Tennessee Approves Cap on Lawsuit Damages

Tennessee lawmakers have given final approval to a plan to cap non-economic and economic lawsuit damages.

The bill (HB 2008) places a cap of $750,000 on non-economic damages such as pain and emotional suffering and a $500,000 cap on economic or punitive damages. It also places a $1 million cap on catastrophic cases where a person becomes paralyzed, burned, blinded, suffers an amputation, or dies leaving behind minor children. It takes effect Oct. 1.

The bill was Gov. Bill Haslam’s legislative centerpiece in his first year in office.

“Tennessee has many great attributes going for it as we recruit companies interested in relocating,” said Haslam “This legislation removes one of the few advantages surrounding states had and makes our state even more desirable to businesses as we go out and sell Tennessee as the best place in the Southeast to do business.”

Tennesseans for Economic Growth, a business coalition, praised lawmakers for passing the bill. “This legislation will catapult Tennessee ahead of many states in terms of attractiveness to businesses looking to relocate or add operations,” said Doug Buttry, executive director for the group. “Indeed, this could be a shot heard around the world putting Tennessee on the map in terms of attracting jobs.”

The bill had been heavily lobbied against by AARP and trial lawyer groups including the Tennessee Association for Justice, which hired Fred Thompson, the state’s popular former U.S. senator. Speaking before the House Judiciary Committee, Thompson likened the bill to killing a mouse with a “bazooka.”

Other features of the bill include:

• There is no cap on any damages that can be objectively quantified.
• Caps punitive damages, which must be proved by clear and convincing evidence, at two times compensatory damage or $500,000, whichever is greater unless the defendant intended to injury the plaintiff, was under the influence of drugs or alcohol, or intentionally falsified records to avoid liability.
• Prevents 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.

Topics Lawsuits Legislation Tennessee