TN Supreme Court Ruling on Noneconomic Damages a Victory for Small Business

Date: February 27, 2020

Jim Brown, the National Federation of Independent Business’ state director for Tennessee, says a state Supreme Court decision upholding Tennessee’s statutory cap on noneconomic damages under all but the most egregious circumstances is a big victory for small business owners.

“One lawsuit can be enough to put a small business out of business,” Brown said. “This week’s 3-2 decision means winning a lawsuit won’t be the same as winning the lottery. It means defendants can be held accountable but that the judgments against them will be fair and reasonable.”

The NFIB Small Business Legal Center joined the U.S. Chamber of Commerce, the Tennessee Chamber of Commerce and Industry, the Tennessee Medical Association, the American Medical Association, the American Tort Reform Association, the and Coalition for Litigation Justice last summer in filing an amicus brief in the case of Jodi McClay v Airport Management Services Inc. and the State of Tennessee.

The case concerned a traveler at Nashville International Airport who was injured at a Hudson News store when a panel from a beverage cooler fell as she closed the cooler door. She was diagnosed with a “crush injury and associated soft tissue damage and bruising.” A jury awarded her $444,500 for future medical expenses and $930,000 for noneconomic damages. Airport Management Services challenged the amount, arguing that the federal district court should apply Tennessee’s statutory cap on noneconomic damages.

In their brief, the NFIB Small Business Legal Center and other business and medical groups noted: “Historically, noneconomic awards were modest and noncontroversial. In the past half century, however, plaintiffs’ lawyers have become skilled at inflating them to the point where, today, they outpace other types of liability.”

The groups argued that upholding the statutory cap on noneconomic damages restores predictability to the civil justice system while maintaining plaintiffs’ right to be compensated for their injuries.

The Tennessee Supreme Court handed down its decision Wednesday.

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