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The "Tennessee Civil Justice Act of 2011" is one of the most important actions of the Tennessee Legislature in recent history. This Act, also referred to as the “Tennessee Tort Reform Bill”, took effect on October 1, 2011 and applies to "all liability actions for injuries, deaths, and losses covered by this act which accrue on or after such date." Here is a link to the bill that was actually signed into law: http://www.tn.gov/sos/acts/107/pub/pc0510.pdf. This law fundamentally changed many aspects of tort law in Tennessee.
To this point there are no substantive decisions interpreting this tort reform bill because it only applies to injuries or events that occur on or after October 1, 2011. Obviously, even if an injury occurred on October 2, 2011, it will take some time for a lawsuit to be filed, a substantive motion to be decided, an appeal to occur, and for the Tennessee Court of Appeals to issue a decision. In fact, it will probably take another six months to a year before we will see any real court interpretation of the Tennessee Civil Justice Act of 2011. Interestingly, the tort reform bill has already been amended at least one time. On June 12, 2012 Governor Bill Haslam signed an amendment of certain portions of T.C.A. § 29-39-102 and T.C.A. § 29-39-104. This bill can be found here: http://www.tn.gov/sos/acts/107/pub/pc0902.pdf.
Regardless, it is important to take time to note the important aspects of the tort reform bill because it will certainly have an impact on Tennessee cases in the future.
Section 10 of the bill 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 “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 will be addressed in subsequent blog posts. These include the following:
1. If there is a "catastrophic loss or injury" then the damages cap for noneconomic damages increases to $1,000,000.00 dollars. (found in sub-part (d))
2. The "noneconomic damages" cap for each injured plaintiff includes claims by a spouse or children (loss of consortium etc.). (found in sub-part (e))
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. (found in sub-part (h))
There are some other changes that will be addressed by subsequent posts in the future.
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