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A Reputation in the Balance

April 27, 2015

By: Stephen Waguespack

A good reputation is hard to earn, but often easy to lose. A bad reputation is the exact opposite. 

Over time, Louisiana has earned a national reputation as a state with a poor legal climate. Sensible and fair-minded people may disagree as to whether or not that reputation is just, but regardless of your opinion on that question, there is no doubt how the nation sees us. 

Louisiana ranks No. 7 nationwide on the Tort Activity Index, No. 49 for its lawsuit climate and No. 7 on the Judicial Hellholes list. Nearly 60 percent of Louisiana Association of Business and Industry (LABI) members report that frivolous lawsuits increase the costs of doing business, savings they could otherwise re-invest in their business and the economy. Seventy percent of corporate executives around the country report that a state’s litigation environment affects where they locate and do business. 

While Louisiana has earned a reputation for a poor legal climate over time, nothing prohibits us from taking control of the system, passing sensible laws to improve it, and changing our reputation for the better. In fact, this year LABI is supporting three small impactful steps for the judiciary that can make one giant leap for Louisiana’s legal reputation.

The first piece of legislation is HB698 by Rep. Neil Abramson, a bill that calls for an annual report of court budgets that taxpayers easily view. Every year, the Louisiana Supreme Court prepares an annual report that offers data and detailed information on the operations of Louisiana courts such as the number of judges and location of every court, the number of criminal and civil case filings, and the number of trials. This report, however, offers little to no information on the resources, budget, or expenditures of the Supreme Court or other state courts.

In general, the Legislature appropriates state taxpayer funds for the operations of the Louisiana Supreme Court and the five courts of appeal as well as the salaries for all state court judges, the compensation of retired and ad hoc judges, and a portion of the salaries for parish and city court judges. In the current fiscal year, $169 million of State General Fund was appropriated to the Louisiana judiciary.

A recent Public Affairs Research Council (PAR) report notes that the judiciary budget has increased 27 percent in the past seven years in comparison with social services, for example, which has been reduced by 36 percent.
In addition to state appropriations, courts are funded by local government and by various fees and fines collected in civil and criminal proceedings. In this legislative session alone, at least 10 bills have been filed to request the state increase fees for an array of court functions.

Despite this significant annual amount of taxpayer funding through direct appropriation, fines and fees, Louisiana state law does not currently require the publication of judicial budgets. After the appropriations are made from state and local government, neither a breakdown of revenue sources nor court expenditures are easily accessible.

Rep. Abramson’s bill would encourage the judiciary to promote better public access to basic data on court budgeting, place them on similar footing with other governmental agencies, and allow taxpayers to better monitor spending and performance. 

The second piece of legislation is HB293 by Rep. Taylor Barras to disclose the contracts held in the judicial branch.

As outlined above, little information on the budget of Louisiana’s courts is available online for public viewing and oversight. This practice stands in stark contrast, for example, to the hundreds of pages of documentation offered on the Division of Administration’s website, thousands of hours of executive branch testimony before the Legislature, and the online contract database run by the State of Louisiana known as LaTrac.

One national study gave Louisiana an “A” for internal auditing, a “B” for state budget processes, and an overall “C-“ score on the State Integrity Index, while rating judicial accountability with an “F” grade. Louisiana specifically scored poorly on such indicators as access to court administrative records.

The Public Affairs Research Council writes: “Citizens are typically concerned with three issues when tracking government’s use of dollars – which services the state is paying for, who the state chooses to provide services, and why and how the vendors are chosen.” States such as Arkansas, Mississippi, Ohio, and Oregon among others, include judicial contracts on their state’s transparency website.

Specifically, Rep. Barras’ bill would require the Supreme Court to establish a website by Jan. 1, 2016, to annually publish the following information on judicial contracts for goods or services: contract amount, agency, and a brief description of the purpose, and dates, name of the contractor, and city and state of the contractor’s business. 

The final piece of legislation LABI is supporting to improve the legal climate this session is HB294 by Rep. Stuart Bishop to require personal financial disclosure for judges.

Rep. Bishop’s bill would require online and accessible financial disclosure by judges in the same manner as other elected officials in Louisiana, which will promote public access, discourage potential conflicts of interest, and enhance public confidence in the integrity of all branches of state government.

PAR argues: “Requiring standardized, easy-to-access personal financial disclosure for high-level public officials is one of the most important steps the state can take to build citizen confidence in the integrity of government.”
In 2008, the Louisiana Legislature passed a series of bills to require personal financial disclosure by department heads, senior state officials, legislators, local elected officials, and private citizens serving on public boards and commissions.

Following this action, in Rule 39 of the Supreme Court, personal financial disclosure requirements were established for judges that are nearly identical to forms filed by legislators. Statements are currently filed with the Louisiana Supreme Court in New Orleans but are not available online.

In 2014, a national study gave Louisiana a failing grade for judicial financial disclosure, criticizing both the level of detail in the disclosure and the lack of accessibility to the statements. The U.S. Senate Ethics Committee wrote that, “Public disclosure of a public official’s personal financial interest is often considered the key component to an effective code of conduct.”

All of the statutorily mandated financial disclosure statements in Louisiana are filed online with the Board of Ethics and are readily available for public viewing. States such as Alabama, Arkansas, Mississippi and Georgia place the disclosure statements of judges online as well. It is time for Louisiana to do the same.

A reputation, whether earned or not, can be always changed by one’s actions. These three small steps should be embraced by the judiciary and would go a long way to improving our legal reputation. If instead of supporting these three simple bills, the judiciary opposes and kills them, that action alone may go a long way towards reinforcing a poor reputation that we all strive to leave in our past.