Isn’t it ironic? Children can’t sue under federal lead-paint law

For many years, lead was a key component of paint.

Pigments used to color paint contained lead. Lead is highly opaque, so a little paint could go a long way — think “one-coat” coverage. Lead is also a very durable material and almost impervious to water, so a dirty wall could be scrubbed clean without affecting the painted finish.

But no paint job, not even a lead-based paint job, lasts forever. It eventually it cracks and peels, producing lead dust. The process also produces chips, which apparently taste sweet.

Kids just love ‘em.

But lead is toxic. Over time, if you get enough of it in you, it attacks the nervous system, among other things. You begin to act as if your brain has turned to mush. Some historians say this explains the often-insane behavior of ancient Roman nobility, who swilled wine from goblets made of lead.

Recognizing all of this, Congress enacted the Residential Lead-Based Paint Hazard Reduction Act of 1992 (RLPHRA), 42 U.S.C. §§ 4851-4856. From Sixth Circuit Judge Richard Allen Griffin, writing in Roberts v. Hamer, et al.:

Congress enacted the RLPHRA based upon its findings that low-level lead poisoning, caused primarily by the ingestion of household dust containing lead from deteriorating or abraded lead-based paint, endangers the health and development of children living in as many as 3.8 million American homes. 42 U.S.C. § 4851.

The act requires property owners to disclose the potential presence of lead-based paint in residential structures and to provide information about how to guard against the paint’s dangers. If the disclosures aren’t made and the information is not provided, the act allows someone who buys a home or rents a residence, “the purchaser or the lessee” in the act’s words, to collect three times their provable damages.

Christina Roberts, whose two children were conceived and raised in an apartment, alleged that her landlords didn’t follow the act. She sued as next friend on behalf of her children, who, she alleged, were poisoned by lead paint in the apartment.

The federal district court dismissed the case.

Griffin agreed. Roberts’ children have no cause of action under the act, he said.

We consider … the text of the relevant provision. …

“Any person who knowingly violates the provisions of this section shall be jointly and severally liable to the purchaser or lessee in an amount equal to 3 times the amount of damages incurred by such individual. 42 U.S.C. § 4852d(b)(3).”

The language plainly and expressly limits private recovery to a “purchaser or lessee” of target housing, and no one else. … “Where a statute names the parties granted the right to invoke its provisions, such parties only may act.” Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6-7 (2000) … .

Because the language is plain — indeed, it could not be more so — we stop here and hold that children of a lessee may not sue a lessor for violations of the RLPHRA’s disclosure requirements.

We decline to expand the cause of action or to infer an implied one where Congress has expressly created one. …

Congress created a cause of action for purchasers and lessees, not those who happen to benefit from the sales and leases, yet are not, themselves, purchasers or lessees.

All is not lost, noted Griffin, citing Mason ex rel. Heiser v. Morrisette, 403 F.3d 28 (1st Cir. 2005), for the proposition that children can pursue causes of action under state and local lead-paint abatement laws.

No quibble here with Griffin’s analysis. The quibble is with Congress, which enacted a law out of concern for millions of children who are at-risk for lead poisoning but didn’t provide the children with a federal remedy.

Frederick Douglass said it best, “At a time like this, scorching irony, not convincing argument, is needed.”

Deposit law challenge canned

A law requiring unique Michigan markings on returnable beverage containers does not, on its face, violate the federal Commerce Clause, according to Western District Judge Gordon Quist.

A suit filed by the American Beverage Association against several state officials claims the law unfairly limits interstate commerce.

The Michigan-specific markings enable deposit-return machines to recognize that the container was purchased in Michigan. The state argues that the law is necessary to prevent situations like this one:

All kidding aside, deposit-return fraud is no small matter, wrote Quist:

[A]lthough it has never been stated with precision how many bottles are fraudulently redeemed each year, Plaintiff does not deny that the problem exists, and Defendants have presented sufficient evidence that estimates the scope of fraud to be, conservatively, 10 million dollars per year.

Yet to be determined in the litigation: whether burden imposed on the beverage manufacturers outweighs the benefits that the state obtains from the unique-marking requirement.

The case is American Beverage Ass’n v. Synder, et al.

In their opinions

“Why would a down-on-his-luck working person, who needed a payday advance to pay his bills, whose check to the payday lender subsequently bounced, and who knew that he still owed money to the payday lender, question the legality of a judgment requiring him to pay treble damages and costs to the payday lender?”

