The effort to lower auto insurance prices by curtailing litigation will have to begin again as Gov. John Bel Edwards on Friday vetoed the legislation that overwhelmingly passed both chambers but included faulty wording.
Senate Bill 418, the Omnibus Premium Reduction Act of 2020, was among eight bills the governor rejected. He also vetoed legislation that required jail time for people crossing often unmarked property lines of critical infrastructure, which community activists called a way to squelch protests at refineries, as well as a measure to limit lawyer advertising.
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Among the 68 bills Edwards signed Friday without comment was House Bill 334 that broadens the ability of people to carry guns into places of worship and Senate Bill 130 setting a Nov. 3 election for parishes to decide if they would allow sports betting.
The veto of the Omnibus Premium Reduction Act of 2020 was not unexpected because a last-minute and poorly worded addition mistakenly required some plaintiffs – those with modest injuries and their own medical insurance – to receive tens of thousands dollars more than their injury cost to treat.
Gov. John Bel Edwards veto message on Omnibus Premium Reduction Act of 2020
But Edwards noted that no insurance company testified on behalf of the legislation and the bill as it landed on his desk was “neither a compromise nor is it a mandate to decrease rates.”
The Louisiana House has three bills on tap for debate Monday, each vying to replace the vetoed Senate Bill 418, but each coming at the issue differently.
The five-part Omnibus Premium Reduction Act would make technical changes to how civil courts operate, including extending the deadline for filing a lawsuit from one year to two, called prescription; lowering the amount of damages sought in order to have the case heard by jury instead of a judge from $50,000 to $5,000 for most personal injury cases, called jury threshold; limiting medical expenses recovered to the actual payments made, rather than what a health care provider charges, called collateral source; requiring lawsuits to be filed against the other driver, rather than the insurance company, called direct action; and allowing judges and juries to know if the injured plaintiff was not wearing a safety belt.
Supporters claim the changes could lead to at least a 10% reduction in the cost of automobile insurance. Opponents counter there’s no guarantee rates would fall, but the changes would leave people injured in accidents more beholden to insurance companies because litigating successful lawsuits would become much more difficult.
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Edwards and SB418’s chief sponsor, Sen. Kirk Talbot, R-River Ridge, had negotiated hoping to avoid a veto override fight that neither side was sure of winning. But talks broke down.
“I worked closely with Sen. Talbot and other legislators and presented a number of areas where compromise could have been reached,” Edwards wrote. Those issues included lowering the jury threshold, eliminating the ban on revealing if the injured party was wearing a seatbelt and simplifying the collateral source rule.
The three measures on the House agenda for Monday are:
- The 10-page House Bill 44, by Rep. Ray Garofalo, R-Chalmette, basically repeats the original bill and jettisons the points of agreement. He sets jury trial threshold at $5,000.
- The 14-page House Bill 42, by Rep. Gregory Miller, R-Norco, incorporates several of the points of agreement, such as allowing a court to compensate the injured party – $1,500, in most cases – for having a medical insurance policy that pays for treatment and thereby lowers the exposure for the driver at fault. He sets the jury threshold at $25,000, down to $10,000 in 2021 if the price of insurance actually drops by 10%.
- Speaker Clay Schexnayder, R-Gonzales, called his two and half page measure the Civil Justice Reform Act. It too addresses each of point in the Omnibus bills, but does so without all the detailed instructions. For instance, House Bill 57 just says all medical costs are admissible and can be considered. He puts the jury threshold at $10,000.
While much of the attention was on the Omnibus Premium Reduction Act, seven bills addressed lawyers who advertise on television, billboards and elsewhere. Two were finally passed during the regular legislative session that adjourned June 1.
Edwards signed Senate Bill 115, by Sen. Patrick Connick, R-Marrero, that requires advertisements for legal services that mention settlements or jury awards to also disclose attorney fees. But Edwards rejected similar legislation, Senate Bill 395, filed by Sen. Heather Cloud, R-Turkey Creek.
She gave the Louisiana Attorney General authority to pursue complaints under the state consumer protection laws. Connick’s bill gave the authority to the Louisiana Supreme Court.
Cloud responded on Facebook: "We must never give up or give in."
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Edwards wrote that making both measures law would be confusing. Plus, he was concerned that SB395’s wording, which tracked similar versions in Tennessee and Texas, could be unconstitutional.
Edwards also vetoed House Bill 197, by Rep. Jerome “Zee” Zeringue, R-Houma, who wanted to strengthen definitions for water and flood control equipment and to provide for a stronger trespassing penalty during a “state of emergency.”
Environmental, faith-based and community groups said that regardless of the intent, the measure heightened criminal penalties for unauthorized entry of a critical infrastructure, which include many refineries and petro-chemical plants. The wording also took away a judge’s discretion by making mandatory a sentence at hard labor from 3 to 15 years and a potential fine of up to $5,000 – a level of harshness the advocates say would chill people from their First Amendment right to protest.
Edwards vetoed, stating Louisiana is in a constant state of emergency – 11 emergency orders on his watch alone – so the harsh sentence would always be in effect. He recommended Zeringue take another run at the bill in a future session.