Old wounds, new practices: How “organizational scars” drive communities to hold corporations accountable

Between 2017 and 2020, something unprecedented happened in the United States. Over half of the country’s counties filed lawsuits against opioid manufacturers and distributors, seeking to recover the staggering costs of an epidemic that has claimed more than half a million lives since 2001. The lawsuits were a form of “affirmative litigation” – legal action in which a government entity sues a corporation on behalf of its constituents. What makes this remarkable is that, for local government attorneys, this kind of aggressive legal action had always been considered outside their professional role. County and city attorneys defend their jurisdictions against lawsuits; they do not typically go after powerful companies. And yet, in a matter of months, they did exactly that – en masse.

Local governments discovered a new tool for addressing public health crises that had previously been absent from their repertoire. The wave of opioid litigation is a social innovation. How this came about is the puzzle motivating a new study published in the American Sociological Review by Amanda Sharkey, Kathryne M. Young, Patrick Bergemann, and me. What we found points to a broader mechanism – one that should be of interest to anyone studying how organizations learn from their past, and anyone who cares about how communities respond when corporations cause widespread harm.

Scars from the past

Our investigation reveals the importance of what we call “organizational scarring.” The concept describes a lingering sense, within an organization, of having been wronged by another entity in the distant past. The injury does not trigger an immediate response. No new routines are built, no new capabilities developed. Instead, the wound persists as a narrative – a story told among organizational members – until a sufficiently analogous situation arises and reactivates it.

In this case, the scar originated two decades earlier, during the Big Tobacco litigation of the 1990s. U.S. states had sued tobacco manufacturers and won a $240 billion settlement, with assurances that the money would fund tobacco prevention programs. But in many states, the funds were diverted to cover budget deficits, infrastructure projects, or other unrelated expenses. Local governments, which bore the direct costs of treating tobacco-related illness, received little or nothing. Many county attorneys we interviewed described this perceived betrayal with striking intensity – even those who had not been in their positions at the time of the original settlement. The story had been passed down through offices, shared in professional meetings, mentioned in hallway conversations. It had become part of the institutional memory.

When the opioid crisis unfolded in ways that were strikingly parallel to the tobacco epidemic – a harmful, addictive product marketed deceptively by large corporations, with enormous costs falling on local hospitals and emergency services – this dormant scar was activated. County attorneys began to distrust state governments’ ability to represent local interests. Rather than waiting for the state to litigate on their behalf (and potentially keep the money again), they decided to act on their own.

Learning and legal consciousness

The scar was not just a source of distrust; it also enabled a fundamental transformation in how local attorneys understood their professional role. Affirmative litigation had long been seen as “aggressive” – the province of state attorneys general or private class actions, not small-town county lawyers. But by framing the opioid lawsuits as a way to defend their counties from being shortchanged by the state once more, local attorneys recast what appeared to be an offensive action as a protective one. As one Oregon attorney told us, explaining the decision to sue rather than trust the state: “That’s why we did it! We initiated it, we’ll get the money, and we’ll decide how it’s spent!”

This shift in “legal consciousness,” or the way legal actors understand their rights, responsibilities, and appropriate roles, was essential. Without it, even intense distrust might not have been enough to spur action. Private law firms provided the logistical capacity by working on contingency, but the decisive factor was this cognitive reframing, rooted in the organizational scar. Research on equal opportunity and diversity legislation – such as Lauren Edelman’s Working Law and Frank Dobbin’s Inventing Equal Opportunity – has shown that organizations don’t simply comply with external legal mandates – they actively shape what compliance looks like from the inside. Our findings extend this insight in a different direction: the boundaries of what local attorneys considered their appropriate legal role were not set by law, but by professional culture, relational history, and organizational narratives. Nothing in the legal code prevented counties from suing. The barrier was more organizational than legal.

Organizational scarring also differs from how we typically think about organizational learning. The classic view, following the influential work of Barbara Levitt and James March, holds that organizations learn by encoding past experiences into new routines and policies. But in this case, counties did not build affirmative litigation departments, nor did they establish new relationships with private law firms in anticipation of future corporate harms. The “lesson” was not immediately codified – rather, it stayed with the offices as a narrative and a feeling of having been wronged. And it shaped behavior when an analogous crisis emerged twenty years later.

This distinction matters because it suggests that organizations carry a wider range of lessons from the past than traditional learning models capture. Emotional residues like frustration, distrust, or a sense of injustice can persist within organizations long after the individuals who experienced the original event have moved on, and these feelings can become consequential under the right conditions.

What this means for organizations and society

Both our in-depth interviews with county attorneys across the United States and a systematic event-history analysis of all U.S. counties support these conclusions. Our findings suggest several lessons for those who study and lead organizations. First, organizational memories are longer and more consequential than we often assume. Narratives about past injustices can lie dormant for decades and still shape decision-making when the right trigger appears. Second, the boundaries of what organizations consider appropriate action are more fluid than they appear. Practices that seem incompatible with an organization’s identity can be reframed under the pressure of relational experiences. Third, and perhaps most practically, those involved in distributing settlement funds or other shared resources should recognize that perceived unfairness can create durable organizational scars – scars that will surface, sometimes in unexpected ways, many years later.

The pattern we identify is not confined to the opioid context. In the United States, over 2,000 lawsuits have now been filed against social media companies by school districts, cities, and states alleging that platforms like Instagram, TikTok, and Snapchat were designed to be addictive and have fueled a youth mental health crisis. The first trials are underway. Observers have explicitly compared these suits to the tobacco and opioid waves – addictive products, corporate knowledge of harm, massive public costs. If the opioid experience is any guide, the way past settlement outcomes are perceived by local actors will shape how aggressively they engage in this new round of litigation.

Climate litigation is expanding along similar lines. Nearly 3,000 climate-related cases have been filed worldwide, and nearly 60 countries are now involved. In Europe, landmark rulings – such as the 2024 KlimaSeniorinnen decision, in which the European Court of Human Rights found that Switzerland had violated citizens’ rights through insufficient climate action, or the ongoing Milieudefensie v. Royal Dutch Shell litigation in the Netherlands – are establishing new norms of corporate and governmental accountability. France’s Loi de Vigilance, which requires large companies to identify and prevent human rights and environmental risks throughout their supply chains, has generated a growing body of litigation holding corporations responsible for harms that extend well beyond national borders. The way the opioid settlements are eventually distributed, fairly or not, may well leave its own organizational scars that shape how local governments approach the next wave of corporate accountability litigation. And communities in and around Lyon may well be inspired by the successes of such social innovations, whether over greenhouse gas emission mitigation, PFAS chemicals in the Vallée de la Chimie, or something not yet on the horizon.

Each of these cases reflects a broader question at the intersection of organizations and society. When corporations profit from products or practices that cause widespread harm to public health or the environment, who should bear the cost? The opioid litigation demonstrates that local communities are increasingly unwilling to wait for national governments to answer this question on their behalf.