After years of skirmishes, the long-running battle in Louisiana between business interests and trial lawyers has burst into the open and is playing a central, if little-noted, role in this year’s gubernatorial and legislative campaigns.
The dispute centers on the push by business interests to limit lawsuits that business leaders say discourage investment and kill jobs.
The lawyers who represent the plaintiffs filing those lawsuits counter that businesses are trying to deny injured parties and wronged landowners their rightful day in court. How can the investment climate really be that bad, they ask, if Gov. Bobby Jindal and Louisiana Economic Development, which works to lure companies and promote investment in the state, have been constantly touting business-sought changes they made to make the state a better place to invest?
At stake are hundreds of millions of dollars in potential payments to be won in court or through legal settlements for people injured in car and industrial accidents or who own land polluted years ago by oil drilling.
Each side has plenty of money.
Business interests are believed to be spending millions of dollars as part of a movement known as “tort reform” to ensure that the next governor and Legislature pass measures to curb the lawsuits they say are anti-business. Business leaders also want legislative changes that take aim at judicial practices they deem to be unfriendly to their interests.
They note that a recent analysis by the United States Chamber’s Institute for Legal Reform ranked Louisiana 49th among the 50 states for its lawsuit climate.
“We intend to propose and promote legislation to address the things that we believe to be unfair in the lawsuit process,” said Loulan Pitre Jr., a New Orleans lawyer and former state House member who is the secretary-treasurer of the Louisiana Lawsuit Fairness PAC. The super PAC — which is chaired by major Republican donor Donald T. “Boysie” Bollinger — will spend heavily to elect like-minded candidates to the Legislature, Pitre said.
Wealthy trial lawyers are fighting back.
One Baton Rouge-based law firm is spending at least $1.7 million for television ads that attack U.S. Sen. David Vitter, the gubernatorial candidate who wants to kill the lawsuits that landowners file against oil and gas companies.
“We just want to defeat David Vitter,” said Don Carmouche, whose firm, Talbot, Carmouche & Marcello, is funding the anti-Vitter super PAC. “He’s Big Oil’s boy.”
Carmouche said the other three gubernatorial candidates “are reasonable.” They are Public Service Commissioner Scott Angelle, Lt. Gov. Jay Dardenne and state Rep. John Bel Edwards, the only Democrat in the race.
Carmouche said the firm is spending an additional $625,000 beyond the $1.1 million previously reported for the anti-Vitter ads.
Business interests and trial lawyers frequently engage in political combat throughout the country, but they have not engaged in a major statewide battle in Louisiana since the 1995 governor’s race, when a little-known state senator named Mike Foster won the election and then spurred the Legislature to enact a series of changes that eliminated legal strategies favored by trial lawyers.
Despite the curbs, the Carmouche law firm and other trial attorneys opened a new legal front. They aggressively signed up landowners throughout Louisiana and filed suit against oil companies, alleging that the companies were responsible for contaminated aquifers and soil. The lawsuits are known as “legacy” cases because the oil drilling took place years earlier.
Foster’s successor, Gov. Kathleen Blanco, had a pro-business record and pushed legislation that restricted, but did not stop, the legacy lawsuits.
Jindal has also had a pro-business record and strongly supported the Legislature’s decision in 2014 to kill a lawsuit filed by the Southeast Louisiana Flood Protection Authority-East against nearly 100 oil and gas companies. The lawsuit accused the companies of destroying wetlands and sought to make them pay more than $1 billion to restore the lost land.
But like Blanco, Jindal has not supported the business community’s demands for a clampdown on the legacy lawsuits.
Jindal has received millions of dollars in campaign contributions from business interests. He also has received $300,000 in campaign contributions from trial lawyers, according to Louisiana Lawsuit Abuse Watch, which pushes the industry view.
Jindal’s inaction has left business interests frustrated, especially since they have gained ground on virtually all of their other issues in Baton Rouge. During the Jindal years, the Legislature has cut taxes for businesses and approved hundreds of millions of dollars in business tax breaks, and his administration has awarded hundreds of millions of dollars in tax exemptions to get companies to invest in Louisiana.
