials (at least after the case was removed to federal court), the
parties (including on his behalf) have used his full name throughout the
proceedings. See Fed. R. Civ. P. 5.2(a)(3), (h) (waiver of protection by filing
own information without redaction).
No. 10-3814 3
Roberts, 295 F.3d 687, 694 (7th Cir. 2002). As it turns out, the
genuinely disputed facts are not material to the legal question
presented by the appeal.
In 1997, Gibson and his family moved into a house in
Milwaukee, Wisconsin. The house was built in 1919. Unfortu-
nately, the paint applied to that house contained white lead
carbonate pigment. In the late 1800s and in the 1900s, paint
manufacturers valued white lead carbonate pigments for
several reasons, including their strength, durability, flexibility,
washability, brushability, and brightness. The white lead
carbonate pigment poisoned Gibson, causing neurological
defects, among other injuries. The paint was applied to Gib-
son’s home sometime before 1978, which is when the Con-
sumer Products Safety Commission banned paint makers from
intentionally adding lead into residential paint.
Gibson is not able to identify which specific manufacturer
made the white lead carbonate pigment that poisoned him. In
Wisconsin state court, Gibson sued seven companies that either
made white lead carbonate pigment or were successors-in-
interest to companies that had made that type of pigment.2
Gibson alleged that he had been injured by the makers’
negligence and their failure to warn about the dangers of white
lead carbonate pigment. Those seven companies were not the
only possible makers of white lead carbonate pigment, al-
though they, along with a no-longer-in-business company,
2
ARCO disputes that it took on the liabilities of the predecessor
corporations (Anaconda Lead Products Company, Anaconda Sales
Company, and the International Lead Refining Company), but Gibson is
entitled to all reasonable inferences on this issue.
4 No. 10-3814
Eagle-Picher Industries, did comprise the primary producers
of the pigment.
On the basis of diversity jurisdiction, the case was removed
to federal court. The district court initially remanded the case
back to state court because of a question over whether the
amount-in-controversy minimum had been met. In state court,
the parties engaged in discovery on the controversy-amount
issue; afterwards, once again the case was removed to federal
court. One manufacturer, Millennium Holdings LLC, was
dismissed from the case after that defendant filed for bank-
ruptcy (more on this below).
The remaining six pigment manufacturers are:
• American Cyanamid (made white lead pigments until
1972).
• Armstrong Containers (successor to MacGregor, which
made white lead pigments until 1971).
• E.I. DuPont (made white lead pigments until 1924).
• NL Industries, Inc. (made white lead pigments, sold its
lead paint and pigment business in 1976).
• Atlantic Richfield (successor to Anaconda, which made
white lead pigments until 1946).
• Sherwin-Williams (made white lead pigments until
1947).
Because Gibson could not identify which of these manufac-
turers made the white lead carbonate pigment that poisoned
him, he had to rely on a theory of tort liability fashioned by the
Wisconsin Supreme Court in Thomas v. Mallet, 701 N.W.2d 523,
No. 10-3814 5
564 (2005). As discussed in more detail below, Thomas held that
a plaintiff who brings a white lead carbonate pigment case
does not bear the traditional burden of proving that a particu-
lar lead-pigment manufacturer caused the plaintiff’s injury.
Instead, so long as a plaintiff makes a prima facie showing that
the manufacturer produced or marketed white lead carbonate
pigment sometime during the house’s existence, then the
burden is on each manufacturer to prove that it did not
produce or market white lead carbonate pigment either during
the house’s existence or in the geographical market where the
house is located. If there are no records (or no longer any
records) to prove the manufacturer’s defense, then the defense
fails.
Atlantic Richfield Corporation (better known as ARCO)
moved for summary judgment, arguing that Thomas’s liability
framework violates the Constitution. ARCO presented various
constitutional arguments, including that the risk-contribution
theory of liability violates the Due Process Clause. The district
court granted summary judgment for ARCO, and then
followed-up with summary judgment for the other five
remaining defendants. R.39, R. 107. Gibson appeals.
II.
A.
Before addressing the merits of the dispute, first we must
ensure, as in all cases, that there is subject matter jurisdiction
over the case in the district court, as well as appellate jurisdic-
tion over the appeal. On the question of subject matter jurisdic-
tion, Gibson’s opening brief disclaimed knowledge about the
citizenship of one of the former defendants in the case, Millen-
6 No. 10-3814
nium Holdings LLC. As discussed in the next section, Millen-
nium Holdings has been dismissed from the case in the district
court. But at the time of the complaint’s removal (the second
time around) to federal court, Millennium Holdings was a
named defendant and its citizenship had to be evaluated for
diversity of citizenship. So we ordered the parties to file
jurisdictional memoranda.
In response, the manufacturer-defendants filed an affidavit
executed by a Millennium Holdings officer, Regina Lee. Lee
was the Secretary and Treasurer of Millennium Holdings. In
the affidavit, Lee averred that Millennium Holdings is a
Delaware limited liability company, with only one member,
Millennium America, Inc. That corporation was incorporated
in Delaware and had its principal place of business there. So
Millennium Holdings LLC was, for purposes of diversity
jurisdiction, a citizen of Delaware. The plaintiffs (Gibson and
his guardian) were citizens of Wisconsin, as was Milwaukee
County, a party that had been realigned to be a plaintiff.
Accordingly, there was complete diversity at the time of the
filing of the notice of removal.
Against this, Gibson argues that Lee’s affidavit should not
be considered because Millennium Holdings had filed an
answer to the complaint, and the answer had stated that
Millennium Holdings was a Delaware corporation with its
principal place of business in Texas. But the answer does not
undermine diversity jurisdiction. First, even if Millennium
Holdings was bound by the characterization of citizenship in
the answer, then there still would be complete diversity, with
only Wisconsin citizens on the plaintiffs’ side of the litigation
and only non-Wisconsin citizens on the other side. More
No. 10-3814 7
importantly, where subject matter jurisdiction turns on actual
facts, the pleadings are not the end-all of determining the facts.
Indeed, “[d]efective allegations of jurisdiction may be
amended, upon terms, in the trial or appellate courts.” 28
U.S.C. § 1653. We have previously permitted jurisdictional
statements to be filed on appeal to fix defective allegations.
E.g., Thomas v. Guardsmark, LLC, 487 F.3d 531, 533–34 (7th Cir.
2007); Tylka v. Gerber Products Co., 211 F.3d 445, 448 (7th Cir.
2000). Accordingly, we consider the notice of removal to be
amended by the defendants’ filing of Lee’s affidavit, which
establishes that Millennium Holdings’ citizenship does not
undermine complete diversity. Diversity jurisdiction was the
proper basis for subject matter jurisdiction over the case.
B.
In addition to subject matter jurisdiction over the case, we
also must ensure that there is jurisdiction over the appeal,
whether or not the parties raise the issue. Wingerter v. Chester
Quarry Co., 185 F.3d 657, 660 (7th Cir. 1998) (per curiam). Here,
the only question is whether there is a final, appealable
decision in the district court in light of the fact that Millennium
Holdings was dismissed from the case “without prejudice.”
Specifically, after Millennium Holdings filed for bankruptcy in
the Southern District of New York, the district court and the
parties treated Millennium Holdings as if it was no longer a
party to the case. When the district court entered a final
judgment under Federal Rule of Civil Procedure 58(a), the
district court stated that the “claims against Millennium
Holdings LLC are dismissed without prejudice because it is in
Chapter 11 bankruptcy.” The district court then stated, on the
judgment, “This action is hereby dismissed.” By the time of the
8 No. 10-3814
entry of the judgment in the district court, the bankruptcy
court had already discharged Gibson’s claim in the bankruptcy
proceeding by confirming a plan of reorganization.
This procedural posture renders the judgment entered by
the district court a final, appealable decision under 28 U.S.C.
§ 1291. When the district court issued its summary judgment
decisions, there was nothing more for the district court to do
with the lawsuit, which is the hallmark of a final decision. “A
district court’s decision is final if ‘the district court has finished
with the case.’” Minnesota Life Ins. Co. v. Kagan, 724 F.3d 843,
847 (7th Cir. 2013) (quoting Chase Manhattan Mortg. Corp. v.
Moore, 446 F.3d 725, 726 (7th Cir. 2006)). In a similar prior
decision, we concluded that, in a case where two of the four
defendants had filed for bankruptcy but had not been formally
dismissed from the case in the district court, the judgment of
the district court with regard to the remaining defendants was
still a final decision, for purposes of appellate jurisdiction,
because any pursuit of the particular claims “will be pursued
if at all in the bankruptcy court.” Dimmit & Owens Financial,
Inc. v. United States, 787 F.2d 1186, 1190 (1986).
