Many different states allow for punitive damages. The court can award punitive damages to the injured party in a civil lawsuit. These damages are in addition to the economic damages suffered by the party filing the claim. The purpose of these damages is to punish the defendant and hopefully deter similar conduct in the future. This makes them different from compensatory damages that have the goal of making the plaintiff whole. While punitive damages in Tennessee are possible, there is a financial cap on the amount the award can be.
If you suffered injuries in a car accident in Tennessee, you can learn how punitive damages can affect your claim by speaking with an experienced lawyer at Labrum Law at (615) 338-9500 about your case.
Determining Punitive Damages in Tennessee
Under Tennessee Law, punitive damages may only be awarded when the claimant (victim) proves by clear and convincing evidence that the defendant acted maliciously, intentionally, fraudulently, or recklessly. Once it is established that the defendant acted maliciously, intentionally, fraudulently, or recklessly, the court will proceed with determining the total amount of punitive damages.
When Are Punitive Damages in Tennessee Awarded?
Simply proving negligence or harm is not enough to convince the court to award punitive damages. The court considers the defendant's actions and the circumstances surrounding them. Experienced attorneys, such as those at Labrum Law, understand that each case is different. It is important to present a thorough picture of the circumstances surrounding the defendant's actions leading up to the resulting injuries.
- Nature of the wrongdoing
- What is the defendant's financial situation?
- Did the defendant intentionally misrepresent?
- Impact on the plaintiff
- Relationship between the defendant and plaintiff
- Defendant's awareness of the harm caused while causing it
- Duration of the wrongdoing
- Did the defendant profit from the misconduct?
- Previous punitive damages awards based on the same wrongdoing
- Remedial actions taken by the defendant
Tennessee Civil Justice Act
Tennessee law applies a cap to the total amount of punitive damages awarded. Awards have a limit of either two times the total amount of compensatory damages awarded; or five hundred thousand dollars ($500,000), whichever is greater. These limits went into effect in 2011 when Tennessee Governor Bill Haslam signed the Tennessee Civil Justice Act. The Tenn. Code Ann. § 29-39-104 limited punitive damages awarded to plaintiffs.
How Do Punitive Caps Affect Damage Claims?
Imposing a cap on punitive damages is a topic under much debate, with valid arguments both for and against this financial limitation. The strongest argument for the cap is to prevent out-of-control punitive damages awards. A notable example of this is the $28 billion awarded to an individual plaintiff in 2002 in a damages claim against Phillip Morris. These extreme value awards affect the defendant's business and the economy that the business operates in.
In some cases, an insurance company pays the punitive damages. The result is the insurance company raising their rates for all of their customers. Everyone progressively pays more for their insurance as the insurance company pays for the punitive damages of their clients.
Those against punitive damage caps argue that it defeats the purpose of the award. Punitive damages have the sole purpose of punishing the defendant to deter undesirable behavior. Placing a cap on punitive damages enables defendants to know that their judgment has a limit. This defeats the purpose of punitive damages as the defendant may decide the cost is not enough to deter the egregious behavior.
The Sixth Circuit Ruling
The United States Court of Appeals for the Sixth Circuit ruled on December 21, 2018, that a cap on punitive damages is unconstitutional under the Tennessee Constitution. The Sixth Circuit's decision in Lindenberg v. Jackson National Life Insurance Company could change how employment lawsuits filed in Tennessee were awarded damages.
The case at hand involved a claim for breach of contract over a life insurance policy. The federal jury awarded the plaintiff $350,000 in compensatory damages, $87,000 in additional damages based on Tennessee's “bad faith” statute, and $3 million in punitive damages. The defense challenged the ruling stating that the trial court must follow Tennessee's cap on punitive damages. The plaintiff responded by stating that Tennessee's punitive damages cap was unconstitutional.
It is important to note that this ruling does not have a binding precedent on the Tennessee state court system. However, the Tennessee Supreme Court can form an official opinion on Lindenberg or another case. It did just that in 2020 with Jodi McClay v. Airport Management Services, LLC, where it ruled that the constitution gives plaintiffs the right to have their case heard by a jury. The cap on punitive damages is not communicated to the jury and is only applied to the award as a matter of law by the judge. This upheld the cap on punitive damages in Tennessee as constitutional.
What These Rulings Mean for Your Case
The conflicting rulings of the two courts signal that the issue of a cap on punitive damages needs more clarification. While the Tennessee state court is clear on its stance, the federal court seems to take a different opinion. We will begin to see a clearer picture as future cases move through the courts.
Contact an Experienced Personal Injury Attorney Today
Each case brought before the Tennessee courts has a unique set of facts that influence whether or not punitive damages may be awarded, and if so, how much. Speaking with an experienced attorney can help clients understand the likelihood of a punitive damages award in their case.
Speak with a lawyer from Labrum Law at (615) 338-9500 about your case and find out if punitive damages in Tennessee can influence the potential damages awarded in your case.