General Assembly passes major legislation, including the Civil Justice Act, and looks toward adjournment

The Tennessee General Assembly worked in marathon floor and committee sessions this week towards the conclusion of the 2011 legislative session. Among major legislation approved by the State Senate is a civil justice law sponsors say will establish a climate to help create jobs in Tennessee, several measures cracking down on child sex offenders and those who engage in human trafficking, and state's rights legislation.

According to its sponsors, the Tennessee Civil Justice Act of 2011 is designed to provide certainty and predictability for businesses, while ensuring that injured plaintiffs receive all of the economic, quantifiable damages they suffer. The bill's sponsors say the state's current civil justice system puts the state at a competitive disadvantage when it comes to attracting new businesses and jobs. Opponents of the bill say it is harmful to injured plaintiffs by limiting the amount they can recover and that Tennessee has not seen runaway jury verdicts as in other states.

Key provisions of Senate Bill 1522 include:
- The bill limits the maximum appeal bond amount from $75 million to $25 million or 125 percent of the judgment amount.
- It defines two components of compensatory damages: economic and non-economic damages.
- The measure 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. However, if the harm suffered is intentional, the caps would not apply.
- As amended, the bill 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, has an amputation of a hand or foot, or wrongfully dies leaving one or more minor children.
- There is no cap, under the measure, on economic damages and any damages that can be objectively quantified may be recovered.
- 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.
- 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.

The bill now goes back to the House of Representatives for approval of an amendment before it is sent to the governor for his signature. It will take effect October 1, 2011, and apply to all liability actions for injuries accruing after that date.