The finality of the judgment in this case distinguishes our
situation from Willhelm v. Eastern Airlines, Inc., 927 F.2d 971,
972 (7th Cir. 1991). There, the plaintiff filed suit against two
defendants; one of the defendants filed for bankruptcy, and the
other defendant won a motion to dismiss with prejudice for
failure to state a claim. Id. at 972. The plaintiff sought to appeal
the dismissal for failure to state a claim, but the district court
had not dismissed the entirety of the action. Instead, the district
court had entered an order stating that the plaintiff could
No. 10-3814 9
either file his claim in the bankruptcy proceeding or move the
bankruptcy court to lift the automatic stay and thereby reopen
the district-court case. Id. We held that it was possible for the
plaintiff to reopen the case, so the case was not entirely
finished in the district court. Id. Accordingly, if it is possible for
the automatic stay to be lifted, thereby allowing the district-
court litigation to resume, then there is no final decision under
28 U.S.C. § 1291. Kimbrell v. Brown, 651 F.3d 752, 756 (7th Cir.
2011). In contrast, as we discussed above, the discharge of
Gibson’s claim in Millennium Holdings’ bankruptcy proceed-
ing renders the judgment entered in the district court a final,
appealable decision. Our appellate jurisdiction is secure.
III.
A.
There is yet another issue that we must address before
getting to the merits of the appeal. During the appeal’s
pendency, the Wisconsin state legislature enacted Wisconsin
Statute 895.046, which purports to extinguish risk-contribution
theory in Wisconsin state courts, including for cases that were
already pending at the time of the statute’s enactment, like
Gibson’s case. Plaintiffs in already-filed lead-pigment cases
have challenged the constitutionality of Section 895.046,
primarily on the ground that retroactive application of the
statute violates the Wisconsin Constitution’s guarantee of due
process. Wisc. Const. art. I, § 1. At our request, the parties filed
supplemental briefs on the impact of Section 895.046, including
on the question of whether we must (or should) address the
10 No. 10-3814
constitutional challenge to the statute, and on the merits of that
challenge.3
We conclude that we have no choice but to address the
challenge under the Wisconsin Constitution to the state
legislature’s attempt to extinguish risk-contribution theory in
already-pending cases. This conclusion arises from our general
duty to avoid federal constitutional issues if the matter can be
resolved on other grounds—including state constitutional
grounds. See, e.g., RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272,
1276 (7th Cir. 1997) (“And we must at least try to address the
state constitutional issue first because the doctrine of constitu-
tional avoidance counsels that federal courts should avoid
addressing federal constitutional issues when it is possible to
dispose of a case on pendent state grounds.”); Allstate Ins. Co.
v. Serio, 261 F.3d 143, 150 (2d Cir. 2001) (“[W]here possible,
courts will render decisions on federal constitutional questions
unnecessary by resolving cases on the basis of state law
(whether statutory or constitutional).”). If Section 895.046 has
indeed successfully (meaning, constitutionally) extinguished
risk-contribution theory in this and other already-pending
cases, then discussing the federal constitutional challenges to
risk-contribution theory would amount to issuing an advisory
opinion.
So, in light of our duty to avoid opining on federal constitu-
tional issues if possible, we must apply the Wisconsin Supreme
Court’s precedent on the retroactive application of state
3
Gibson filed motions asking us to take judicial notice of various state-
court filings and the Clark decision, see Docket Entries R. 75, 88, 94. For the
sake of a complete record, the motions are granted.
No. 10-3814 11
legislation. As noted above, plaintiffs in already-pending lead-
pigment cases have already brought Wisconsin-Constitution
based challenges to Section 895.046.4 In Clark ex rel. Gramlin v.
American Cyanamid Co., 2014 WL 1257118, Case No.
06-CV-12653 (Wis. Circuit Ct. March 25, 2014), the Circuit
Court of Milwaukee County struck down the statute as
violating Wisconsin’s constitutional guarantee of due process.
We agree with Clark that Wisconsin Supreme Court
precedent demands holding that Section 895.046 violates state
due-process principles by trying to extinguish Gibson’s vested
right in his negligence and strict-liability causes of action. The
state high court tests the due-process constitutionality of the
retroactive application of state statutes by asking, first, whether
the statute is taking away a “vested right” of the challenger.
Matthies v. Positive Safety Mfg. Co., 628 N.W.2d 842, 852–53, 244
Wis. 2d. 720, 737–38 (Wis. 2001); see Martin by Scoptur v.
Richards, 531 N.W.2d 70, 90, 192 Wis. 2d 156, 206 (1995). If the
answer is that no vested right is at stake, then the statute
satisfies due process and the inquiry ends. If, however, the
challenger is losing a vested right, then the second step of the
inquiry asks whether retroactive application has a rational
basis, which is discerned by balancing the public interest
served by retroactive application against the private interest
impacted by the statute. Matthies, 628 N.W.2d at 855, Martin,
531 N.W.2d at 93.
4
Because Gibson challenges Section 895.046 under Wisconsin’s Constitu-
tion, not the federal constitution, there is no need to certify the challenge to
the Wisconsin Attorney General under 28 U.S.C. 2403(b) or Federal Rule of
Appellate Procedure 44(b).
12 No. 10-3814
Under Wisconsin law, Gibson did have a “vested right” in
his claims under Thomas’s risk-contribution theory. The
Wisconsin Supreme Court decisions in Matthies and in Martin
both dictate that a plaintiff’s interest in a common-law claim is
a protected vested interest. In Matthies, the interest was the
plaintiff’s previously existing common-law negligence claim,
specifically, his right to hold a defendant jointly and severally
liable without having to prove that the defendant was more
than 50% negligent (the statute at issue extinguished joint and
several liability unless that threshold of comparative negli-
gence was met). 628 N.W.2d at 852–53. Matthies explained that
an “existing right of action which has accrued under the rules
of the common law or in accordance with its principles is a
vested property right.” Id. at 852 (quotation and citation
omitted). Similarly, in Martin, the statute at issue imposed caps
on non-economic damages, and the Wisconsin Supreme Court
held that, when the plaintiffs’ claim accrued, they “had a
substantive right to recover, in full, the non[-]economic
damages awarded by the jury,” and that right was vested for
due-process purposes. 531 N.W.2d at 901–02. Just so here,
where Gibson’s right to pursue the risk-contribution theory of
liability on his negligence and strict-liability claims had already
accrued by the time Section 895.046 tried to extinguish that
right in June 2013.
On the second step of the analysis—the balancing of the
public interest and the private interest—it is true that Wiscon-
sin case law grants Section 895.046 a presumption of constitu-
tionality, even in retroactive application. But here again
Wisconsin Supreme Court precedent dictates that Section
895.046 cannot be retroactively applied in light of the state
No. 10-3814 13
constitution’s guarantee of due process. In Martin, the state
high court rejected retroactive application of the cap on non-
economic damages in medical malpractice cases, because the
legislature burdened—retroactively—“severely injured
litigants” at the expense of trying to bring down the costs of
medical-malpractice suits and of health care overall. 531
N.W.2d at 93.
Similarly, in Matthies, despite the public interest in modify-
ing joint and several liability so that a defendant who is less
than 51% negligent would not have to pay the entirety of the
damages award, the Wisconsin Supreme Court emphasized
that retroactive application of the statute on the plaintiff would
deprive him of his ability to recover full compensation for his
injury. 628 N.W.2d at 860–61. Moreover, the public interest in
retroactive application did not outweigh the plaintiff’s private
interest because there already existed contribution claims
among tortfeasors to apportion liability. Id. at 857.
In our case, Section 895.046 was enacted to serve the public
interest in permitting businesses to operate in Wisconsin
without fear of products-liability litigation in the indefinite
future based on risk-contribution theory. Wis. Stat.
§ 895.046(1g) (describing legislative findings and intent). And,
of course, Section 895.046 serves this purpose by extinguishing
risk-contribution theory altogether. But the competing private
interest is significant, even more so than in Martin and Matthies.
Without risk-contribution theory, Gibson (and similarly
situated plaintiffs) cannot prove causation-in-fact as to a
particular manufacturer and thus will likely recover nothing,
even though Gibson can show (if he proves his prima facie
case) that the pigment manufacturers contributed to the risk of
14 No. 10-3814
injuring him. In Martin and Matthies, the statutes at issue did
not entirely extinguish the plaintiffs’ vested right to recover
some amount of damages, whether it was from another
negligent defendant (Martin) or under the statutory cap of
damages (Matthies), and yet even there the Wisconsin Supreme
Court rejected retroactive application. Here, Gibson would
likely have no remedy at all. As interpreted by the Wisconsin
Supreme Court, the state constitution’s due-process guarantee
prohibits retroactive application of Section 895.046. Gibson’s
claims remain viable, so we therefore cannot avoid the federal
constitutional issues.
B.
Turning now to the merits of this appeal, the manufacturers
challenge the constitutionality of the liability framework
created by Thomas v. Mallet, 701 N.W.2d 523, 564 (2005). Before
we get to Thomas, however, we first need to discuss the case on
which Thomas was built. That building-block case is another
Wisconsin Supreme Court case, Collins v. Eli Lilly Co., 342
N.W.2d 37 (1984).
