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PRESENTATION OBJECTIVES

CO2 NUISANCE LITIGATION – TIP OF THE ICEBERG? ELECTRIC UTILITIES ENVIRONMENTAL CONFERENCE ELECTRIC UTILITY CONFERENCE TUCSON, ARIZONA JANUARY 2005. PRESENTATION OBJECTIVES. SDNY CO2 Nuisance Lawsuit Today’s litigation landscape

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PRESENTATION OBJECTIVES

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  1. CO2 NUISANCE LITIGATION – TIP OF THE ICEBERG?ELECTRIC UTILITIES ENVIRONMENTAL CONFERENCEELECTRIC UTILITY CONFERENCE TUCSON, ARIZONA JANUARY 2005

  2. PRESENTATION OBJECTIVES • SDNY CO2 Nuisance Lawsuit • Today’s litigation landscape • Analyze potential for personal injury litigation against coal chain companies based on air pollution

  3. SDNY CO2 NUISANCE LAWSUIT • Eight State AGs and NYC Sued Five Electric Utilities • Parallel Lawsuits by Three Environmental Organizations • CO2 Emissions From Generating Stations in 20 States at Issue • Alleges Emissions Causing a Public Nuisance Under Federal Common Law and State Common Law • Seeks an Injunction Capping and then Reducing CO2 Emissions

  4. TODAY’S LITIGATION LANDSCAPE: PLAINTIFFS’ COUNSEL ARE WELL-FUNDED, ORGANIZED AND COORDINATED

  5. Plaintiffs’ Litigation Industry • Suing major corporations is a $25-billion-a-year industry • Trial lawyers, always evaluating new targets, • Form national committees to map strategy • Solicit and market defendants’ documents • Package and sell litigation kits • Use TV to test market new claims • Big winners in plaintiffs’ bar have, in effect, become venture capitalists in targeting new defendants

  6. Plaintiffs’ Litigation Industry Using attorneys’ fees earned in similar litigation, these industrious “tort kings” bankroll the next generation of class action lawsuits. Given recent recoveries, their pockets are as deep as many corporations. As lawyer Richard Scruggs said, “Asbestos gave us a war chest for tobacco. Now tobacco fees will finance “more daunting cases.” The very act of targeting an industry can wreak havoc. Upon announcing an attack on HMOs, those businesses experienced a $12 billion stock drop in a single day. Whatever the merits of the action, the effect is to bring an industry to its knees before a lawsuit is ever filed. Crier, “The Case Against Lawyers,” p. 193 (2002)

  7. Trial Lawyers’ Impact on the Courts • The “new regulation through litigation” uses massive liability to change the law. • Causes of action are being tested or extended • Civil procedure is influenced – from discovery to class actions • Damages for pain and suffering are expanding • Punitive damages verdicts of $100 million or more have quadrupled since 1993 (4 to 16 per year)

  8. Trial Lawyers’ Impact on the Courts • Plaintiffs initiate high-profile litigation in sympathetic jurisdictions (a/k/a “Judicial Hellholes”) • Madison County, Illinois, illustrates the issue: • Population of county’s largest town is 31,301 • 1990 to 2000, 70 class actions filed • 85 percent of plaintiffs’ lawyers on pleadings were from outside the county (e.g., Texas, NY, DC, New Orleans, Mississippi, California) • In 2001, 43 more class actions were filed • Only five Madison County companies were sued in those 43 cases

  9. Juries Increasingly Receptive to Trial Lawyers’ Messages • Consensus points: • Negligent companies should pay punitive damages (89%) • “Sending a message” is an important jury function (72%) • Large companies will lie to win a lawsuit (59%) • Anger toward companies is at an all-time high • Public believes regulation doesn’t work (see Enron) • To many jurors, class actions keep big companies honest • Mindset: plaintiffs’ injuries should be taken care of, never mind fault • Bottom line: “Life comes with a warranty”

  10. Wednesday, February 18, 2004 Corporate Scandals Hit Home Reputations of Big Companies Tumble in Consumer Survey: ‘Money Can Rob the Goodness’ Three quarters of survey respondents graded the image of big corporations as either “not good” or “terrible.”

  11. HOLLYWOOD • A CIVIL ACTION • RUNAWAY JURY • ERIN BROCKOVITCH • THE INSIDER • THE DAY AFTER TOMORROW

  12. SURVEY DONE BY DISPUTE DYNAMICS • Results of nationwide telephone survey of 1,000+ jury-eligible adults (2002) • 75% agreed with statements excerpted here: • Enron and WorldCom just “the tip of the iceberg” • Large corporations “tend to hide information” • Many companies “destroy documents to avoid…responsibility”

  13. Trial Lawyers’ Interaction with Politicians • Association of Trial Lawyers of America (ATLA) is ranked by Fortune magazine as the sixth most powerful lobby on Capitol Hill. Crier, p. 183 (2002) • On both the state and national level, attorney’s fees are added as an element of damages in major legislation. Crier, p. 187 (2002) • State attorneys general promote linkage with the plaintiffs’ bar • “The recent government suits against the tobacco and firearms industries trample upon this central feature (separation of powers) of the rule of law. The aim of this (new wave) of litigation is to shift the awesome powers of legislative bodies – commercial regulation, taxation, appropriations and the power to change the law – to the judicial branch of government.” Pryor, November 2002

  14. LITIGATION: THE HORIZON • There may be state Attorneys General actions -- “the tobacco model” • National Symposium on State Attorneys General Actions Against Business, November 20-21, 2002, Washington, D.C. • Conference Agenda includes: (1) “Who’s Next on the Hit List”; (2) “The Role of Plaintiffs’ Bar: Coordinator or Leading the Charge”; (3) “What To Expect in the International Arena”. • There may be failure to warn claims regarding alleged risks known to an industry - - documents may be at issue • “After tobacco, anything is possible.” John Banzhaff.

  15. IS THE COAL-FIRED ELECTRIC UTILITY INDUSTRY NEXT?

  16. MERCURY LAWSUITS Coal-Burners Get Swept Into Thimerasol Litigation • Numerous Lawsuits against Georgia Power • BG&E • TECO/FPC AEP-Texas sued for damage to lake

  17. WARMING UP TO A NOT SO RADICAL IDEA: TORT BASED CLIMATE CHANGE LITIGATION Columbia Journal of Environmental Law 1/28/03 “This article…focuses on…applying tort law to hold fossil fuel companies and some of their reliant industries liable for at least some of the harms caused by global warming.”

  18. MORE GLOBAL WARMING LAWSUITS? • Climate Justice Programme • Lawsuits reportedly under development • Relying heavily on 2001 UN report • “Would make tobacco payments look like peanuts,” claims one proponent

  19. AIR EMISSION AND CURRENT DEVELOPMENTS

  20. Estimated Public Health Impacts of Criteria Pollutant Air Emissions from theSalem Harbor and Brayton Point Power Plants

  21. Estimated Public Health Impacts of Criteria Pollutant Air Emissions from theSalem Harbor and Brayton Point Power Plants

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