Competition Economics Academic Affiliate Professor Justine Hastings and Competition Economics Director Dr. Michael A. Williams to publish an upcoming article entitled “Market Share Liability: Lessons from New Hampshire v. Exxon Mobil” in the Journal of Environmental Law and Litigation.

 

Economics teaches that firms causing “negative externalities” should be taxed or fined to “internalize” the costs they cause, thus ensuring market efficiency. For instance, environmental regulation and remediation requirements can mitigate or prevent negative externalities by forcing firms to internalize the costs of their pollution through the use of monetary penalties for environmental damage.

 

Negative externalities are pervasive in today’s modern economy. Economic efficiency requires, and public policies attempt to ensure, that polluting firms internalize the costs they impose on society. In many instances, however, tracking a pollutant back to its source can be difficult or impossible. In such circumstances, market share liability may serve as a viable method with which to assign damages. In other circumstances, e.g., global warming litigation, the alternative methodology of substantial causation may better serve that purpose.

 

The article examines the history of market share liability in litigation involving a number of products, as well as the strengths and weaknesses of market share liability in other areas of product liability litigation. The paper also discusses how market shares can be weighted to reflect the relative damages caused by similar but not identical products.