In that case, the plaintiff was Therese Collins, and her
mother was Roseann Collins. In 1957, during Roseann Collins’s
pregnancy, her doctor prescribed diethylstilbestrol, known as
“DES,” a drug that would ostensibly prevent miscarriages by
keeping hormonal levels constant. Id. at 43. Therese Collins
was born without apparent incident in 1958. But seventeen
years later, in 1975, Therese Collins was diagnosed with
vaginal cancer. Id. at 41. Therese Collins filed suit against
twelve drug companies that allegedly produced or marketed
DES. The trial court granted the drug companies’ motion for
No. 10-3814 15
summary judgment because Collins could not prove which
specific drug company manufactured the DES that her mother
used. Id. at 42.
In reversing the trial court, the Wisconsin Supreme Court
identified the problems of proof faced by Collins in trying to
prove which specific DES maker caused her injuries. First, DES
was produced in generic form, and the drug itself did not have
any clearly identifiable characteristics that could distinguish
one maker’s version of the drug from any other maker. 342
N.W.2d at 44. Second, during the twenty-four-year period that
DES was on the market, over 300 companies produced or
marketed DES. Id. Third, many drug companies did not have
access to accurate records as to where, when, and what type of
DES they produced or marketed. Id. In light of these proof
problems, the Wisconsin Supreme Court observed that the
choice it faced was either to fashion a novel method for
recovery for DES plaintiffs, or to permit possibly negligent
defendants to escape liability. Id. at 45. The state high court
refused to allow liability to go unaddressed, relying on Article
I, Section 9 of the Wisconsin Constitution to make the choice.
That section provides that “every person is entitled to a certain
remedy in the laws for all injuries, or wrongs, which he may
receive in his person, property, or character.” Id. at 45.
In deciding what form the remedy would take, the Wiscon-
sin Supreme Court chose to fashion the risk contribution
theory of liability, and rejected other potential theories. First
among the rejected theories was the “alternative” liability
theory embodied in Summers v. Tice, 199 P.2d 1, 4–5 (Cal. 1948).
In Summers, there were only two potentially liable defendants,
16 No. 10-3814
but for DES cases, there were hundreds of drug makers that
might be liable. Therefore, alternative liability would not be a
fair way to apportion damages among the defendants. Collins,
342 N.W.2d at 46.
The Wisconsin Supreme Court also rejected enterprise
liability, which is a framework that allows a plaintiff to hold
defendants liable for industry-wide practices that created a risk
of harm. 342 N.W.2d at 47. The state high court observed that
DES manufacturers did not jointly control the risk of injury to
plaintiffs because so many different companies entered and
exited the market over twenty-four years. Id. Collins also
rejected the plaintiff’s theory that the drug companies con-
spired to misrepresent DES’s safety. Id. at 47–48.
Finally, Collins decided not to adopt, in its entirety, the
market share theory adopted by the California Supreme Court
in Sindell v. Abbot Labs., 607 P.2d 924, 937, 26 Cal.3d 588, 613
(Cal. 1980). Sindell also involved DES, and the California
Supreme Court reasoned that it was fair to shift the burden of
causation to the defendants. Based on the market share theory,
the defendants would be liable for the percentage of damages
that approximated their share of the market. Collins, 342
N.W.2d at 48. The Wisconsin Supreme Court rejected the
market-share theory, however, because of the practical
difficulty of defining and proving market share. Id. But in
rejecting market-share liability, Collins still noted that market
share, if it could be determined, is a relevant “factor” in
deciding how to apportion liability among defendants. Id. at
49.
No. 10-3814 17
After rejecting these other theories of liability, Collins
adopted the “risk contribution” theory of liability. The premise
of this form of liability is that each defendant “contributed to
the risk of injury to the public and consequently, the risk of
injury to individual plaintiffs.” 342 N.W.2d at 49. The Wiscon-
sin Supreme Court explained that it was better for drug
companies to share the cost of injury than to place the entire
burden on the innocent plaintiff. So instead of having to prove
that a particular defendant produced or marketed the DES
taken by her mother, Collins simply had to prove—by a
preponderance of the evidence—that the defendant produced
or marketed the “type” of DES taken by her mother, “type”
meaning the color, shape, markings, size, or other characteris-
tics of the DES. 342 N.W.2d at 50. Practically speaking, that
burden of proof would not narrow the possible defendants by
much, because “DES was, for the most part, produced in a
‘generic’ form which did not contain any clearly identifiable
shape, color, or markings,” Id. at 37. Collins would not have to
prove any facts related to the time period during which the
defendant made or marketed DES, nor what the geographic
area was in which the defendant distributed DES. Id. at 50. On
the issues of time period of distribution and geographic area of
distribution, Collins decided that “it is appropriate to shift the
burden of proof on time and geographic distribution to the
defendant drug companies because they will have better access
to relevant records than the plaintiff.” Id. at 53. But even if
relevant records did not exist any longer, the Wisconsin
Supreme Court opined, “we believe that the equities of DES
cases favor placing the consequences on the defendants.” Id. at
53.
18 No. 10-3814
C.
This brings us to the heart of this appeal, the Wisconsin
Supreme Court’s extension of Collins’s risk-contribution theory
of liability to white lead carbonate pigment cases, as held by
Thomas v. Mallet, 701 N.W.2d 523 (Wisc. 2005). Thomas com-
pared DES cases with white lead carbonate pigment cases, and
concluded, over two dissenting opinions, that the “main policy
reasons identified in Collins warrant extension of the
risk-contribution theory here.” Id. at 558. Primary among those
reasons was, as the Wisconsin Supreme Court put it, the
widespread health problem posed by white lead carbonate
poisoning, a problem so significant that Thomas described it as
“a public health catastrophe that is poised to linger for quite
some time.” Id.Thomas went on to explain that the blame for this public-
health problem is on the defendants, each of which contributed
to the risk of injury. 701 N.W.2d at 558. Indeed, the blame was
deeper than negligence: “Many of the individual defendants or
their predecessors-in-interest did more than simply contribute
to a risk; they knew of the harm white lead carbonate pigments
caused and continued production and promotion of the
pigment notwithstanding that knowledge.” Id. In addition to
the culpability of the defendants and the innocence of the
plaintiff, Thomas also relied on the view that the defendants are
“in a better position to absorb the cost of the injury,” because
the defendants “can insure themselves against liability, absorb
the damage award, or pass the cost along to the consuming
public as a cost of doing business.” Id.No. 10-3814 19
In extending the risk contribution theory of liability to
white lead carbonate pigment, Thomas also rejected the manu-
facturers’ attempts to distinguish lead pigment from DES. First,
the manufacturers argued that plaintiffs in white lead carbon-
ate pigment cases do have alternative remedies, because
plaintiffs can sue their landlords, so it is unnecessary to apply
risk contribution liability. In contrast, the manufacturers
contended, DES plaintiffs had no other remedies. The Wiscon-
sin Supreme Court disagreed, rejecting the manufacturers’
argument that suing landlords would provide an adequate
remedy. 701 N.W.2d at 552. Thomas explained that the land-
lords’ insurers could rely on a “pollution exclusion” in com-
mercial general liability insurance policies to avoid a duty to
indemnify landlords. Id. So, although Thomas himself had
been able to obtain a settlement from two of the landlord’s
insurers, other plaintiffs might not be so lucky. Id. at 552–53.
Moreover, under a Wisconsin statute (which has since been
repealed), landlords could immunize themselves from liability
if they had received a certificate (from a certified lead-risk
assessor) that the housing units were lead-free. Id. at 553. And,
in any event, it did not matter that plaintiffs could seek
remedies against other wrongdoers, such as landlords, because
those remedies did not absolve other wrongdoers, such as the
manufacturers, from liability. Id. at 553–54.
In addition to the alternative-remedies argument, white
lead carbonate pigment makers also tried to distinguish their
product from DES by pointing out that white lead carbonate
came in three different chemical formulas, whereas DES was a
fungible drug produced with a chemically identical formula.
701 N.W.2d at 559. But that distinction did not make a differ-
20 No. 10-3814
ence, Thomas concluded. Even though there are three different
chemical compositions, the bottom line was that all forms of
white lead carbonate pigment contained an inherently hazard-
ous element: lead. Id. at 550–60. What’s more, the various
forms of white lead carbonate pigment still all performed the
same function, were physically indistinguishable, and pre-
sented the same risk to health. Id. at 560–61. Thomas concluded
that the different forms of white lead carbonate pigment were
sufficiently similar to warrant the same risk-contribution
treatment.
Thomas also rejected the manufacturers’ argument that,
unlike the nine-month pregnancy period in DES cases, the time
period during which the white lead carbonate pigment could
have been applied was, in some cases, on the order of decades.
The plaintiff in Thomas lived in houses built in 1900 and 1905,
so the white lead carbonate pigment could have been applied
any time between then and the 1978 lead-paint ban. 701
N.W.2d at 562. The Wisconsin Supreme Court acknowledged
that the time period was “drastically larger” than the
nine-month window in DES cases. Id. In response, however,
Thomas reasoned that “the window will not always be poten-
tially as large as appears in this case,” but even if the time
window would “routinely” be that long, “the Pigment Manu-
facturers’ argument must be put into perspective: they are
essentially arguing that their negligent conduct should be
excused because they got away with it for too long.” Id.Ultimately, Thomas again invoked the “equities” of the situa-
tion, and concluded that the time window, although poten-
tially long, did not justify putting the causation burden back on
the innocent plaintiff. Id. at 563.
