DJ Journal Op Piece: Frivolous Lawsuits Are Killing Louisiana’s Economy

quote:

---

Texas and Louisiana are a study in contrasts. Over the last 30 years, Texas’ population has jumped 70 percent while Louisiana’s has grown by 6 percent. Texas’ gross state product came in at $87,150 per capita in 2025, while Louisiana’s was $57,000. Employment gains in Texas have averaged more than 2 percent over the past decade, while Louisiana’s job growth has been negligible. Net migration to Texas has averaged more than 150,000 people since 2015, while tens of thousands have left Louisiana.

Texas and Louisiana are both resource-based economies, with energy and agriculture accounting for sizable shares of gross state product. Both states also have a large convention and tourism industry. Why, then, does the Texas economy consistently outperform Louisiana’s? In short, Texas has a more positive business climate, while Louisiana is often viewed as hostile to business and industry.

Louisiana’s legal environment is partly responsible for the state’s anti-business posture. Indeed, the state may be the most tortious in the nation, with a strong plaintiff’s bar well-connected politically. One recent study, commissioned by Citizens Against Lawsuit Abuse, estimated that lawsuit misuse in Louisiana erodes billions of dollars in economic activity annually, destroys more than 45,000 potential jobs, and imposes a “tort tax” of more than $1,100 on each Louisiana resident.

A recent state court judgment is perhaps the most egregious example of the politically driven legal abuse plaguing the Bayou State. More than a decade ago, several Louisiana parishes (counties) filed lawsuits alleging that a small group of energy producers, including Chevron, ExxonMobil, and other oil and gas companies, were primarily responsible for coastal erosion in the Mississippi River delta. Last April, a judge in Plaquemines Parish made a procedural ruling in the plaintiffs’ favor, and a jury found that Chevron was responsible for $744 million in wetland damages.

Without question, coastal erosion is a serious problem in Louisiana. The local jury ignored the evidence showing the main culprits are storms and geography, not oil and gas drilling. Army Corps of Engineers flood control projects have also had the unintended effect of slowing the natural process of wetland regeneration.

During World War II, the federal government directed oil and gas companies to boost production in Louisiana to supply high-octane aviation gasoline for American bombers and warships. Defendants argued that this federal government mandate created a sufficient nexus to remove the case to federal court.

Muddying the legal waters even more, the lead lawyer, who has filed 43 lawsuits related to coastal litigation, has been a major donor to the governor of Louisiana, who was the state’s attorney general in 2016. That year, the former attorney general (now governor) entered into a joint prosecution agreement to exclusively support the plaintiffs and disregard the defendants’ arguments.

---

quote:

---

In contrast to Louisiana, Texas began enacting tort reforms in the 1980s, including recent legislation requiring findings of economic damages to be fair, reasonable and based on evidence. And in 2023, the legislature created the Texas Business Court, a statewide trial-level court with jurisdiction over certain high-value and complex commercial disputes.

The Chevron case notwithstanding, one has to wonder why the state of Louisiana would want to take a big bite out of the hand that feeds it. The oil and gas industry accounts for 25 percent of the state’s economy, and energy companies have lots of domestic and global options for siting their operations. Does Louisiana want to chase its biggest industry out of the state?

Louisiana consistently ranks among the states with the lowest per-capita income while recording the nation’s highest poverty rate at 20 percent. The state will never reach parity with the nation unless, and until, it becomes more hospitable to business. Major tort reforms would be an important first step in improving Louisiana’s business climate and assuring investors that their investments will be protected from frivolous lawsuits.

---

quote:

---

Bernard L. Weinstein is emeritus professor of applied economics at the University of North Texas

---