Opinion | Louisiana: The Trial-Lawyer State
By The Editorial Board
Louisiana used to be a leader in U.S. energy production, but Governor John Bel Edwards has turned it into a leading lawsuit producer instead. Jobs have declined while taxes and auto insurance rates have risen.
Mr. Bel Edwards ran in 2015 as an anti-abortion Catholic and former Army ranger, rolling over Republican David Vitter who had been caught patronizing prostitutes. Falling oil prices in 2015 had hurt tax revenues and energy employment, and Democrats blamed the state’s economic problems on GOP tax cuts.
The new Governor persuaded his Republican Legislature to raise the state sales tax to shore up the budget and expand Medicaid. Louisiana’s average state-local sales tax rate has risen to 9.45%, among the highest in the country, and its business tax climate has sunk to 10th worst in the country from 14th, according to the Tax Foundation. Employment has fallen by a net 5,000 jobs in Mr. Bel Edwards’ term.
Oil production has declined by nearly a quarter since January 2016 while increasing in most energy-rich states and on federal land in the Gulf of Mexico. Natural gas withdrawals have returned to 2012 levels thanks to a new liquefied-natural-gas export terminal. But industries downstream from energy such as manufacturing, utilities and construction are hurting.
One reason is that Mr. Bel Edwards, a former trial attorney, has spent four years trying to wring more money out of energy producers. In November 2013, two coastal jurisdictions sued oil and gas companies for coastal erosion that was largely caused by levees on the Mississippi River and natural forces. After getting elected, Mr. Bel Edwards joined the raid.
Front-running the lawsuits were trial attorneys at Talbot, Carmouche & Marcello, which raised $2 million for a super PAC supporting the Governor’s election and $640,000 for his re-election. Mr. Bel Edwards has demanded that energy producers pay billions of dollars for coastal restoration.
A new study by the Pelican Institute comparing offshore drilling on state and federal land in the Gulf finds the lawsuits have scared off producers. Oil and gas employment declined by 2,000 in the six months after the first two lawsuits were filed, which was before oil prices plunged. The study estimates that litigation risk has cost the state economy between $44 million and $113 million.
The lawsuits were supposed to go to trial this year before a state judge whose re-election campaign was supported by Talbot, Carmouche & Marcello, but energy producers are seeking to move them to federal court. Politicians from both parties play footsie with trial lawyers, but Mr. Edwards would make most blush.
He hired a law firm that paid for his transition team to represent his Department of Health in opioid litigation. Louisiana has the second highest auto insurance rates in the country, and premiums have risen by more than half since 2011. According to the American Tort Reform Association, the state has more than twice the national average in bodily injury claims but about the average in accidents per capita.
Mr. Edwards has accused his Republican opponent Eddie Rispone, who founded a construction business, of receiving state tax breaks and creating few jobs. That’s better than the Governor who has paid off his political donors and cost jobs. The runoff election is November 16.