No. 10-3814 21
The next unsuccessful attempt to distinguish white lead
carbonate pigment from DES was the lack of a “signature”
injury arising from white lead carbonate pigment. The Wiscon-
sin Supreme Court acknowledged that the records showed that
lead poisoning could be caused by many different sources,
including “ambient air, many foods, drinking water, soil, and
dust.” 701 N.W.2d at 563. And the injuries themselves (cogni-
tive defects) could have causes other than lead poisoning, such
as genetics or complications during birth. Id. In rejecting this
purported distinction, Thomas reasoned that, “Harm is harm,
whether ‘signature’ or otherwise.” Id. The important thing is
that a white lead carbonate pigment plaintiff still must prove
that the pigment caused his or her injuries. Id. “[T]hat merely
means that Thomas may have a harder case to make to his
jury.” Id. It did not mean, Thomas held, that risk-contribution
theory should not apply. Id.The final attempt by the pigment manufacturers to distin-
guish DES cases also failed. Specifically, the pigment manufac-
turers argued that they did not have exclusive control of the
risk posed by their white lead carbonate pigment; for example,
paint manufacturers took control of the pigment when making
paint. But Thomas responded that the level of control over the
product was no different from DES cases, where “doctors were
the ones who prescribed the dosage of DES” or pharmacists
filled prescriptions. 701 N.W.2d at 563. And, in any event, the
paint manufacturers’ exertion of control over white lead
carbonate pigment diluted (if it did anything) the toxicity of the
white lead carbonate from the time it left the pigment manufac-
turers’ hands. Id. Worse, the manufacturers “actually magni-
fied the risk through their aggressive promotion of white lead
22 No. 10-3814
carbonate, even despite the awareness of the toxicity of the
lead.” Id. at 564. Thomas concluded that the level of control
over white lead carbonate pigment made no difference. Id.With all the proffered differences from DES cases rejected,5
Thomas extended the risk-contribution theory of liability to
white lead carbonate pigment cases. That means, for negli-
gence claims, that the plaintiff must prove duty, breach of
duty, and injury caused by white lead carbonate ingestion, but
with regard to imposing liability on a particular manufacturer,
the plaintiff “need only prove that the Pigment Manufacturers
produced or marketed white lead carbonate for use during the
relevant time period: the duration of the houses’ existence.”
701 N.W.2d at 564. For strict liability claims, the identification
of the manufacturer on which liability can be imposed is
proven by showing “[t]hat the pigment manufacturer engaged
in the business of producing or marketing white lead carbonate
or, put negatively, that this is not an isolated or infrequent
transaction not related to the principal business of the pigment
manufacturer.” Id.As Thomas describes it, the actual implementation of the
risk-contribution theory comprises the following: the plaintiff
makes a prima facie case for either a negligence or strict
liability claim (or both), and then “the burden of proof shifts to
each defendant[-manufacturer] to prove by a preponderance
of the evidence that it did not produce or market white lead
5
The Wisconsin Supreme Court decided not to decide the federal
constitutional challenges made by the manufacturers because, in the state
high court’s view, the procedural posture of the case rendered it premature
to take up those challenges. 701 N.W.2d at 565.
No. 10-3814 23
carbonate either during the relevant time period or in the
geographical market where the house is located.” 701 N.W.2d
at 564. Thomas also specifically instructs trial courts what to do
if there are no records (or no longer any records) to prove the
defense: “if relevant records do not exist that can substantiate
either defense, we believe that the equities of [white lead
carbonate] cases favor placing the consequences on the
[Pigment Manufacturers].” Id. (internal quotation omitted).
With risk-contribution theory in place for white lead
carbonate pigment claims, the Wisconsin Supreme Court
remanded the case to the trial court for a jury trial. At the trial,
the jury decided that Thomas had failed to prove that his
injuries were caused by white lead carbonate pigment, so the
jury did not end up applying the risk contribution theory.
Thomas v. Mallett, 795 N.W.2d 62 (Wisc. Ct. App. 2010) (unpub-
lished order).
D.
In considering the manufacturers’ constitutional challenges
against applying risk-contribution theory to white lead
carbonate pigment cases, we start with the proposition that the
federal Constitution gives a wide berth to state (and local)
laws, allowing state legislatures to enact laws unless a specific
constitutional bar prevents it. In this case, the manufacturers’
primary challenge to risk contribution theory is that it violates
the substantive component of the Due Process Clause, and this
is the argument with which the district court agreed.
Generally speaking, state laws need only be rational and
non-arbitrary in order to satisfy the right to substantive due
process. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15
24 No. 10-3814
(1976); see also Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467
U.S. 717, 730 (1984)). The reason for this deference is that other
parts of the Constitution contain more specific guarantees of
rights, and judicial self-restraint requires caution when
invoking the “more generalized notion of ‘substantive due
process.’” See Graham v. Connor, 490 U.S. 386, 395 (1989). “As a
general matter, the [Supreme] Court has always been reluctant
to expand the concept of substantive due process because
guideposts for responsible decisionmaking in this unchartered
area are scarce and open-ended.” Collins v. Harker Heights, 503
U.S. 115, 125 (1992) (citing Regents of Univ. of Mich. v. Ewing,
474 U.S. 214, 225–26 (1985)). Substantive due process
protections “have for the most part been accorded to matters
relating to marriage, family, procreation, and the right to
bodily integrity.” Albright v. Oliver, 510 U.S. 266, 272 (1994)
(plurality opinion).
Of course, none of those concerns are at stake in risk-
contribution theory, but the manufacturers argue that the
theory still violates substantive due process. In particular, the
manufacturers argue that the district court correctly held that
a combination of the United States Supreme Court’s plurality,
concurring, and dissenting opinions in Eastern Enterprises v.
Apfel, 524 U.S. 498 (1998), dictates a substantive due process
analysis that renders risk-contribution theory unconstitutional.
Relying on the combined opinions, the district court concluded
that risk-contribution theory “imposes severe retroactive
liability on a limited class of parties that could not have
anticipated the liability, and the extent of that liability is
substantially disproportionate to the parties’ experience.” R. 39
No. 10-3814 25
at 29 (quoting Eastern Enterprises, 524 U.S. at 528-29 (plurality
opinion)).
Eastern Enterprises, however, did not produce a binding
precedent (other than its specific result) because no controlling
principle can be gleaned from the plurality, concurrence
(which was a concurrence in the judgment only), and the
dissenting opinions. In order to understand why Eastern
Enterprises cannot be said to have produced binding precedent,
it is necessary to examine the opinions in detail and the history
and context of the federal statutory scheme at issue there. It
starts in 1946, when the United Mine Workers of America and
various coal companies reached an agreement that led to the
creation of other funds that would provide health benefits,
survivors’ benefits, and pension-type benefits for miners and
their dependents. Eastern Enterprises, 524 U.S. at 505. These
funds served as the basis for the creation of funds in later years
that operated as trusts: a portion of coal-production profits
were placed into the funds, which would provide benefits to
miners and their families. Id. But no specific amount of benefits
was promised by the funds. Id. In 1950, the United Mine
Workers and the coal operators entered into an agreement that
increased the royalty payments into another fund (which again
took the form of a trust). Id. at 506. But, again, the fund did not
promise miners and their dependents a specific amount of
benefits. Id. at 506, 507. This included no promise as to provid-
ing lifetime health benefits for coal miners and their depend-
ents. Id. at 508.
In 1974, the Employment Retirement Income Security Act
(ERISA) created new requirements for pension plans, and to
26 No. 10-3814
comply with ERISA, the United Mine Workers and the
Bituminous Coal Operators Association entered into an
agreement. Id. at 509. The new agreement stated that miners
who retired before 1976 would be covered by the 1950 plan,
and miners who retired after 1975 would be covered by the
1974 plan. Id.Soon, with declining coal operator profits, along with the
acceleration of health care costs, both the 1950 and 1974 plans
ran into financial trouble. Id. at 510. Coal companies began to
withdraw from the plans, leaving the remaining employers to
absorb the increasing cost of covering retirees. Id. In an attempt
to deal with the problem, eventually Congress passed the Coal
Act in 1992. Id. at 514. The Coal Act combined the 1950 and
1974 plans (the “Combined Fund”), and provided substantially
the same health benefits to retirees and their dependents as
they were receiving under the prior plans. The Combined Fund
was financed by “annual premiums assessed against ‘signatory
coal operators,’ i.e., coal operators that signed any [National
Bituminous Coal Wage Agreement] [NBCWA] or any other
agreement requiring contributions to the 1950 or 1974 Benefit
Plans.” Id. Any signatory operator who “conducts or derives
revenue from any business activity, whether or not in the coal
industry,” could be liable for those premiums. Id. (internal
quotation omitted). Beyond signatory operators themselves,
where a signatory was no longer involved in any business
activity, premiums could be levied against “related persons,”
including successors-in-interest and businesses or corporations
under common control. Id. The Act gave the Commissioner of
Social Security the duty to assign retirees to employers who
No. 10-3814 27
would be responsible for paying for the retirees’ benefits. Id. at
515.
