A new bill by the Louisiana Senate would outlaw lawyer ads that it finds to be deceptive — ads that state how much a client received as a settlement or judgment, without deducting for things like attorney fees, expert witness fees, or court filing costs.
Louisiana Senate Bill 395
The bill enacts R.S. 51:1429, which provides in pertinent part, that, “No person in any advertisement shall make, or permit to be made, a false, misleading, or deceptive statement about a monetary result obtained on behalf of a client or fail to disclose information necessary to prevent the information supplied in an advertisement from being false, misleading, or deceptive.”
The law defines “false, misleading, or deceptive statement” as “any communication that states or infers that a person actually received an amount of money that they did not actually receive.” The law defines “actually received” as “the net amount of money received by a person, calculated by deducting from the person’s gross recovery all expenses including but not limited to attorney fees, broker fees, expert witness fees, interest, court costs, costs of collection or recovery, and all other expenses related to litigation.”
This means that Louisiana lawyers who run billboards, print and digital ads, or television and radio spots will need to say how much of a total settlement went to attorneys’ fees, court costs, and expert witness fees.
Any violation of this law would be prosecuted under the state’s Unfair Trade Practices and Consumer Protection Law by the Louisiana Attorney General’s Office.
The Louisiana Senate gave final approval to the bill on June 1 with a 37-0 vote. The state House of Representatives voted 78-23 on the bill on May 29.
The bill’s sponsor was Senator Heather Cloud (R), who argued that lawyer advertisements that make false promises of substantial payouts encourage people to sue businesses without understanding that they may only receive a small fraction of the settlement or final verdict amount.
Co-sponsors of this bill included: Sen. Michael Fesi, Sen. Sharon Hewitt, Sen. Ronnie Johns, Sen. Barry Milligan, Sen. Robert Mills, Sen. Beth Mizell, Sen. Mike Reese, Sen. Mack White, Rep. Beryl Amedee, Rep. Tony Bacala, Rep. Rhonda Butler, Rep. Dewith Carrier, Rep. Raymond Crews, Rep. Phillip DeVillier, Rep. Rick Edmonds, Rep. Julie Emerson, Rep. Gabe Firment, Rep. Larry Frieman, Rep. Raymond Garofalo, Rep. Jonathan Goudeau, Rep. Lance Harris, Rep. Dodie Horton, Rep. Mike Johnson, Rep. Danny McCormick, Rep. Charles Owen, Rep. Thomas Pressly, Rep. Troy Romero, Rep. Rodney Schamerhorn, Rep. Alan Seabaugh, Rep. John Stefanski, and Rep. Polly Thomas.
All sponsoring senators and representatives are Republicans.
Ramifications of Law
According to the legislative analysis, the Louisiana Attorney General’s office expects about six investigations each year would result from the new law. Complaints about deceptive advertising would be required to start an investigation and would be handled by existing staff within its Public Protection Division. The Public Protection Division is staffed by a total of 34 employees, including 13 attorneys. The Louisiana AG’s office received 2,910 consumer complaints in 2017; 3,120 consumer complaints in 2016; and 2,696 consumer complaints in 2015.
The state should also expect litigation based on First Amendment challenges to the law. The Supreme Court has upheld attorney advertising from efforts to prevent lawyers from making truthful statements about their services. Saying that a jury awarded a specific amount is truthful, and it does not imply that the lawyer earned no fee or that the client received the full amount awarded. Forcing lawyers to add information to their advertising that they view as unnecessary may result in constitutional challenges.
The bill is now headed to Governor John Bel Edwards (D). The new rules would take effect August 1, 2020.