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Changes to Louisiana’s legal system fail to get the state off the ‘judicial hellhole’ list

A package of legal changes that state business lobbyists supported and lawmakers approved failed to get Louisiana off the American Tort Reform Association’s annual list of “judicial hellholes.”

This is the eighth consecutive year Louisiana has been on the list, which identifies courts, jurisdictions and litigation in which defendants are not treated fairly. Critics call the list “pro-corporate propaganda” that reflects political goals, not research into the courts.

This year, the Louisiana Legislature approved a bill that Gov. John Bel Edwards signed making a series of changes to the state’s civil justice system. The new law reduces the amount that must be at stake to guarantee the right to a civil jury trial from $50,000, by far the highest threshold in the nation, to $10,000.

Proponents of the change say the high threshold allowed plaintiffs to “shop” for sympathetic judges eager to approve judgements worth a little less than $50,000. Insurers settle the claims rather than go through the time and expense to litigate them, passing those costs along to other insurance customers and driving auto insurance rates up, advocates said.

Louisiana plaintiffs still can sue an insurer directly, though in most cases juries would never learn the insurer’s identity. The bill also allows courts to consider whether a plaintiff’s failure to wear a seat belt contributed to their injuries, which previously was not allowed.

The bill also created a “collateral source” rule in Louisiana law meant to ensure plaintiffs are compensated only for medical damages either paid or owed, as opposed to the “sticker price” of a procedure, which might be much higher. However, if there is a difference between the amount billed and the amount paid, judges have the discretion to award the plaintiff up to 40 percent of the savings.

But whatever the merits of the changes, that bill, and separate legislation meant to protect businesses and schools from lawsuits alleging COVID-19 infection, wasn’t enough to get Louisiana off of the “hellhole” list. The American Tort Reform Association cited a scheme in which several residents “faked” auto accidents with 18-wheeler tractor trailers and worked with a specific lawyer to get payouts.

The report also mentions the prevalence of attorney advertising, which ATRA says drives away businesses and residents.

Lawsuits seeking compensation from oil companies for alleged environmental damage to Louisiana’s coastal region discourage investment in the state, the report’s authors argue.

“The coastal lawsuits and the legacy lawsuits [so named because the alleged damage took place years or even decades ago] are the single biggest deterrent to investment in oil and gas in our state,” state Sen. Sharon Hewitt, an oil-and-gas engineering executive by trade, said in a webinar an industry group held Wednesday.

The Louisiana Association of Business and Industry, which supported the changes lawmakers approved this year, agreed with ATRA’s assessment of Louisiana’s “toxic legal climate” though pointed to Louisiana moving from fourth to fifth on the list as a silver lining. The rankings are subjective and are not based on any set criteria.

“While we’re pleased Louisiana’s landmark legal reform effort at the Legislature was singled out as positive progress, ATRA’s report is a clear reminder that we have much work to do in ensuring our legal system, including our courts, is a fair and level playing field for all involved,” said Lauren Chauvin, LABI’s director of Civil Justice and LABI’s Judicial Program.

Supporters of this year’s legal changes said they expected the tweaks would lead to cheaper auto insurance in Louisiana, where rates are among the highest in the nation. Unlike other similar bills that did not make it through the legislative process, the approved legislation did not call for a specific rate decrease.

Eric Holl with Real Reform Louisiana, which opposed the changes, noted that Pennsylvania, represented by its Supreme Court and the Philadelphia Court of Common Pleas, ranks first on the hellhole list while also having relatively low auto insurance rates. He called the lobbyist-backed report “thoroughly discredited” “pro-corporate propaganda” because it is not an empirical study.

“We need real insurance reform to lower rates and protect the working people of Louisiana,” Holl said.

David Jacobs, Staff Reporter for the Center Square, is a Baton Rouge-based award-winning journalist who has written about government, politics, business and culture in Louisiana for almost 15 years. He joined The Center Square in 2018.