In modern American politics, people are prepared to argue that nearly every price increase is the product of greed, consolidation, or conspiracy. However, higher prices alone are not always evidence of price fixing, especially when ample evidence suggests that other forces, including lawsuit abuse, are contributing to price pressures.
Incidents of “nuclear verdicts,” jury awards exceeding $10 million, have soared of late. Even “thermonuclear” judgments, those that exceed $100 million, are increasingly common. In 2024, there were 49 such verdicts, nearly doubling the prior year’s total. These litigation costs are ultimately incorporated into equipment prices, insurance premiums, and cost of goods.
A major driver of these staggering verdicts is a rapid expansion of third-party litigation funding that has fundamentally misaligned incentives in the legal system. Outside investors finance lawsuits in exchange for a share of future settlements or judgments. In 2024, 42 funders held $16.1 billion in assets under management in U.S. commercial litigation, up from $9.5 billion in 2019—a 70 percent increase in five years. This creates incentives in class action and mass tort cases to pursue sprawling litigation strategies designed less to clarify the merits of a claim than to maximize settlement leverage.
The latest example of this is a wave of antitrust litigation accusing fire truck manufacturers of unlawful collusion. Here, over a dozen municipalities in multiple states have alleged that three leading fire truck manufacturers—Oshkosh Corp., REV Group, and Rosenbauer America—conspired with a trade association to restrict supply and inflate prices. Last month, the U.S. Judicial Panel on Multidistrict Litigation consolidated at least a dozen similar cases and transferred them to a federal district court in Wisconsin.
These plaintiffs’ arguments that price fixing occurred ultimately rest on inference: prices rose, backlogs grew, and the market became more concentrated. But each of those facts is better explained by the profound disruptions that have reshaped heavy vehicle manufacturing over the past six years.
In the U.S., fire trucks are rarely purchased “off-the-shelf.” American municipalities increasingly opt for bespoke fire trucks tailored to local preferences, such as custom pump configurations, specialized ladder lengths, and unique compartment layouts. This requires a complex production process involving many components, many of which were affected by pandemic-era supply chain disruptions. Delivery timelines stretched to well over two years during the peak of these disruptions.
At the same time, municipalities—flush with federal pandemic aid—accelerated orders, boosting demand precisely when supply was constrained. While production bottlenecks have eased, other forces pushed up prices, too. In the last year, the impact of tariffs on steel, aluminum, and medium- and heavy-duty vehicle components has further increased price pressure on heavy equipment manufacturing. As companies struggle to meet customer demands amid brutal economic realities, frivolous lawsuits only drain corporate resources and force manufacturers to raise prices.
Another lawsuit abuse scam terrorizing American companies is nuisance litigation: a cynical ploy where plaintiffs allege vague claims of “substantial interference” with public welfare to collect millions in settlements. In the energy sector, dozens of local and state governments are suing energy companies—not for spills or direct harm, but for producing the fossil fuels America runs on. Green foundations bankroll lawyers and activists to strong-arm politicians into filing these massive suits, and the lawyers pocket 20–25 percent contingency fees from any judgments. This is political theater designed to bully America’s oil and gas providers into a green agenda.
When litigation becomes untethered from clear evidence of wrongdoing, it ceases to be a tool for accountability and becomes a mechanism for wealth transfer—one whose costs are ultimately borne by consumers, taxpayers, and public institutions. For example, in previous research, I found that states eliminating caps on non-economic damages experienced sharp increases in insurance costs as liability exposure rose.
Tort litigation payments in the U.S. exceeded half a trillion dollars last year and are on track to reach $800 billion per year by 2030. To fix this, policymakers should revisit tort reforms that would discourage speculative class action litigation. One such reform is the Litigation Funding Transparency Act, recently introduced by Sen. Chuck Grassley (R-Iowa), chair of the Senate Judiciary Committee. This bill would require disclosure of outside funding arrangements in federal class actions and multidistrict litigation while limiting the ability of funders to influence legal strategy.
The litigation environment increasingly incentivizes expansive class actions built on inference rather than direct evidence. Misdiagnosing market strain as corporate conspiracy will not make fire trucks cheaper. It will simply make them scarcer and more expensive, which serves as a reminder of why tort reform and litigation-funding transparency matter. Litigation cannot repeal the laws of supply and demand.
