Non-ecomonic Damages Now “Capped” in Tennessee

On Thursday, June 16, 2011, Governor Bill Haslam signed into law the lawsuit “reform” bill that caps non-economic damages (pain and suffering, loss of consortium, and so forth) at $750,000. The Tennessee legislature, now dominated by Republicans, had passed the legislation “with comfortable margins” in both houses despite strong opposition from the Tennessee Association for Justice (TAJ) and the AARP. The legislation was the new Republican Governor’s “legislative centerpiece”.  It does allow for up to $1,000,000 in non-economic damages in certain catastrophic injury cases.  While the legislation may be good for business it is bad for accident victims and their families.  No matter how bad the injury, no matter how devastating the loss, non-economic damages in Tennessee are now limited to $750,000 in most cases, or $1,000,000 in catastrophic injury cases.

Other bill provisions include “capping” punitive damages at $500,000, and the prohibition of punitive damages “in product liability actions unless the seller had substantial control over the design and manufacturing of the product or had actual knowledge of the defect in the product at the time it was sold.”  The new legislation takes effect on October 1, 2011.

Such “caps” have been successfully challenged in the courts in other states, such as Georgia. The Mississippi Supreme Court will soon determine the constitutionality of lawsuit damage caps in that state.  They are considering the constitutionality of a $1,000,000 noneconomic damage cap, following a request by the 5th US Circuit Court of Appeals. The requests stems from a Mississippi woman’s injury lawsuit against Sears, Roebuck and Co. after she collided with a company van. A jury initially awarded the plaintiff $2.2 million in noneconomic damages but a judge subsequently reduced the award. The issue is whether “the Legislature overstepped its authority in passing the law and whether the law violates a constitutional right to have a jury determines the facts of a case, including damages.”

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