For the third straight year state of Louisiana’s judicial system has garnered recognition as a “Judicial Hellhole.”
A study released by the American Tort Reform Association (ATRA) last week cited the state’s high jury trial threshold of $50,000 as a major issue as well as a litigious environment that has driven Louisiana’s auto insurance rates to the top in the nation at around $2,500 per year for the average driver.
Although the report stated actions in the 2012 legislature addressing so-called “legacy lawsuits,” an issue that pitted landowners and trial attorneys against the oil and gas industry over how cleanup of environmental damage on land from drilling years ago should be handled, was a bright spot for the state.
Melissa Landry with Louisiana Lawsuit Abuse Watch group said though passage of a bill pertaining to legacy lawsuits was a positive step there is more work to be done in the state.
“Legacy lawsuits have cost our state 30,000 jobs and $10 billion in economic output,” Landry said. “Passing that bill and helping to reign in that excessive litigation in that particular sector is a huge step in the right direction, but unfortunately if we want to try and rid ourselves of this hellhole reputation once and for all we’ll have to take on broader reform efforts.”
Don Briggs with the Louisiana Oil and Gas Association said his lobby fought hard to get passage of the bill reigning in legacy lawsuits, but he said he’s not sure he trusts the state’s judicial system to uphold the law in the form and function as proposed by the legislature.
“It's one of these things where we won the skirmish," Briggs said. "Until the work and the interpretation of what was completed in that session on the legacy lawsuit issue–until it gets used and upheld and used in the court system we won't really know just how good it was and what the impact of it was."
Briggs pointed to the recent Supreme Court runoff race of in which Jeff Hughes (R–Walker) won over John Michael Guidry (D–Baton Rouge).
A Baton Rouge-based political action committee named Citizens for Clean Water & Land raised $380,000 for Hughes in that race.
Briggs said that the money came from trial lawyers who were likely hoping to secure a spot on the Supreme Court in preparation for a possible review of the legacy lawsuit reform bill.
Landry said the election of Hughes may be a blow to industry in the state.
“Folks who are involved in the business and the legal reform community need to continue to keep a very close eye on the Louisiana Supreme Court to determine the impact Hughes’ election will have on the outcome of cases,” Landry said. “It's our hope, as it always is, that Judge Hughes and every judge from the court will get every fact of a case and render a decision based on the facts and not go into any of the cases that they hear with any degree of impartiality based on who the lawyers that are involved on either side.”
The report also noted that recent multi-million dollar judgments in the state hurt Louisiana’s reputation.
One such case was a $258 million awarded in damages in a case brought on behalf Attorney General Buddy Caldwell by “politically-supportive” plaintiff’s attorneys against Janssen Pharmaceutical and Johnson & Johnson that found the companies did not fully disclose information about side effects of anti-psychotic drug Risperdal.
“One thing to keep in mind is that no one was actually injured because of anything that went on that ultimately led to this multi-million dollar verdict,” Landry said.
The attorneys representing the state in the case are reported to have received fees of $70 million.
“While the attorney general will take a look at this case and tell you it is a huge win for the state we believe that it hurts the potential for folks who want to spend money and create jobs here in Louisiana,” Landry said. “Additionally it says beware of the civil justice system. One lawsuit, one runaway jury, one verdict could leave you with a multi-million dollar judgment and I don't think that's the message we want to send about our state's legal climate.”
Briggs said that sentiment was echoed by oil and gas companies executives at a recent roundtable discussion he attended in New Orleans.
“There was a total consensus in the room of all these presidents of companies that the legal climate in Louisiana is a major, major issue,” Briggs said. “In fact, in all of my state of the industry presentations that I am going to be making here in the next month or two I am only listing one issue and that is Louisiana's legal climate…that is number one to me.”
Plaintiff’s attorney Brian Blackwell of Baton Rouge-based Blackwell & Associates said he disagreed with ATRA’s report. Blackwell specializes in asbestos and personal injury litigation as well as other specialties.
“I do quite a bit of plaintiff’s work and I lose as many case as I win," Blackwell said. "I wish it was as described, but I believe that is a large mischaracterization of fact."
In response to the Judicial Hellhole designation hurting Louisiana’s business climate reputation Blackwell also disagreed.
“I seem to see the governor on the TV everyday talking about so many businesses coming to Louisiana," he said.
"I just saw the other day there was a business coming to Lake Charles that is going to invest $7 billion, the largest investment in Louisiana history. We’re not talking about a snow cone stand, we’re talking about people who are making investments of billions and billions of dollars like the natural gas facility in Calcasieu Parish. If our judicial climate is doing anything it seems to want to encourage people to invest here.”