Louisiana Passes Legislation Aimed at Significant Tort Reform
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Buoyed by support from the trucking industry, lawmakers in Louisiana have taken a first step aimed at reducing “nuclear” jury verdicts for motor carriers sued in traffic accidents that occur in one of the nation’s most litigious states.
For some time, Louisiana has carried a reputation for high insurance premiums and highways dotted with attorney billboards soliciting clients injured in accidents with trucks. It was also the epicenter of a scam in which people staged accidents with trucks in the hopes of scoring big paydays in court.
A new state law, passed June 30, aims to change this legal climate by limiting medical costs and cutting down on a practice allowing plaintiffs attorneys to “judge-shop.” In the long run, it could even help reduce insurance premiums.
Guillot
The law, which was supported and shepherded by trucking leaders, was passed only days after the American Transportation Research Institute released an 80-page, data-backed report, “Understanding the Impact of Nuclear Verdicts on the Trucking Industry.” The report largely confirmed what many truckers across the U.S. have seen anecdotally: Large jury verdicts against motor carriers are increasing dramatically both in number and size.
“This is a great thing for the trucking industry and Louisiana. We got meaningful tort reform passed that’s been a long time coming,” said American Trucking Associations Chairman Randy Guillot, president of New Orleans-based Triple G Express. He noted that while the new law is not a “silver bullet” to take care of every challenge, it “takes a lot of things in a positive direction.”
He said that the compromise bill’s passage was the result of hard work by a number of legislators, along with Democratic Gov. John Bel Edwards and American Trucking Associations President Chris Spear. A spokeswoman for Edwards said at press time that the governor had not yet signed the bill, but noted that he worked on the compromise language.
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“Chris and I met with the governor back in January to lay the groundwork for this,” Guillot said.
The bill also tweaks a statute that will now limit plaintiffs attorneys from discussing insurance issues in front of a jury, said Douglas Williams, a New Orleans attorney with the law firm of Breazeale, Sachse and Wilson, and also general counsel for the Louisiana Motor Transport Association for many years.
“The biggest thing is some collateral source relief,” Williams told Transport Topics. “The plaintiff gets to put on the entire amount of the [medical] bill, but afterwards, the judge will reduce the award down to the amount actually paid, not the amount billed. But there’s a kicker. Part of the write-off can get put back into the judgment. It’s better than what we have right now. Because we pay 100% of the bill.”
“For years, the plaintiffs’ bar has perverted the civil litigation system into a profit center to line their own pockets,” Spear said in a statement. “This pursuit of ‘jackpot justice’ comes with a heavy price felt far and wide, punishing anyone who drives a car as well as every single motor carrier — including those with excellent safety records.”
Governor Edwards deserves a lot of credit for taking this issue on and seeing it through to completion, working in good faith with the legislature and all stakeholders to find common ground and reach an agreeable, compromise solution.
ATA President Chris Spear
Spear added, “Gov. Edwards deserves a lot of credit for taking this issue on and seeing it through to completion, working in good faith with the Legislature and all stakeholders to find common ground and reach an agreeable, compromise solution.”
Guillot gives Republican state Rep. Jack McFarland, a trucker himself, much of the credit for shepherding the bill though the statehouse.
“I believe the bill will lower the award amounts,” McFarland told TT. “We’re going to reduce the medical ‘phantom charges’ by 60%. This is our first step toward getting business and industry to take a look at us and say, ‘Hey, maybe Louisiana is not the litigious environment that we thought it was.’ ”
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The R Street Institute, a Washington, D.C., nonprofit, nonpartisan, public policy research organization, said the law represents a compromise approach to tort reform intended to curb out-of-control legal costs in the state’s insurance market.
“Louisiana’s costly and uncompetitive auto insurance markets are a big reason it has, for two years in a row, ranked dead last among the 50 states in R Street’s annual Insurance Regulation Report Card,” said R.J. Lehmann, R Street’s director of finance, insurance and trade policy.
He noted that the law will lower Louisiana’s threshold for jury trials, currently the highest in the nation, from $50,000 to $10,000. “Under the current $50,000 threshold, 53% of auto claim disputes in the state are heard before elected judges, providing opportunity to shop for favorable venues for frivolous cases,” he said.
“It’s not where we want to be five years from now, but we got something that the governor agreed to sign,” Williams added. “The Legislature down here understood that the trucking industry was behind tort reform because we need it.”
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