Liability for federally-approved products and litigation funding among concerns.
WASHINGTON — The American Tort Reform Association provided the Department of Justice an outline of state laws and regulations that unduly burden businesses.
The comments were submitted in response to the DOJ’s request for information on state laws that have significant adverse effects on the national economy or on interstate commerce.
ATRA’s comments spotlight four major areas of concern that they say project the regulatory preferences of a few states into all states, hurt innovation, and unnecessarily raise costs for consumers.
Product Liability Litigation Involving Federally-Approved Products
ATRA notes the difficulty for business operations that face lawsuits for products like medications, medical devices, and pesticides, that are compliant with federal laws. ATRA urged President Trump’s administration to preempt state product liability lawsuits with federal safety standards and product approvals. The Association also urged support of federal legislation that promotes congruity between federal regulatory compliance and state tort liability.
Public Nuisance Claims Targeting Manufacturers
For several years, ATRA has warned against the inappropriate expansion and use of public nuisance laws to target manufacturers for various issues. In their comments to the DOJ, ATRA urged the administration to weigh in and support the dismissal of state-level litigation related to global concerns like climate change.
The administration did so last week when it filed amicus briefs with the U.S. Supreme Court in two cases related to climate change – one Louisiana case brought by local governments and the other brought by Boulder County in Colorado. ATRA also submitted briefs in the two cases, Chevron U.S.A. Inc. v. Plaquemines Parish and Suncor Energy Inc., et. al. v. County Commissioners of Boulder County, et. al.
Consent to Jurisdiction Through Registration Laws
After a 2023 U.S. Supreme Court decision ruled that states can require out-of-state corporations that register to do business in the state to “consent” to being sued for any purpose there, state legislatures have introduced “consent through registration” laws. Illinois Governor JB Pritzker (D) was the first to sign such a bill into law this August and is expected to result in significant litigation.
Third-Party Litigation Funding
Third-party litigation financing, or lawsuit funding, is the practice of investors buying an interest in the outcome of a lawsuit, and has become a multi-billion-dollar industry. ATRA warns that this outside investment can be abused by foreign adversaries who seek to undermine the competitiveness of U.S. businesses and urges, at a minimum, transparency and disclosure in litigation if such funding arrangements are present.
“If President Trump and his administration address some of these key issues negatively impacting our country’s civil justice system, it would improve fairness, balance, and predictability for business nationwide,” said Tiger Joyce, president of ATRA. “Whether through federal legislative, regulatory, or other action, we look forward to the DOJ considering these important policy concerns.”
American families pay an estimated $5,215 “tort tax” every year due to excessive tort costs, which are exacerbated by the issues outlined by ATRA.
The full letter with ATRA’s comments submitted to the DOJ is available here.
About the American Tort Reform Association
Founded in 1986, ATRA is a nonpartisan, nonprofit organization and is the nation’s first organization dedicated exclusively to reforming the civil justice system through education and legislative enactment. ATRA acts as a nationwide network of state-based liability reform coalitions backed by 154,000 grassroots supporters. ATRA works to bring greater fairness, predictability and efficiency to America’s civil justice system. Those efforts have resulted in the enactment of state and federal laws that make the system fairer for everyone.
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