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Tenn. SC says judge was too quick to overturn caps on non-economic damages

By Vimbai Chikomo | Dec 9, 2015

NASHVILLE, Tenn. (Legal Newsline) - In the ever-evolving saga of the constitutionality of caps on non-economic damages, the Tennessee Supreme Court has determined a state judge was too quick to strike them down.

In March, Judge Neil Thomas, a circuit judge in Chattanooga, ruled that the attempt by the state's legislature to restrict non-economic damages in personal injury cases was a violation of the Tennessee constitutional guarantee of the right to trial by jury, which indicates that a plaintiff has the right to have a jury decide what compensatory amount is most appropriate for non-economic damages.

Although damage caps are designed to protect businesses from fraudulent and malicious claims, they have been criticized for minimizing non-economic factors like pain and suffering, loss of enjoyment of life, emotional distress, loss of society, injury to reputation, humiliation and mental anguish.

Tennessee is one of many states that places caps on non-economic damages. In 2011, the legislature passed the state's Tort Reform Act, which placed a statutory cap, with some exceptions, on non-economic damages that can be awarded in personal injury and wrongful death cases. The limit is $750,000, or more in cases involving “catastrophic” injuries.

The statute defines “catastrophic loss or injury“ as a spinal cord injury resulting in paraplegia or quadriplegia, multiple amputations of the hands or feet, extensive burns to the body or face or wrongful death of a parent with surviving minor children, in which case the limit for non-economic damages is $1 million.

In Cain v. Clark, an automobile accident case, plaintiffs Donald and Beverly Clark filed a lawsuit seeking compensation for non-economic damages that exceeded the cap, thus seeking a ruling on the constitutionality of the law capping non-economic damages at $750,000.

One of the defendants filed a motion for summary judgment, and Tennessee Attorney General Herbert Slatery argued the defendant could not move for partial judgments awarded to the plaintiff that exceeded the cap because whether the plaintiff would be awarded a judgement in excess of the cap was yet to be seen.

Judge Thomas declined to delay the ruling and found that Tennessee’s cap on non-economic damages violates the plaintiffs’ right to due process and equal protection under the Tennessee Constitution.

He also ruled that the plaintiffs’ right to a jury trial is a fundamental constitutional right, and that the traditional function of a jury at common law was to determine an appropriate remedy for personal injury, including the underlying facts of the case.

The Supreme Court's decision did not consider the constitutionality of the cap, but overturned the lower court on more technical grounds.

On Oct. 16, the high court determined that the ruling by the trial judge was premature, pointing out that under the statute, the damages cap is not disclosed to the jury; and that the trial judge applies the cap if and when the jury awards the plaintiff damages that exceed the cap.

George T. Lewis III, the chair of the Appellate Practice Litigation Group at law firm Baker Donelson, doesn’t think many people are surprised by the Supreme Court's ruling.

“All the Supreme Court has done is... they have not decided whether they [the caps] are constitutional or not. They just decided that the issue is not appropriate for decision until the jury awards more than the cap,” he said.

So what happens next?

The Supreme Court remanded the case for further proceedings.

“So [the case] it’s going back to trial court,” Lewis said. “If it doesn’t settle and it goes to trial, then the jury is not told about the cap. The trial judge applies the cap after the verdict. At that point, the trial judge could decline to enforce the caps on the basis that are unconstitutional.”

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