Under the Coal Act, the Social Security Commissioner
assigned Eastern Enterprises an obligation for premiums
covering over 1,000 retired miners who had worked for the
company before 1966. But Eastern had, back in 1965, trans-
ferred all of its coal-related operations to a subsidiary. At that
time (more precisely, in 1966), the 1950 fund had a positive
balance topping $145 million. In 1987, Eastern had sold its
ownership interest in the subsidiary to another corporation.
This was five years before the passage of the Coal Act, and the
two not-yet-combined funds still had a total positive balance
of over $33 million.
After Eastern was assigned the 1,000+ retired miners, which
represented more than a $5 million liability to the Combined
Fund, Eastern filed suit, arguing that the Coal Act violated
substantive due process (as applied to Eastern) and was a
“taking” that violated the Fifth Amendment’s Takings Clause.
The Supreme Court held that this aspect of the Coal Act was
unconstitutional as applied to Eastern, but the four-Justice
plurality opinion and the one-Justice concurring-in-the-
judgment opinion invoked different grounds for the decision.
The four dissenters would have upheld the constitutionality of
the Coal Act.
According to the four-Justice plurality opinion, the Coal Act
was an unconstitutional taking of Eastern’s property in
violation of the Fifth Amendment; the plurality decided not to
reach the substantive due process issue. Specifically, the
plurality, in an opinion authored by Justice O’Connor,
28 No. 10-3814
analogized the Coal Act’s assignment to an economic regula-
tion that amounted to a taking. Eastern Enterprises, 524 U.S. at522–23. To be sure, “Congress had considerable leeway to
fashion economic legislation,” including “impos[ing] retroac-
tive liability to some degree.” Id. at 528. But, the plurality
explained, economic legislation can amount to an unconstitu-
tional taking “if it imposes severe retroactive liability on a
limited class of parties that could not have anticipated the
liability, and the extent of that liability is substantially dispro-
portionate to the parties’ experience.” Id. at 528–29.
The plurality explained that the Coal Act did amount to an
unconstitutional taking. The assignment of liability to Eastern
was retroactive because it “substantially interfere[d] with
Eastern’s reasonable investment-backed expectations” by
reaching back “30 to 50 years to impose liability … based on
the company’s activities between 1946 and 1965.” 524 U.S. at
532. The Coal Act operated “retroactively, divesting Eastern of
property long after the company believed its liabilities under
the 1950 W&R Fund to have been settled.” Id. at 534. Indeed,
the 1974 fund had not even been created at the time that
Eastern transferred its coal-related operations to a subsidiary.
According to the plurality, the assignment of liability was
not only retroactive, it would be severe. Although the parties
provided different estimates for what Eastern’s total payments
would be under the Act, the range was between $50 to $100
million (the $5 million liability was only for the first year of the
Coal Act’s operation). Id. at 529. And the severe financial
impact was not proportionate to Eastern’s experience with the
funds. Id. at 529–30. During the time that Eastern actually
No. 10-3814 29
employed minors, the benefits were “far less extensive,” and
indeed there were no promises to pay specific amounts. Id. at
530–31. Combining the retroactive nature of the liability with
the enormous financial impact resulted in substantial interfer-
ence with Eastern’s reasonable investment-backed expecta-
tions. Id. at 532–33.
Finally, the plurality acknowledged that “analysis of
legislation under the Takings and Due Process Clauses is
correlated to some extent.” Id. at 537. But, in line with prior
cases, the plurality expressed hesitation about using the Due
Process clause to invalidate economic legislation. Id. Ulti-
mately, the plurality expressly declined to address Eastern’s
substantive due process claim. Id. at 538.6
Justice Kennedy provided the fifth vote to invalidate the
Coal Act’s assignment of liability to Eastern. But his concur-
rence rejected that a taking had occurred, because no specific
property or assets were identified to be taken. Id. at 540. Justice
Kennedy acknowledged that, in some prior cases, economic
regulations had such a broad reach that the Court had deemed
those regulations to be a taking of property, but always there
was a “specific property right or interest … at stake.” Id. at
540–41. In contrast, the Coal Act’s assignment did not destroy
or take a specific asset or property interest, so it was imprecise
to interpret the Coal Act as amounting to a taking. Id. at
541–42.
6
Justice Thomas joined the plurality, and wrote a separate concurrence that
expressed a willingness to consider whether the Ex Post Facto Clause could
apply outside the criminal-law context. 524 U.S. at 538–39 (Thomas, J.,
concurring).
30 No. 10-3814
Instead, Justice Kennedy reasoned, substantive due process
was the correct way to analyze the Coal Act’s constitutionality,
a test that, in his view, the Act failed as applied to Eastern. Id.
at 547. Like the plurality, Justice Kennedy acknowledged the
general hesitancy with scrutinizing economic legislation under
the Due Process Clause. Id. But the concurrence stated that
retroactive laws had long invoked “a singular distrust,”
“requir[ing] an inquiry into whether in enacting the retroactive
law the legislature acted in an arbitrary and irrational way.” Id.One reason for this concern over retroactive laws is the
“‘tempt[ation] to use retroactive legislation as a means of
retribution against unpopular groups or individuals.’” Id. at
548 (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 266
(1994)). Without due-process scrutiny of retroactive laws, the
stability of property ownership would be vulnerable to
government action: “If retroactive laws change the legal
consequences of transactions long closed, the change can
destroy the reasonable certainty and security which are the
very objects of property ownership.” Id. at 548.
With regard to the Coal Act, Justice Kennedy concluded
that this was one of the “rare instances” where the legislature
exceeded due process limits. Id. at 549. The concurring opinion
referred to the plurality opinion’s “convincing” demonstration
that “in creating liability for events which occurred 35 years
ago the Coal Act has a retroactive effect of unprecedented
scope.” Id. “As the plurality opinion discusses in detail, the
expectation was created by promises and agreements made
long after Eastern left the coal business. Eastern was not
responsible for the resulting chaos in the funding mechanism
caused by other coal companies leaving” the prior funding
No. 10-3814 31
agreement. Id. at 550. Thus, Justice Kennedy concluded, the
Coal Act’s assignment of liability to Eastern exceeded even the
“permissive standard” of substantive due process. Id. at 550.
Justice Breyer, writing for the four dissenting Justices,
agreed with Justice Kennedy that the Coal Act did not present
a takings issue.7 Along the same lines as Justice Kennedy’s
concurring opinion, the dissent explained that although some
economic regulations amount to a taking, those regulations
identified specific physical property or specific assets, rather
than a general liability. Id. at 555.
Like Justice Kennedy, the dissent identified the Due Process
Clause as the “natural home” for scrutinizing “the potential
unfairness of retroactive liability.” Id. at 557. Due Process
protects against arbitrary and irrational legislation, and if a law
is fundamentally unfair because of its retroactivity, then it is
arbitrary. Id. The question presented by the Coal Act is
“whether or not it is fundamentally unfair to require Eastern
to make future payments for health care costs of retired miners
and their families, on the basis of Eastern’s past association
with those miners.” Id. at 558–59.
The dissent concluded that the Coal Act did not violate due
process, because the Act only made assignments of miners
whom Eastern had employed in the past. Id. at 560. Moreover,
even though Eastern had not made contractually enforceable
promises to the miners, coal companies and the federal
government had acted in a way that led the miners to reason-
7
Justice Stevens wrote a separate dissent that explained why he believed
the retroactive application of the Coal Act did not raise a takings issue.
32 No. 10-3814
ably expect that they would continue to receive medical
benefits. Id. at 560–63. The dissent viewed the historical record
as showing that, in reaction to the conduct of the coal compa-
nies and the government, the United Mine Workers had acted
in a way (by giving layoff and work-force concessions) that
was based on assurances of continued benefits. Id. at 563–64.
On top of this, Eastern continued to receive, through its
subsidiary, profits from the coal mining industry. Id. at 565–66.
Under these circumstances, it was not fundamentally unfair to
impose the liability on Eastern. Id. at 566.
Returning to our case, the district court here concluded, as
noted above, that the opinions in Eastern Enterprises established
a substantive due process right that invalidates state law when
the law “imposes severe retroactive liability on a limited class
of parties that could not have anticipated the liability, and the
extent of that liability is substantially disproportionate to the
parties’ experience.” R. 39 at 29 (quoting 524 U.S. at 528–29
(plurality opinion)). On appeal, the parties debate whether
Eastern Enterprises establishes a rule of decision.
