Utah Bill Aims to Crack Down on Frivolous Lawsuits

Published May 1, 2009

Tired of seeing environmental activists obstruct and economically punish lawful activities through frivolous lawsuits, Utah state Rep. Mike Noel (R-Kanab) has introduced legislation requiring anyone seeking an environmental stay of a permit issued by state agencies to post a bond to cover any damages the delay might cause.

Lawful Projects Halted

Supporters of Noel’s bill, The Environmental Litigation Bond Act, point out it requires little time, money, or legal foundation for environmental activists to challenge projects and activities that already have been studied by state agencies and been determined to abide by relevant environmental laws.

As a result, many state-approved projects are shelved because those attempting to defend against frivolous environmental suits don’t have the time or money to fight off costly, drawn-out litigation … even when they are confident they will ultimately prevail in court.

The state House Natural Resources and Environment Committee unanimously approved the bill March 2. The bill’s fate with the full House remains uncertain, but proponents vow to continue supporting it in the 2010 legislative session if the bill is not approved this year.

Activists Manipulating System

Kenneth Green, a resident scholar at the American Enterprise Institute, believes environmental activist groups are wrongly manipulating the court system through frivolous lawsuits.

“There is no question that environmental groups are filing a vast array of lawsuits—many of them frivolous or intentionally distorted—and this is causing major economic losses,” Green said. “Efforts to reduce that kind of legalistic obstructionism are always warranted and need to continue.”

Green thinks “bounty hunter” provisions in the federal Clean Air Act and other federal environmental statutes also merit revision.

“There are many federal ‘bounty hunter’ provisions in numerous environmental statutes. These provisions allow environmental groups to get exceptionally large damages if they win their case, but if they lose they do not need to pay the defendant’s legal bills,” said Green.

“There is a prime incentive for environmental groups to consistently sue under bounty hunter procedural provisions because the payday can be massive and the loss is relatively small. It is why many environmental groups are made up primarily of lawyers—all they do is sue,” Green added.

Firming Up the Criteria

Randall O’Toole, a senior fellow at the Cato Institute, agrees there is a problem with environmental groups abusing the legal system, but he cautions too much reform could hamper legitimate claims against state-approved development projects.

“I think it is more of a problem in some areas than others,” O’Toole said. “I am of two minds because I know of some projects that need to be slowed down through the courts and stopped. But on the other hand, environmental groups are being obstructionist.”

O’Toole believes there is room for state and local governments to reform bounty hunter provisions. “We need to firm up the criteria,” he noted.

O’Toole also faults bounty hunter provisions in environmental statutes for removing the incentive for environmental groups to work with developers in designing projects. “Why bother [compromising], when you get paid in court?” O’Toole observed.

Model for Other States

Green is hopeful legislators in other states will consider similar bills.

“There is a definite need to reform these provisions,” said Green. “At all levels, it is essential to avoid letting special-interest groups use the legal system inappropriately to prevent something they do not like from happening. To file a lawsuit on dubious [legal] ground should be fought against, and laws to prevent such abuse are warranted at every level, whether federal, state, or local.”

Thomas Cheplick ([email protected]) writes from Cambridge, Massachusetts.