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Is a Perfect Storm Creating the Environment for Significant Tort and Liability Reform in Louisiana?

May 15, 2020

Just two weeks ago, COVID-19 halted Louisiana's legislative session. When it returned, it was considered mainly in crisis mode: restricted to the budget, crisis-related legislation, and bills deemed a top priority for Members’ districts. Since then, it appears that the 2020 legislative session may be forever remembered for sweeping tort reform, including liability limitations related to COVID-19. However, due to the extremely shortened session – reduced from three months to one month – only two weeks are left to achieve final passage. It will be a scene more fit for Wile E. Coyote and the Road Runner as business groups, the plaintiffs’ bar, insurance interests, and the Legislature circle through the legislative process and its conclusion on June 1.

Tort Reform Gains Significant Traction

The two notable tort reform bills were filed by Senator Kirk Talbot (R-River Ridge) and Representative Ray Garofalo (R- Chalmette) and are identical mainly in substance. The bills seek sweeping reform in an effort to reduce the cost of motor vehicle insurance by legislation and include the following proposals:

Table 1 These efforts are not new. For several legislative sessions, a portion of these reforms have been debated and failed. However, with the backdrop of COVID-19, a challenging business climate, and a newly elected legislative body, tort and liability reform is alive and well. Yet, perhaps the biggest difference with this legislative effort is tying the reform to a mandatory rate reduction. Namely, the proposed legislation requires motor vehicle insurers to reduce rates when “actuarially justified” and to “make a motor vehicle policy rate filing with the Department of Insurance” for three years following the law’s enactment. Aside from demonstrating an actuarial exception, this legislation will require insurance providers to decrease premiums by at least 10%. In a recent committee hearing, Commissioner Donelon testified that he believes this legislation will result in a 20-25% decrease in premiums – well below the statutory requirement.

Protecting Employers in the COVID-19 World

This session’s proposed tort reform also extends to liability issues arising from the COVID-19 pandemic by way of a bill filed by Representative Thomas Pressly (R-Shreveport). This legislation would limit liability related to COVID-19 exposures occurring on or after March 11, 2020. In particular, the new law would protect the following classes of persons from civil liability during the present public health emergency absent gross negligence or willful and wanton misconduct:

Table 2

The most significant protection is for employers. Namely, under the proposed legislation, no business will be liable for damages resulting from injury or death related to exposure of coronavirus in the course and scope of its operations, unless it was not in “substantial compliance” with coronavirus procedures established by applicable federal, state, and/or local agencies. Further, the bill prohibits tort actions by an employee against an employer for coronavirus exposure, unless the exposure is intentional.

A Path to Passage?

The tort reform packages cleared historically dead-end hurdles this week. Namely, Sen. Talbot’s bill (SB 418) passed the Senate Judiciary “A” Committee with amendments 4-3. Rep. Garofalo’s bill (HB 9) likewise was reported favorably by the Civil Law Committee 11-5, which involved nearly nine hours of testimony.

Sen. Talbot’s bill is currently on the schedule, for full Senate consideration on May 18, and the House will meet as a whole and may consider Rep. Garofalo’s bill over the weekend.

Rep. Pressly’s COVID-19 liability bill (HB 826) passed the House Civil Law Committee with amendments but faces a longer path forward. This legislation is subject to full House consideration, a Senate committee, the entire Senate, and possibly another vote by the full body of the House in the event of amendments by the Senate.

For all of these bills, the path to the Governor’s desk is just beginning, and the circumstances will likely require expedited consideration to meet the current deadline of June 1. Jerry Reed’s chorus from East Bound and Down summarizes best the present hurdles faced by the Legislature— “We have a long way to go and a short time to get there.”

Our COVID-19 Task Force and Government Relations Team will continue to monitor the ever-changing landscape of options and issues for businesses to consider as we navigate through the pandemic and beyond.