Louisiana’s “Judicial Hellhole®” Status Costs Residents $965 Annually In “Tort Tax”

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Nuclear Verdicts® and Insurance Fraud Plague State’s Legal System

Today, the American Tort Reform Association announced that Louisiana remains among the nation’s worst “Judicial Hellholes®,” this year ranked No. 10 in the American Tort Reform Foundation’s annual report.

“Louisiana’s lawsuit abuse climate burdens both its residents and its economy,” said Tiger Joyce, ATRA president. “From nuclear verdicts® to coastal litigation and rampant insurance fraud, the state’s lawsuit abuse culture effectively hangs a ‘closed for business’ sign on the state.”

Recent data reveals the stark economic consequences — Louisiana loses 40,500 jobs each year due to excessive tort costs while residents pay a $965 annual “tort tax.” 

For the roughly 20% of the state living in the New Orleans metro, that figure nearly doubles to a $1,917 annual “tort tax.” In Baton Rouge, residents’ annual “tort tax” is $984.

“These numbers represent real costs to real people,” Joyce said. “Lawsuit abuse stifles potential prosperity, drives up prices and drives away businesses.”

ATRF’s 2024-2025 report highlights new issues in the Pelican State’s civil justice system combining to create a perfect storm of lawsuit abuse, including the increasing prevalence of high-dollar nuclear verdicts®.

Louisiana state courts awarded more than $409 million in nuclear verdicts® against businesses in 2023, according to a Marathon Strategies study. Nuclear verdicts® are subjective and immeasurable “pain and suffering” damages that are greater than $10 million, which ATRF notes often surpass reasonable compensation for injuries. The pharmaceutical, oil and gas, and trucking industries are the most frequent targets of these verdicts in Louisiana. 

In September, an Opelousas jury handed down a single nuclear verdict® equal to more than half of all nuclear verdicts® from 2023. The $220 million verdict stemmed from an ambulance collision case involving an unrestrained medic that included $155.5 million in noneconomic damages, or subjective and immeasurable “pain and suffering” damages. 

“These excessive awards don’t just shock businesses — they paralyze them,” Joyce said. “Nuclear verdicts® drive up costs for everyone, deter investment, and ultimately hurt the very communities these courts claim to serve. Louisiana’s courts need to rein in this practice and fairly compensate victims without crippling the state’s economic future.”

During his gubernatorial campaign, Gov. Jeff Landry’s campaign contributions exposed ties to the trial lawyer lobby, reportedly receiving more than $700,000 in campaign contributions from plaintiffs’ attorneys. Unfortunately, during his first legislative session as governor this year, Gov. Landry vetoed a bill that would have prevented plaintiffs, and their attorneys, from receiving windfalls from litigation. 

“It’s time for Louisiana’s leaders, including Gov. Landry, to prioritize legal reform that benefits all citizens — not just trial lawyers,” Joyce said. “We urge all three branches of government and citizens to work together to bring about meaningful change to attract businesses, create jobs, and ensure a fair legal system for all.”

ATRF says widespread insurance fraud in the state further exacerbates Louisiana’s auto insurance crisis. A massive scheme dubbed “Operation Sideswipe” led to more than 60 indictments, including charges for the murder of an informant. In staged accidents with commercial trucks, perpetrators deliberately caused collisions, faked injuries, and filed fraudulent insurance claims, often colluding with lawyers and medical professionals. 

“‘Operation Sideswipe’ exposes the dark underbelly of Louisiana’s litigious culture,” Joyce said. “This scheme not only defrauds insurance companies but serves as a stark reminder that lawsuit abuse is not a victimless crime – it threatens public safety and financial security for all Louisianans. When insurance fraud escalates to murder charges, the consequences of unchecked lawsuit abuse become shockingly clear.”

Louisiana’s ongoing coastal litigation, including lawsuits against more than 200 energy companies, threatens billions in damages and creates uncertainty for the state’s vital energy sector, ATRF’s report states. 

“Louisiana’s coastal litigation saga epitomizes lawsuit abuse at its worst,” Joyce said. “After more than a decade, litigation drags on without resolution or coastal restoration. Unfortunately, it’s not just the companies named in the lawsuits impacted — the ongoing legal quagmire jeopardizes thousands of jobs and economic prosperity.”

To see the full lineup of this year’s Judicial Hellholes® and to read the full report, visit JudicialHellholes.org.

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