August 09, 2006

Strapped for Cash? Start an Environmentalist Group and Start Suing Profitable Firms

Today in the Wall Street Journal Professor Bruce Benson reports on how environmental “bounty hunters” like Natural Resources Defense Council and Earthjustice Legal Defense Fund threaten private firms with lawsuits over often petty paperwork violations in order to extract cash for their “supplemental environmental projects.” Usually, companies decide to settle and end the harassment rather than go through an expensive litigation process.

Benson finds ample evidence most of the lawsuits are more about greenbacks than green policies:

“An indication that self-interest, not environmental stewardship, propels these suits comes from comparing citizen suits filed under two different laws. Between 1995 and 2002, 1,371 citizen suits were filed under the under the Clean Water Act but only 143 under the Clean Air Act. Do environmental groups such as the Natural Resources Defense Council and the Earthjustice Legal Defense Fund think that water violations are more serious than air pollution? Probably not. They do know, however, that the Clean Water Act mandates record-keeping that makes suing under it easy and allows large fines that make settlements lucrative; the Clean Air Act does not.

Another sign that the goals are financial, not environmental, is that the Clean Water Act suits are disproportionately targeted at private firms, not municipal governments. Yet municipal governments generate much more water pollution.”

You can read Professor Benson’s more comprehensive report here at the website of the Property and Environmental Research Center.