Tennessee Gov. Bill Haslam has signed a measure to cap payouts for medical malpractice and other civil cases that he said is good for business in the state.
The law places a $750,000 cap on non-economic damages such as pain and suffering. The cap will 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 are capped at twice the amount of compensatory damages or $500,000, whichever is greater.
“We wanted to make sure we did everything we could to protect victims’ rights, but also have a predictable playing field for businesses,” said the Republican governor.
Valerie Nagoshiner, acting director of the National Federation of Independent Business in Tennessee, said the law should help. “Small businesses are especially vulnerable to frivolous lawsuits,” Nagoshiner said in a release. “It’s hard enough for them to defend themselves against even the weakest of claims, but one outrageous jury award or one frivolous lawsuit can be the difference between a small, family-owned business staying open or closing for good.”
Critics say the law weakens company accountability. They say juries should decide damages.
“Everyone should be held accountable when they make a mistake,” said Democratic Sen. Andy Berke of Chattanooga. “All our jury system does is ensure that we have a fair way to judge that. Unfortunately, too often in our society we are seeing personal responsibility and accountability go by the wayside.”
Mary Mancini, executive director of Tennessee Citizen Action, agreed.
“Damage awards act as a deterrent and make large corporations think twice about repeating egregious acts that can lead to abuse, neglect, and death,” she said. “This bill takes away the right of victims to have their full day in court and the right of juries to hold accountable responsible parties as they see fit.”
Although the legislation has passed, one issue is still under discussion: bodily injury.
The original House version sought to lift the $750,000 cap on non-economic damages if the defendant caused the injury while committing a felony. But the chamber agreed to Senate language to lift the cap only if the defendant is found to have intended to cause bodily injury.
Republican Rep. Dennis Vance of Savannah, the main sponsor of the House version, said that he’s already filed legislation for next year to adopt the House standard. “I fully anticipate that being one of the first things we do when we get back in session,” he said.
Also, Haslam signed the state’s $30.8 billion spending plan for the fiscal year that begins July 1. It includes $71 million for disaster relief from recent storms and flooding, and a 1.6 percent raise for state employees, their first pay increase in four years.