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Public nuisance is a legal concept that has been used to address issues of public health, safety, and welfare. It is a tort that is committed when an individual or entity creates a condition that interferes with the use and enjoyment of a public right. In essence, the theory behind public nuisance asserts that an individual or entity, while engaged in legally permissible activity, has ultimately caused or contributed to a public health crisis by that very activity. As a result, the individual or entity may be found liable to “fund” the alleged societal cost.
This common law concept, which has been around for centuries, seems simple enough, right? Not so fast: the laws surrounding public nuisance litigation are significantly expanding. This evolution has the potential to affect some routine operations that are commonplace in many small to mid-sized insurance companys’ books.
Modern public nuisance litigation has fallen into the following broad categories:
These categories may seem expansive, and loss scenarios remote, when one considers a typical insurance company’s portfolio. However, the potential impact becomes clearer when one focuses the evolving litigation around restaurants and fast-food establishments, a common class in many portfolios.
The restaurant and fast-food industries have faced a growing number of public nuisance lawsuits in recent years, reflecting health and safety concerns brought on by the sale of unhealthy, addicting, high-calorie foods and larger-than-average portion sizes. Allegations are that they contribute to the obesity epidemic and other public health problems, like diabetes.
To that point, a recent University of Michigan study found that roughly 13% of people aged 50 to 80 showed signs of addiction to highly processed foods, defined as those that contain large amounts of fat and carbohydrates rarely seen in fruits, vegetables, and other natural foods.3 Further, the study showed that when people cut back on highly processed foods, they display symptoms similar to those experienced by drug abusers, such as irritability, fatigue, feelings of sadness, and cravings.4
A UK Study published in 2022 estimated that substituting 10% of ultra-processed foods with minimally processed food decreases dementia by 19%.5 Another UK study demonstrated a strong relationship between ultra-processed food and the subsequent development of cardiovascular disease.6
While no plaintiff has yet succeeded with food-related litigation, some such as David Loughran of the emerging risk modeling firm Praedicat posit that as the body of research increases, it’s likely that governmental and individual legal action looms.7
Another area of concern is the fast-food industry’s environmental impact. Lawsuits focus on the harm caused to the environment through their use of plastic packaging and other waste products.
New and emerging litigation involves the impact of labor practices on communities. Lawsuits allege the fast-food industry perpetuates poverty and inequality through low-wage labor practices.
This evolving litigation is taking an industry that some view as benign and well understood and moving it squarely in the cross hairs of evolving public nuisance litigation. Except for technology, the fast-food industry checks all the evolving public nuisance litigation boxes – public health and safety, environmental protection, and social justice and inequity concerns.
Whether the producers of processed foods and the restaurant industry become ensnared in public nuisance litigation remains an open question. Nevertheless, it’s clear at this early juncture that such potential exists. Key determinants going forward will be the success of other types of public nuisance litigation (such as opioids and climate change) and whether the large number of scientific studies now underway directly link consumption to adverse health consequences. Carriers and policyholders alike would be well served to keep a close eye on developments – and be prepared to expect the unexpected.
