Tennessee Caps on Damages

I am very busy this week traveling on several cases.  As a result, I decided to repurpose/repost an article that I did early in the life of this blog on a topic that I get asked about all of the time.  This topic is often discussed because people have heard that there are “new” caps on damages in Tennessee.  These caps were passed by the legislature in the 2011 Tennessee Tort Reform legislation.  These caps apply to "all liability actions for injuries, deaths, and losses covered by this act which accrue on or after…” October 1, 2011.  This law fundamentally changed many aspects of tort law in Tennessee however there are not a lot of cases interpreting this statute as of this time.  I expect over the next 10 years a large body of law will be developed, but at this time we have only scratched the surface.  Here is a summary of some of the key portions of the bill. 

One of the things this bill did was it created T.C.A. § 29-39-102.  This is a long statute which has many nuances, however, for now we will briefly discuss one of the key portions which are the caps that now apply to civil actions filed in Tennessee.  Section (a) provides as follows:

(a) In a civil action, each injured plaintiff may be awarded:

(1) Compensation for economic damages suffered by each injured plaintiff; and

(2) Compensation for any noneconomic damages suffered by each injured plaintiff not to exceed seven hundred fifty thousand dollars ($750,000) for all injuries and occurrences that were or could have been asserted, regardless of whether the action is based on a single act or omission or a series of acts or omissions that allegedly caused the injuries or death.

As a result, the damages that are recoverable include the "economic damages" suffered by each injured plaintiff.  "Economic damages" are defined in T.C.A. § 29-39-101.  The definition of "economic damages" is:

(1) “Economic damages” means damages, to the extent they are provided by applicable law, for: objectively verifiable pecuniary damages arising from medical expenses and medical care, rehabilitation services, mental health treatment, custodial care, loss of earnings and earning capacity, loss of income, burial costs, loss of use of property, repair or replacement of property, obtaining substitute domestic services, loss of employment, loss of business or employment opportunities, and other objectively verifiable monetary losses;

After the plaintiff recovers economic damages then he or she can recover compensation for "noneconomic damages" which is a defined term in T.C.A. § 29-39-101.  The definition of "Noneconomic damages" is:

(2) “Noneconomic damages” means damages, to the extent they are provided by applicable law, for: physical and emotional pain; suffering; inconvenience; physical impairment; disfigurement; mental anguish; emotional distress; loss of society, companionship, and consortium; injury to reputation; humiliation; noneconomic effects of disability, including loss of enjoyment of normal activities, benefits and pleasures of life and loss of mental or physical health, well-being or bodily functions; and all other nonpecuniary losses of any kind or nature.

As a result, a plaintiff can recover all economic damages plus an additional $750,000.00 for each injured plaintiff.  This significantly reduces the monetary exposure in cases where, on occasion, juries assess significant "noneconomic damages" for pain and suffering, physical impairment, emotional distress, etc.  In the long run this will likely drive the settlement value of claims down because the chance for the extreme “home run” is no longer there for the plaintiff in cases involving significant medical expenses.  However, when liability is in dispute, this change could also cause an increase in trials because the defendant does not have as much fear of an extreme award for noneconomic damages.

It is important to note the total cap on damages of $750,000.00 or $1 million dollars (depending on the circumstances) is a total cap no matter how many defendants are involved in the case.  Sub-part (b) makes it clear that the cap applies no matter how many defendants are involved in the litigation.

There are additional aspects to this cap on damages that are important to consider and have been addressed in other blog posts I have done.  These include the following:

1.          If there is a "catastrophic loss or injury" then the damages cap for non-economic damages increases to $1,000,000.00 dollars.

2.          A punitive damages cap was also adopted by the Tennessee legislature.

3.          There are exceptions that apply to the cap of the statute) under certain conditions like when the act is intentional or if drugs and alcohol are involved.