– Michigan Court of Appeals Judges Curtis T. Wilder, Peter T. O’Connell and Michael J. Talbot, per curiam, in Michigan Deferred Presentment Services Ass’n v. Ross.

Good question. Before the advent of the Deferred Presentment Service Transactions Act (DPSTA), MCL 487.2121 et seq., payday lenders enthusiastically sought treble damages under MCL 600.2952(4), a provision of the Revised Judicature Act, after their customers repaid the loans with nonsufficient funds (NSF) checks. Often, treble damages were awarded after the hapless borrowers failed to appear in court.

The DPSTA, which provided licensure of payday lenders and subjected them to oversight by the Office of Financial and Insurance Regulation (OFIR), limited the lenders’ remedy to the amount of the check plus $25.

But the treble damage actions apparently continued unabated, prompting OFIR Commissioner Ken Ross to issue an administrative order directing the lenders to follow the DPSTA or risk having their licenses yanked.

How dare he? The Michigan Deferred Presentment Services Ass’n, a trade group that represents payday lenders, sued Ross under 42 U.S.C. 1983, claiming that Ross was denying the lenders their First Amendment day in court.

The COA’s response was a polite version of “utter nonsense.”

Plaintiff cannot claim that a violation of 42 USC 1983 occurred simply because a newly enacted statute precluded recovery of certain damages that plaintiff’s members had become accustomed to receiving in NSF cases.

Further, the administrative order simply informs payday lenders of the authority that, by statute, the Legislature granted to the OFIR to enforce the DPSTA and to respond to violations.

If it so chooses, a licensed payday lender may still file a cause of action with the district court seeking recovery in excess of what the DPSTA statutorily permits. The statute, however, permits the OFIR to revoke licenses and impose civil fines for violations of the DPSTA.

The administrative order notifies payday lenders of the consequences of choosing to violate the DPSTA, all of which are authorized by statute. Defendant does not violate 42 USC 1983 by issuing another administrative order informing payday lenders of the statutorily mandated penalties that they face if they violate the provisions of the DPSTA.

The panel noted that the DPSTA was enacted to “curb abuses” and scolded the payday lender industry.

We find it particularly curious that payday lenders continue to seek damages under the RJA, in contravention of the DPSTA, against individuals who do not have the resources or legal acumen to address the payday lenders’ repeated application of the incorrect statute.

Many customers of payday lenders are individuals who live paycheck to paycheck; the point of the payday lending business is to provide short-term salary advances to individuals who otherwise would not have enough money to make it to their next payday.

Therefore, many of these default judgments would be against individuals who probably cannot afford legal representation and who likely are not even aware that the payday lender sought recovery under the wrong statute. …

Realistically, how would such an individual even know that the DPSTA, not the RJA, governed the amount that a payday lender could recover for his bounced check, and how could that individual, lacking legal training or the funds to hire an attorney, hope to make such a technical legal argument?

MSC hears insurance credit-scoring case

The Associated Press reports that the Michigan Supreme Court heard arguments Wednesday on whether insurance companies should be able to keep using customers’ credit scores as a consideration in setting auto and home premiums.

“The practice was outlawed by state regulators in 2005, but insurers are being allowed to factor credit reports into their rates pending the outcome of their lawsuit at the high court,” says The AP.

Lawyers for the industry told justices that former insurance commissioner Linda Watters overstepped her authority when she barred insurers from providing discounts to policyholders with good credit ratings.

“Insurance scores work,” attorney Peter Ellsworth said. “They are actuarially sound. If they weren’t, insurance companies wouldn’t be before this court today asking to be able to use them.”

He warned that at least 60 percent of policyholders will pay higher premiums if the court allows the ban against insurance credit scoring.

Critics, however, say insurers raise all base rates, then “discount” some.

“Insurance scoring makes insurance less available and affordable as a whole by driving up the cost for people who are least able to pay,” said Assistant Attorney General William Chenoweth. “Discounts given to favored policyholders are paid for by premium increases charged people who are disfavored.”

New lead plaintiff in mouthwash class-action case

A Detroit-area lawyer whose bad experience with mouthwash led to a lawsuit against Procter & Gamble has removed himself as the lead plaintiff in the case, according to a report by The Associated Press.

Mark Rossman says his teeth were stained brown after using Crest Pro-Health mouthwash. His law firm filed a class-action lawsuit a month ago in federal court in Detroit.

But Rossman has dropped his name from the case. He’s been replaced by a 52-year-old Saginaw woman, Leslie McQuillan.