Business community plans to ask legislators to limit lawsuits

“In the coming session, we’ll be asking the Legislature to level the playing field for small businesses in the state’s courts.” John Overton, chairman of the Louisiana Leadership Council for the National Federation of Independent Business

The business community plans to push the Louisiana Legislature to pass bills that would limit who has access to the courts to redress grievances.

Louisiana Association of Business and Industry President Stephen Waguespack pointed to an American Tort Reform report that Tuesday ranked the state second among the nation’s “Judicial Hellholes” as reason for focusing legislative efforts on the ability of parish governments to sue the energy industry for damage caused to the state’s coastline.

“The most recent examples are the parish suits, where they are targeting industries that have valid permits for working in the coastal zone. That is an absolute signal to anyone looking to invest in Louisiana to think twice about it,” Waguespack said Tuesday.

Officials with the Louisiana Mid-Continent Oil and Gas Association and the Louisiana branch of the National Federation of Independent Business, also reacting to the national report, agreed that legislation was needed to curb lawsuits.

“In the coming session, we’ll be asking the Legislature to level the playing field for small businesses in the state’s courts,” John Overton, chairman of the Louisiana Leadership Council for the National Federation of Independent Business, said Tuesday in a prepared statement.

The American Tort Reform Association, which issues the annual “Judicial Hellholes” report, was founded in 1986 by the American Medical Association and American Council of Engineering Companies, and now has hundreds of corporate members.

Writing in the West Virginia Law Review, Elizabeth G. Thornburg, a professor at the Southern Methodist University Dedman School of Law in Dallas, wrote the rankings are based on anecdotal information.

“Judicial Hellholes are selected in whatever way suits ATRA’s political goals,” Thornburg wrote. “The choice is not based on research into the actual conditions in the courts ... empirical research tends to debunk the industry complaints.”

“These types of reports have been issued for more than a decade,” stated the Louisiana Association for Justice, a Baton Rouge-based group for lawyers who represent plaintiffs in civil litigation. “And each time their credibility has been questioned. It is not unexpected that this report seems to promote a specific legislative agenda or that it appears prior to a Louisiana legislative session.”

The ATRA report listed several issues with Louisiana, including public agencies hiring private lawyers to sue large energy companies, alleging potentially billions of dollars in damages. “You cannot allow public bodies at the local and political subdivision level, especially, to go out and cut these deals,” with private lawyers to file lawsuits against private industry, Waguespack said.

Jefferson and Plaquemines parishes and The Southeast Louisiana Flood Protection Authority-East have filed lawsuits alleging dozens of energy companies and their contractors destroyed and polluted the coastal area. Failure to restore area to its original condition is linked to coastal erosion, according to the lawsuits’ claims.

The state Attorney General’s Office said state law precludes interference. Waguespack says he’s not so sure the Attorney General’s Office is correct but it is clear that the law needs to be clarified on this point.

“Whether you disagree or not with that interpretation from the attorney general’s opinion is almost irrelevant. Let’s make the law crystal clear, black and white that that can’t happen anymore,” Waguespack said.

LABI is reviewing various mechanisms from a straight out prohibition to requiring additional approval for a local public agency to file a lawsuit to the attorney general or the governor’s administration or the Louisiana Legislature or some combination of those entities, Waguespack said.

“It’s a panic-stricken, kneejerk reaction,” Sandy Rosenthal, of New Orleans, said about industry’s legislative plans. She is with Levees.org and supports the lawsuits.

The legislative session begins March 10.