Insurance

When faced with the challenge of defending abusive public nuisance lawsuits, corporate defendants would be well advised to examine their insurance policies. In addition to providing coverage for any potential liability, such policies may also provide costs of defense coverage.

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authors: Donna Wilson and Marla Kanemitsu

We are seeing the first volley over the issue of insurance coverage for policyholders faced with climate change lawsuits predicated on public and private nuisance theories.  The AES Company is one of many energy companies sued by the Native Village of Kivalina in federal court in California.  The Village consists of approximately 400 people.  The suit seeks relief for damages allegedly cause by the defendants’ greenhouse gas emissions.  According to the Village, greenhouse gas emissions have caused temperatures to rise, which in turn caused the ice barrier protecting the Village to melt, thus jeopardizing the ability of the Village to withstand winter storms.  Read More »

The public nuisance theory is already expanding into the subprime mortgage context. Earlier this year, the City of Cleveland sued 21 financial institutions, including Ameriquest, Bank of America, Citigroup, and J.P. Morgan Chase, among others, alleging that the defendants’ “sub-prime lending abuses” created a foreclosure crisis that has imposed “tangible costs” on the city, including increased fire and police expenditures associated with vacant properties, demolition costs, and lost tax revenue. The city claims the foreclosures constitute a “public nuisance” and seeks compensation from the banks for the city’s losses.  Read More »

authors: Donna L. Wilson and Marla H. Kanemitsu

Syllabus

Since the 1990s, the tort of “public nuisance” has emerged as a new weapon of states and municipalities looking to spread the economic cost of large-scale societal ills.¹ To date, it has been used in attempts to impose liability on asbestos manufacturers for asbestos-related illnesses, poultry farmers for water pollution, former lead pigment and paint manufacturers for childhood lead poisoning, and firearm manufacturers for contributing to the black-market for handguns. The newest wave of public nuisance suits seek to address global warming by holding auto manufacturers, electricity producers and others liable for the effects of greenhouse gas emissions, and secondary market investors for the subprime mortgage crisis. As these descriptions reflect, the damages sought by the plaintiffs are virtually boundless.  Read More »