Louisiana’s insurance commissioner is calling for a special legislative session on legal reforms in the wake of Gov. Jeff Landry vetoing a bill favored by business groups that would have clarified medical payment amounts used to determine civil damages awards.
In a press conference on Tuesday, Landry announced his veto of House Bill 423, authored by Rep. Michael Melerine (R-Shreveport), which would have allowed jurors in civil cases to know the actual amounts paid to plaintiffs’ medical providers by insurance companies. Often, the amount billed is more than what is actually paid out due to negotiated rates and discounts, according to critics.
Groups such as Louisiana Lawsuit Abuse Watch (LLAW) expressed disappointment that Landry did not sign the legislative measure reforming what’s called the state’s collateral source rule. In its current form, the collateral source rule allows claimants to recover higher amounts through damages awards, leading trial attorneys to get more of the proceeds in civil lawsuits, according to an LLAW statement emailed to the Louisiana Record.
Insurance Commissioner Tim Temple said the state cannot wait another year to try again on passing legal reforms.
“... I’m asking Gov. Landry, Senate President (Cameron) Henry and House Speaker (Phillip) DeVillier to call a special session so we can work together to pass legislation including changes to the collateral source rule and the Housley presumption,” Temple said in a prepared statement.
The Housley presumption, which arose from the 1991 state Supreme Court case Housley v. Cerise, refers to the current premise in Louisiana civil cases that injuries to previously healthy plaintiffs were caused by the accidents which prompted the lawsuits.
In his veto remarks, Landry took issue with the idea that tort reforms are an avenue to lower insurance rates. About 250 pro-insurance company bills have been passed in the state since 1974, with promises of rate reductions never materializing, the governor said.
The proposed change in the collateral source rule would ultimately hurt injured consumers and reduce damages amounts that should benefit them rather than insurance-company defendants, according to Landry.
“I’m not going to sign a bill that would have hurt the working class,” he said.
Landry acknowledged that about 7% of his campaign contributions in his 2023 election came from the trial bar, but he stressed that he signed 26 tort-reform measures into law during his first six months in office.
The business community is very disappointed by the veto of HB 4323, according to the Louisiana Association of Business and Industry (LABI). The association characterized the bill as a compromise that would have brought about more predictability and fairness in the state’s legal system.
“To defend his veto, the governor cherry-picked examples and pointed to other states that have litigation protections and guardrails in place that simply don’t exist in Louisiana, and therefore did not tell the whole story,” Will Green, LABI’s president and CEO, said in a prepared statement. “While Gov. Landry could have provided a lifeline for all Louisianans currently drowning in an unaffordable market, he instead chose to stand with the trial bar and the status quo while businesses and citizens across this state scramble to pay yet another year of unsustainable premiums.”
Green acknowledged that Landry did previously sign into law insurance reforms that would help stabilize the property insurance market, but the state’s “crippling” auto insurance premiums remain unaddressed.