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New Report Offers Solutions to Deter Municipal Litigation Against Manufacturers

The concerning trend of public nuisance litigation against manufacturers across the country “warrants close scrutiny,” as these municipal suits “have a number of significant consequences beyond the outcomes of individual cases,” argues a recent report from the U.S. Chamber Institute for Legal Reform, “Mitigating Municipality Litigation: Scope and Solutions.

“The incentives that drive municipal litigation are principally economic,” ILR notes (pg. 5). The report explains that plaintiffs’ attorneys deploy three main tactics to convince government officials to hire them:

  1. They contribute to the politicians’ campaigns;
  2. They tout the prospect of substantial settlements from the lawsuits as a way to make up budgetary shortfalls; and
  3. They insist that the attorneys’ contingency fee arrangements will make the lawsuits “free” to the localities.

The report then outlines a number of potential actions states can take in order to avoid becoming the next breeding ground for this litigation.

  1. Limit the power of municipalities to sue, “either generally or in connection with certain types of claims,” (pg. 20). As a “creature of the state,” municipalities are granted their powers by the state, which “frequently preempt control over certain matters,” (pg. 20).
  2. Protect certain industries from litigation. As the report states, “It is not uncommon for states to immunize certain industries or their activities from suit. Every state, for instance, has enacted some level of statutory protection for agricultural operations by limiting their exposure to nuisance claims,” (pg. 20).
  3.  “[R]edefine the cause of action for public nuisance, for instance, to exclude certain activities,” such as energy production or geographic regions, (pg. 20). “Such legislation might be especially appropriate where the alleged nuisance activity relates to a large-scope issue with many contributing causes from many different industries—including examples discussed in Part I, such as climate change or the opioid epidemic,” (pg. 38).
  4. Limit a private trial lawyer’s ability to both bring these lawsuits and work on a contingency fee basis, thereby ensuring municipalities are being represented by attorneys who have their clients’ best interest—not their own paychecks—in mind, (pg. 32).
  5. Require plaintiffs to provide concrete evidence to support their claims. Suing based on “alleged future harms,” like in the case of climate change litigation, creates such evidentiary issues. A “proof of damages requirement could have posed a serious stumbling block,” (pg. 41).
  6.  “[E]xpand the doctrines that bar recovery when the plaintiff itself contributes to the alleged harms. As one court recently observed in scrutinizing nuisance and trespass claims based on climate change, ‘it is not clear that Defendants’ fossil fuel production and the emissions created therefrom have been an ‘unlawful invason in New York City, as the City benefits from and participates in the use of fossil fuels as a source of power, and has done so for many decades.’” (pg. 41-42)

Although this type of litigation has generally failed, localities and trial lawyers have not been deterred from filing new claims. Litigation, though, cannot solve climate change. Innovation is the answer. Through innovation we can take meaningful steps to reduce emissions, and manufacturers are leading the way and eager to work with—not be the scapegoats for—localities and others in this effort.

This blog is the second in a two-part series on recent reports from the Institute for Legal Reform. To read the first piece in this series, please click here.