Louisiana has retained its longtime designation as a Judicial Hellhole by the American Tort Reform Foundation, whose 2023-2024 annual report found the Bayou State was the seventh-worst civil litigation jurisdiction in the country.
The ATRF’s report, which was released December 5, criticized Louisiana over its multibillion coastal-erosion lawsuits, property insurance scams and a failure to get a handle on third-party litigation financing.
“This annual report ranks the most unjust local courts and state civil justice systems in the country,” Louisiana Lawsuit Abuse Watch (LLAW) said in a statement emailed to the Louisiana Record. “This marks the 14th year Louisiana has been named in the report and the second year in a row the state has claimed the No. 7 spot.”
The report paints Louisiana residents as burdened by an annual “tort tax” of $1,118 and job losses amounting to nearly 49,000 as a result of the state’s problem-plagued civil justice system. In addition, Louisianans were inundated with 858,000 legal-services television ads in 2022, according to the report, as plaintiffs’ attorneys sought to get a share of the state courts’ “nuclear verdicts.”
LLAW said it looks forward to working with newly elected state officials to advance new civil-justice reforms, including a measure to provide transparency when civil lawsuits are funded by third-party financers, and reduce the litigation burdens on businesses so they are better able to provide quality jobs.
“Lawsuit abuse harms hardworking Louisianans by clogging our court system with meritless and frivolous cases, increasing the costs of goods and services while driving up insurance costs and driving away jobs,” the LLAW statement says. “Louisiana can – and must – do better.”
The ATRF report criticizes outgoing Gov. John Bel Edwards for vetoing legislation, Senate Bill 196, which would have required parties to disclose third-party litigation financing contracts in civil lawsuits.
“The outgoing governor, an attorney with deep ties to the plaintiffs’ bar, was a roadblock for reforms, vetoing several pieces of legislation during his governorship,” the ATRF’s report says. “The ATRF will keep a watchful eye on incoming Gov. Jeff Landry to see if there might be an opportunity for the state to improve its civil justice environment.”
But the report does acknowledge that Edwards this year signed into law House Bill 183, a measure backed by tort-reform advocates that bars any attempt to either solicit or accept assignment-of-benefits (AOB) contained in consumers’ insurance policies.
The state’s previous acceptance of AOB contracts in hurricane property damage repairs helped to spur questionable litigated claims in Louisiana in the wake of Hurricanes Delta, Laura and Ida, according to the report. In particular, a single law firm, Houston-based McClenny, Moseley and Associates (MMA), filed 2,766 property insurance lawsuits in the state from 2020 to 2022, the report said.
“MMA is alleged to have made duplicate lawsuit filings, sued insurance companies having no business relationships with the plaintiffs and filed lawsuits on behalf of clients who had previously settled their claims with insurers,” the report says.
The ATRF also noted the number of people sentenced for criminal activities related to “Operation Sideswipe,” a New Orleans-area conspiracy among scammers, doctors and lawyers to stage auto accidents and collect resulting damage awards, continued to rise in 2023. The number of scam participants sentenced now numbers more than 50, according to the report.
ATRF laments the more than 40 lawsuits filed by several Louisiana parishes against energy companies over coastal erosion damage. These lawsuits create burdens for an industry that generates billions of dollars for the state economy and supports nearly 350,000 jobs, according to the report.
Though the oil-company defendants have argued that their drilling activities in the coastal regions were the result of World War II-era directives from the federal government, the lawsuits are now set to be tried in state courts. That’s because the U.S. Supreme Court this year refused to review an appellate court’s decision to send the lawsuits to state courts.