Louisiana Voice

Editor’s note: The following is a guest column by a Baton Rouge attorney who represents plaintiffs in civil litigation and who chooses to use the nom de plume of Edward Livingston, considered one of the fathers of Louisiana law. 

By Edward Livingston

The Louisiana Association of Business and Industry (LABI) has issued a “fact sheet” about “Louisiana’s Judicial Climate.” http://labi.org/assets/media/documents/JudicialClimateFactSheet_Reduced.pdf

It should not surprise you that big business, and particularly the oil and gas industry, are as much in denial about changes in Louisiana’s judicial climate as they are about changes in the earth’s climate.

The juridical, or artificial, “persons” http://www.legis.state.la.us/lss/lss.asp?doc=109467 who constitute Corporate America hate, hate, hate the civil justice system. When you compare the three branches of government, it’s easy to see why. Through lobbying, donations and favors, they easily influence the legislative branch. As an example, note that after the worst oil spill in history, which caused billions of dollars in personal, economic, and environmental damages, the oil and gas industry was able to derail congressional proposals to raise the meager $75 million damage cap under the Oil Pollution Act. They have similar influence on the executive branch through regulatory capture. Look no further than the Federal Communications Commission, purportedly established to protect consumers, but even under a Democratic president, it is run by a former (and likely future) telecom lobbyist. Is it any wonder that the FCC is working to do away with net neutrality? And of course, our own commissioner of insurance spends our money to run ads and buy billboards accusing us all of committing insurance fraud.

But the judiciary is another kettle of fish. The civil justice system is the one area where common, everyday natural persons have a chance to stand almost as equals to corporate behemoths. Because procedural rules are designed to ensure a fair trial, because ethical rules prevent ex parte lobbying of judges, and because corporate litigants do not know the identity of nor can they attempt to influence individual jurors, it is much more difficult for them to create the lopsided playing field that they are used to in their other dealings with government entities.

This horror at the notion of being subjected to actual justice gave rise to the so-called “tort reform” industry. This industry does two things: It attempts to convince the public, and lawmakers, that the judicial system is inherently unfair, and it tries to sell the notion that the civil justice system is somehow bad for the economy. These attempts, in turn, serve two goals: They seek to poison the minds of potential jurors by creating a bias in favor of defendants in civil cases, and, more importantly, they want to change the substantive rules of law and procedure to decrease corporate liability for wrongdoing.

Tort reformers’ arguments are rife with references to “frivolous lawsuits,” but that’s just a smokescreen. They know that frivolous lawsuits are both vanishingly rare (what in the world is the incentive for a contingent fee lawyer to spend her own money pursuing a lawsuit she probably can’t win?) and rapidly dismissed, usually with sanctions http://www.legis.state.la.us/lss/lss.asp?doc=112283 for the lawyer who filed them. What they’re really concerned about are the lawsuits that have merit, because those are the ones that cost them serious money to repair the damage they’ve done. Whether it’s a person rendered quadriplegic in crash with an 18-wheeler being driven by a drunken driver or a worker burned beyond recognition in an industrial explosion, those are the kinds of cases that the purported “reformers” are really trying to limit.

With that background in mind, let’s turn to LABI’s description of our judicial climate. Its fact sheet focuses on three issues that it contends are harming Louisiana. First, LABI is concerned about legacy lawsuits, that is, lawsuits brought by landowners against oil and gas producers for damage to their land caused by the oil and gas production. They are worried that these lawsuits hurt the oil and gas industry, and by extension the economy, by discouraging production companies from drilling in the state, or by discouraging them from entering the state in the first place. Second, LABI is also worried about the lawsuit brought against ninety-seven oil and gas producers by the Southeast Louisiana Flood Protection Authority-East. Again, the concern seems to be that the oil and gas industry, and thus the state’s economy, will be harmed by the mere attempt to hold these companies liable for their alleged wrongdoing. Finally, LABI is appalled that defendants cannot request jury trials unless there is more than $50,000 at issue in the case. This deprivation of access to jury trials, due to a threshold that is much greater than that in other states, is said to lead to excessive litigation. The implication is that the judges who try these small cases are giving claimants too much money.

LABI’s fact sheet is full of footnotes and citations, but that should be taken with a grain of salt. While it cites a number of public bodies for raw numbers on suit filings, trials, judges and the like, the raw meat on the effects of these numbers comes almost exclusively from professional tort reform institutions. The primary, if not exclusive, purpose of these organizations – groups like the American Tort Reform Association, American Tort Reform Federation, the U.S. Chamber of Commerce, its Institute for Legal Reform, and Louisiana Lawsuit Abuse Watch – is to complain that the civil justice system hurts the economy and is unfair to corporate defendants. It would be shocking if their work product didn’t support those positions. But if you believe them, I’m sure BP would like to share with you their studies showing how inconsequential the Deepwater Horizon disaster was.

