One of the latest developments in products liability law is "public tort" litigation. Public tort or government-sponsored lawsuits are actions by federal, state, or local government entities to recover the cost of public services provided to persons who have been injured as the result of a defendant's alleged misconduct. The best known example is the tobacco litigation of the mid-1990s in which more than forty states brought suit against the leading tobacco companies to recoup the cost of providing health care services to indigent smokers. Eventually, the tobacco companies agreed to pay the states more than $200 billion and also consented to substantially restrict their advertising and promotion activities. The tobacco industry is now defending itself against a similar suit by the federal government.
Legal scholars disagree sharply about the value of public tort litigation. One group strongly approves of government-sponsored lawsuits, arguing that the existence of Medicaid and other welfare programs should not enable profit making enterprises to shift the social costs of their commercial activities to the government. However, other commentators have expressed severe reservations about public tort litigation, citing doctrinal, economic, and separation of powers concerns. This Article examines the history of public tort lawsuits and concludes that the social, political, and economic costs outweigh the benefits of this type of litigation.
Part I of this Article looks at the history of government-sponsored lawsuits against tobacco, handgun, and lead-based paint manufacturers. Part II evaluates various liability theories that government plaintiffs have relied upon, including negligent entrustment, strict liability for engaging in abnormally dangerous activities, fraud and conspiracy, unjust enrichment, public nuisance, parens patriae, and violation of federal RICO provisions. This part concludes that public nuisance now appears to be the most promising of these liability theories.
Part III analyzes a number of potential statutory and doctrinal limitations on liability such as statutory prohibitions on municipal lawsuits, standing requirements, duty and proximate cause, the economic loss rule, and the municipal cost recovery rule. Part IV considers the adverse effects of public tort litigation on governmental and legal institutions. Part IV also examines the impact of such lawsuits on product manufacturers and other sectors of the economy. Finally, the Article identifies a number of steps that could be taken to control public tort litigation in the future.
Richard C. Ausness, Public Tort Litigation: Public Benefit or Public Nuisance?, 77 Temple L. Rev. 825 (2004).