Status of Pending Tennessee Legislation to Abolish Collateral Source Rule in Tennessee – What Happened in 2014 Legislative Session?

Several people have recently asked me about the status of proposed legislation in Tennessee to abolish the collateral source rule.  Many of you will recall that in the 2013 legislative session a bill on this issue was proposed called the “Phantom Damages Elimination Act”.  This bill was SB 1184/HB 0978.  The Legislative website page that will provide you with updates on this bill can be found here.  This bill would effectively abolish the collateral source rule in Tennessee. 

There were many discussions about this bill in 2013.  In fact, in 2013 the Senate Judiciary Committee decided to establish a study committee to study the impact of this bill over the summer and fall of 2013.  In the 2013 hearings it was stated that the bill would be brought back in 2014 pursuant to the request of Senator Tracy, who sponsored the bill in the Senate.  So the question is, what happened in the recently ended 2014 Tennessee legislative session?

The answer to this question is simply – nothing happened!  The bill was only called up on one occasion on January 14, 2014 in the Senate Judiciary Committee.  The Chair of the Senate Judiciary Committee, Brian Kelsey made one comment about the bill at that time.  He said simply “at the sponsor’s request that has been rolled to the last calendar” – see the video of the hearing here.  That is the only official insight we can obtain on this bill at this time.  There was no discussion or revelation of the results of the “study committee” that was established in the 2013 session.  The bill was never called up again according to the Tennessee legislature’s website.  The House appears to have not even called it up in any committee.

So what happened?  It was a hot topic in 2013 that was discussed in several committee hearings and there were many articles posted in the media and on attorney’s websites discussing this possible legislation.  At this time, I simply cannot tell what happened.  I did a Google search and could not find any substantive discussion about why it was not addressed in the 2014 Legislative session.  As a result, I am at a loss to explain why it was not addressed.  I can only guess that there must have been behind the scenes discussions that somehow prevented this from coming up in 2014.  Maybe it was because of all of the other hot button issues that came up in the session.  Maybe it was because of effective lobbying by the Tennessee plaintiff’s bar.  Maybe it was because the “study committee” is late on their homework.  I simply do not know.

For those who are not aware, the collateral source rule prevents a defendant from introducing evidence that the injured plaintiff received payments from any other source to try to reduce or mitigate the damages sustained by the plaintiff.  The Tennessee Court of Appeals in Fye v. Kennedy, 991 S.W. 2d 754, 763 (Tenn. Ct. App. 1998) stated that: 

An injured party's right to recover his or her “reasonable and necessary expenses” must be viewed in connection with the collateral source rule:

Normally, of course, in an action for damages in tort, the fact that the plaintiff has received payments from a collateral source, other than the defendant, is not admissible in evidence and does not reduce or mitigate the defendant's liability.

The proposed SB 1184/HB 0978 would effectively eliminate the collateral source rule in Tennessee.  In fact, the language in the bill would only allow a plaintiff in a personal injury or wrongful death case to recover economic damages for medical and other costs of medical care for:

            (1) The amount actually paid by or on behalf of the claimant;

            (2) Any amount necessary to cover unpaid medical expenses;

            (3) Any amount necessary to satisfy future medical charges.

Once again, I will follow this issue in the 2015 Tennessee Legislative session.  If any of my readers know why this bill was not brought up, please let me know so I can pass along the information to everyone.