Louisiana, famous for its unique swamps and abundant wildlife, is known as the Sportsman’s Paradise. Unfortunately, it is also becoming known as a plaintiffs’ lawyers’ paradise.
The U.S. Chamber’s Institute for Legal Reform’s 2015 Lawsuit Climate Survey ranks the states based on perceptions of their lawsuit environments. In five of the past six surveys, Louisiana has come in at No. 49 — stuck next to last. In particular, respondents in the survey named Orleans Parish as one of the least fair and reasonable litigation environments in the entire country.
Why is Louisiana’s legal system so troubled?
For one thing, Louisiana law keeps citizens out of the process and puts too much power in the hands of judges. Jury trials are only permitted for civil claims seeking more than $50,000. To put this in perspective, the national average is under $2,000, with most states allowing jury trials in cases where no money is sought.
In addition, Louisiana’s lax venue laws allow for “forum shopping,” a tactic used by plaintiffs’ lawyers to win verdicts in friendly locations. Louisiana courts are notorious for awarding excessive damages and allowing frivolous claims to proceed. Louisiana also has the largest number of judges and lawsuits per capita in the South. In fact, Louisiana residents file three times as many lawsuits as do residents in Alabama.
Then there is the ongoing problem of “legacy” lawsuits, where plaintiffs seek millions of dollars from oil and gas producers for alleged environmental damage. In these cases, plaintiffs are not required to prove specific damages by companies, and they are not required to spend settlement dollars on actual cleanups. But the lawyers do well.
Lawsuits aren’t the only thing unchecked in Louisiana. Over the years, state and local agencies have used contingency fee contracts with outside attorneys — crafted behind closed doors and without public input — to pursue high-dollar lawsuits. This practice continues today despite a recently passed law to end it.
This state of legal affairs is not good for Louisianans. A legal system that is unfair and unchecked keeps a state’s legal ranking low, thereby serving as a deterrent to economic growth. In today’s global economy, where jobs and investment can go anywhere in the world, a state’s ability to build a reputation of creating a strong business environment is critical to success.
In order to improve Louisiana’s legal system, state and local agencies must follow the law and stop the excessive use of outside counsel. The Legislature should consider passing common sense legal reforms to curb abusive lawsuits, starting with the elimination of the state’s jury trial threshold and amendments to venue laws to require a closer connection between a lawsuit and the area in which it may be filed. These changes will help bring Louisiana back into the mainstream, give citizens more access to the courts and ensure that everyone receives a fair trial.
The judiciary must also be more accountable to taxpayers by posting online (in a searchable database) court budgets and contracts, as well as personal financial disclosures of judges. Other branches of government in Louisiana, as well as many other states, routinely disclose this information. Louisiana courts should be held to the same standard of transparency and accountability.
The Legislature should prioritize these reforms in its 2016 session. By acting decisively against the abuses of today, it can help create a more prosperous future for Louisiana — a future where the state is no longer swamped with litigation.
Lisa A. Rickard is president of the U.S. Chamber Institute for Legal Reform. Stephen Waguespack is president of the Louisiana Association of Business and Industry.