SE Texas Record

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McConnell tapped tobacco war chest to fund 9-year lead paint battle

By The SE Texas Record | Oct 21, 2009


PROVIDENCE, R.I. (Special from For nine years prospective federal judge nominee Jack McConnell battled paint makers with boundless powers he received from attorneys general he helped elect.

As he awaits the nomination process, McConnell, of the Motley Rice firm in Providence, continues in his role as Rhode Island Democratic Party treasurer.

Had he been successful in carrying out the mammoth lead paint abatement plan he devised in 1999, and which fell apart last year, McConnell and other lawyers would have shared hundreds of millions in fees, maybe billions.

According to court records, the abatement plan would have bulldozed Rhode Island from end to end. State and federal housing laws and regulations that would forbid entering properties without warrants would have been suspended. And while abatement crews took over approximately 250,000 properties, families would have been displaced. Crews would have wrapped their furniture in plastic, stripped walls, and repainted. Dusty debris would have been hauled away by an awesome fleet of trucks.

McConnell and Providence County Judge Michael Silverstein had already hired four public health professionals to start the abatement when the Rhode Island Supreme Court stopped it last year.

The Justices found that the paint makers didn't interfere with public rights. They also made sure no attorney general would ever again give a private lawyer as much power as former attorney general Sheldon Whitehouse gave McConnell.

McConnell had already served four years as state treasurer when he and Whitehouse signed the lead abatement contract.

Whitehouse has since advanced to the U.S. Senate, where he and Sen. Jack Reed (D) have recommended McConnell to fill a vacancy on the U.S. District Court of Rhode Island. Ultimately, it is the President's role to nominate a candidate who would then face Senate confirmation.

'Bring the Entire Lead Paint Industry to its Knees'

McConnell joined Motley Rice in 1986, according to the firm's website.

"Jack's career in complex litigation began with asbestos cases and trials, including several mass consolidation cases on behalf of more than ten thousand asbestos victims in Maryland, Mississippi and West Virginia," according to the website.

The firm identifies him as negotiator and primary drafter of the master tobacco settlement agreement of 1998.

Whitehouse explained to reporters that the state wouldn't spend any money on lead abatement because Motley Rice had "a big war chest from the tobacco litigation," according to a report in the Providence Journal.

"McConnell brings horses in a big way," Whitehouse said. "He's part of a great firm with very deep pockets."

McConnell's boss, Ron Motley of Mount Pleasant, S.C., promised reporters in 1999 they would "bring the entire lead paint industry to its knees," according to a report in the Dallas Morning News.

Lawyers' Fee: One Sixth

The abatement agreement provided that if the state obtained judgment, McConnell and his associates would receive a sixth of the judgment as its fee. If the state lost, he and his associates would bear all costs.

Whitehouse and McConnell sued multiple defendants, and some settled out.

Others moved to dismiss, and Silverstein denied the motion.

"Uncork the champagne bottles," Motley told reporters in 2001, according to court documents.

Silverstein held a trial, but it ended in a jury deadlock and he set another trial.

By then, Whitehouse had moved to Washington and Patrick Lynch had replaced him as attorney general.

Five years into the case, the paint makers challenged McConnell's fee agreement.

Financial interest

Atlantic Richfield counsel David Wollin of Providence asked the state Supreme Court, "May the state's law enforcement power be exercised by lawyers who have a personal financial interest in using the state's police power to seize a defendant's money, because they will personally receive a share of the amount seized?"

"A Supreme Court decision declaring the contingent fee agreement void would confirm that this proceeding has been infected from its inception by a violation of defendants' constitutional rights," Wollin wrote.

"Absent that violation, this overbroad case would not have been brought."

Wollin wrote that the case was inconsistent with a lead poisoning law that Rhode Island legislators passed in 2002.

"The lead poisoning prevention act was not designed to generate huge contingent fees; this lawsuit was," Wollin wrote.

The agreement disabled the attorney general from terminating the lawyers, he wrote, by requiring a substantial payment for termination.

The Supreme Court didn't answer the question.

The case proceeded to trial against Sherwin Williams, Millennium Holdings and NL.

Jurors declared a nuisance in 2006 but didn't fashion a remedy.

The paint makers appealed to the Supreme Court and asked Silverstein to delay abatement until the Justices reached a decision.

Forced Relocations

At a hearing in January 2008, Sherwin Williams lawyer Mickey Pohl of Pittsburgh told Silverstein that abatement would involve forced relocations to hotels and motels.

He said property owners couldn't opt out and there would be warrantless entries.

He said legislators didn't require these measures.

Silverstein said that in his first decision of the case he found that the legislative scheme wasn't a be-all and end-all.

He said an attorney general has rights of his own and he asked Pohl, "Isn't that what this whole case has been predicated on?"

Pohl said abatement would conflict with laws and regulations, and he quoted a line about special waivers from Housing and Urban Development.

Silverstein said, "The jury has determined remedy. Remedy is abatement. Wasn't it left to the court to determine what abatement means?"

Silverstein ordered abatement to begin.

He hired two examiners, who hired two more.

By July 2008, abatement had cost paint makers about $242,000.

Rhode Island Supreme Court Reverses

In August 2008, the Supreme Court reversed Silverstein.

"The law of public nuisance never before has been applied to products, however harmful,"

Chief Justice Frank Williams wrote. "The enormous leap that the state urges us to take is wholly inconsistent with the widely recognized principle that the evolution of common law should occur gradually, predictably, and incrementally," he wrote.

The state couldn't establish that defendants interfered with any public right or that they were in control of pigment they made at the time it harmed children, he wrote.

The General Assembly placed the burden of safety on owners, he wrote.

By wiping out the judgment they wiped out McConnell's one sixth share and rendered moot the challenge to his fee.

Still, they couldn't ignore the danger no attorney general would ever again sign a contract like the one Whitehouse signed with McConnell.

Court: Contingency fees proper only when AG in control

Justice William Robinson started gently, finding nothing unconstitutional, illegal or inappropriate about an attorney general approving a contingency fee.

Results of such relationships might benefit society, he wrote.

Then he changed tone, declaring a contingency fee proper only if an attorney general retains absolute and total control over all critical decisions.

Outside counsel must be subordinate, he wrote, and a senior member of the attorney general's staff must be involved at all stages.

$242,000 Abatement Costs Unpaid

Though the Supreme Court stopped the abatement, the dust still hasn't settled.

McConnell now resists repaying the paint makers the $242,000 that he and Silverstein made them spend on abatement.

McConnell claims they don't need it because their insurers can cover the loss.

For proof he offers a document someone swiped from a Sherwin Williams board meeting and faxed to Motley Rice
Instead of allowing Sherwin Williams to investigate the theft, Silverstein decided McConnell should investigate Sherwin Williams.

In March, Silverstein granted a motion from McConnell to conduct discovery into the document and the board meeting.

In May, Fidelma Fitzpatrick of Motley Rice asked Sherwin Williams to identify who prepared the power point, who saw each draft of the document and who had access to the board room or its trash cans.

She asked the name of every Sherwin Williams record custodian since 2004. She asked how many copies of the document existed on paper and in e-mail. She asked for policies and procedures on document distribution, retention and disposal.

She asked for a list of everyone to whom Sherwin Williams provided insurance information on Rhode Island lead litigation. She asked for minutes and tape of the board meeting.

And, she asked for all documents identifying the person who sent the fax to Motley Rice, all documents from the investigation of the fax, and all documents Sherwin Williams used in preparing responses to her questions.

In July, Silverstein received briefs from both sides and sealed them.

As of Sept. 4, he had not set a hearing on the $242,000 dispute.

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