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Activist litigation against manufacturers has gone too far

The Hill, December 10, 2017

By: Linda Kelly

Early on, children learn that when one parent doesn’t have the answer they want, they just ask the other. We naturally seek the forum that will give us the best result, a tactic all too familiar to those of us in the legal community.

In courtrooms across the country, profit-motivated plaintiffs’ lawyers are shopping legal theories seeking the most sympathetic ear by pursuing litigation against manufacturers who make the products on which American consumers depend.

These cases have become increasingly costly and alarmingly commonplace, are perpetuated by a small group of rent-seeking attorneys, and — perhaps worst for our judicial system — do not belong in a court of law in the first place. But when one court shuts them down, these lawyers simply find another court and try again.

These cases involve efforts to push the boundaries of tort law and especially to stretch the definition of an ill-defined legal concept called “public nuisance.”

A recent example is a ruling in state court in California that holds paint manufacturing companies liable — to the tune of over a billion dollars — for removing lead paint in houses built prior to 1951 in 10 California localities.

The plaintiffs’ legal theory — that the companies had created a “public nuisance” through sale of their product decades ago — was tested and dismissed in Rhode Island, Wisconsin, Illinois, Missouri and New Jersey before finally taking hold in California.

In another case, American Electric Power v. Connecticut (AEP v. CT), a state-led coalition sued a group of power companies claiming that the emissions they produced should be regulated as a public nuisance.

The case reached the U.S. Supreme Court, which, in a unanimous vote, ruled against the plaintiffs, finding that emissions are meant to be regulated by the U.S. Environmental Protection Agency (EPA) and not by the courts.

While this case has served as grounds for dismissal of a number of similar federal suits, plaintiffs’ attorneys continue to shop around for like-minded courts, including state courts, willing to ignore or reinterpret this precedent.

A long line of cases has found that valid concerns over the effects of climate change are, by design, better addressed elsewhere within the federal government. However, in the mind of the activists, the alternatives to legal action aren’t very compelling, and to the plaintiffs’ bar, they are not very lucrative.

If such attorneys truly had the interests of their clients in mind, they would advise them to petition those regulatory agencies or lawmakers who indeed have the power to make a change. Instead, they seem motivated by the prospect of political or financial gain.

Dragging manufacturers into such fruitless lawsuits is also counterproductive. It forces companies to squander significant resources on legal fees instead of investing in new technology to improve the efficiency of their operations or to provide a product that, in AEP’s case, literally keeps the lights on in homes across the country.

These cases can have devastating impacts on entire industries and the jobs they support. The easy argument for any media outlet to make is that those companies deserved what was handed to them.

But as the National Bureau of Economic Research suggests, “The worse is the regulators’ failure, the stronger the courts’ reaction is likely to be.” And litigation is a notoriously inefficient way to compensate plaintiffs. One need look no further than the asbestos litigation debacle that enriched lawyers with over $34 billion while delivering around 40 cents on the dollar to the clients and bankrupting 85 companies.

Companies large and small will always be targets — whether it’s for not properly indicating that the coffee they serve is hot or that the paint they sold legally decades ago will forever be their liability. Manufacturers in America want nothing more than to be responsible stewards of the community and create products that people use every day.

But one thing we can no longer stand for is litigation for litigation’s sake that will only set dangerous precedents that neither mom nor dad could ever approve.