There are some questionable media outlets out there. The Wall Street Journal is not one of them. Few publications hold more credibility in corporate board rooms than the Journal. Those who decide where to invest billions in capital often take note of what’s printed in The Wall Street Journal. That’s why the paper's editorial from last weekend, entitled “Louisiana: The Trial-Lawyer State,” is a big deal.
The Journal’s editorial board argues that “Louisiana used to be a leader in U.S. energy production, but Gov. John Bel Edwards has turned it into a leading lawsuit producer instead.”
Louisiana’s judicial hellhole not only deters investment, but it’s also shriveled a once-thriving energy industry. Gifford Briggs, president of the Louisiana Oil & Gas Association, says the state’s legal environment has weakened the industry considerably while our neighbors are experiencing a revival of growth and prosperity in the sector. Briggs blames Edwards.
“That’s what our members tell us; that’s what outsiders tell us,” Briggs said of Louisiana’s legal environment. “When they talk about (drilling for oil and gas), they say Louisiana has great prospects, but we cannot find investors. Our state has become off-limits. The legal environment has become too risky.”
Four years ago, plaintiff attorneys spent millions getting Edwards elected. It paid off. In return for their support, Edwards orchestrated what the Journal describes as a shakedown of Louisiana’s oil industry. Those same plaintiff attorneys and their millions are back once again trying to help Edwards win a second term, hoping to keep the good times rolling. All while the withering of the state’s oil industry continues.
“Oil production has declined (in Louisiana) by nearly a quarter since January 2016 while increasing in most energy-rich states and on federal land in the Gulf of Mexico,” writes the Journal’s editorial board. “One reason is that Mr. Edwards, a former trial attorney, has spent four years trying to wring more money out of energy producers. Mr. Edwards has demanded that energy producers pay billions of dollars for coastal restoration.”
Corporations are understandably skittish about investing in Louisiana, where plaintiff attorneys traditionally hold a stranglehold on the courts. The state has been long overdue for meaningful tort reform, and companies know under Edwards, any such legislation is dead on arrival. Plaintiff attorneys often donate millions to judicial candidates, including those running for Louisiana’s Supreme Court. If a plaintiff attorney-friendly judge catches a case against an oil company, it could lead to billions in lost value for shareholders.
Energy corporations have a fiduciary responsibility to act in the best interest of their shareholders. Those shareholders often depend on their investments to do well so they can comfortably live out their retirement years. Many of them worked hard their entire lives saving and exercising self-control so they could have enough money left over after paying bills to invest. One could argue for energy corporations to invest in Louisiana while Edwards is governor betrays the trust of those very shareholders.
The advantage plaintiff attorneys have over businesses in Louisiana under Edwards has led to embarrassingly lean GDP growth in the past four years. GDP shrank under Edwards’ first two years in office. Last year, GDP only grew a paltry 1.7%.
The Bureau of Economic Analysis released numbers earlier this year giving us a small glimpse of hope our economy was gasping for air and not smothered by Edwards and his gang of plaintiff attorneys. BEA reported Louisiana experienced a 3.8% increase in the first-quarter GDP. Edwards was quick to take credit for the surprising GDP growth numbers. But this past week, the agency revised its numbers to show the state’s first-quarter GDP growth at 0, not 3.8%.
Under the Edwards economy, there’s been plenty of pain to go around with lost jobs, stagnant growth and more people leaving Louisiana than only four other states.
Louisiana desperately needs an infusion of new capital, creating jobs and opportunities for families. Especially from the oil industry. Those who sit in corporate board rooms, read The Wall Street Journal, and invest are clearly not picking us as much as our neighboring states. Why would they? Why would anyone invest in “Louisiana: The Trial-Lawyer State“?
