SADOW: There’s A Nuclear Option On Tort Reform, If Leges Will Use It

Will the “nuclear option” force Democrat Gov. John Bel Edwards to do the right thing?

That’s how Louisiana legislative Republicans have set him up over tort reform, pursuing a dual track strategy that gives him no choice but to pick a policy option he doesn’t want. As the last dozen days of the First Extraordinary Session approach, GOP legislative leaders have chosen to employ an iron fist in a velvet glove.

Last week, Edwards vetoed from the regular session SB 418 by Republican Sen. Kirk Talbot, which would align Louisiana’s tort laws closely with those of other states that have far lower vehicle insurance premium rates. With the special session afoot, leadership could have attempted a veto override, and probably would have succeeded, although likely having to avail itself of some strongarm tactics to do so.

Instead, they have chosen to eschew that and to try again with a more, er, nuclear character to it. The instrument settled upon, HB 57 by GOP House Speaker Clay Schexnayder, in its current posture tracks fairly closely with SB 418 with one major exception: the period in which a case may be brought stays at one year rather than extended to two, ironically a matter to which Democrats have least objected.

That bill picked up several House Democrat votes over what SB 418 drew that put it well above the veto override threshold, but that probably doesn’t reflect genuine satisfaction with it. Instead, it represents political calculations based upon the other prong of the GOP strategy.

This parry involves suspending key parts of code and law that would alter more drastically the present tort regime. The Legislature may suspend measures through the end of the next legislative session plus 60 days by simple majorities, not subject to a gubernatorial veto. Joint resolutions suspending much of what HB 57 would change permanently by Republican state Rep. Alan Seabaugh and GOP state Sen. Robert Mills are working their way through the process, with final approval by both chambers needed by Jun. 30.

In Wednesday’s Senate Judiciary A Committee, all of HB 57 and Mills’ SCR 14, 15 and 16 went to the Senate floor on party-line votes. Member Democrat state Sen. Jay Luneau – who as a personal injury lawyer appeared to make at least $200,000 last year to supplement property with his spouse valued at a minimum of $430,000 and likely would see that income diminished with reform – tried to serve as the battering ram against the attempts to lower rates.

He and his allies saved their biggest skirmish for SCR 16, which would suspend the jury trial threshold of $50,000 for tort cases, most of which involve vehicular accidents. This draws their strongest objection because of how the system works in Louisiana.

With such a high threshold – most states don’t have one and of the few that do, none other is higher than $15,000 – trial lawyers can push many of their cases in front of judges, who are elected and whose campaign committees draw a huge proportion of their funds from trial lawyers. By contrast, not only are juries a less reliable source of favorable and higher judgments for plaintiffs, but they present higher initial startup costs as in Louisiana the plaintiff parties must put down bonds to fund juries (either side may request a jury trial).

This limit makes civil jury trials in Louisiana almost as rare as Tulane University football championships. Of the 42 districts in the state that conduct these, 16 didn’t even have one in 2019 and only 176 occurred statewide. By contrast, over 140,000 civil cases were filed, encouraged by the high threshold.

By suspending through early August, 2021 the threshold entirely for suits requesting damages (it still would apply to other kinds of cases), Luneau argued this would flood the district courts with jury trials, a line or argument picked up by Democrat former state Rep. Glenn Ansardi, now a (Republican) district judge and representing them, and Debbie Hudnall, a Democrat former East Feliciana Parish clerk of court now representing them statewide. They complained also that the courts could see more cases coming from courts of limited jurisdiction (such as parish and city courts with concurrent jurisdiction to certain amounts in controversy, which heard over 92,000 civil cases in 2019) because those have only judges and so this would drive up district costs, and the immediate application of the suspension gives little chance to prepare for the change.

But assuming that a bench trial automatically converts into a jury trial is greatly overstated. More cases will have juries hear cases. However, the vast majority of these cases likely would come to a settlement prior to their commencement. The real problem opponents have with a large increase in the number of settlements is these likely typically would result in lower awards than what they could have gotten from a bench trial, meaning lower incomes for trial lawyers that prompts them to reduce their campaign donations.

Still, let’s assume the dire scenario occurs. If these resolutions cause such chaos, opponents such as Edwards have a solution – enact HB 57. On this issue, it would set a threshold at $10,000 starting in 2021, so alleged problems are solved, if the alternative of zero immediately is so cataclysmic.

What Republicans plan to do is send HB 57 to the governor and keep the resolutions in either chamber on the brink of passage. They will give Edwards a deadline to sign not long before the session must adjourn (the timing is such that he wouldn’t have to sign or veto prior to session end, so an override couldn’t occur before the conclusion). If he doesn’t comply, the resolutions will be passed. They will because Republicans have healthy majorities in each chamber.

So, Edwards has a choice to make. He either can go along with the “lite” version of tort reform as in HB 57, or he will have thrust upon him annual resolutions, at least for the foreseeable future, about which he can do nothing, which impose the policies he despises in a more draconian fashion even less to his liking. And nothing can stop the Legislature from doing the same thing as many times as it needs, on as many issues as it finds pleasurable, to get Edwards to yield or see him leave office.

He would be foolish to do anything but yield, and legislative Democrats know it. That explains their defectors on HB 57: most of that cohort don’t really support tort reform and wouldn’t vote to sustain a veto, but generally their constituents favor it. So, knowing tort reform is inevitable one way or the other, they want to look like they do as well.

Checkmate. Or, if you prefer, nuclear winter.

As long as Republicans stay the course and avoid procedural mines, in one form or another (although it will be trickier for insurers to provide with rate cuts the temporary resolutions) long-suffering Louisianans will start to see some vehicle insurance rate relief – and lower prices from the commercial insured who can pass rate relief on to their customers – starting in the next few months.



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