NFIB Legal Center Defends TN Cap on Punitive Damages

Date: January 17, 2018

The National Federation of Independent Business (NFIB) Small Business Legal Center and the Beacon Center of Tennessee have filed an amicus brief in the Sixth Circuit Court of Appeals defending a Tennessee law that places a cap on punitive damages.

The brief was filed today in Lindenberg v. Jackson National Life Insurance Co. In the case, the plaintiffs argue that a cap on punitive damages violates the state constitutional guarantee of a right to trial by jury. But NFIB maintains that it is within the legislature’s prerogative to place a cap on punitive damages, which represent additional damages awarded to punish a defendant in a civil lawsuit.

“We believe the state constitution guarantees the right for a jury to decide disputed facts in the case, but it doesn’t guarantee the right to pile-on punitive damages once a plaintiff is made whole for actual losses,” said Karen Harned, executive director of the NFIB Small Business Legal Center. “The concept of punitive damages didn’t exist in Tennessee until long after the state constitution was ratified.”

The earliest example of punitive damages in a Tennessee court is 1840. The original state constitution was adopted in 1796. The constitution was revised in 1834.

“If you go back and look at the record, the state Supreme Court never considered the concept punitive damages to be untouchable,” Harned said. “In fact, the Court has expressly and substantively altered punitive damage awards on its own.

“Punitive damages and their limits are a matter of policy, not precedent,” Harned said. “And the fact of the matter is that punitive damages have gotten out of hand. Victims have a right to be made whole for actual losses, but as a matter of law and policy, punitive damages are limited in Tennessee to ensure that lawsuits are not about hitting the jackpot.”

“The state constitution absolutely gives lawmakers the right set a limit on jury awards intended solely to punish defendants,” Harned said. “We sympathize with the plaintiff in this case, but we also believe the constitution is crystal clear when it comes to creating a level playing field for everyone in the state courts.”

The NFIB Small Business Legal Center is the voice of small business in the nation’s courts and the legal resource for small-business owners nationwide. To learn more, visit www.NFIB.com/legal and follow @NFIBlegal on Twitter.

 

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