GOP can't fumble tort reform close to scoring

As legislators enter the homestretch of tort reform, the Republican legislative leadership has to make sure it doesn’t fritter away its opportunity to make this meaningful.

The situation prior to Tuesday’s end of session remains in great flux. A mélange of ten bills circulate at present to bring this about, addressing five distinct issues, presented here roughly in order of impact in lowering vehicle insurance rates: (1) lowering the amount in controversy, or the jury trial threshold, (2) calculating more accurately the actual costs involved to deal with injury, or collateral source, (3) eliminating the ability to sue insurance companies directly, or direct action, (4) allowing evidence of seat belt usage in a trial, or the seat belt gag rule, and (5) lengthening the amount of time to file these cases for hearing, or the prescription period.

Currently, leadership has banked upon eight of these instruments addressing these matters. HB 57 by GOP Speaker Clay Schexnayder tackles the jury trial threshold by lowering it to $10,000, the seat belt exclusion, and a diluted version of direct action, after the Senate amended out a section dealing with collateral source. It sits in conference between those two versions.

SB 9 by Republican state Sen. Sharon Hewitt replicates ending the seat belt exclusion in HB 57. It rests on the desk of Democrat Gov. John Bel Edwards, an avowed foe of all the provisions but doubling prescription to two years. He could veto either of these bills that makes their changes permanent as of next year and have little chance of their override, since that would require a veto override session unlikely to have a majority of either chamber members support.

In response, there are HCR 18, 19, and 20 by GOP state Rep. Alan Seabaugh and SCR 14, 15, and 16 by Republican state Sen. Robert Mills. Collectively, these suspend for about a year starting Aug. 1 exclusion of seat belt usage in determining accident tort damages, the ability to sue directly insurers relative to such accidents, and the current jury threshold of $50,000. In essence, these represent temporary but more extreme versions of the other two bills and in language are tied to them: if neither of the bills become law, meaning that Edwards doesn’t sign them prior to the end of the session, these resolutions would kick in.

They also would cause disruption and potentially greater expense to the state’s judiciary, but require only simple majorities to pass and Edwards can’t veto them. In essence, their presence invites him to sign legislation he greatly dislikes or be forced to accept temporary but renewable changes he absolutely loathes. One of the Senate resolutions has made it to the House (on a test vote that showed all three could command a Senate majority), but given its rules the trio if there would have to run a gauntlet of supermajority votes for consideration, so the identical House resolutions, all of which await scheduling for the full Senate, realistically remain available for use.

Floating on the periphery is HB 44 by GOP state Rep. Ray Garofalo, which at one time mirrored HB 57 but was stripped down to serve as an instrument carrying the collateral source language like that in the HB 57 House version. It next would go to conference and could be subject to chaining, but appears to be the provision most likely for the majority to sacrifice.

Finally, HB 66 by Republican state Rep. Richard Nelson appears as the wild card. Described by its author as a “compromise,” it picked up considerable Democrat support on the House and a Democrat vote in Senate committee. It contains entire or diluted reforms pertaining to four of the issues, excepting the gag rule.

However, it also contains two poisonous passages. One would prohibit the use of sex in pricing premiums for those 25 or older. Evidence from other states shows this would increase prices in the aggregate, although probably not by much.

Worse, that would help to sabotage another portion, which mandates in three years that rates fall 15 percent compared to changes in other states or the bill’s language nullifies. Too many Louisiana-specific, idiosyncratic variables out of control of legislation in rate-setting make this impractical to judge whether reforms worked; for example, they could cause a 20 percent reduction but other things such as increases in numbers of miles driven, accidents, severity, etc. could take back 10 percent, leaving it short of the goal.

More practically, the contingent status of the reforms would inhibit new insurers from entering the state, a key component in driving down rates, and cause others to leave pressured to lower rates too much if outside pricing factors work against that. Finally, even in the hypothetical scenario above a 10 percent comparative reduction is better than none, but would be lost under the current language.

If it goes anywhere, leadership must excise these, but it wouldn’t matter in a sense. Edwards, under great pressure from trial lawyers who sent tens of millions of dollars to support his campaign and Democrats generally who depend upon trial lawyer donations for election and need that source to continue (even as they double-dip by voting for HB 66 so they can claim they are for reform), would veto the current language as well.

Legislative leadership can’t mess around. One guiding principle must inform all its actions: on this matter with all other things equal, Edwards can’t be trusted to do anything but veto whatever hits his desk.

Thus, you have to make other things unequal. GOP Pres. Page Cortez must schedule the Seabaugh resolutions for Monday and make sure they pass to cock the gun. Also, he should schedule HB 66 with amendments to stripping its poisonous measures and send that to a vote in time for conference (and perhaps linking it to others). Finally, in the House Schexnayder should take HB 44 into conference and see if he can link it to enactment of HB 57; that is, in HB 57 conference write that signing HB 44 must happen or HB 57 fails, meaning the resolutions kick in.

This strategy attains everything, but winning just a large portion of it improves matters for Louisiana ratepayers. Skilled leading will force Edwards to sign many or all of these reforms into law in forms that will make a real difference. Republicans just have to have the will to do it.