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New Report Highlights Abuse of Public Nuisance Litigation Against Manufacturers 

The ongoing surge in public nuisance litigation filed against manufacturers by municipalities across the United States is a “uniquely potent weapon” when wielded improperly by governmental entities and the trial lawyers representing them, according to a recent report by the U.S. Chamber Institute for Legal Reform. “Waking the Litigation Monster: The Misuse of Public Nuisance” explains how local governments—and the lawyers representing them—are misusing public nuisance tort litigation against manufacturers.

First, the lawsuits seek to circumvent the political branches of government to make public policy. As the report observes, “states and local governments have turned to the courts, using the tort of public nuisance in particular, to manage …public policy problems.”

The report further explains the history of how and when plaintiffs’ lawyers and localities first started trying to turn public nuisance from a tort utilized solely for solving local issues into one that could cover a national or even international issue such as global climate change:

This transformation of focus from a discrete injury to a more generalized societal problem potentially empowers ‘a single judge or jury to set public policy for an entire state or the nation.’ (pgs. 29-30)

Thus, given that they seek to circumvent America’s policymaking process, these lawsuits are undemocratic, disrupting core checks and balances:

[T]he legislature sets the overall policy, the executive carries it out, and the courts defer to that policy in their judgments. This constitutional division of labor is upset when courts take on the legislative role and attempt to balance all of the interests at play in widespread societal problems. This observation applies with even greater force to an international problem such as climate change, because courts traditionally defer to the political branches in matters of foreign affairs and the presumption against extraterritoriality applies. (pg. 33)

This concern over checks and balances and the separation of powers is the reason both U.S. District Court Judge Alsup and U.S. District Court Judge Keenan dismissed the San Francisco/Oakland and New York City lawsuits, respectively. These judges’ reasoning emulates the U.S. Supreme Court ruling in AEP v. Connecticut. In that case, the Court ruled that climate change tort litigation raises issues that are exclusively national and legislative in nature. Public nuisance litigation is not the appropriate nor most effective way to combat an issue so global in scope.

Second, this litigation is problematic because it is being pursued by private lawyers out of their own financial interests, rather than what is best for the public. The private lawyers, who are working on a contingency fee basis, are filing similar lawsuits for towns around the country. Even if the lawsuits are meritless, the lawyers hope to coerce companies to settle them rather than fight them. Many companies cannot take the risk that these lawsuits, which attack core aspects of their lawful business models, could ever succeed.

In the climate change public nuisance litigation, it has been reported that the plaintiffs’ attorneys are working on contingency fee contracts that would pay them 20% to 23.5% of any award or settlement, meaning they stand to pocket millions of dollars just by leveraging the multiple lawsuits into a settlement.

Virtually any manufacturer could find itself a target of these lawsuits regardless of how lawful or beneficial their products. That is why, at their core, these lawsuits threaten manufacturers’ jobs and livelihoods and the economies of the communities where they live and work. MAP commends the ILR for further exposing the serious threat this type of litigation poses and hopes that by shining a light on these practices we can put an end to this concerning trend.

This is blog is first piece in a two-part series on recent reports from the Institute for Legal Reform.