Generally put—and more easily stated than applied—when
the Supreme Court issues divided opinions with no single
opinion commanding a majority, the holding of the case “may
be viewed as that position taken by those Members who
concurred in the judgments on the narrowest grounds.” Marks
v. United States, 430 U.S. 188, 193 (1977). “When, however, a
concurrence that provides the fifth vote necessary to reach a
majority does not provide a ‘common denominator’ for the
judgment, the Marks rule does not help to resolve the ultimate
question.” United States v. Heron, 564 F.3d 879, 884 (7th Cir.
No. 10-3814 33
2009) (collecting cases). This means that Marks applies “only
when one opinion is a logical subset of other, broader opin-
ions.” King v. Palmer, 950 F.2d 771, 781 (D.C. Cir. 1991) (en
banc). “[W]hen it is not possible to discover a single standard
that legitimately constitutes the narrowest ground for a
decision on that issue, there is then no law of the land because
no one standard commands the support of a majority of the
Supreme Court.” United States v. Alcan Aluminum Corp., 315
F.3d 179, 189 (2d Cir. 2003).
There is no narrow-grounds rationale that supplies the rule
of decision in Eastern Enterprises. The five Justices “who
concurred in the judgments,” Marks, 430 U.S. at 193, did not
even agree on which constitutional provision applied to the
Coal Act to render it invalid. The four-justice plurality based its
decision on the Takings Clause, whereas Justice
Kennedy—who concurred in the judgment only and was the
necessary fifth vote for the case’s result—concluded that the
Coal Act violated substantive due process. Unlike Marks, which
examined a prior set of opinions where at least the same
constitutional provision was the basis for the rule of decision
(the First Amendment), in Eastern Enterprises the plurality and
the concurrence were not even interpreting the same constitu-
tional right, so neither one of those opinions could be said to be
the narrower of the other. Asking which opinion is narrower
than the other would be like examining a square with a width
that is the same length as the diameter of a circle, and futilely
asking which is narrower, the square or the circle.
It is true that, at times, the plurality opinion and Justice
Kennedy’s concurring opinion refer to one another in a way
34 No. 10-3814
that suggests some level of overlap in their respective analysis.
524 U.S. at 537 (plurality opinion) (the “analysis of legislation
under the Takings and Due Process Clauses is correlated to
some extent”); id. at 549 (Kennedy, J., concurring) (“The
plurality opinion demonstrates in convincing fashion that the
remedy created by the Coal Act bears no legitimate relation to
the interest which the Government asserts in support of the
statute.”); id. at 530 (Kennedy, J., concurring) (“As the plurality
opinion discusses in detail, the expectation was created by
promises and agreements made long after Eastern left the coal
business.”). But it is not possible to take these isolated refer-
ences and translate the plurality opinion’s Takings Clause
analysis into Justice Kennedy’s substantive due process
analysis, and vice-versa. The opinions themselves do not
purport to decode how the respective analyses relate to one
another. The plurality opinion declined to address the substan-
tive due process argument. And the ability to compare the two
opinions for Marks purposes is undermined even more by
Justice Kennedy’s concurring opinion, which expressly rejected
the plurality’s reasoning and concluded that the Takings
Clause did not apply at all to the Coal Act. In Justice Ken-
nedy’s view, no taking occurs if no “specific property interest”
is invaded. Id. at 543. Without that limitation on the Takings
Clause, the “plurality opinion would throw one of the most
difficult and litigated areas of the law into confusion . . . .” Id.
at 542. The concurring opinion did not try to fit the substantive
due process analysis into the “already difficult and uncertain”
jurisprudence on regulatory takings. Id.In light of the different provisions and different approaches
of the plurality opinion and Justice Kennedy’s opinion, neither
No. 10-3814 35
can be characterized as narrower or broader than the other.
Our colleagues in other Circuits agree that no governing
holding emerged from Eastern Enterprises. See Alcan, 315 F.3d
at 189; A.T. Massey Coal Co. v. Massanari, 305 F.3d 226, 240–41
(4th Cir. 2002); Anker Energy Corp. v. Consolidation Coal Co., 177
F.3d 161, 172 (3d Cir. 1999); Association of Bituminous
Contractors, Inc. v. Apfel, 156 F.3d 1246, 1256 (D.C. Cir. 1998).
The specific result of Eastern Enterprises—the Coal Act’s
unconstitutionality, on a combination of the plurality and the
concurrence’s votes—is the only binding precedent that arises
from the case.
In deciding that Eastern Enterprises articulated a governing
substantive due process standard applicable to risk-contribu-
tion theory, the district court reasoned that Justice Kennedy
and the four dissenting Justices agreed to apply substantive due
process to the Coal Act, and they combined for a majority of
the Court on that proposition. But the problem with that
approach is that Marks itself instructs that “the holding is the
narrowest position taken by those members who concurred in
the judgment.” 430 U.S. at 193 (emphasis added). So, under
Marks, the positions of those Justices who dissented from the
judgment are not counted in trying to discern a governing
holding from divided opinions. It makes sense to exclude the
dissenting opinions: by definition, the dissenters have dis-
agreed with both the plurality and any concurring Justice on
the outcome of the case, so by definition, the dissenters have
disagreed with the plurality and the concurrence on how the
governing standard applies to the facts and issues at hand
(even if there is agreement on what constitutional provision is
being interpreted). It is very likely that if the dissenters
36 No. 10-3814
disagree with the outcome of the case, then lower courts and
(more importantly) litigants will not have a clear idea on the
contours of the standard and how to apply it in future cases.
This is not the way to make binding precedent.
Eastern Enterprises is itself an example of the difficulty in
combining a concurring opinion and a dissenting opinion to
arrive at binding precedent. Justice Kennedy reasoned that
Eastern Enterprises was “not responsible for their [the former
miners and their beneficiaries] expectation of lifetime health
benefits or for the perilous financial condition” of the benefits
plans. Id. at 550. But the dissenting opinion concluded other-
wise, relying on the significance of the employer-employee
relationship and, more importantly, on the statements and
conduct of Eastern Enterprises, the coal industry, and even the
federal government, in creating an expectation of lifetime
benefits. Id. at 560–64. So while both Justice Kennedy’s concur-
rence and the dissenting opinion applied the Due Process
Clause, their application of substantive due process was starkly
different and provides little guidance for future applications to
future cases. Eastern Enterprises demonstrates why dissenting
opinions cannot be counted under Marks to create binding
precedent.8
8
As a matter of logic, too, dissenting opinions must be excluded from the
Marks analysis, as demonstrated again by considering the Coal Act and
Eastern Enterprises. If the Coal Act had been litigated again, lower courts
would be bound to hold it was unconstitutional by combining the result of
the plurality and concurrence, rather than be free to apply a substantive due
process standard under which the dissenting Justices would outnumber the
concurring Justice.
No. 10-3814 37
It is possible to argue that, in two prior cases, we have at
least made reference to dissenting opinions when discussing
Marks. See United States v. Gerke Excavating, Inc., 464 F.3d 723,
724–25 (7th Cir. 2006); United States v. Hodge, 558 F.3d 630, 634
(7th Cir. 2009). Of course, Marks itself is binding on us, and
instructs that only those positions of the Justices concurring in
the outcome count in the analysis. And, in any event, in neither
of our prior cases was inclusion of the dissenting opinion
necessary to the outcome of the appeal; in other words, the
references to the dissenting opinion were dicta. In Gerke
Excavating, we examined a Supreme Court opinion, Rapanos v.
United States, 547 U.S. 715 (2006), that had been decided on a
four-Justice plurality opinion, a concurring opinion by Justice
Kennedy, and a four-Justice dissent. We observed that Justice
Kennedy’s standard for testing the scope of federal authority
over wetlands under the Clean Water Act was narrower that
the plurality’s (in the sense that it imposed greater restrictions
on federal authority) in most cases, so we went ahead and
applied the rationale in Justice Kennedy’s concurrence. Gerke
Excavating, 464 F.3d at 724–25. It is true that we made the same
narrower-grounds point in comparing the concurrence with
the dissenting opinion, id. at 725, but that comparison was not
necessary to resolving the appeal, so it was dicta.
The same is true with the mention of a dissenting opinion
in United States v. Hodge. There, we discussed the potential
combination of a one-Justice concurrence and four-Justice
dissent in United States v. Santos, 553 U.S. 507 (2008). But there
was no need to decide what impact the combination would
have, if anything, on the appeal because the government
conceded what standard should control. 558 F.3d at 633–34. We
38 No. 10-3814
therefore expressly declined to decide the issue. Id. at 633(“Whether the concession was appropriate is a difficult
question, which we need not answer … .”) So the discussion
of the dissenting opinion was dicta. The bottom line is that
neither Gerke Excavating nor Hodge provides support for
counting dissenting opinions in a Marks analysis.
Without a controlling test from Eastern Enterprises, then, we
are back to where we started: economic legislation does not
violate substantive due process unless the law is arbitrary and
irrational. The question is not whether a law is wise or not; we
test only whether the law is arbitrary or irrational. As put by
the Supreme Court:
It is by now well established that legislative Acts
adjusting the burdens and benefits of economic life
come to the Court with a presumption of constitutional-
ity, and that the burden is on one complaining of a due
process violation to establish that the legislature has
acted in an arbitrary and irrational way.
