What if your city government wasn't just collecting trash and running the rec center, but also hiring high-priced lawyers to sue private companies for a big potential payday? And what if those lawsuits were driving up everyday costs for your family by raising the prices of the goods and services they need?
They are. Excessive, abusive tort litigation costs American families nearly $5,600 a year. Inflation hurts. But it stings even more when the problem starts at city hall.
It’s become big business not just for the cities, but for the private lawyers they hire to do the job. The legal firm hired by the city of Oakland, Calif., in 2018 to sue Chevron, ExxonMobil and BP over climate-change harm, for example, has been promised nearly a quarter of whatever it recovers.
How it works is simple. Cities hire outside contingency-fee lawyers to go after a private industry of choice, such as big oil, “forever chemical” manufacturers, ultra-processed-food producers or even Uber and Lyft. The national opioid settlement against pharmaceutical companies and retailers including Walmart, Kroger and CVS is a useful example. Local governments across the country joined states to successfully sue for a total of $26 billion, 15 percent of which was slated to go directly to the private law firms.
Walmart doesn’t absorb its $3.1 billion share of the opioid settlement — it passes it on to the consumers at checkout. If every local and state politician is speaking the language of affordability, how can they justify using the legal system to inflate prices on everyday goods and services?
In just the last year, the cities of Baltimore; Fresno, Calif.; Honolulu; and San Francisco have launched lawsuits against private industries that sell everything from packaged food products to cooking pans, each one outsourcing the efforts to private plaintiff attorneys rather than using their own staff lawyers. The North Carolina town of Carrboro even hired a crack litigation team to sue its own electricity provider, Duke Energy, for harms related to climate change.
As with retailers like Walmart, when industries beef up legal spending to defend against these suits, they pass the costs to consumers — the very residents these cities claim to represent. The real question is: When did we sign up for city governments outsourcing lawsuits to private attorneys with their own financial interests?
Public-interest litigation is typically an avenue for state attorneys general, who usually lay out their priorities in election campaigns and win votes based on them. That we can expect. But the unleashing of municipal suits is new in our American legal system, and, given how it can increase costs for goods and services for everyone, it should worry us all.
The vast majority of trips taken via ride-hailing apps like Uber are completed safely and without incident. However, insurance costs per trip rose by over 50 percent between 2021 and 2024, driven in part by meritless, vicarious liability suits. That cost goes straight into your fare. The same logic applies to energy bills and food prices. These aren’t abstract corporate losses; they’re priced into everything.
In the key piece of irony, the same progressive public officials suing energy companies preside over some of the most expensive cities in the country. And the same conservatives who talk deregulation quietly let plaintiffs’ lawyers run wild in their states. This isn’t about protecting consumers; it’s about generating settlements and feeding the trial bar.
While this doesn’t bode well for consumers, we’re seeing some smart legislative fixes. Florida’s liability reforms have caused insurance prices to fall. Texas’ state oversight of cities' hiring of outside law firms is likely to yield positive results that other states should emulate. A case before the Supreme Court will also soon decide whether localities, rather than the federal government, can sue oil and gas providers over climate harm.
Those developments are great news for consumers because they mean the prices they pay for goods and services could stop skyrocketing and even fall, and the incentive for their local governments to sue may finally be curbed. Consumers need all the help they can get.
Yaël Ossowski writes about legal reform and is deputy director at the Consumer Choice Center, which advocates for smarter government regulation of consumer products, tort reform and policies that promote market competition.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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