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....

Mental Health Law – New requirements for mental health practitioners passed in the 2013 Tennessee legislative session.

Analysis:  The 2013 Tennessee legislative session brought about an important new addition to the Tennessee Mental Health statutes found in Title 33.  Specifically, Public Chapter No. 300 which was signed into law by Tennessee Governor Bill Haslam on April 29, 2013, added T.C.A. § 33-3-210.  This statute went into effect on July 1, 2013.  It provides specific reporting requirements for mental health professionals to report “immediately” to law enforcement when their patient threatens to harm an identifiable victim under certain circumstances.  This statute provides as follows:

(a) If a service recipient has communicated to a qualified mental health professional or behavior analyst an actual threat of serious bodily harm or death against a reasonably identifiable victim or victims, the qualified mental health professional or behavior analyst, using the reasonable skill, knowledge, and care ordinarily possessed and exercised by the professional's specialty under similar circumstances, who has determined or reasonably should have determined that the service recipient has the apparent ability to commit such an act and is likely to carry out the threat unless prevented from doing so, shall immediately report the service recipient to local law enforcement, who shall take appropriate action based upon the information reported.

(b) If a mental health professional or behavior analyst is required to report pursuant to subsection (a), the professional or analyst shall report the following information:

(1) Complete name and all aliases of the service recipient;

(2) Name of the mental health professional or behavior analyst and name of private or state hospital or treatment resource from which the individual may be receiving services; and

(3) Date of birth of the service recipient.

Damages – Tennessee legislature amends requirement for jury to find each element of future damages “on an annual basis” under T.C.A. § 29-39-103.

Analysis:  The Tennessee Tort Reform Bill of 2011 required a judge or jury to make specific findings for certain types of damages.  T.C.A. § 29-39-103 was created by the 2011 Tennessee Tort Reform Legislation and the statute provided as follows:

(a) If liability is found in a civil action, then the trier of fact, in addition to other appropriate findings, shall make separate findings for each claimant specifying the amount of:

(1) Any past damages for each of the following types of damages:

(A) Medical and other costs of health care;

(B) Other economic damages; and

(C) Noneconomic damages; and

(2) Any future damages and the periods over which they will accrue, on an annual basis, for each of the following types of damages:

(A) Medical and other costs of health care;

(B) Other economic damages; and

Modification to Tennessee Medicaid False Claims Act clarifies that employees, contractors and agents are entitled to relief for employment discrimination for efforts to stop violations of the Act.

Analysis:  The Tennessee Medicaid False Claims Act (“the Act”) is an important statute that is intended to prevent the filing of false or fraudulent Medicaid claims.  It has a specific provision that provides protections to employees and others who are discriminated against for taking any action against Medicaid fraud under the statute.  On April 11, 2013, Governor Bill Haslam signed Public Chapter No. 99 which was passed by the Tennessee Legislature in the 2013 Tennessee Legislative session.  It basically clarifies that this statute is also intended to provide protection to individuals who attempt to stop any violation of the Act.  Specifically they are entitled to protections if they experience any employment discrimination as a result of their actions to stop violations of the Act.  Prior to this amendment, the statute was not very clear on this issue.  The Tennessee legislature bill summary provides a good summary of the intent of this new legislation.  It provides as follows:

Generally, under the present Tennessee Medicaid False Claims Act (the Act), any employee, contractor, or agent who is discriminated against in the terms and conditions of employment because of lawful acts done in furtherance of an action for Medicaid fraud, including investigation for, initiation of, testimony for, or assistance in such an action, is entitled to all relief necessary to make the employee, contractor, or agent whole, including reinstatement, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained, including litigation costs and reasonable attorney's fees.

This bill clarifies that employees, contractors and agents would additionally be entitled to the relief described above for employment discrimination due to any effort of such person to stop a violation of the Act.

The new language is now found in T.C.A. § 71-5-183(g) which provides as follows:

Products Liability – Joint and several liability in product liability cases is significantly changed by new 2013 Tennessee Statute, T.C.A. § 29-11-107.

Brief Summary:  Joint and several liability between a manufacturer and seller of a product is abolished in Tennessee.  Joint and several liability in product liability actions now only apply between manufacturers under the legal theories of strict liability and breach of warranty.

Analysis:  One area of Tennessee law that retained a portion of the doctrine of joint and several liability since McIntyre v. Ballentine, 833 S.W.2d 52 (Tenn. 1992) is in products liability actions.  The Tennessee Supreme Court in Owens v. Truckstops of America, 915 S.W.2d 420, 433 (Tenn. 1996) found that “the adoption of comparative fault did not alter that product liability law under which the liability of defendants in the chain of distribution of a product, who are liable under a theory of strict liability, is joint and several.”  In other areas of the law the Tennessee Supreme Court has issued several other decisions over the years that moved away from a general abolishment of joint and several liability.  Therefore, the Tennessee legislature addressed this issue in the 2013 Tennessee legislative session.  It passed Public Chapter No. 317 which was signed into law by Governor Bill Haslam on April 29, 2013.  This Public Chapter created a new statute, T.C.A. § 29-11-107, which provides as follows:

(a)  If multiple defendants are found liable in a civil action governed by comparative fault, a defendant shall only be severally liable for the percentage of damages for which fault is attributed to such defendant by the trier of fact, and no defendant shall be held jointly liable for any damages.

2013 Tennessee Legislation – New requirements for healthcare providers to provide infant CPR information and instruction.

Analysis:  The Tennessee legislature passed Public Chapter No. 197 which was signed into law by Governor Bill Haslam on April 23, 2013.  Public Chapter No. 197 provides a new requirement for almost every kind of health care practitioner or health care facility that provides health care to prenatal patients or newborns.  This bill requires these health care providers to provide infant CPR “information and instruction concerning the appropriate use and techniques of infant cardiopulmonary resuscitation (CPR).” TCA § 68-5-___ (the new bill did not designate a specific section for the statute but that will be done shortly).  This new law goes into effect on July 1, 2013.

The information and instruction is required to be provided to one (1) parent or caregiver of the newborn infant.  It is also important to point out that this new statute does not go as far as requiring classes in certification for infant CPR.  The entire text of this new statute is as follows:

§68-5-____

(a)        Hospitals, birthing centers, health care facilities, physicians, nurse practitioners, physician assistants or other health care practitioners who provide medical care to newborns as well as obstetricians who provide routine care for prenatal patients shall make available information and instruction concerning the appropriate use of techniques of infant cardiopulmonary resuscitation (CPR) to at least one (1) parent or caregiver of a newborn infant.  Nothing in this section shall require classes in certification of infant CPR.  This section shall also not constitute a requirement to be assessed during any inspection under Chapter 11, part 2 of this title.

(b)        Any facility or practitioner acting within the scope of their licensure or practice shall be immune from any civil liability under this section and shall have an affirmative defense to...

Tennessee Collateral Source Rule – Status of the pending proposed 2013 Tennessee legislation to abolish the collateral source rule in Tennessee.

The Tennessee legislature is considering many interesting pieces of legislation in the 2013 legislative session.  One bill that is of great interest to Tennessee attorneys as well as anyone handling Tennessee personal injury claims is SB 1184/HB 0978.  The bill is aptly named the “Phantom Damages Elimination Act”.  This bill would effectively abolish the collateral source rule in Tennessee. 

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.

See also John Day’s detailed discussion of the collateral source rule on his blog for a more detailed discussion of the collateral source rule. 

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: