Story here. Looks like Tulane and the pro-clinic forces were up to the challenge of killing this bill (edit: at least for this legislative session). Still, one wonders what effect this affair might have, especially when coupled with the similar events in Maryland. To what degree will law school clinics, at the margin, pull their punches when attacking in-state industry? (nod to Prof. Robert Kuehn, who sent me the link and who runs an environmental clinic at Washington University (St. Louis))
There was another issue lurking here that I didn't have time to chase down: how do free speech and academic freedom affect the normal law-of-lawyering analysis when a lawyer wants a third party to fund litigation that the payor finds distasteful? Normally, the lawyer's wishes don't amount to much in that analysis; the client and the payor assert their respective rights and the lawyer lives with the outcome. In clinical settings, it has apparently been suggested (see the comments as well), the professor herself holds important rights.
UPDATE. Here's the letter written by CLEA (Clinical Legal Education Association) to the Louisiana legislators, via Prof. Kuehn. Download Senator Ann Duplessis letter