If you’ve made it this far, it probably won’t surprise you to find that LABI’s three big concerns are each, to use a technical legal term, baloney. Let’s start with legacy litigation. In these cases, landowners complain that their oil company lessees acted unreasonably and damaged their land. The underlying problem here – the fact that oil companies have polluted a lot of land in Louisiana – is hardly new (the Louisiana Supreme Court held oil companies liable for land damage as early as 1907), and it resulted from two things: weak rules, and even weaker enforcement of those rules. There’s a marvelous timeline of oil company documents dating back to the 1930s showing that the oil companies knew very well that they were breaking the law and could someday be held accountable for it. http://jonesswanson.com/slfpaecase/timeline/

But the Department of Natural Resources did not promulgate strong rules, and they didn’t even enforce the weak rules they had. The difference? Courts are now actually enforcing both the leases and the regulations, requiring the land to be cleaned up, and that’s costing oil companies a lot of money. Some oil companies are getting popped with huge damage awards to clean up the tremendous messes they made. If you’re a really big landowner in these cases (like former governor Mike Foster), you’ve got some leverage, and the producers will settle with you. If you’re a little guy, not so much.

According to the oil and gas industry, these cases are a huge problem, hampering new oil and gas exploration and putting the state’s economy at risk. Their proposed solution to the problem won’t surprise you – they’ve gone to the legislature and sought repeatedly, and successfully, to take the decision-making on cleanups out of the courts and put it back in the hands of their old pal, the Department of Natural Resources. The legislature has gone along with this, especially this last session when the big landowners (whose cases have already been settled) gave their go-ahead on it.

So, to put it in context, the oil and gas companies are basically like the college kids who trash your rental house during the semester, and then whine when you keep their deposit and otherwise seek to hold them accountable for the damage they’ve done. The difference is the legislature actually listens to these deadbeats.

Perhaps the final irony on legacy cases involves Don Briggs, the head of the Louisiana Oil and Gas Association (LOGA), a big-time tort reformer who for years has been telling anyone who would listen that legacy litigation was killing the oil and gas industry. That was working great for him until he actually filed a lawsuit, and he got put under oath, subject to the penalties for perjury. At that point, as one news outlet put it, “Briggs was forced to admit that he knows of no oil companies that have left or will be leaving Louisiana because of its legal climate. He also has no proof companies even consider the legal climate and was unable to cite any data to back up his long-held claims.” http://www.acadianabusiness.com/business-news-sp-416426703/oil-a-gas/16586-read-briggs-depo-here

If you’re curious about what a tort reform advocate has to say about the legal climate when they’re placed under an oath to tell the truth, you can read his entire deposition here. http://www.theind.com/extras/Official-Transcript-Briggs-Depo.pdf

LOGA’s lawsuit brings us to LABI’s second worry – the SLFPA-E suit. Sometimes, those rowdy college kids didn’t just trash the place; sometimes, on the coast, they destroyed it altogether.   LOGA filed that suit to have the levee board suit declared illegal – LOGA lost. The same operative facts apply, and this suit was opposed by largely the same cast of characters, with the notable addition of Governor Bobby Jindal and his former head of the Coastal Protection and Restoration Authority (and now congressional candidate) Garret Graves. They both leapt to the defense of the poor, beleaguered oil industry against the terrible, greedy levee board that was trying to find some way to raise funds for a $50 billion dollar coastal restoration plan. Unfortunately, Graves has a problematic penchant for telling the truth. First, he admitted that the lawsuit isn’t frivolous at all, but that it has merit, stating, “I will be the first to admit there’s liability there.” [http://www.cleanwaterlandcoast.com/james-gill-graves-shows-lawsuit-needed-2/] Then he pulled the whole “reform” fig leaf off the operation, predicting, “I don’t see any scenario where this levee district doesn’t get gutted – or, say, ‘reformed’ – in the next legislative session.”   http://thelensnola.org/2013/08/22/levee-district-jindal-administration-remain-at-odds-over-lawsuit-a-week-after-hints-of-reconciliation/

Despite all this, the legislature did everything it could do to reform gut the levee board lawsuit; we’ll see if it was successful in giving away the state’s chance to recover billions of dollars to pay for coastal restoration.

Finally, there is that horrible $50,000 jury trial threshold. A little background, and some inside baseball: As many know, Louisiana private law is based on Roman, or civil, law, as received through France and Spain. Unlike the English common law that prevails in the other forty-nine states, Louisiana has no tradition of civil juries. As a result, Louisiana is the only state without a constitutional right to a civil jury trial; Louisiana’s constitution is the only one that requires appellate courts to review both legal and factual findings (like amounts of damages) of trial courts in civil cases; and in Louisiana the litigants, rather than the state or local governments, have to front the money to pay for a civil jury trial.

Over the years, particularly since the adoption of the Code of Civil Procedure in 1960, civil jury trials became more common. Then, in the late 80s and early 90s, a certain insurance company decided that “good hands” required it to refuse to settle any small auto cases, no matter the facts, and to force claimants with such small cases into trial by jury. This had several effects: It made those small cases less economical to litigate, since they were more expensive, and, more importantly, it clogged the courts’ trial calendars with cases, because every case had to set for jury trial. After several years of this foolishness, the district court judges convinced the legislature that jury trials should be limited to relatively large cases; the $50,000 figure that was chosen was the threshold for federal diversity jurisdiction at the time. For truly big (and even not-so-big) cases, everyone still has a statutory right to a jury trial.

