14 June 2010

Committee action, Jun. 14: SB 606, HB 731, SB 185


SB 606 would ensure religious freedom for Louisiana residents. As author Sen. Danny Martiny and experts he had gathered explained to the House Civil Law and Procedure Committee, the provision in the Constitution when enacted in 1974 has been at the federal level altered in meaning and could be altered in its meaning by federal courts. By passing this statute, it would direct the Louisiana Supreme Court to interpret these kinds of cases as under the original intent in 1974.

A substantive amendment was offered up to address concerns about prisons, and adopted without objection. Rep. John Bel Edwards wondered whether such specific definitions would not lead to more litigation, and was informed that the language was largely that of other states and tried and tested. Martiny also said immunities were added to prevent some of that.

Edwards offered an amendment that essentially would prevent the standard supported by the bill to be applied in certain cases involving minors, which would be especially applicable when there was disagreement between parents. Martiny said this would moot the bill in those cases, and argued that judicial discretion was unlimited by the bill in these cases, and would be more confusing than clarifying. He also said he was open to working on language between the committee and floor, and Edwards and Martiny left the immediate area.

Rep. Neil Abramson then offered an amendment that would prevent harm to a person, animal, or property, which Martiny also did not like for much the same reason. It failed 6-7. Another of his amendment was to change the attorney fee structure, which Martiny did not think necessary. It also failed, 5-8. Rep. Walker Hines then wanted to add not allowing psychological harm being done as a result of application of this standard, to which Martiny said that was not the purpose of the bill. It failed 5-7.

Edwards then said he had worked something out to define “compelling interest,” offered the amendment, and it was adopted without objection. The question then was called and Martiny briefly closed. It passed without objection.


SB 731 by Pres. Joel Chaisson would allow contingency fee contracts to be entered into by the Attorney General. Chaisson said the scope of the recent oil spill tragedy underscored what other Gulf Coast states could do in this way and what the state needed for relief, and assured there would be sufficient safeguards to prevent abuse of the system. He said this would put the LA AG on the same footing as what potential defendants could draw upon in terms of resources. Attorney General Buddy Caldwell said a company like BP could only pay attorneys by the hour in these instances, but at a rate over 40 times what the state paid comparably. Contingency arrangements he thought would level the playing field.

Hines asked about the reimbursement caps, saying he wasn’t a fan of the 10 percent level at the highest (over $250 million) level, saying something should be done with the bill so that it would not end up giving a handful of lawyers hundreds of millions of dollars each which might happen in any suit against BP. He also wondered if this kind of fee should not be given preferably to area attorneys, to which Caldwell said he wouldn’t perceive many “outsiders” being needed typically. Edwards didn’t so much ask a question but commented that a sufficient level for the fee was needed in order to make it worthwhile for lawyers to want to put up costs up front, and given budgetary constraints this made contingency fees even more necessary now. He also said that these kinds of contracts were good when facing a party, such as with BP, that was in a “superior” position.

Rep. Nancy Landry asked whether some kind of hybrid could be arranged. Caldwell said that might work in some cases but not in others. Landry said she feared the compensation otherwise would be out of bounds to what would be appropriate and should be retained to the state. Chaisson said that shouldn’t matter if the attorneys delivered for the state. Landry asked about a cap, but Chaisson said a cap could prevent the best lawyers from being hired.

Rep. Greg Cromer said he didn’t see how such high rewards were helpful to the state’s people, money going to lawyers that could be used in recovery. He said he didn’t want certain people to enrich themselves at the state’s expense. Chaisson said the only thing that would be “enriched” in this case without this law was BP.

Rep. Tom Wilmott noted a discrepancy in the step percentages that might create weird incentives to settle for less. Chaisson explained the percentages applied to floors that would increase after certain thresholds, but Wilmott said the wording still should be looked at.

Stephen Waguespack from the governor’s office said he appreciated efforts to deal with the current BP crisis such as this, and felt it would be appropriate in this particular case. He did not endorse it for any occasion and said this specific endorsement did not mean a blanket endorsement.

