In what promises to be a landmark court case, Farmers Insurance Co. has filed a class action lawsuit against some 200 communities in the Chicago Area. Farmers at the heart of its argument is claiming that local governments know or should have known the rise in global temperatures would result in heavier rains. Local governments, according to Farmers, failed to make the necessary repairs to sewer and stormwater drains in response. The suits are believed to be the first of their kind.
The issue in these suits is really going to turn on whether the effects of climate change are an “act of God” or if it is something of a foreseeable nature that municipalities could prepare for in advance. There is the likelihood that we will see a flood (pardon the pun) of this type of lawsuit around the country over the next several years. As Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School in New York, puts it “We will see more and more cases. No one is expected to plan for the 500-year storm, but if horrible events are happening with increasing frequency, that may shift the focus.”
By “shifting the focus” what Gerrard is saying is that insurance companies are in the business of protecting against the expected, but infrequent, disaster: floods, fire, tornadoes, etc. However, when “disasters” become a common theme due to a known set of circumstances the duty shifts to those charged with public safety. In other words, government at its most basic level must provide for the safety of its citizens. It is through this lawsuit that Farmers is attempting to enforce this basic tenant.
The government for its part will argue governmental immunity. Governmental immunity is a court doctrine that protects them from prosecution. Several similar class actions accusing the Army Corps of Engineers of failing to secure levees breached during Hurricane Katrina in 2005 were dismissed last year on immunity grounds. If, somehow, the insurance companies were successful the obvious question becomes “who pays?”
If Farmers manages to succeed in its suit the expectation is that they would recoup the amount paid to insured homeowners when flooding stuck Illinois in April 2013. While Farmers has not specified how much the company paid in claims, the suits have not specified a damage amount, estimates can be made. The federal government paid more than 64,000 households and individuals more than $218 million in aid and low-interest loans following the storms according to the state’s Emergency Management Agency.
If successful the cost will ultimately be borne by us, the taxpayers/insured, in one way or another; whether it is through higher taxes or higher insurance premiums. This suit should be on everyone’s radar given the number of disasters that are being blamed on climate change. If you would like to follow this suit the Farmers Chicago Flooding Class Action Lawsuit is Illinois Farmers Insurance Co. v. The Metropolitan Water Reclamation District of Greater Chicago District, et al., Case No. 14Ch06608, in the Circuit Court of Cook County, Illinois.
