Gannett Louisiana columnist Mike Hasten recently posed the question, “What’s the real story about Louisiana’s business atmosphere?” After citing a series of positive economic development statistics, he challenges the description of Louisiana as a “judicial hellhole” and the notion that our state’s negative legal climate is a deterrent to economic development.
Unfortunately, this is not the case.
Without question, Louisiana has made progress in recent years. With more than $60 billion in new investments currently on the books, it is clear Louisiana is experiencing economic growth. Much of that can be attributed to positive tax incentives, reforms in education and ethics, and a serious commitment to workforce development. Additionally, the historically low price of natural gas has helped attract “world class” manufacturing and industrial developments.
But our work is not done.
To create a strong business climate for the long term, we must invest in major reforms to improve Louisiana’s legal system. In spite of all our recent success, economists estimate lawsuit abuse costs us as many as 50,000 jobs every year. On the other hand, an improved legal climate could save Louisiana businesses as much as $1.1 billion in lawsuit costs — and increase employment even more across the state. Simply put, we are leaving a lot on the table because of some excessive and meritless litigation where all too often the goal is to strike it rich, rather than redress a wrong.
Louisiana’s legal challenge is one of both perception and substance. We see astonishing multimillion dollar verdicts being rendered nearly every other week, massive tort filings that are sponsored or authorized by government entities, and unique laws that seem to give plaintiffs the upper hand in legal proceedings.
That’s how we earned our reputation as one of the worst places in the country to be sued. In addition to the annual “judicial hellholes” ranking that Hasten questioned, the Center for Public Integrity gave Louisiana an “F” for judicial accountability. The U.S. Chamber of Commerce’s Institute for Legal Reform ranked Louisiana courts 49th in the nation for overall legal fairness, according to the most recent rankings from 2012.
Meanwhile, the Wall Street Journal described Louisiana as “the tort bar’s new mecca for litigation,” and the Manhattan Institute’s Center for Legal Policy called us a “hotbed for new legal theories.” Clearly, there’s a pattern here.
But it is not just national groups that see deficiencies in our judicial system. A 2014 survey of Louisiana voters found 72 percent of respondents believe there are too many lawyers filing frivolous lawsuits in our state, and 76 percent said state laws need to be strengthened to limit lawsuit abuse.
Unfortunately, these rankings and poll results reflect the sad reality that far too many Louisiana businesses and individuals face on the front lines of lawsuit abuse every day. As any business owner will tell you, there are many factors that contribute to a business’s success — and one of those is having a fair, predictable legal system.
Until we decide to make lawsuit reform a priority in Louisiana, and create a legal climate that helps foster long term economic growth in our state, we will continue to leave jobs and opportunities on the table.