Turner Elkhorn Mining, 428 U.S. at 15; see also Goodpaster v. City
of Indianapolis, 736 F.3d 1060, 1071 (7th Cir. 2013). This rational-
basis review applies “even though the effect of the legislation
is to impose a new duty or liability based on past acts.”
Concrete Pipe and Prods. of Cal., Inc. v. Construction Laborers
Pension Trust for S. Cal., 508 U.S. 602, 637 (1993) (quoting
Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 730
(1984)). Legislation “is not unlawful solely because it upsets
otherwise settled expectations.” Concrete Pipe and Prods., 508
U.S. at 637 (quoting Gray, 467 U.S. at 729).
No. 10-3814 39
The manufacturers primarily argue that two characteristics
of risk-contribution theory render it arbitrary and irrational:
first, that the theory dispenses with the traditional tort require-
ment that the plaintiff prove that the defendant caused the
injury at issue; and second, that the theory imposes liability
retroactively, that is, the rule of liability has changed after the
defendants engaged in the conduct that is the subject of the
suit.
On the latter point, although “retroactive legislation does
have to meet a burden not faced by legislation that has only
future effects,” Gray, 467 U.S. at 730, “that burden is met
simply by showing that the retroactive application of the
legislation is itself justified by a rational legislative purpose,”
id. Indeed, while we have been setting out the deferential
standard for reviewing state legislation, even more deference is
owed to judicial common-law developments, which by their
nature must operate retroactively on the parties in the case.
The development of state common law is a fundamental
feature of our legal system. And, in turn, “the foundation of
the common law system” is “the incremental and reasoned
development of precedent.” See Rogers v. Tennessee, 532 U.S.
451, 461 (2001). If strict constraints on retroactivity applied to
state-court common-law decisions, then the development of
common law would be impaired. Rogers explained this point
in the context of deciding whether to extend Ex Post Facto
Clause protection (which applies against legislatures only)
through the Due Process Clause against the courts. Rogers was
a criminal defendant whose victim died 15 months after Rogers
stabbed him. Rogers was convicted of murder in Tennessee
40 No. 10-3814
state court, despite the fact that, at the time of his trial, Tennes-
see common law held that no defendant could be convicted of
murder if his victim died more than a year and a day after the
fatal act. 532 U.S. at 455. On appeal, the Tennessee Supreme
Court acknowledged that the year-and-a-day rule was indeed
part of the state’s common law, but the state high court
abolished the rule in Rogers’s appeal and affirmed his convic-
tion. In Rogers’s appeal to the United States Supreme Court, he
argued that Ex Post Facto Clause protection should apply
against state common-law decision-making.
Even though the direct question presented in Rogers was
whether to incorporate the Ex Post Facto Clause into the Due
Process Clause, which is not the issue in this case, the rationale
of Rogers helps in evaluating the retroactivity concerns raised
by the pigment manufacturers here. There are indeed Due
Process limits on the retroactive application of a judicial
decision, but only if the judicial decision “is unexpected and
indefensible by reference to the law which had been expressed
prior to the conduct in issue.” 532 U.S. at 457, 462 (quoting
Bouie v. City of Columbia, 378 U.S. 347, 352 (1964)). Rogers
declined to apply to courts the same ex post facto standard
applicable to legislatures, because of the lesser danger pre-
sented by judicial interpretations and the need to allow for
common-law developments. 532 U.S. at 461–62. On the point
about danger, a “court’s opportunity for discrimination … is
more limited than a legislature’s in that it can only act in
construing existing law in actual litigation.” 532 U.S. at 460–61
(quoting James v. United States, 366 U.S. 213, 247 n.3 (1961)
(Harlan, J., concurring in part and dissenting in part). Unlike
legislatures, which have the general freedom to explore
No. 10-3814 41
whatever subject area at whatever time, courts can only decide
issues in cases brought them to by litigants.
On the second point—the breathing space that common-
law development requires—Rogers explained that “[i]n the
context of common law doctrines …, there often arises a need
to clarify or even to reevaluate prior opinions as new circum-
stances and fact patterns present themselves.” 532 U.S. at 461.
The need to adjust the common law as new cases are presented
is the reason why common law courts are granted “substantial
leeway … [in] reevaluating and refining [doctrines] as may be
necessary to bring the common law into conformity with logic
and common sense.” Id. To wrap any greater straitjacket on
common-law development “would place an unworkable and
unacceptable restraint on normal judicial processes and would
be incompatible with the resolution of uncertainty that marks
any evolving legal system.” Id. at 461. Thus, judicial decisions
that retroactively change the common law do not violate due
process unless they are “unexpected and indefensible by
reference to the law which has been expressed prior to the
conduct in issue.” Id. at 462.9
With these principles in mind, we conclude that risk-
contribution theory is not arbitrary and irrational, nor is it
unexpected and indefensible. In developing the common-law
torts of negligence and strict liability by adopting risk-contri-
9
Rogers arrived at this deferential standard when addressing a develop-
ment of state common law concerning a criminal-law doctrine, one that was
to the detriment of the defendant. If anything, the retroactivity concern
should be less forceful in the context of civil disputes, and the bar for
constitutionality correspondingly lower.
42 No. 10-3814
bution theory, the Wisconsin Supreme Court balanced the
tortious conduct of pigment manufacturers in distributing an
unreasonably dangerous product with the possibility of
leaving the non-culpable plaintiff without a sufficient remedy,
while recognizing that the state high court was relaxing the
traditional standard of causation. Thomas, 701 N.W.2d at 558.
Thomas rationally relied on the wide scope of the health
dangers posed by white carbonate lead pigment. The lead
poisoning caused by the pigment is not only widespread in
terms of the number of individuals affected, but just as
problematic, in the Wisconsin Supreme Court’s view, is the
ongoing exposure to lead pigment that would continue to
cause injuries in the foreseeable future. Id. (describing the
hazard as “a public health catastrophe that is poised to linger
for quite some time”). At the same time, victims of pigment
poisoning face difficult problems of proof, in part because the
pigment was so unreasonably dangerous that it remains a
health danger even decades later.
To address the problem of compensating victims and the
problem of proof, neither problem of which could be blamed
on plaintiffs in pigment cases, Thomas extended risk-contribu-
tion theory to the pigment manufacturers, each of which
contributed to the risk of injury, either directly or via their
predecessors-in-interest. 701 N.W.2d at 558. The manufacturers
either knew or should have known of the harm that they were
causing, so culpability was laid at the feet of the manufactur-
ers. Id. Relaxing the standard of causation was justified in favor
of the innocent plaintiff and against the risk-creating manufac-
turers. Id. In addition to the culpability of the manufacturers
and the innocence of the plaintiff, Thomas also reasoned that
No. 10-3814 43
the manufacturers are “in a better position to absorb the cost of
the injury,” because they “can insure themselves against
liability, absorb the damage award, or pass the cost along to
the consuming public as a cost of doing business.” Id. In sum,
the Wisconsin Supreme Court rationally concluded that, under
the state’s common law, “it is better to have the Pigment
Manufacturers or consumers share the cost of injury rather
than place the burden on the innocent plaintiff.” Id. There is
nothing irrational about developing the state’s common law to
prevent the manufacturers from avoiding liability for injuries
caused by risks to which they contributed.
It is important to understand that, in fashioning risk-
contribution theory and relaxing the traditional cause-in-fact
requirement, Thomas did not entirely eliminate causation. In
order to invoke the risk-contribution theory against a particu-
lar manufacturer, the plaintiff still must “prove that the
Pigment Manufacturers produced or marketed white lead
carbonate for use during the relevant time period: the duration
of the houses’ existence.” 701 N.W.2d at 564. And even under
the relaxed causation-in-fact standard of risk-contribution
theory, liability is far from automatic: the plaintiff still must
prove that white carbonate lead pigment was the cause of the
lead poisoning. This poses a substantial causation question
because there are other sources of lead poisoning (such as the
ambient air, drinking water, soil, and dust), and there is no
“signature” injury for lead poisoning specifically from white
carbonate lead pigment, 701 N.W.2d at 563. In other words,
causation is not entirely eliminated: plaintiffs still must prove
that lead pigment caused their injuries, and only then do the
manufacturers face liability for having contributed to the risk.
44 No. 10-3814
Despite the pigment manufacturers’ argument that they
will be held liable in particular cases for injuries that they did
not cause, what risk-contribution theory does is reflect the
overall liability that the manufacturers should have expected to
face from selling lead pigment. In other mass-tort contexts,
similar tort-liability theories reflect the same overall compensa-
tion framework: “Assuming every injured person will sue,
looking at the total number of successful claims, each defen-
dant will, at least theoretically, only be held responsible for
that part of the damage that it caused to the community.” In re
Agent Orange Product Liab. Litig., 597 F. Supp. 740, 823
(E.D.N.Y. 1984). Put another way, if for example Sherwin-
Williams ends up paying for harm it did not cause in a particu-
lar case brought by a particular plaintiff, it will also end up
paying less than it should in the next case—where it did cause
the harm—when another manufacturer is also found liable for
harm caused by Sherwin-Williams.
