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Louisiana

Nuclear verdicts® plague the state’s civil justice system, bringing it in line with other Judicial Hellholes®. This year, an auto accident case in a Louisiana case resulted in a $220 million verdict. Meanwhile, the Louisiana Supreme Court caved to political pressure from the plaintiffs’ bar and discarded established constitutional protections in favor of lawsuits. Public trust in the state’s judicial system has been on the decline and this latest action only magnifies this concern.

Perennial issues also plague the state’s civil justice system – coastal litigation bogs down the state’s economy and fallout from “Operation Sideswipe” continues.

Campaign Contributions

Governor Jeff Landry has received significant campaign contributions from Louisiana trial lawyers over the years. He has received more than $700,000 from plaintiffs’ lawyers, which is more than former Democratic Governor John Bel Edwards received. This is particularly noteworthy because during the 2024 legislative session, his first as governor, Governor Landry vetoed much needed legislation that would have prevented plaintiffs, and their attorneys, from receiving a windfall from litigation by basing dam- ages for medical care on inflated list prices that no one ever paid.

The sizeable contributions raise concern over the future prospect of civil justice reforms in the state. Kevin Cunningham of the Louisiana Legal Reform Coalition found it particularly concerning that the trial bar’s support appears to be tied to promises from Landry that he would act as an ally to trial lawyers if elected. Still, he is hopeful that Landry will sup- port needed checks on excessive liability in the state rather than determine his support for legislation based on donations from plaintiffs’ lawyers.

Nuclear Verdicts®

Louisiana state courts awarded $409 million in nuclear verdicts® (awards of $10 million or more) against businesses in 2023, according to a study by Marathon Strategies. The most frequent recipients of these verdicts in Louisiana over the years are the pharmaceutical, oil and gas, and trucking industries. A separate study by the U.S. Chamber of Commerce found that Louisiana placed eighth among the states for the most nuclear verdicts® in personal injury and wrongful death cases in 2023, according to preliminary data.

A recent example occurred in September 2024, when an Opelousas jury (St. Landry Parish) returned an eye-popping $220 million verdict in a trial stemming from a collision between an ambulance and a pickup truck. The plaintiff, an EMT, was unrestrained in the back of the ambulance at the time of the crash. The other driver, who turned in front of the ambulance, was transporting several electrical line coworkers home from a job. The verdict against the pickup truck driver’s employer included noneconomic damages in seven categories totaling $155.5 million.

Court Caves to Political Pressure

In May 2024, the Louisiana Supreme Court issued a rare announcement that it would rehear a case it had just decided a few months prior. The initial ruling found unconstitutional a state law that retroactively disregarded the statute of limitations in certain cases. On rehearing, the Louisiana Supreme Court vacated its earlier decision, allowing the legislature to revive time-barred claims.

It is highly unusual for a state high court to rehear a case just a few months after deciding it, particularly when one considers there were no errors in the court’s understanding of the underlying facts. This extraordinary step, made during a sustained pressure campaign from the legislature and state attorney general, raises concerns about the court’s independence and respect for precedent.

In its original 4-3 decision in March 2024, the Court rightly joined courts in other states such as Colorado, Kentucky, and Utah in finding that reviving time-barred claims violates defendants’ due process rights. Rehearings typically are reserved to correct factual errors — even in the most horrific cases as was the case in this matter — not to re-argue legal reasoning in the face of political criticism.

Both its original ruling and its June 2024 decision on rehearing recognized that the ending of what Louisiana calls a “prescription period” (more commonly referred to as a statute of limitations) provides defendants with a vested right to be free from claims. However, the new majority found that the legislature can abolish a vested right whenever legislation has a “rational relationship to a legitimate government interest.”

While the prior majority had stated that it would not upend “nearly half of a century’s jurisprudence that recognizes the unique nature of vested rights associated with liberative prescription,” the new majority departed from stare decisis and characterized the prior case law as “questionable” and “logically faulty.”

In dissent, Justice James Genovese expressed concern that the majority had granted the legislature “unbridled authority … to enact legislation which supersedes and tramples our constitution.” He also observed that subjecting defendants to lawsuits that expired fifty years earlier after all of the witnesses and documents are likely gone is “tantamount to a violation of due process.”

Coastal Litigation

For the past decade, Louisiana courts have had their hands full with coastal litigation. Louisiana parishes have sued more than 200 energy companies alleging that their operations have damaged coastal marshes and wetlands. Coastal litigation has had enormous implications for the state’s energy industry with the potential to dish out billions of dollars in damages.

The litigation drags on with no end in sight, and even more importantly, no help for the coast. There are over 40 lawsuits filed by six Louisiana parishes against Chevron, ConocoPhillips, and ExxonMobil. The lawsuits continue to be stalled in a preliminary battle over whether they should proceed in state or federal court. Energy companies maintain that the lawsuits involve federal questions and should remain in federal court, not the various local state courts where they were filed. They argue that returning the litigation to state court would rob oil companies of the opportunity to present a federal defense that arises directly out of their relationship with the government. The companies cite WWII-era directives that demanded producers drill and extract excess oil that was critical to the war effort.

In December 2023, the Parish of Cameron and the State of Louisiana reached a “landmark settlement” with BP, Shell and Hilcorp. This is the first case to settle, and District Court Judge Penelope Richard issued a protective order to conceal the settlement amounts until all the parties sign off.

Despite this settlement, several cases remain. In May 2024, the U.S. Court of Appeals for the Fifth Circuit returned two of the lawsuits to state court for trial. It affirmed the lower court’s ruling from October 2022, finding that “just because oil and gas exploration and production operations during World War II were conducted on behalf of a federal war effort, the companies were not ‘acting under’ a federal officer’s direction in their drilling practices and those actions were not ‘connected or associated with’ orders given by federal officials.”

Fall Out From ‘Operation Sideswipe’ Continues

Fueled by a climate of lawsuit abuse, the high cost of auto insurance has long plagued Louisiana families and businesses.

One driver of Louisiana’s high cost of auto insurance is simply fraud. A sprawling federal investigation, dubbed “Operation Sideswipe,” is exposing the scope of one such scheme: staged accidents with big rigs in the New Orleans area. These accidents typically involved a driver (“the slammer”) intentionally colliding with a tractor trailer and a second person entering the vehicle and feigning injury. Working with lawyers and doctors who may have been in on the scheme, the participants would then demand compensation for the bogus accident. Those involved ultimately secured settlements from insurance companies that provided coverage for the commercial carriers.

The dominos continue to fall in this ongoing investigation. More than 60 individuals have been charged, pleaded guilty, or sentenced for their role in the scheme. Four people pled guilty in early 2024, and unfortunately, two co-conspirators were indicted on charges of murdering an informant who cooperated with the police in their investigation of “Operation Sideswipe.”