Rep. Fred Mills wanted to know the state’s risk if a defendant declared bankruptcy. The answer: nothing, because all the risk was with the lawyers. He also wanted to know why the state couldn’t issue a bond to cover the costs. Answer: supporters didn’t think anybody would buy such a bond.

Rep. John Schroder asked why not limit this bill to the current BP situation. Chaisson said why not have it available for the next time something big happened, and if done case-by-case it would have to be done in session. But Schroder said the taxpayer was the ultimate concern and doing something lasting that could harm there. He also expressed concern that even in this situation too much could be taken from taxpayers in fees. Caldwell said rather than worry about what lawyers, worry first about getting it. Schroder noted the first worry must be reasonable use of the taxpayers’ resources, and the perception that the process would be for sale. He also worried that legislation like this would make BP hostile to its voluntary payments now. Chaisson didn’t think it would affect matters, and these payments were being made in states with contingency contracting.

Opponents said they weren’t sure what she was dealing with, but whatever it was, they said it was unneeded. The AG has resources to hire by the hour, they said, and the state should retain full fruits of recovery, and gave past examples of cases where they said overcompensation occurred because of contingency fees and hypothetical applications of the bill to other cases where the state would have gotten less and lawyers more. They also questioned the language and timing in the bill as a Trojan Horse, even if limited to BP, for spreading this. They stated such a bill would give an enormous power to the state to go after small business for settlements. They saw the current crisis as creating far more defendants under the bill than just BP. They also noted Louisiana wasn’t really out of step with other states, as other common law states would allow these contracts only if not prohibited by legislatures, so not many had approved of them explicitly. Further, other states had far more stringent requirements and caps on fees. They said there were many more options than just hourly and contingency arrangements, and noted the state already was pursuing many of these kinds of cases using contracted high hourly rates. This bill, they said, regardless of presumed protections, invited corruption, gave examples of it, and other gave examples of how under hourly fees courts could award additional compensation to lawyers.

Rep. Robert Johnson asked opponents for suggestions on how to finance the current situation. Chuck McMains, former legislator now representing business interests, said that Caldwell’s estimate of $50-100 million in costs over an estimate of 10 years would produce a reasonable per year cost that could be appropriated by the Legislature. Edwards also said a court could place limits on attorneys’ fees, and McMains said that would be better if added to the bill but did not compensate for other demerits in the bill.

Amendments by Chairman Tim Burns were introduced, the most significant of which tried to limit the bill’s scope to the current crisis and other “spills of national significance” and removed the stairstep percentages. Hines said he had a lot of questions about the large numbers of amendments, and asked Chaisson what he thought. Chaisson said he liked some of it and other parts not, but would be amenable to getting it out of the panel and looking at it again on the floor. McMains said the reduced disclosure and lack of substantive caps did not improve the bill enough. Chaisson called amorphous claims of corruption “ridiculous” and said not to pass these would “tie the hands” of Caldwell.

Schroder wondered whether amendments to address McMains’ concerns could be put up. Burns said perhaps a delay was in order and insisted he was not trying to slow things down with that request. Chaisson asked that they send out the bill and work on things before hitting the floor; Hines and Mills agreed it had to be finished one way or the other today. Without objection, the large amendment set was then approved.

Abramson then proposed amending it to hire only Louisiana lawyers this way. Hines wondered if this would be too restrictive. Chaisson said he didn’t mind the amendment. Landry said this might be too limiting. Abramson said his amendment would make the contract with Louisiana people, but others could be brought in from elsewhere. Burns then announced the bill would be dealt with further after a committee recess, after taking on other business, after House adjournment for the day.


SB 185 by Sen. Nick Gautreaux would prevent someone convicted of a felony anywhere, not even for a felony in Louisiana, could not run for office. Edwards said it could mean someone running afoul of Sharia law in Saudi Arabia could not run for office in Louisiana. Thus, Vice Chairman Nick Lorusso said they might wish to look at this again when the panel reconvened later in the day.

No comments: