7th Circuit Rejects Substantive Due Process Challenge to Wisconsin Supreme Court Special Tort Liability Doctrine


In an unusual case, the US Court of Appeals for the Seventh Circuit held, in Gibson v. American Cyanamid Co., et al., that the Wisconsin Supreme Court’s “risk contribution theory” would apply to the manufacturers of lead pigments that were added to commercial paint products until their use was banned in 1978 by the Consumer Product Safety Commission.

The plaintiff suffers from neurological defects which were allegedly caused by the white lead carbonate pigments that were contained in the paint used to paint the house he lived in. The plaintiff could not identify the pigment manufacturer. In these situations, the Wisconsin Supreme Court has developed a risk contribution theory for use a in such litigation. The defendant paint manufacturers argued that this doctrine violated established substantive due process constitutional principles in that it is arbitrary and capricious. Moreover, the Wisconsin legislature recently enacted a statute nullifying this court-made doctrine.

The case was dismissed by the federal trial court, but the Court of Appeals, in a ruling released on July 24, 2014, reversed the trial court. The Court of Appeals noted that the new Wisconsin law has itself been ruled to be unconstitutional by a Wisconsin state court, and it agreed with this ruling. Then applying US Supreme Court precedents, which it holds applies with equal force to state judicial common law rulings, state economic regulation need only be rational and non-arbitrary to satisfy substantive due process standards. As to the defendant companies’ argument that the Supreme Court’s 1998 ruling in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), fashioned a new rule for applying substantive due process to retroactive federal legislation, the Seventh Circuit notes that Eastern Enterprises was such a fractured decision that it cannot stand for the proposition embraced by the defendants.