Tenn. Senate passes bill to limit lawsuit payouts

On May 12, 2011, in News 2011, by Mark Norris

CNBC.com
May 12, 2011

NASHVILLE, Tenn. – Gov. Bill Haslam’s proposal to limit lawsuit damages in Tennessee passed the Senate on Thursday despite passionate arguments from opponents that the measure would unfairly target victims.

The legislation carried by Republican Senate Majority Leader Mark Norris of Collierville was approved 21-12 after nearly four hours of debate.

The House passed the companion bill 72-24 earlier this month. Minor differences must now be worked out between the two chambers before the legislation goes to the Republican governor.

Under the proposal, a $750,000 cap would be placed on non-economic damages such as pain and suffering, and the cap would be raised to $1 million in cases involving serious spinal cord injuries, severe burns or the death of a parent of minor children.

Punitive damages would be capped at twice the amount of compensatory damages or $500,000 — whichever is greater.

“About 30 states have done this, so it’s a big step for Tennessee,” Norris said after the vote. “We think it’s not only a good thing for competitiveness, but to maintain the strength of our judicial system.”

Supporters say the proposal will help job creation, while opponents argue that limiting damages in most lawsuits would unfairly target victims and free companies from needed accountability.

“You are diminishing the role of personal responsibility in our society if you vote to impose caps,” said Sen. Mike Faulk of Kingsport, the only Republican to vote against the proposal.

Sen. Douglas Henry was one of two Democrats who voted for the legislation. He said businesses are “looking for something certain, and this puts more certainty into the structure than there was before.”

However, Democratic Sen. Roy Herron of Dresden focused his argument on the victims.

“We are harming the victims and protecting the wrongdoers,” said Herron, who used a Senate rule to divide up the legislation and require lawmakers to vote on each section.

“You’ve got non-economic damages, you’ve got punitive damages, you’ve got the Consumer Protection Act, you’ve got security,” Herron said. “It’s a bunch of bills put together and I thought it ought to be voted on its own merits.”

Republicans defeated several attempts by Democrats to eliminate or raise the caps and to require the state comptroller to study whether the measure delivers on promised job growth if it becomes law.

Democratic Sen. Andy Berke of Chattanooga tried to pass an amendment that would add brain injuries to those that would fall under the $1 million cap.

“For many of us who believe in the system, this is a tragedy,” said Berke, adding that juries should decide the damages.

“We do not allow the powerful, the rich or our government to make these decisions. We allow juries.”

 

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