Let’s be Reasonable: NFIB Legal Center Defends Tennessee’s Cap on Punitive Damages

Date: January 19, 2018

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In conjunction with the Beacon Center, the National Federation of Independent Business Small Business Legal Center recently filed an amicus brief in the Sixth Circuit Federal Court of Appeals defending Tennessee’s statutory cap on punitive damage awards. As we argued, its absolutely within the prerogative of a state legislature to impose limits on damage awards—at least in the case of “punitive damages.” That’s because punitive damages are not about making the plaintiff whole, but are levied simply to punish a defendant for acting badly. But whether and to what extent the law should punish conduct is quintessentially a question of public policy, which means it’s fair game for legislative changes.

In this case the plaintiffs’ bar seeks to knock-out Tennessee’s punitive damages cap on the theory that it violates the right to a trial by jury, as guaranteed under the Tennessee Constitution. But historically, the jury’s role is to decide questions of disputed fact; there is no basis for claiming that the right to a trial by jury means a litigant has a guaranteed right to punitive damages. In fact, the concept of punitive damages did not develop in Tennessee until well after ratification of the state constitution—proof that the state constitution provides no guarantee of unlimited punitive damage awards.

We’ve weighed-in to defend similar caps in other states. For example, in Estate of McCall v. United States we defended Florida’s statutory cap on medical malpractice awards. But in Tennessee there’s no question that punitive damages may be capped. For one, the Tennessee Supreme Court has itself reduced punitive damage awards to ensure fair play and justice in the past. And to boot Tennessee’s constitutional guarantee of a right to a jury trial was pulled directly from the North Carolina Constitution, which the North Carolina Supreme Court construed to allow punitive damage caps. These are all compelling reasons why the Sixth Circuit should reject the plaintiffs’ bar’s call to strike-down Tennessee’s cap in Lindenberg v. Jackson National Life Insurance Company.

If you are interested, you can check-out the brief we filed previously with a coalition of other industry groups when the Tennessee Supreme Court was considering whether to address this issue. (Because the state supreme court balked, the issue will now be decided by a federal court of appeal).

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