The US state of California is suing the six biggest automakers in the country, saying their vehicles add to global warming and cost the state billions of dollars in anti-pollution and erosion costs.
The firms being sued are General Motors, Ford, Toyota, DaimlerChrysler, Honda and Nissan.
In the lawsuit filed at the district court in Oakland, the firms are accused of violating federal and state laws by creating a public nuisance by having vehicles emit huge quantities of carbon dioxide.
California attorney general Bill Lockyer said in a statement: "Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and the automakers have refused to act."
Mr Lockyer's spokeswoman, Teresa Schilling, said the action was the first by a state that involved suing car firms over emissions linked to global warming.
California approved measures last month to force utilities to cut emissions and has sued the US government for failing to address the effects of carbon dioxide emissions.
Speaking on BBC Radio Five Live this morning, John Banzhaf, a law professor at George Washington University, claimed that the state was justified in its decision to pursue compensation.
"A number of years ago the state sued the major tobacco companies arguing that the tobacco companies were making a product - cigarettes - which resulted in huge costs being imposed upon the state and the taxpayer.
"The suits were successful, the tobacco companies settled for just short of $250 billion (£132 billion), and established the idea that products manufacturers can be sued not just by individual consumers that may be hurt, but rather by the state suing on behalf of the taxpayer," Mr Banzhaf added.
"That is exactly the precedent they are seeking to rely on here, arguing that automobiles, like cigarettes, cost the state lots of money," the legal expert concluded.