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A Reputation Worth Changing

September 12, 2017

By: Stephen Waguespack

“Your brand name is only as good as your reputation.” – Richard Branson

Louisiana’s brand is strong in many ways. Our culture is second to none, and our people are inviting and entertaining. We are rich in natural resources that fuel the world, as well as those that fuel the sporting passions of any outdoorsman. We are heroically resilient and civically driven, as recently evidenced by the Cajun Navy members and many other responders who rushed to Houston just to help a stranger in need.

But as we all know, our brand is historically tarnished by various critical issues, and the latest 2017 Lawsuit Climate Survey: Ranking the States gives us another blunt reality check.

This week, the U.S. Chamber of Commerce Institute for Legal Reform ranked Louisiana 50th in the nation for our legal reputation. That’s right, dead last. This means the rest of America thinks we have the worst legal climate in the country. Considering that over 70% of the world’s lawyers live and practice in the United States, this unfortunate reputation may essentially make us one of the most hostile legal climates in the world in terms of investment and economic development.  Considering we need every private sector job we can get these days, that can’t be good.

I can hear the survey’s detractors now bemoaning any call for change and justifying the status quo. Some will probably fecklessly argue this survey shouldn’t set the bar for one reason or another, and their sound bites will be all too familiar. You will likely hear something like “just because the rest of the nation thinks we are lawsuit happy doesn’t mean they are right” or “the private sector can never be as trustworthy as a government agency” even if that agency has a hired-gun lawyer.

Come on. Use common sense here, folks.

Putting your head in the sand is rarely a good solution to fix an obviously bad reputation, and many of our elected officials have long had sand castles in their ears on this issue. Remember, we have ranked second to last on this same survey the past several years.

We have the highest jury trial threshold in the nation by far, meaning civil claims are decided by a judge instead of a jury for any claim under $50,000 (Maryland is the next lowest threshold at $15,000). This encourages lawsuits and settlements under that $50,000 level and has created a profitable market in Louisiana for car wreck cases. Don’t believe it? Just look at the billboards on our interstates, the commercials during our television shows or the ads in our newspapers and magazines to see how much money is being made. It’s no coincidence we have the second highest vehicle insurance rates in the nation.

The New Orleans court system was tied for last in the nation in this year’s survey for fairness in contract and tort litigation. There have been several notable cases of judges suspended, fined or removed over the last few years for misconduct. The Louisiana Legislature has frustratingly resisted efforts over the years to address some of these longstanding problems. They have also consistently refused to tighten laws that prevent venue shopping or pass model legislation to increase transparency in asbestos trusts that prevent double dipping and direct more financial awards to individuals, not their lawyers.

The Edwards Administration is also cited in the new report for helping make our bad legal climate reputation even worse by pursuing state lawsuits that have taken Louisiana’s legacy lawsuit concept to a whole new level. Hand-selected attorneys are broadly attacking numerous energy companies that have legally operated with coastal use permits in Louisiana for years, rather than seeking to penalize specific actions or bad actors. And the pursuit of lawsuits didn’t stop there, parishes are now being pressured by the Governor’s team to do the same. This litigious behavior by state government itself is simply unprecedented and unacceptable.

Other industries are taking note and fear this sue-and-settle game plan could target them next. In fact, just this past week, the Baton Rouge Metro Council announced they will soon decide if they want to sue pharmaceutical companies. If successful, the feeding frenzy on any industry investing in Louisiana will be off and running, all encouraged and promoted by elected leaders blinded by the money involved.

Ultimately, the costs of a litigious environment are borne by consumers and citizens across Louisiana, not just the large and small businesses caught in the quagmire.

Like it or not, this is Louisiana’s reputation, and time is of the essence to address it because 85% of the more than 1,300 counsels and executives from U.S. companies that responded to the survey say they will decide where to invest and grow their business, in part, based on a state’s legal reputation.

The good news is we can easily fix it. The policy changes needed to improve our legal climate are well-known, cost nothing and have been debated for years, but the political will to change has not yet existed.

Legislation to provide an intense application of transparency and public participation in our court system would do wonders to improve national perceptions, as would a prohibition on double dipping and a crackdown on corruption. These changes can be made. Demanding that our elected leaders stop chasing away investment by shaking down job creators any chance they get can happen at any time.

Ben Franklin once said, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” The opposite is also true. While Louisiana’s bad legal climate reputation is a result of many years of poor policies protected by complicit politicians, a strong citizen-led movement towards a more transparent system can be the deed that helps us lose that reputation. It’s time to trend in that direction.