Financial Times: Lawyers aim to pin blame on big business: “Big oil companies such as Shell, ChevronTexaco and Exxon Mobil are being sued on the grounds that their refining and production activities in the Gulf cause global warming, which in turn caused Katrina.”: Saturday 22 October 2005
By Ben Bain and Patti Waldmeir in Washington
Published: October 22 2005
Plenty of people have been blamed for the devastation of the US Gulf coast after Hurricane Katrina - but most of them cannot be sued.
Suing the federal government, or the much-maligned Federal Emergency Management Agency, is very difficult. So now enterprising lawyers - many of whom hail from the south - are trying to hold insurance companies, oil companies and mortgage lenders responsible.
Post-disaster lawsuits are a fixture of modern American life: many were also filed in the aftermath of September 11, and many get nowhere. But the US Chamber of Commerce says post-Katrina suits are hampering the relief effort. It is pushing for legislation to protect companies involved in relief and reconstruction efforts from liability.
Big oil companies such as Shell, ChevronTexaco and Exxon Mobil are being sued on the grounds that their refining and production activities in the Gulf cause global warming, which in turn caused Katrina. Lawyers are trying to turn that lawsuit into a Mississippi-wide class action.
It claims that oil companies are the “greatest single source” of global warming and that their activities “produced the conditions whereby a storm of the strength and size of Hurricane Katrina would inevitably form and strike the Mississippi Gulf coast”.
Oil companies are also being sued for causing ecological damage to coastal marshes that had protected New Orleans.
The global warming suit, which was filed in federal court in Mississippi by the New Orleans law firm Maples & Kirwan, also targets insurance companies and mortgage lenders. Several other suits have also been brought against insurers, including one by the Mississippi attorney-general.
Most homeowners' policies exclude flood losses, and the federal government provides flood insurance to compensate; but many homeowners did not buy it. The Mississippi attorney-general is trying to get the exclusions voided on grounds that they violate state public policy.
Such actions impede recovery, says Tom Donohue, the Chamber of Commerce president: “It becomes more difficult to attract resources and risk-takers if insurance companies aren't able to participate without the fear of having their policies changed after the fact.” He says a small group of class-action and mass-action lawyers are exploiting the disaster.
“If these lawsuits were successful they would essentially be rewriting contracts after the fact and that's something that has serious implications not just for insurance contracts but for any contract under the US legal system,” adds Julie Pulliam of the American Insurance Association.
The Association of Trial Lawyers of America rejects this. “If the insurance industry and big energy companies acted responsibly there would be no reason for lawsuits, but many times the last resort for victims is the civil justice system, and they are given no other choice when negligent corporations do bad things,” says its spokesman Chris Mather.
F. Gerald Maples, who filed the global warming lawsuit, says part of its point is to raise public awareness. He hopes the suit “will bring dialogue and resources to solving the problem”.
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