WAGUESPACK: Self-Inflicted Wounds

Those who do not learn from history are doomed to repeat it.

One question we should currently be asking ourselves is what exactly did we learn from the 80s?

On the positive side, we learned that America can stare down threats to freedom and democracy and accomplish great things with strong leadership. We also learned from the personal computer and cable TV that technology and innovation are some of the strongest foundations of economic growth.

On the negative side, we learned Curly Hallman is not an effective head coach that parachute pants are ridiculous and that short-term economic success should not be taken for granted.

In the 70s, Louisiana outgrew the nation by 15 percent. An oil and gas boom fueled strong growth in the state, especially in manufacturing and chemical production. Everyone was happy and the state was on its way. By 1983, our unemployment rate had doubled, countless jobs were lost, and too many family and friends were forced to leave the state for employment. Unfortunately, my family was one of those families, and to this day that experience drives me to help our state reach its economic potential.

While disco is dead and polyester is out, we are starting to repeat the 70s. We have seen more than $60 billion in new job announcements and we will need more than 250,000 workers over the next several years. Low natural gas prices are fueling a manufacturing renaissance and chemical production and demand is climbing every day. There is no doubt we are about to go on a good run. However, can we make it last? Can we finally stop the boom or bust cycle we have seen before and take the steps necessary to find systemic or “cruise control” growth?

The answer is “yes” if we have the will to do so. One major impediment to cruise control growth is repairing a legal system that caters to a select few instead of the needs of many.

Our legal climate has become a silent job killer in this state, costing us as many as 50,000 new jobs every year. That is in large part due to our reputation for having one of the poorest legal climates in the country. Seventy percent of corporate executives report that a state’s litigation environment affects where they locate and do business. Our reputation incentivizes these employers to look elsewhere and serves as a tort tax on every citizen in this state.

Our reputation for a poor legal climate is well deserved and reflected in several different ways. Issues such as jury trial threshold, judge shopping, excessive contingency fee contracts, legacy lawsuits, lawsuit lending and patent trolling are just a few of the issues that stack up quite poorly compared to other states with which we compete.

Take jury trial threshold, for instance. In Louisiana, a citizen or small business being sued has no right to request a jury trial unless that suit is for more than $50,000. This arbitrary limit that gives unnecessary leverage to the trial lawyer, restricts the rights of citizens, was set in 1993 as part of a political compromise, and signed into law by Governor Edwards.

No other state in the country is even close to that threshold. Maryland has a $15,000 threshold, and a few other states have much smaller limits. Thirty-six states allow anyone to request a jury, regardless of dollar amount. We are the outlier compared to other states and it isn’t even close.

Why should you care? Because any company looking to invest here has to account for excessive lawsuits and bake that cost into the cost of goods and services they provide. Whether they are selling insurance, widgets or anything else, this tort tax gives them pause to come here and makes them pass those costs on to the consumer. It is a self-inflicted wound we put upon ourselves in 1993, and it will not heal until we change the law.

Those in the system will say it will create backlog in the courts and more workload for the judiciary. The reality is 49 states have figured out how to deal with it effectively and the citizens in those states are the benefit of that responsible approach.

History tells our story but does not mandate our future. Only we the people can determine our future and only if we the people have the will to do so. In the 70s we had a good run. In the 80s we had a big fall. In 1993, we created a legal system that incentives excessive lawsuits and restricts a citizen’s right to a jury of its peers. In 2014, our history is not yet written.

Our history is educational to learn from, but it is definitely not worth repeating.

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