Tennessee lawmakers have approved a tort reform package (HB 2008/SB 1522) designed to improve the state’s business climate. Slated to take effect October 1, 2011, the Tennessee Civil Justice Act of 2011 is a gubernatorial priority and awaits Governor Bill Haslam’s (R) signature. According to Lt. Governor Ron Ramsey (R), the legislation aims to “provide certainty and predictability for businesses, while ensuring that injured plaintiffs receive all of the economic, quantifiable damages they suffer.”

Ramsey said that the bill (i) “limits the maximum appeal bond amount from $75 million to $25 million or 125 percent of the judgment amount”; (ii) “defines two components of compensatory damages: economic and non-economic damages”; (iii) “places a cap on non-economic damages, which are subjective damages like pain and suffering, at $750,000 per injured plaintiff for both healthcare liability action and other personal injury actions,” which cap would not apply if the harm were caused by intentional conduct; (iv) “raises the cap to $1.0 million if the plaintiff becomes a paraplegic or quadriplegic because of spinal cord injury, sustains third degree burns over 40 percent or more of his or her body or face, [or] has an amputation of a hand or foot,” or if the matter involves the wrongful death of a parent “leaving one or more minor children”; (v) “places no cap on economic damages and [allows] any damages that can be objectively quantified [to] be recovered”; (vi) “caps punitive damages, which must be proved by clear and convincing evidence, at two times compensatory damage or $500,000, whichever is greater unless the defendant intended to injure the plaintiff, was under the influence of drugs or alcohol, or intentionally falsified records to avoid liability”; (vii) “prevents punitive damages in products liability actions, unless the seller had substantial control over the design or manufacturing of the product or had actual knowledge of the defect in the product at the time it was sold.” See Lt. Governor Ron Ramsey Press Release, May 16, 2011.