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A New Frontier in Product Liability: Greenhouse Gas (GHG) Emissions



From government research studies to law firm blogs, global warming claims are popping up as a new frontier in mass product liability litigation. Reports suggest that global warming claims will assume large and staggering financial burdens for select organizations and targets, in much the same way that asbestos, tobacco, and lead paint have in prior decades. Corporations that emit greenhouse gases such as carbon dioxide need to give serious consideration and planning to stockpiling monies to address their liability exposure and risk associated with emissions. In fact, the insurance industry is already bracing itself and training its workforce how to recognize, assess, underwrite, and mitigate risks associated with greenhouse gas emissions.

Greenhouse Gas Regulations Lay the Groundwork for Lawsuits

The U.S. Supreme Court ruled in 2007 that greenhouse gases were covered by the Clean Air Act as pollutants. The court mandated that the Environmental Protection Agency (EPA) make a determination of whether the gases were significant health threats to humans, such that an additional federal regulatory scheme would be necessary. In Fall 2009, the EPA released a reporting requirement that was mandatory for greenhouse gas emitters in 2010. The requirement mandated that the country's 10,000 largest greenhouse gas producers disclose their emissions (by volume) to the agency. The largest producers were defined as those companies that emitted 25,000 or more metric tons of carbon dioxide annually. The largest 10,000 producers comprise the majority (at least 85 percent) of the country's greenhouse gas emissions.

U.S. Government Presses Greenhouse Gas Emitters to Comply With Regulations

The EPA continued its press toward more stringent regulations in the area of greenhouse gas emissions in late 2009, when it ruled that the pollution and climate changes related to carbon dioxide emissions were threats to the nation's public health and to our global environment and community. This regulatory framework laid by the agency is paving the way for compliance enforcement measures to be taken against those largest producers who have access and technology to reduce and mitigate their greenhouse gas emissions, but who do not for bottom line financial reasons.

Lawsuits May Range From Individual Investor Suits to States Suing Polluting Manufacturers

Legal bloggers, as well as mass torts and environmental lawyers, predict that investor lawsuits will meet with more success and increase as the EPA and other governmental regulation schemes with emissions disclosure requirements become mandatory and more of a reality to the corporate community. The litigation-friendly state of California sued six major auto manufacturing companies in 2006. The suit sought damages against car manufacturers for their global warming contributions and posited that the manufacturers' emissions were creating major harm to the state's economy, tourism, public health, and environment. By 2008, there were 16 greenhouse gas emissions lawsuits in active status throughout the nation's federal and state court dockets.

What Does the Future Hold for Greenhouse Gas Emissions Suits?

None of the greenhouse gas emissions lawsuits reported to date have been successful in terms of verdicts or judgments. However, the prosecution and defense of these suits has generated significant legal fees and costs. The tobacco litigation began in much the same way, and eventually that sector faced multibillion-dollar settlements and litigation that continues to this day. In terms of future product liability suits in the greenhouse gas emissions field, claims are likely to focus upon materials and products that cause climate change. The bases of liability for corporate manufacturing and other defendants may center upon foreseeability and the failure to warn consumers and the public.