Trial Lawyers, Inc.: Environment

Environmental litigation is deeply rooted in Anglo-American law: the common-law tort of nuisance, which emerged in twelfth-century Britain,[1] allows individuals to recover compensation for “real injuries” to their “lands.”[2] Some modern environmental litigation, most prominently that which seeks redress for injuries generated by the oil spill from BP’s Gulf of Mexico Deepwater Horizon rig, falls well within this historical paradigm. Images of oil washing up on Gulf beaches and bayou marshes demonstrate obvious coastal harms, and few would maintain that owners of beachfront property and others directly injured by the oil leaked into the Gulf do not have a basis for making claims against the company or companies responsible.

But much of the litigation sure to flow from the spill is of a very different character. How should we think about suits charging BP with securities fraud for not making clear its safety risks? What about suits alleging pension fraud for not making clear the financial threat to the company’s retirees posed by its Gulf of Mexico operations? And what about suits that target not just BP but all oil companies, not for oil actually spilled but for the threat of rising sea levels resulting from global warming, itself indirectly caused at least in part by the use of fossil fuels?

Modern environmental litigation includes each of these types of lawsuits; and very real and valid claims—such as those inevitably facing BP—are, in some cases, less attractive to avaricious trial lawyers than speculative claims related only tangentially, if at all, to actual injury. Lawyers have already launched such claims, even though the actual damage bill has not yet been tallied. Texas’s Mark Lanier is an asbestos lawyer who became a celebrity of sorts when he won a $253.5 million jury verdict in the first case to go to trial alleging injuries caused by Merck’s blockbuster painkilling drug, Vioxx (the verdict was later reversed on appeal).[3] Lanier has now announced his intention to file class actions and other lawsuits claiming not only direct losses from the Gulf spill but in pension and securities investments resulting from declines in BP’s share price as the spill’s huge cost became clear.[4]

In addition, lawsuits alleging health injuries stemming from oil exposure will drag on for decades, some analysts expect.[5] If the history of mass toxic torts like Vioxx, fen-phen, and asbestos is any guide, many, if not most, of the lawsuits in this latter class of cases will be dubious. High-profile class-action and mass-tort attorneys—whom we like to call Trial Lawyers, Inc.—rely on the unique rules of American law to overwhelm corporate defendants with so many claims that companies are unable to defend against them all in court and must instead reach “mass settlements” that invariably compensate undeserving plaintiffs, under-compensate genuinely injured victims, and give the lawyers a healthy cut of the overall proceeds.[8] If courts are the primary locus for recovery and remediation of the Gulf oil spill, genuinely injured people and businesses are likely to suffer the same disappointments that true asbestos victims have.

ENVIRONMENTAL TORTS BASED ON INJURY IN FACT

Long before we had regulatory agencies like the Environmental Protection Agency (EPA), the courts were the preferred government forum for remedying environmental injuries. Our free-market, property-based legal regime treats commerce as advancing not only the parties’ mutual benefit but society’s in general. But the law has also long recognized the cost of some economic activity to individuals not party to the exchange, as when a smokestack emits fumes that blow onto neighbors’ property. Thus, there is a common-law tort of nuisance to deal with environmental pollution, just as there is a civil action available in the case of physical assault or libelous speech. Indeed, the tort of nuisance is so well entrenched in American law that the U.S. Supreme Court has given it constitutional weight.[9]

In traditional nuisance suits, an individual has had to demonstrate harms directly flowing from another’s actions. The remedy sought in such cases was typically economic damages to make the injured property owner whole. If, however, the harms were dispersed and did not peculiarly or disproportionately harm a particular party, lawsuits alleging a “public nuisance” would often be filed. Many of these would seek injunctive relief to prevent the offending party from continuing the harmful activity. In the pre-regulatory era, such suits were effectively devices to force municipalities to remove trees from roadways, for example, or to stop companies from discharging effluents into public waterways or emitting unpleasant vapors and gases that disturbed nearby residents.

But traditional nuisance suits do not manage many environmental harms well. Injuries are sometimes too dispersed to be remedied by damage awards to individuals, and causation too speculative or remote to meet historical legal norms. Lay juries are generally ill-equipped to make scientific judgments on complex environmental questions. In addition, tort law is necessarily retrospective, not prospective: plaintiffs must show that they have actually been injured and that the party being sued caused the injury. Because it makes sense to prevent environmental injuries, instead of addressing them after they occur—and because unpredictable civil litigation is a crude regulatory device at best—modern states, including the United States and others with advanced economies, have developed regulatory regimes that place boundaries around economic activities that risk generating environmental damage.

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