So why is this a concern for LABI? Because they don’t like the availability of relatively inexpensive and rapid dispute resolution. It drastically decreases the leverage of insurers, who want to force claimants into accepting lowball settlements. More importantly, by clearing the trial court dockets of small cases, it allows truly large and significant cases to get to trial much sooner, reducing the leverage of defendants in those cases by reducing the systemic delay in resolution of the cases.

How do we know that these are LABI’s concerns, rather than a reverence for the sanctity of the right to a jury trial? Easy. They have never proposed to change the state constitution to provide for a constitutional right to civil jury trials or to prohibit appellate review of facts. If those things were done by the legislature, those rights could be used to overturn things like damage caps, which are nothing more than pre-litigation (and usually pre-accident) findings of fact by the legislature. If they really believed that jury trials were a sacrosanct method of finding facts in a civil trial, they’d be talking about those issues.

So, what is the true judicial climate in Louisiana? Well, if you’re an injured person, a landowner, or a taxpayer, for the last forty years, it’s been changing for the worse. Examples:

• In 1975, in response to a fabricated “crisis,” the legislature capped damages in medical malpractice cases at $500,000 plus medical expenses. [ http://www.legis.state.la.us/lss/lss.asp?doc=97236 http://www.legis.state.la.us/lss/lss.asp?doc=97236 The legislature has since refused to raise the cap (it’s now worth less than $125,000 in 1975 dollars) or to create an exception for lost out-of-pocket wages. The “hellhole” Louisiana Supreme Court recently refused, yet again, to hold that unconstitutional. http://scholar.google.com/scholar_case?case=8858215592530732468&q=Oliver+v.+Magnolia+Clinic&hl=en&as_sdt=8000006 So if you’re disabled by medical malpractice and lose $1,000,000 in future earnings, tough – you’ll get half of that, and nothing for your pain and suffering.

• In 1988, in response to the Louisiana Supreme Court having the temerity to hold that asbestos – a substance known to be a carcinogen for decades, but continuously used anyway – was unreasonably dangerous per se http://scholar.google.com/scholar_case?case=10728730403952334192&q=Halphen+v.+Johns-Manville&hl=en&as_sdt=8000006, the legislature enacted one of, if not the, most stringent product liability laws in the nation. https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1PCTG_enUS461US464&ion=1&espv=2&ie=UTF-8#q=la%20rs%209%3A2800.51 (It was authored by our current treasurer, John Kennedy.) While this hasn’t stopped asbestos litigation, it has allowed the executives of other product manufacturers to sleep a little better at night, at the expense of injured workers and consumers, or their survivors.
• In 1996, in response to Mike Foster, a welder wealthy heir and industrial contractor, getting elected governor, in a special session, the legislature enacted sweeping “tort reform,” including but not limited to:
• Elimination of solidary liability (a Roman law concept two thousand years old – thanks, “ conservatives”!), so that if a big corporation can blame part of your damages on someone who’s broke, you, rather than the at-fault corporation, have to bear those expenses. http://www.legis.state.la.us/lss/lss.asp?doc=109388
• Elimination of exemplary or punitive damages for the wanton and reckless disregard of public safety in the storage, handling, and transportation of hazardous substances, so the next time a drunk railroad engineer partying with his girlfriend derails a train in your community and pollutes it with chemicals (not that that would ever happen, Livingston, cough, cough), relax, you don’t have to worry about the railroad getting punished! http://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=6320&context=lalrev and
• Elimination of so-called “strict” liability, which means that when your neighbor’s tree falls on you and breaks your neck, you have to prove that he knew the tree was rotten in order to recover your damages from his insurance company. http://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=5791&context=lalrev

I could go on; these are just the “greatest hits” of Louisiana tort reform. Every year, tort reformers try, usually with at least some success, to chip away at the rights of citizens and governmental entities to seek redress for corporate wrongdoing. For instance, this year, since the attorney general recovered several hundred million dollars for the Medicaid program from pharmaceutical companies, Big Pharma convinced the legislature to take away his power to hire outside lawyers without the legislature’s approval. http://www.legis.la.gov/legis/ViewDocument.aspx?d=915585&n=HB799%20Act%20796

If the legislator’s will bow to Big Pharma’s will on this, what are the odds they’ll let the attorney general ever hire outside lawyers? And every year, proposals to restore some of the historic rights of Louisiana citizens fall on deaf ears at the capitol.

Louisiana is a conservative state. Its conservative voters elect fairly conservative judges, and they make up fairly conservative juries. If one of those judges or juries should run amuck, there are multi-parish appellate courts, and a state-wide supreme court, acting as backstops for Corporate America.

But that’s never enough. Corporate America still wants to take away your rights. Ironically, these corporations are the true socialists. The only thing they want privatized is profit. They want the costs and risks of production to be borne by society at large: their victims and, ultimately, the taxpayers.