This reflection of overall liability is consistent with other
common-law developments in tort schemes where causation-
in-fact is not required for recovery and liability is instead
premised in some way on the defendants’ contribution to the
risk of injury. Whether the liability arises from a simple two-
defendant scenario of alternative liability, Summers v. Tice, 199
P.2d 1, 4–5 (Cal. 1948), or from a multi-defendant market-share
approach, Sindell v. Abbott Labs., 607 P.2d 924, 937, 26 Cal.3d
588, 613 (Cal. 1980), Hymowitz v. Eli Lilly & Co., 539 N.E.2d
1069, 1078 (N.Y. 1989), or from Thomas’s risk-contribution
theory, all of these theories dispatch with the requirement that
the plaintiff prove which particular defendant harmed the
plaintiff in a particular case, and all permit tortfeasors to be
No. 10-3814 45
held liable to plaintiffs who they did not actually injure or to be
held liable for injuries that they did not cause. See also Conley v.
Boyle Drug Co., 570 So. 2d 275, 286 (Fla. 1990) (DES); Ray v.
Cutter Labs., 754 F. Supp. 193, 195 (M.D. Fla. 1991)
(blood-clotting product, Factor VIII); Smith v. Cutter Biological,
Inc., 823 P.2d 717, 728 (Haw. 1991) (Factor VIII); Abel v. Eli Lilly
& Co., 343 N.W.2d 164, 173 (Mich. 1984) (DES); Martin v. Abbott
Labs., 689 P.2d 368, 382–83 (Wash. 1984) (DES). To be sure,
most states for most types of claims continue to apply a strict
causation-in-fact requirement, but that does not mean that
those states that have chosen to develop their common law to
permit recovery on a theory of culpable contribution to the risk
of injury have made an irrational or arbitrary choice.
One final point on the Due Process challenge to Thomas. The
Wisconsin Supreme Court’s decision was not an “unexpected
and indefensible” break from Wisconsin’s prior common law.
As discussed earlier, Thomas’s foundation in Wisconsin
common law was Collins v. Eli Lilly Co., 342 N.W.2d 37, 52
(1984), which applied risk-contribution theory to DES cases. By
the time that Thomas was decided, Collins had been part of the
state’s common law for twenty years. The Wisconsin Supreme
Court applied the same rationale in Collins as in Thomas,
recognizing for DES cases the same balancing between the
culpable set of defendants and the innocent plaintiff:
We believe that this procedure [risk-contribution
theory] will result in a pool of defendants which it can
reasonably be assumed could have caused the plaintiff’s
injuries… . [S]ome of the remaining defendants may be
innocent, but we accept this as the price the defendants,
46 No. 10-3814
and perhaps ultimately society, must pay to provide the
plaintiff an adequate remedy under the law.
Collins, 342 N.W.2d at 52. Operating from this same premise,
Thomas rationally rejected the pigment manufacturers’ at-
tempts to distinguish lead pigment from DES for purposes of
applying risk-contribution theory, as we detailed above. See
701 N.W.2d at 552 (rejecting distinction based on purported
existence of other remedies, because those remedies are limited
at best and do not absolve the manufacturers); id. at 559–561
(rejecting distinction based on three chemical compositions for
lead pigment versus one for DES, because the lead pigment
was still physically indistinguishable); id. at 562 (rejecting
distinction based on time period of exposure, because expan-
sive time period reflected culpability); id. at 563 (rejecting
distinction based on other potential sources of lead poisoning,
because the plaintiff still must prove lead-pigment as the
source of injury); id. at 563 (rejecting distinction based on paint
makers as intervening actor, because doctors were involved in
distributing DES). In light of the “substantial leeway” given to
state courts to develop the common law, see Rogers, 532 U.S. at
461, taking the step from Collins to Thomas was reasonably
expected under Wisconsin law. Thomas satisfies the test of
substantive due process.
E.
In light of our conclusion that the manufacturers’
substantive-due-process challenge to Thomas must fail, and that
Eastern Enterprises does not support that challenge, we can
readily reject the manufacturers’ other constitutional chal-
lenges. The primary premise of the manufacturers’ argument
No. 10-3814 47
that Thomas amounts to a “taking” of property under the
Takings Clause is that the plurality opinion in Eastern Enter-
prises announces the applicable test, but as we explained
earlier, there is no binding precedent arising from that case,
whether on substantive due process or on the Takings Clause.10
This leaves the manufacturers without a basis to argue that a
statute or regulation (let alone a judicial decision) that imposes
a liability on a party rather than take or burden a specific
property interest owned by that party amounts to a “taking.”
Instead, the Supreme Court has recognized that Congress, for
example, “may set minimum wages, control prices, or create
causes of action that did not previously exist,” all without
implicating the Takings Clause. Connolly v. Pension Ben.
Guaranty Corp., 475 US. 211, 223 (1986) (emphasis added).
Assessing liability “that adjusts the benefits and burdens of
economic life to promote the common good … does not
constitute a taking.” Id. at 225; accord Concrete Pipe and Prods. of
Cal., Inc. v. Construction Laborers Pension Trust for S. Cal., 508
U.S. 602, 643 (1993).
Next, the manufacturers argue that procedural due process
is violated by risk-contribution theory. Ordinarily, the familiar
three-factor balancing test of Mathews v. Eldridge, 424 U.S. 319,
335 (1976), governs whether the “risk of erroneous depriva-
tion” is too great in light of the private interest at stake, the
government’s interest, and the probable value of other proce-
10
The other case cited by the manufacturers, Stop the Beach Renourishment,
Inc. v. Fla. Dep’t of Envt’l Protection, 560 U.S. 702, 714 (2010), was divided in
a way similar to Eastern Enterprises, with only four Justices relying on the
Takings Clause to analyze the state-court decision there.
48 No. 10-3814
dures. But the manufacturers’ challenge is not really any
different from the substantive-due-process argument, because
what the manufacturers primarily complain about is the risk of
being found liable even though one or more of them did not
actually cause Gibson’s injury. But such a finding would not be
a “mistake” against which more procedural safeguards are
needed; instead, that finding would be a result of the permissi-
ble and rational common-law development that the Wisconsin
Supreme Court fashioned. And in individual cases, there is no
reason to believe that the manufacturers will not have notice
and a meaningful opportunity to be heard in litigating whether
the plaintiff has proved his or her prima facie case or in
litigating their defenses against the rebuttable presumption
created by Thomas. Indeed, as noted above, on remand to the
trial court in Thomas, the jury found that the plaintiff there
failed to prove that lead pigment caused his injuries, see Thomas
v. Mallett, 795 N.W.2d 62 (Wisc. Ct. App. 2011) (unpublished
order), and thus the defendant prevailed. Liability simply is
not automatic, and risk-contribution theory satisfies due
process, both substantively and procedurally.
Finally, Sherwin-Williams argues that Thomas discriminates
against interstate commerce, in violation of the Commerce
Clause, U.S. Const., art. I, § 8, cl. 3. Sherwin-Williams cites no
precedent for the proposition that a state court’s decision
providing for tort compensation of the state’s residents
amounts to a Commerce Clause violation. It is one thing for a
state court, through a jury verdict, to burden interstate
commerce by imposing sanctions for out-of-state behavior with
no in-state impact, see BMW of N. Am., Inc. v. Gore, 517 U.S. 559,
572–73 (1996) (cited by Sherwin-Williams Br. at 47), but there
No. 10-3814 49
is no Commerce Clause obstacle to fashioning a tort remedy for
in-state residents who suffer in-state injuries. Indeed, the
closest case, factually speaking, to ours (where a state
common-law remedy is challenged for providing a remedy to
an injured in-state resident) that is cited by Sherwin-Williams
actually rejected the interstate-commerce argument, concluding
that the state’s interest in the health and safety of its residents
has long justified imposing burdens, in the form of tort
liability, on out-of-state entities. See Estate of Stone v. Frontier
Airlines, Inc. 256 F. Supp. 2d 28, 46–47 (D. Mass. 2002). Thomas’s
adoption of risk-contribution theory does not violate the
Commerce Clause.11
IV.
The Wisconsin Supreme Court’s decision in Thomas,
establishing the risk-contribution theory of liability for lead
pigment claims, does not violate the Due Process, Takings, or
interstate-commerce Clauses of the Constitution. The judgment
in favor of the defendants is reversed, and the case is re-
manded to reinstate the case and for further proceedings.
11
Sherwin-Williams also argues that the Wisconsin Supreme Court
apparently intended to discriminate against out-of-state corporations
because Thomas imposed risk-contribution theory only against pigment
manufacturers (which are all out-of-state) and not against paint makers and
retailers (some of which are in-state). This argument makes an inferential
leap too far, and also ignores Thomas’s discussion of pigment manufactur-
ers’ greater culpability, when compared to paint makers and retailers. See
Thomas, 701 N.W.2d at 563 (stating that, if anything, paint makers and
retailers reduced the risk of harm by diluting the lead pigment).