Every few years, the U.S. Chamber Institute for Legal Reform releases an updated version of its Lawsuit Climate Survey: Ranking the States report, and each time the result is the same for Louisiana: a No. 49 ranking, just ahead of West Virginia.
It’s been that way since 2008 and remains that way in the new 2015 report, released this morning. ILR, an advocacy group founded in 1998 by the United States Chamber of Commerce, has released the rankings periodically since 2002, when Louisiana was ranked No. 47 nationally—its highest ever ranking on the list.
The survey suggests Louisiana’s litigious nature is increasingly bad for business. According to ILR, 75% of senior company attorneys surveyed say a state’s lawsuit environment is likely to impact important business decisions at their company, including where to locate or expand. That’s an 18% increase from eight years ago—and an all-time high, ILR says.
“More business leaders than ever have identified a state’s lawsuit climate as a significant factor in determining their growth and expansion plans,” says Lisa Rickard, president of ILR, in a prepared statement. “If the Louisiana governor and legislature want to attract businesses and build the state’s economy, they need to pass common sense reforms of the state’s judiciary.”
Despite laws passed by the state legislature and rulings by the state Supreme Court to curb the practice, ILR notes Louisiana Attorney General Buddy Caldwell continues to award contracts to represent the state to private plaintiffs’ firms that have donated to his political campaigns.
Furthermore, the Southeast Louisiana Flood Protection Authority-East continues to appeal a lawsuit against dozens of oil and gas companies accusing them of causing coastal erosion that a federal judge dismissed in February because it failed to make a valid claim. Indiscriminate “legacy” lawsuits against oil and gas producers over alleged environmental damage also prompted Louisiana to pass a law in 2014 to curb the practice.
Additionally, judges, not juries, decide many lawsuits in Louisiana because the state only permits a jury trial for civil claims seeking $50,000 or more. ILR says that’s the highest threshold in the nation and more than three times higher than the second highest state, Maryland.
“The new survey results reflect the unfortunate reality that so many of our small business owners and manufacturers face everyday—an unbalanced and inefficient legal system that is inundated with excessive and often times meritless litigation,” says Louisiana Association of Business and Industry President Stephen Waguespack in a statement issued this morning. “The Legislature should prioritize legal reform in its 2016 session. By acting decisively against the abuses of today, it can help create a more prosperous future for Louisiana—a future where the state is no longer swamped with litigation.”
The rankings are based on the results of a national survey of 1,203 in-house general counsel, senior litigators or attorneys, as well as senior executives who indicated they are knowledgeable about litigation matters at companies with at least $100 million in annual revenues, and have recent litigation experience in each state. Harris Poll, a global polling firm, conducted the survey via telephone and online interviews between March 9 and June 24.