Jeff Landry vetoes legal bill, receives praise from trial lawyers, dismay from business (2024)

Gov. Jeff Landry sided with trial lawyers over business interests Tuesday in a high-stakes legal and political battle in Baton Rouge over how much people who sue can collect in injury and damage claims.

Landry vetoed House Bill 423, a bill that would have reduced payouts to the injured. Conservative “tort reform” champions expected his move, they said, because of the large campaign contributions the governor received from trial attorneys during last year’s election campaign. Trial lawyers have traditionally been big donors to Democrats, including Gov. John Bel Edwards.

The veto exposed a divide between the Republican governor and his allies in the business community. During the just-completed regular legislative session, Landry backed conservative causes on virtually every issue except tort issues.

Over the opposition of business lobbies and insurance companies, Landry also signed into law a bill supported by trial lawyers that gives them two years, up from one, to file lawsuits after death or injury. Landry said the bill will result in fewer cases clogging up the court system by leading to more settlements.

During the session, the governor also insisted that lawmakers weaken several other pro-industry bills that passed.

Landry went to great lengths Tuesday to say that he vetoed HB 423 to ensure that working people and consumers would receive what they deserve in medical costs following an accident caused by others. Standing by his side was a Shreveport woman who said the existing law enabled her and her two daughters to collect a fair payout after being badly injured by an 18-wheel truck whose brakes failed.

Landry added that the veto had nothing to do with the trial lawyers’ campaign contributions, which, he said, accounted for only 7% of his overall donations.

“We do one thing and it’s, ‘Oh the governor’s in bed with the trial bar,’” Landry said at a press conference at the Capitol. “I will tell you I have problems with the insurance industry as much as I have with the trial bar.”

He said that insurance companies have won the passage of 250 bills in Louisiana since 1994 and yet property and auto insurance rates continue to climb.

Landry also said insurers receive more money in Louisiana than in Mississippi when comparing premium payments and payouts for losses, yet insurance rates in Louisiana are higher.

Will Green, the president and CEO of the Louisiana Association of Business and Industry, expressed his disappointment with Landry’s decision.

“To defend his veto, the governor cherry-picked examples and pointed to other states that have litigation protections and guardrails in place that simply don’t exist in Louisiana, and therefore did not tell the whole story,” Green said in a statement. “While Gov. Landry could have provided a lifeline for all Louisianans currently drowning in an unaffordable market, he instead chose to stand with the trial bar and the status quo while businesses and citizens across this state scramble to pay yet another year of unsustainable premiums.”

Lana Venable of Louisiana Lawsuit Abuse Watch said the bill “would have brought more fairness and balance to our civil justice system, and more predictability to our business climate. Lawsuit abuse does not discriminate – everyone pays the price when the resulting costs are passed down to all of us.”

In issuing the veto, Landry not only criticized insurance companies but also their legal allies in the Legislature, an apparent shot at the bill’s sponsor, Rep. Michael Melerine, R-Shreveport, and his law partner, Sen. Alan Seabaugh, R-Shreveport. They represent insurance companies.

“The bill passed with bipartisan support and would have addressed the heart of the automobile insurance crisis,” Melerine said.

Daniel “Becket” Becnel, a trial attorney based in the River Parishes, praised Landry’s decision.

The veto will “help people who want to fight big insurance companies for what they’re rightfully owed,” said Becnel, who helped lead the effort last year to have trial lawyers contribute heavily to Landry rather than to the Democratic candidate, Shawn Wilson, a heavy underdog.

Melerine’s bill deals with a convoluted but politically volatile provision of tort law that has long drawn a fault line between trial lawyers and industry groups. In cases where a person’s medical expenses are paid by an insurer, state law limits recovery of expenses to the amount that the insurer actually pays to a provider. But the law also lets claimants recover from insurers 40% of the difference between the amount billed to the insurer by the medical provider and the amount actually paid to the provider.

Melerine's HB 423 sought initially to repeal that provision entirely — a long-running goal of insurers and pro-business lobbyists. It was later amended to reduce the difference they can collect from 40% to 20%, rather than eliminating that amount entirely. Before the Legislature began to chip away at that percentage through a bill in 2020, claimants could collect up to 100% of that difference.

State Insurance Commissioner Tim Temple, who ran on a pledge to loosen regulations on insurance companies, urged Landry and legislative leaders to call a special session to pass another version of Melerine’s bill and another pro-industry measure that died during the legislative session.

"It is imperative that we prioritize starting the process of creating the competitive market our fellow citizens, business owners and truckers need and deserve," Temple said.

Landry said he has done his share for the industry, signing 26 tort bills into law already.

The veto could cause political problems for Landry as he nears the halfway mark of his first year as governor. Landry is already facing criticism from allies for appointing John Carmouche, a legal foe of petrochemical companies, to a plum seat on the LSU Board of Supervisors last week.

But vetoing the bill might mean more among Capitol insiders than with rank-and-file Republican voters who elected Landry, said John Couvillon, a Baton Rouge-based pollster and political analyst who usually works with Republican clients. Few voters are interested enough in tort law to take note of the move, Couvillon said. Landry’s appeal lies more in his messaging on issues such as crime.

“You have to remember what really got Jeff elected was what I jokingly refer to as ‘all crime all the time,’” Couvillon said.

Staff writer Alyse Pfeil contributed to this story.