ATRA Reiterates Support for Chapter 11 Bankruptcy Use to Address Mass Tort Litigation, Urges Meaningful Dialogue Amid Senate Judiciary Committee Hearing
Lawsuits Look to Place Blame on Industry
New trend shows companies sued for everything from coronavirus to climate change
An alarming new trend reveals a little-known legal tool is being utilized as the basis to pin the blame on businesses for societal ills, including COVID-19. The trend is driven by attorneys who claim to represent the broader public interest, but their cases often fail to prove who actually is at fault or possibly caused the harm in question.
Lawyers pitch their services and potential lawsuits to state and local government officials and others on a “contingency fee” basis. In doing so, they employ a centuries-old legal theory known as “public nuisance” in order to sue companies for allegedly causing various environmental and social harms.
Just last week, a lawsuit filed in federal court alleged a food manufacturing plant created a “public nuisance” in continuing its operations during the COVID-19 outbreak.
“These recent uses of public nuisance litigation are a dramatic departure from any long-standing liability law,” American Tort Reform Association President Tiger Joyce said.
Dating back 700 years to English common law, public nuisance lawsuits historically had four main components:
- The lawsuit must defend a public right;
- The “public nuisance” is the condition blocking public use of land or water;
- To be liable, one must be engaged in an unlawful activity causing the public nuisance condition; and,
- Only the person unlawfully causing or in control of the public nuisance is responsible, not a company that made a product used or otherwise involved in creating the nuisance.
In the 1960s, trial lawyers began to try to expand the applicability of public nuisance law, and by the 1970s and 1980s, they began testing this expansion through various cases.
Today’s public nuisance lawsuits are vastly different and widely expanded from the legal theory’s original intent. It has evolved such that merely selling an everyday product can create virtually unlimited liability.
Today’s most common public nuisance lawsuits include:
- The majority of today’s public nuisance lawsuits are related to opioids. The lawsuits target the pharmaceutical industry to pay costs of treating and fighting opioid abuse. The suits do not allege specific violations of law or unlawful conduct. For this reason, a number of cases have been dismissed by various courts for failing to show how the companies caused the opioid-related harms that are the basis for large financial demands.
- Climate change
- Lawsuits now are being used as a political and regulatory shortcut to solve problems associated with climate change. The lawsuits allege energy companies created a public nuisance by producing energy needed and used by Americans in our everyday lives and in business. More than one dozen governmental entities are suing energy producers on this basis, seeking compensation to address the impacts of climate change. Various courts have found climate change is not a matter for courts to resolve, but instead is a complex global problem requiring a global, public-policy-based solution.
- Environmental and plastic cleanups
- Manufacturers are targeted with lawsuits for the environmental impacts of products sold years ago, regardless of fault. Traditional legal theory would hold that a person or entity that caused the public nuisance ought to be responsible for abating it. The potential legal responsibility for chemicals or products involved in these cases should be based on reliable science and factual evidence, not the financial capacity of the defendant companies.
- E-cigarettes and vape products
- In another recent misuse of public nuisance lawsuits, trial lawyers are recruiting school districts, local governments and states to file lawsuits against e-cigarette companies. Claims alleging a company unlawfully promoted or manufactured defective products should be brought under those specific laws. As the courts have stated in opioid litigation, public health concerns do not qualify as “public nuisances,” but it is too early to know how these lawsuits will fare in the courts.
“This new breed of public nuisance lawsuits is just another example of the rampant abuse in our judicial system,” Joyce said. “Excessive litigation is bad for consumers, costing both job opportunities and income. Further expansion into COVID-19 public nuisance lawsuits will only serve to further inhibit the nation’s economic recovery.”
Research shows that the cost of the U.S. tort system is more than $373 billion as of 2019. Excessive tort costs result in job losses across the U.S., with some states losing nearly one-quarter-million jobs due to these costs.
View the full report to connect the dots and see the alarming legal trend at atra.org.
The lack of oversight and transparency around third-party litigation funding threatens the integrity of our legal system
Together, let’s forge a legal landscape that makes equitable access to justice a living reality for all Georgians.
This is an opportunity to reassess the practices and regulations surrounding private-attorney contracting and to enact reforms that promote fairness, transparency and value for taxpayer dollars.
Allowing the company to continue the bankruptcy process will help ensure equitable and efficient resolution in complex mass tort claims