Lawsuit Abuse Costs Louisiana Thousands of Jobs and Big Money

Lawsuit abuse is quite costly to the state of Louisiana. That's the message in a new study by the Pelican Institute.

If shows coastal litigation alone is costing Louisiana thousands of jobs and as much as $113 million in economic activity each year.

The study, titled “The Cost of Lawsuit Abuse: An Economic Analysis of Louisiana’s Coastal Litigation,” examines the impacts the sweeping state-sanctioned litigation is having on state and parish economies. According to the conservative estimates utilized in the study, Louisiana’s economy loses between $44 million to $113 million per year due to the state’s risk of lawsuits in the offshore energy industry.

The study also discovered that between May 2012 and May 2014 Louisiana lost a minimum of 2,000 jobs in the industry due to the increased risk of lawsuits occurring in that period. These job declines equate to approximately $70 million in lost earnings for Louisiana workers.

Additionally, the study discovered coastal lawsuits are causing Louisiana state and local governments to lose as much as $22.6 million per year in industry royalties, as offshore drilling has declined more than 50 percent since the lawsuits were filed. The first coastal lawsuits were filed against some of Louisiana’s largest job creators in 2013.

Daniel Erspamer, chief executive officer of the Pelican Institute, said the study demonstrates the breadth of the impact coastal lawsuits and litigation abuse are having on coastal communities and the state as a whole.

"It should come as no surprise that suing Louisiana’s No. 1 job creators is damaging to the state’s economy and working families. Since they were filed nearly six years ago, these lawsuits have directly contributed to lost jobs and opportunities for countless Louisianans,” Erspamer said. “We’ve gained nothing for our state as a result of the lawsuits, and we continue to fall further behind our neighbors. It’s time to abandon this ill-fated lawsuit strategy and bring Louisiana back to a place that’s welcoming to job creators and seekers alike. Our future hangs in the balance.”