Vitter, however, has promised to make the changes sought by industry, most notably at a campaign forum in Lake Charles in March sponsored by the Louisiana Oil and Gas Association.
“I’m the only candidate for governor this year who has said flat out the biggest problem we have for our business climate is the litigation environment,” Vitter said. “We have to change it.”
Vitter also cited a conversation with the chief executive officer of Hilcorp, a Houston-based oil and natural gas exploration company, who, according to Vitter, said that 70 of the 75 lawsuits against his company were filed in Louisiana and that he no longer plans to invest in the state. Vitter added that he intends to work aggressively as governor to make the changes sought by companies such as Hilcorp.
Vitter’s clarion call and the business community’s frustration with Jindal propelled the issue onto the agenda in this year’s gubernatorial and legislative races.
“You’ve got to have a governor who feels it in his gut, has a passion for it and is willing to spend some political capital to achieve it,” said Chuck McMains, a lobbyist for insurance companies who, as a state House member from Baton Rouge in the late 1990s, sponsored several anti-lawsuit measures favored by Foster that the Legislature approved.
Vitter’s promise to fit the mold described by McMains alarmed the Carmouche law firm, which has filed 182 of the 385 legacy cases identified by the state Department of Natural Resources.
The Carmouche firm is also representing Plaquemines and Jefferson parishes in lawsuits alleging that drilling by oil and gas companies has destroyed wetlands in those parishes. The lawsuits are seeking to make the companies pay to restore the damage they caused.
The Carmouche firm — which in 2012 played an outsized role in the election of Jeff Hughes to the state Supreme Court by organizing a PAC that spent $695,000 for him — geared up for the governor’s race this year by hiring a pollster and a media consultant. That led to the release of two ads under the somewhat confusing name of the Louisiana Water Coalition. The ads attack Vitter for his 2007 prostitution scandal and for having an aide on his Senate staff who had several run-ins with the law, including an incident where the aide’s girlfriend said he slashed her with a knife.
Trial lawyers, but not Carmouche, are the main funders of a separate anti-Vitter group known as Gumbo PAC, according to its executive director, Trey Ourso.
The main issue for Carmouche is a measure approved by the Legislature in 2006 under Blanco that is known as Act 312. It gave an obscure office in the Department of Natural Resources — known as the Office of Conservation — the authority to determine the cost of cleaning up contaminated land. Previously, only judges and juries had that authority.
Carmouche initially opposed Act 312 but said he has learned to live with it. Now, he believes Vitter would seek to amend the act to try to kill the legacy lawsuits and would also install a pro-industry regulator to oversee that office.
Carmouche also fears that Vitter will try to kill the parish lawsuits that aim to restore the coast.
Besides the legacy and coastal lawsuits, the battle between the trial lawyers and industry forces operates on another political front. The Louisiana Association of Business and Industry is stepping up its fight to change the jury threshold for civil cases. Under law, cases are not heard by a jury if the amount at issue does not reach $50,000. That is the highest threshold in the country. LABI wants to lower it.
“Putting power into the hands of an elected judge allows entrepreneurial trial lawyers to ‘judge shop’ to legally and openly seek a venue with a track record that is more favorable to their clients and therefore more profitable to them,” says a LABI brief on the issue.
An effort to lower the jury trial threshold died in the state House in 2014.
“This is the key piece of the puzzle to begin lowering insurance rates” for autos, homes and businesses, said state Rep. Ray Garofalo, R-Chalmette, the sponsor of that legislation.
Garofalo is seeking re-election and says trial lawyers are assisting his opponents. He said he has received contributions from LABI and business owners “because I am working to improve the business climate in Louisiana.”
Donald Price, a Baton Rouge-based attorney who is the past president of the trial lawyers’ trade group, the Louisiana Association for Justice, scoffs at the notion that Louisiana’s laws don’t favor business, given the state’s conservative bent.
“These are red state jurors and judges elected by red state voters,” Price said. “They don’t just give away money.”
Follow Tyler Bridges on Twitter @TegBridges. For more coverage of the state capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politics blog.