2016 Tennessee Statute Provides for Attorney’s Fees to Be Awarded to State When State Employee is Individually Sued Unsuccessfully Under § 1983

Sometimes state government employees are sued on an individual basis for actions that they took as a government employee.  Often these cases are § 1983 claims asserting the state employee acted inappropriately under the “color of law.”  However, this new statute is not limited to claims under § 1983.  In response, the Tennessee legislature felt it was necessary to provide protection to the State when the individual governmental employee is successful in defending such a claim.  As a result, the 2016 Tennessee added a provision in the law that provides that attorney’s fees and costs should be awarded to the state or the state employee when the state employee is not found to be not responsible when they are sued in their individual.  In fact, the employee is not even required to be successful on the merits, but instead, even if the case is voluntarily dismissed greater than 45 days after an Answer is filed making specific assertions, then the employee is still awarded attorney’s fees and costs.   

Public Chapter No. 848, which was signed into law on April 19, 2016 by Governor Bill Haslam, has been amended and now provides as follows:

(a) Notwithstanding § 20-12-119(c)(5)(A), if a claim is filed with a Tennessee or federal court, the Tennessee claims commission, board of claims, or any other judicial body established by the state or by a governmental entity of the state, against an employee of the state or of a governmental entity of the state in the person's individual capacity, and the claim arises from actions or omissions of the employee acting in an official capacity or under color of law, and that employee prevails in the proceeding as provided in this section, then the court or other judicial body on motion shall award reasonable attorneys' fees and costs incurred by the employee in defending the claim filed against the employee.

(b) For purposes of this section, the employee shall be the prevailing party if:

(1) The employee successfully defends the claim alleging individual liability; or

(2) The claim of individual liability is dismissed with or without prejudice after forty-five (45) days have elapsed after an answer or other responsive pleading is filed in which the employee asserts the employee was not acting within the employee's individual capacity at the time of the matters stated in the complaint.

(c) The inclusion of an additional claim against the employee in official capacity in the same proceeding shall not preclude the employee from obtaining the remedies provided in this section that are related to the claim against the employee in individual capacity.

(d) Attorneys' fees and costs shall be paid to the state, or a governmental entity of the state, if either the state or the governmental entity represents, or retains and agrees to pay for counsel to represent, the employee sued in an individual capacity. If the state has not made such agreement, the attorneys' fees and costs shall be paid to the employee, or to counsel representing the employee. Attorneys' fees shall be calculated at a reasonable rate paid to attorneys of similar experience in private practice in the county where the proceeding is initiated.

This statute takes effect June 1, 2016 for all claims filed on or after that date.  As a result, litigation against individual employees in the State government has now become much more difficult.  This is due to the fact that attorney’s fees can be awarded if the plaintiff is not successful on the claims against the individual Tennessee state employee.  Frankly, this will make it very difficult to pursue these types of claims because of the potential financial ruin is the plaintiff is not successful.  This statute is contrary to the typical “American Rule” which provides, generally, that each party pays their own attorney’s fees in litigation.