Louisiana lawmakers seek to revive this conservative priority, months ahead of 2025 session

State lawmakers are reviving a decades-old debate over whether to stifle large damage claims against businesses and insurers, less than two months after Gov. Jeff Landry batted down legislation that would have done so.

Business interests have long sought ways to limit how much they have to pay when they are sued over injuries, a priority dubbed "tort reform." And they made their displeasure public after Landry in June vetoed a tort measure.

At the time, Landry said his rejection of the legislation was meant to protect consumers and the working class.

But Landry's bid for governor was funded in part by trial attorneys who represent and make money off of injured plaintiffs that sue businesses and insurance companies. And during this year's legislative session, the interests of the trial attorneys were protected through a tacit alliance with Landry.

Now the insurance industry is back at the table as the Legislature embarks on a monthslong mission to craft policy that supporters hope will lower Louisiana's high auto rates. Lawmakers plan to put together a package of insurance legislation, possibly ahead of a special session on insurance next year.

Opponents say there's no guarantee tort changes will lower auto insurance premiums.

On Wednesday, four separate legislative committees met to hear testimony from various stakeholders on the factors contributing to high personal and commercial auto insurance rates. The set of committee meetings is just the second in what is expected to be a series of several meetings on the topic between now and December. It follows a marathon nine-hour meeting held in July that kicked off the effort.

"Louisiana's rate of early attorney involvement in claims is far higher than the national average, and Louisiana's litigation rate in auto claims is, again, more than two-and-half times higher than the average," Robert Gordon, a lobbyist for American Property Casualty Insurance Association, told the House Insurance Committee on Wednesday. "It's taken a long time for Louisiana to become one of the worst legal climates. It'll take time to turn it around."

But Rep. Edmond Jordan, D-Baton Rouge, a trial attorney, pushed back on Gordon's characterization of the issue: "Frankly I'm just frustrated by a lot of the propaganda and the rhetoric."

Jordan said that data he's seen that shows litigation only accounts for a small fraction of the factors contributing to high premiums in Louisiana.

Across the hall, in the Senate Insurance Committee, lawmakers set the stage for a potential resurrection of the bill vetoed by Landry in June.

That measure, House Bill 423, was sponsored by Rep. Michael Melerine, R-Shreveport, an insurance defense attorney. It would have reduced how much money plaintiffs could collect in damages and allowed juries to see the actual amount paid on medical bills. The powerful Louisiana Association of Business and Industry backed the proposal.

Under current law, after trial, plaintiffs can recover the amount paid for a medical bill plus 40% of the difference between the amount paid and the amount charged, amounts which often differ greatly. And defense attorneys representing insurers generally may not introduce evidence to show how much money was actually paid. Only the billed amount is admissible in court.

Doran Drummond, an insurance defense attorney for the Baton Rouge-based firm Taylor, Wellons, Politz & Duhe, told the committee he believes those rules were "forcing" insurance companies to "pay a windfall" for injury claims. He argued those payouts drive up insurance rates, of which Louisiana has some of the highest in the nation.

Sen. Kirk Talbot, R-River Ridge, who chairs the insurance committee, and Sen. Adam Bass, R-Bossier City, who owns an insurance agency, were receptive to that take.

But Sen. Royce Duplessis, D-New Orleans, an attorney who sometimes represents plaintiffs, was skeptical of the argument and of the committee's overall purpose.

He pointed out that LABI asked Drummond to testify and questioned why the committee wasn't hearing from consumer advocates.

"This (appearance) is in your capacity just as a good citizen, because you were asked by LABI?" Duplessis asked Drummond. "(But) 100% of your work is representing insurance companies?"

Duplessis said he didn't think the state would make progress in lowering insurance rates until it looked at factors such as road quality, education and poverty, and drilled down the actuarial science determining the rates.

Rep. Gabe Firment, R-Pollock, who chairs the House Insurance Committee and has worked in the insurance industry for years, said the Legislature's deep dive into auto insurance rates goes beyond the conflict between business interests and trial lawyers.

"Historically this discussion has devolved into an argument between the plaintiff bar — trial lawyers — and the insurance industry. That's not the right approach," he said.

His committee on Wednesday heard from the Department of Transportation and Development on road conditions, from the Louisiana State Police on traffic fatalities, and from the Louisiana Department of Insurance. At future meetings, lawmakers plan to invite others affected by the issue, he and state Rep. Mike Johnson, R-Pineville, said.

It's unclear if Landry, who all told opposed six pro-industry bills in the recent session, will embrace whatever plan emerges from the Legislature's work.

Of the Legislature's efforts, Landry spokesperson Kate Kelly said Wednesday, "Gov. Landry is very interested in lowering insurance across the board. However, he believes it's important we do so with facts and look at factors and policies that have been proven to lower insurance and auto insurance."