For Louisiana’s Legal Climate, Perception is in Fact Reality

Ready. Aim. Sue.

Louisiana has a reputation for many things, including a warm and welcoming culture, a robust energy infrastructure and some of the best food and outdoor adventures in the nation. Unfortunately, we are also known for a few other things, including a reputation for a poor legal climate that is well deserved by our past and current actions.

Last week, Louisiana Association of Business and Industry (LABI) released a paper entitled, “Fact Sheet:  Louisiana’s Judicial Climate.” The document is a follow-up to a report issued earlier this year entitled, “Making the Case to Improve Louisiana’s Business Climate Through Lawsuit Reform.” Both documents, located on our website, labi.org, collectively make the case that our legal system is in desperate need for reform.

While several bills passed this recent legislative session to make improvements to our legal climate, we know that is just a first step. We have a long way to go in order to make our system more fair and accountable to taxpayers.

Reports and studies on legal reform is one of those issues that can put to sleep even the most caffeinated person, leaving them lost in a sea of legalese and Latin. While wonky, the reality is this subject may be the most important issue we face as a state for one very important reason:  the rest of the nation views us much more poorly on this issue than we view ourselves and this reputation is an inhibitor to sustainable investment.

Some closer to home have argued our system is really not that bad. Others have asked why pick such a thorny topic to discuss? The path of least resistance may not naturally flow through legal reform fights, but the path to long-term, sustainable growth simply cannot avoid this route. As we compete for investment and jobs in the global economy, our legal climate must improve.

Not convinced? Just ask others outside our state about our reputation for legal fairness.

We rank second on the judicial hellhole rankings of the American Tort Reform Association. A NERA economic consulting study ranks us seventh worst for tort activity and second worst for the impact our state’s legal climate has on tort. The U.S. Chamber has ranked our legal climate second worst in the country and fourth worst for enforcing meaningful venue requirements. Every study or ranking around the country leads to the same unfortunate conclusion that the nation’s perception is in fact our reality.

You may not concern yourself with what those outside our state think about our legal system; maybe you only care what people in Louisiana think. Well, when we polled Louisiana employers earlier this year about our legal climate, the chorus was clear. Seventy-six percent said our laws need to be strengthened to discourage frivolous lawsuits, 70 percent said frivolous lawsuits drive up prices for goods and services and 71 percent said lawsuit reform will help attract new businesses to Louisiana and keep existing businesses in our state.

Perhaps you don’t find studies by outsiders or polls by anyone reliable. You may be a quantitative type that prefers to see the data. Well, we have per capita more lawyers than any other Southern state. We also have more judges per capita than any other Southern state. Moreover, when it comes to lawsuits, we file civil suits against our fellow citizens three times more often than the citizens of Alabama and Kentucky, which are both states with similar size and demographics to our population. In Texas, over 230,000 cases were filed, which is only double the amount of cases in Louisiana, despite a population that is six times larger than ours.

Maybe you are not a data geek and you need a few anecdotal examples to grasp the depth of our addiction to lawsuits. Well, let’s see. After the 2012 legislative session ended, opponents to reform ran to the courthouse to file numerous lawsuits to challenge education reform and pension reform in various ways. The following year, one law firm cut a secret deal with a New Orleans levee board to sue 97 employers around the state while several other law firms ran to the coastal parishes to stake claim to their own lawsuit bounty. Even the recent debate over Common Core is not immune to our addictive behavior, where numerous suits are pending from several different plaintiffs accusing a smorgasbord of defendants of countless allegations.

Regardless of how you view our legal climate, the clear reality is that we are addicted to lawsuits and the abuse is growing in severity. This reality is undisputed and is not a recent phenomenon. From time to time we can minimize the damage of our legal system thanks to low energy prices or aggressive economic development efforts, but our booms will always be threatened by the next bust if we continue to ignore this problem.

Our culture is a big component of who we are as a state. We are a proud people that embrace our heritage in everything we do. We know how to have a good time, respect our family and friends and respond to adversity. Our reputation on those fronts is impeccable and well known throughout the nation. But the reputation of our legal climate is also well known by the employers looking to invest and expand in Louisiana and it is not helpful to our cause. It is a scarlet letter to our otherwise impressive presentation and it has been part of our appearance for far too long.

Our legal reputation is not worthy of being associated with our great state, but just like all reputations, it can only be discarded if our actions discount it.