There’s a quiet revolution taking place in the law, powered by a sleepy old common law theory called public nuisance, and it is on the cusp of causing a breakdown of the American tort system.
In the litigation over opioids, plaintiffs used public nuisance as a cause of action to get around the fact that the manufacture, distribution and sale of opioids was allowed by law and subject to exacting federal regulations. But there was a twist: Trial lawyers combined private plaintiffs with hundreds of state, municipal and quasi-government actors to file thousands of individual suits in a tidal wave.
This public nuisance playbook is radically changing the dynamics of litigation.
Many assumed that the maneuver was a one-time deal in response to an unprecedented crisis. But it turned out that the public nuisance playbook, which combined this ill-fitting legal theory with high-stakes game theory, has exposed a loophole in our legal system that continues to grow. Now, it threatens not only to upend nearly every industry in America, but also to overwhelm the tort system, the multi-district litigation process and the bankruptcy system in an avalanche.
“Bet the company” litigation is an old term referring to lawsuits over an incident or wrong so big that the consequences could literally imperil the survival of the company.
As Alabama’s attorney general, I prosecuted one such case on behalf of the state: the Deepwater Horizon oil spill. When companies or industries engage in wrongdoing or oversee a massive accident like that, they certainly need to pay the price.
But the “bet the company” dynamics of the public nuisance playbook should be alarming. Industries otherwise following the law, abiding by regulations and going about their regular business can find themselves suddenly subsumed in a public nuisance tidal wave.
This is where game theory comes in: Targeted defendants have to decide whether to take a chance fighting every single case in court, where even a single adverse ruling could lead to bankruptcy. Most defendants opt to survive by settling, because they have to run the table or else risk complete destruction. Thus, few of these cases get any real scrutiny in court. It’s tort system highway robbery.
These are not cases where bad actors are being held accountable for their actions. For the most part, these cases are filed to achieve policy goals that have failed to gain traction with voters in our democratic system.
Currently pending at the Supreme Court is a case from the Hawaii Supreme Court, ostensibly concerning oil companies’ responsibility for climate change. Public nuisance lawsuits like this one are not about saving the planet. They are about using the cover of the public good to exact as much money as possible from their targets while obtaining ideological objectives.
Think about the endless possibilities for profit in such cases, and then consider that almost anything in modern life can be at least tenuously tied to purported climate impacts. This genre of litigation endangers every business in America.
The activists have already targeted oil and gas using the public nuisance playbook. Now they are also laying the groundwork to run this playbook against those who make or utilize plastic and plastic packaging. The possibilities are endless.
What’s to say that artificial intelligence or crypto-mining technology, manufacturing consumer goods, having a home swimming pool or even a larger family couldn’t be labeled a public nuisance? These all contribute to carbon emissions, after all.
Nor does it end with climate change suits. Some cities have started attempting to use public nuisance against auto manufacturers in response to rampant crime. Others have attempted to use it to go after social media companies.
Public nuisance law arises from a time when the public mostly agreed on what constituted a nuisance worthy of a tort action. Now it seems just to mean anything that trial lawyers don’t like and can potentially profit from or use in a public policy battle.
Everyday Americans are at risk of having fundamental decisions about their daily lives dictated by activists and trial lawyers exploiting this loophole in the legal system rather than through their representatives in government or consumers’ own choice. Meanwhile the unwieldy, time-consuming settlement process drains resources away from developing better products or offering better prices. No one is immune.
The public nuisance playbook is currently so well-crafted and fine-tuned to avoid the normal checks of the legal system that almost no one gets their day in court. It could become open season on every single industry, with little opportunity for higher court review.
The Supreme Court has recently done an admirable job seeing through the federal government’s gaming of the system to avoid the rule of law. The court must now see this misuse of public nuisance for what it is and address it head on.
Luther Strange (R) is the former attorney general of Alabama and a former U.S. senator.
