Public health problems often have the potential to lead to severe and systemic liability losses. This was the case in the massive asbestos and tobacco litigation events of the 20th century, as well as the ongoing waves of litigation responding to the opioid crisis and PFAS “forever chemical” contamination in the U.S.

Since the early 2000s, as the so-called obesity epidemic has increased, analysts have raised the question of whether obesity and related issues could grow into a similarly widespread liability event in which individuals, governments or other entities sue corporations to recover obesity-related costs. This type of obesity liability event has failed to take off so far, due in part to some significant legal and legislative barriers that persist today.

However, in light of recent scientific and legal developments, it’s worth taking a new look at how litigation related to obesity and nutrition-related illnesses may become a major liability event. For insurers, now is the time to begin analyzing some of the different and surprising ways an obesity- or nutrition-related liability event could impact their business, before losses from future litigation start hitting their books.

Why Could Obesity Issues Present a Liability Risk?

Obesity and the health impacts associated with it have some of the key drivers of a major potential liability event. First, obesity is widespread: as of 2023, according to the Centers for Disease Control and Prevention (CDC), 100 million American adults (or 41.9 percent of adults) and 15 million American children (or 19.7 percent) meet the criteria for obesity (defined as a body mass index of 30 or higher). This type of widespread issue lends itself to large pools of potential plaintiffs if litigation takes off, which in turn paves the way for higher losses.

Second, obesity is considered costly due to its association with negative health impacts such as diabetes, heart disease and stroke. It is easy to find studies estimating the annual aggregate costs of obesity to the U.S. healthcare system at over $200 billion. These widespread costs to a societal system are similar to the type of public health costs that state and local government plaintiffs have claimed in opioid crisis litigation, using “public nuisance” arguments—a litigation tactic that has become more common in recent years. If local or state governments or healthcare systems could successfully sue to recover the costs associated with obesity, the high cost estimates and high numbers of potentially harmed parties could set the stage for high liability losses.

Another key driver of potentially major liability losses is that the food and beverage industries and their supply chains—the most obvious potential target for this litigation—are large industries with significant assets, akin to the “Big Tobacco” and “Big Pharma” companies of other major liability risks. This would lay the groundwork for a systemic liability event, since there could be plausible litigation targets across many companies and industries, including food and beverage manufacturers, wholesalers, and retailers.

Lastly, some of the cultural attitudes toward obesity have started to change in recent years, placing less emphasis on the personal responsibility of individuals for gaining weight and more emphasis on external factors, including factors such as marketing, ingredients and additives, for which food and beverage companies could be considered liable.

Obesity issues could follow a similar trajectory to tobacco litigation, where lawsuits filed by smokers were initially derided and rebuked on the grounds that smokers chose to assume the risk, but cultural attitudes shifted as more information emerged about the full risks and addictiveness of tobacco products. On the backdrop of other major public health-related liability events, the stage may be better set for obesity and nutrition litigation than it was in previous years.

These key drivers explain why the possibility of obesity liability has caught the attention of analysts and insurers. If obesity issues have the makings of a systemic, large-loss liability event, why haven’t we seen it take off yet? And what could it realistically look like if it did take off in the near future?

How Might a Major Obesity-Related Liability Event Play Out?

As mentioned above, it has become more common in recent years for state and local governments to launch litigation on the basis of “public nuisance” and other broad-based arguments to seek to recover large societal costs from corporations allegedly responsible for public health crises. Although the causes of obesity are multiple, complex and not fully understood, there are specific arguments that could expose the food and beverage supply chain to liability. The case for corporations’ liability may be stronger:

• If it can be argued that companies aggressively or deceptively marketed their food or beverage products, especially to children or other higher-risk consumers.
• If new information comes out suggesting that companies downplayed or failed to adequately disclose the potential health risks from certain food or beverage products.
• If scientific evidence grows that the ingredients or additives that companies incorporate into their food or beverage products are chemically addictive.

However, there are some significant reasons that nutrition- and obesity-related lawsuits to date have not succeeded in winning sizable monetary compensation from food and beverage companies. Previous lawsuits attempting to hold food companies liable for obesity and related health impacts have been unsuccessful, partly due to the argument that plaintiffs did not show a sufficient connection between their negative health outcomes and the specific ingredients or marketing actions of the defendant companies. Unlike with prescription drugs or cigarettes, foods and beverages are supplied to consumers from a wide range of different companies, making it difficult to attribute a health impact to specific products.

In addition, the science on the causes of obesity is complicated and not entirely settled, with a high number of contributing factors in the mix—including diet, physical activity, genetics, income, marketing and others—making it difficult to blame one product or company. Relevant lawsuits to date have more often led to changes in corporate practices—such as ceasing to sell sugary drinks to schools or agreeing to better publicize certain disclosures about food ingredients—rather than large monetary awards.

Perhaps even more importantly, since 2003, 26 U.S. states have enacted laws known as “commonsense consumption acts”—or, more informally, “cheeseburger bills”—that shield food manufacturers, distributors, advertisers and other corporations along the food product supply chain from civil liability for weight- and obesity-related health impacts that arise from “long-term consumption of food.” Many of these laws explicitly prevent lawsuits along these lines even coming from governmental entities such as attorneys general, which may prevent major obesity-focused litigation from taking off in these 26 states.

Given these barriers, it is worth looking beyond this narrative of potential public nuisance liability against food/beverage companies. Even if litigation against food and beverage companies for the costs of obesity continues to struggle in the near-term, the complexity of nutrition-related public health problems presents multiple other ways that the issues associated with obesity could lead to liability losses including:

Public nuisance litigation against plastics and chemical companies. As mentioned above, scientific research into the causes of obesity is complex and somewhat uncertain. Attention has grown in recent years on chemicals known as “obesegens,” which are found as plastics and plastic additives in a wide variety of consumer products and may increase the risk of obesity by affecting metabolism and fat cell growth.

If evidence for this explanation continues to strengthen, industries that produce plastics, chemical additives and consumer products may face liability risk in addition to or instead of food and beverage companies. If companies are found to have failed to adequately disclose their use of certain materials or to have allowed environmental contamination with these materials that impacted human populations, the case for their liability could be stronger.

Litigation claiming a more narrowly defined nutrition-related harm: We may also see future litigation that focuses more narrowly on a specific disease or condition that is not completely tied to obesity or weight gain, which could overcome some of the above-mentioned barriers to “obesity” litigation. Some of the diseases commonly associated with poor-quality foods, such as diabetes and fatty liver disease, can develop in people who do not meet the criteria for overweight or obesity, providing a potential plaintiff pool with negative health impacts that are not necessarily conditional on weight gain.

In addition, given the complexity of obesity causation science, it may be easier to link a more narrowly defined health condition to a specific product. If scientific evidence emerges linking particular food ingredients or additives to one specific disease other than obesity, litigation to recover the costs associated with that specific disease may take off more easily.

Litigation claiming harms from weight-loss pharmaceuticals. The options that arise to counter public health problems can come with their own flaws and corresponding liability risks. Weight loss drugs prescribed to high numbers of people may present their own risks of dangerous side effects, as occurred in the 1990s with the drug combination fen-phen, which was found to cause serious heart problems. Other weight-loss drugs currently on the market are also causing concern for side effects, with some lawsuits ongoing.

As our knowledge continues to evolve regarding the scientific causes of obesity, the potential contributing roles of corporations and the legal landscape, the insurance industry should monitor the multiple possibilities for how major litigation could develop.