Oil and Gas Companies Struggle with Rising Insurance Costs, Coverage
What happened: Oil and gas companies are facing skyrocketing insurance costs and limited coverage options as a result of abusive and unnecessary lawsuits. Read more
Tell me more: The industry has seen a surge in auto insurance claims, with settlements rising from $50,000 a decade ago to $500,000 to $1 million today, placing significant financial strain on oilfield operators.
- Paired with the inflation of rank-and-file lawsuit settlements, the threat of nuclear verdicts—or jury awards exceeding $10 million—further exacerbates these rising costs and creates an unpredictable legal environment.
In his own words: “Oil and gas carriers have a target on their back. The easiest way for everyone to win is for legislation to establish guidelines.”—Ryan Edgmon, managing director of the energy division at Higginbotham Insurance and Financial Services
TLR Thoughts: Texas’ energy industry isn’t alone in facing unsustainable insurance costs that threaten its ability to operate and create jobs. Every Texan is feeling the effect of unnecessary litigation on their insurance premiums, whether a small business or a family renewing their personal automobile insurance coverage. Without legislative action to address the abusive litigation tactics that drive these lawsuits—like inflated medical bills—we’ll all continue to pay the price.
PepsiCo Trapped in Public Nuisance Litigation Yo-Yo
What happened: The day after Los Angeles County filed a lawsuit against PepsiCo and Coca-Cola, accusing their product packaging of creating a public nuisance, a similar lawsuit against PepsiCo was dismissed in New York. Read more
Tell me more: These lawsuits are the latest attempts to hijack public nuisance law to legislate through litigation, an overbroad and inappropriate use of the courts that has been dismissed by judges in the past.
- The judge in the New York case ruled it would run “contrary to every norm of established jurisprudence” to punish PepsiCo, because it was people, not the company, who ignored laws prohibiting littering.
In his own words: “While I can think of no reasonable person who does not believe in the imperatives of recycling and being better stewards of our environment, this does not give rise to phantom assertions of liability that do nothing to solve the problem that exists… The judicial system should not be burdened with predatory lawsuits that seek to impose punishment while searching for a crime.” —New York Supreme Court Justice Emilio Colaiacovo
Remember this? California filed a nuisance lawsuit against ExxonMobil in September for its role in plastics production.
TLR Thoughts: PepsiCo’s public nuisance rollercoaster—with one state-based public nuisance claim filed the day before a similar state-based claim is thrown out—is a glaring example of how a patchwork of state nuisance lawsuits can quickly become a quagmire for businesses operating around the country. The Legislature has a critical opportunity to stop this trend from taking hold in the Lone Star State.
