Secretive US rightwing group Alec designs law to give big business ‘complete immunity for bad acts’
Opioid manufacturers and other major corporations are pushing legislation to strip away state laws that have been used to sue the pharmaceutical industry for hundreds of millions of dollars over the worst drug epidemic in US history.
The influential rightwing pressure group the American Legislative Exchange Council (Alec), which is funded by large US companies, is behind model legislation to greatly restrict lawsuits under state public nuisance laws which are widely used to hold big business to account.
Public nuisance legislation was central to state lawsuits against the tobacco industry over the damage caused to public health by smoking in the 1990s. The laws are also at the heart of some litigation against fossil fuel companies over the climate crisis and emerging lawsuits against companies that failed to adequately protect workers from Covid.
They have also resulted in drug manufacturers and distributors paying out hundreds of millions of dollars to cities and other authorities for their part in the opioid crisis that has claimed about 800,000 lives. On Friday, the advertising company Publicis Health agreed a $350m settlement with US states that sued the company under public nuisance laws for promoting the high-strength painkiller that kicked off the opioid epidemic, OxyContin, to doctors with false claims about its safety.
But in an attempt to limit public authorities and others harmed by the actions of big business from seeking redress, corporations are using groups such as Alec and the US chamber of commerce to push state legislatures to pass laws to curb similar legal actions in the future.
Mary Graffam, the director of state affairs and research for the legal group the American Association of Justice, warned that the legislation would strip away rights for local governments and other entities, such as hospital districts and Native American tribes, to hold corporations to account.
“Because municipalities have successfully held corporations accountable for causing catastrophic harms such as the opioid crisis and environmental pollution, these companies are now turning to front groups like Alec and the US Chamber of Commerce to push laws that would give them complete immunity for their future bad acts,” she said.
The model legislation was unveiled by Alec’s civil justice taskforce at the organisation’s national meeting in December 2020 where big pharma and other corporate interests were well represented. The attendees included two senior executives of the drug industry lobby group PhRMA and Neil Pratt, head of international legal affairs for Pharmaceutical Research and Manufacturers of America.
The model legislation significantly limits the basis of public nuisance claims, specifically banning them for cases “based on the manufacturing, distributing, selling, labelling, or marketing of a product, regardless of whether the product is defective”. The law would also bar claims over any product that “endangers the health, safety, or welfare of the public at large or has caused injury to one or more members of the public”.
Corporations have grown increasingly concerned about cities and counties across the country working together to sue for large amounts of compensation. Alec has said that use of the laws should be limited to individuals and government entities that can show direct harm caused by unlawful conduct.
“Historical basis for public nuisance was defendants’ wrongful or abusive use of land or obstruction of public highways and waterways,” it has said.
Opponents said that the proposed legislation would have prevented public nuisance lawsuits over the opioid epidemic and cigarettes.
Not long after the 2020 summit, the model legislation disappeared from Alec’s website but re-emerged in state legislatures, including Texas, West Virginia and Missouri, where it was strongly backed by corporate interests.
Although it did not progress to become law in any state, groups monitoring state legislation say they see signs of a fresh push to get the model bill passed this year.
The Texas legislature held hearings on the legislation last year, which pitted major corporations against local authorities.
Among those who gave evidence in support of the bill was Nathan Morris, senior vice-president of the chamber of commerce’s institute for legal reform. The ILR argues that “public nuisance lawsuits were traditionally used to address problems like blocked roads or polluted waterways, not lawfully sold products or public policy issues best left to legislatures”.
But it ran into strong opposition from representatives of local government and other bodies across Texas who said public nuisance laws provide an important tool in ensuring the drug industry paid for the cost of the opioid epidemic borne by hospitals and social services.
Sally Basurto, San Antonio’s director of government affairs, told the legislature that if the law passed it would endanger lives.
“This essentially gives manufacturers and distributors of dangerous products, such as opioids, a free pass to act with reckless disregard to the public safety,” she said.
Jonny Hipp, administrator of the Nueces county hospital district in Corpus Christi, told the committee the proposed legislation was “a very bad bill as it shifts responsibility for paying for care caused by misconduct from those who commit the misconduct to taxpayers”. He said the county and hospital district were able to fund treatment for those addicted to opioids by suing the drug industry under public nuisance laws.
“If we had not had the right to bring these lawsuits, the taxpayers would have had to pay for that care. And taxpayers already feel overtaxed, they don’t want to pay more tax to bail out a company that did something wrong,” he said.
The bill passed committee in both houses of the Texas legislature but the session ran out of time before it became law.