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How Foundations and Contingency Fees Privately Fund Government Climate Litigation

In Chapter Five of Beyond the Courtroom: A Closer Look at Climate Litigation in the United States, the Manufacturers’ Accountability Project explains the private funding models, namely foundation money and contingency fee arrangements, behind today’s government climate lawsuits. The Chapter explains how these funding sources can distort justice and create conflicts of interest between the for-profit lawyers and the communities they purport to represent.

Here are some of the key excerpts from “Foundations and Contingency Fees: The Private Financing Behind Government Climate Litigation:”

  • Private foundations fund plaintiffs’ lawyers to actively recruit and “wage much of this litigation as a political tool.” As a result, “irrespective of the outcome of the lawsuits, the lawyers still receive payment—they’re paid simply to generate this litigation … Despite this funding, the private lawyers pursuing climate change litigation are also seeking huge contingency fees from the governments if the litigation is somehow successful in generating a settlement or litigation award.”
  • “Contingency fees were intended to offset the risk for lawyers so that they would invest their own time and resources in cases for people who could not afford to pay them. Even though the plaintiffs’ lawyers are not taking these kinds of risks here, they are still seeking a huge payday …  [T]he opportunity for the lawyers to translate this litigation into personal wealth far outpaces any risk or reasonable fee that would normally be associated with traditional contingency fee litigation.”
  • “Also, the foundations providing them with the grants to recruit governments to file the cases are not necessarily banking on the success of the litigation. Rather, to them, the mere generation of the lawsuits is a victory in itself. They are hoping to leverage the filings, reputational damage and threats of high-profile litigation to achieve a political goal. Thus, in these cases, the threat of losing is not a sufficient safeguard against highly speculative or abusive litigation.”
  • Further, the plaintiffs’ “[l]awyers have no motivation to work constructively with manufacturers and communities to fight the causes and impacts of climate change if it doesn’t produce money for them. This is part of why tort litigation is ill suited for achieving climate-related public policy goals.”
  • In addition, climate litigation has created a new, highly controversial funding arrangement—foundations or private individuals are paying for “attorney general offices directly to hire lawyers for the purpose of bringing climate lawsuits. These attorneys wield the government’s authority, but private interests hire and pay them.” This arrangement, through NYU’s State Energy and Environmental Impact Center (SEEIC), is funded by former New York City Mayor Michael Bloomberg.
  • “In 2018, the SEEIC had 14 fellows working in attorneys general offices in Illinois, Maryland, Massachusetts, New Mexico, New York, Oregon, Washington and the District of Colombia.” States including Virginia and Wisconsin have questioned and banned this controversial practice, which allows private interests to unduly influence state attorney general actions.

Chapter Five concludes by discussing why courts and legislatures should examine the propriety of these funding models because they create the incentive for private attorneys “to generate personal wealth… even at the expense of justice or fairness.” Chapters One, Two, Three and Four are available here.