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May 13th, 2011

Tennessee Legislature Scores Big ‘Point of Light’

Following a favorable House vote earlier this week, the Tennessee Senate yesterday passed the Tennessee Civil Justice Act of 2011.  The legislation is backed by Governor Bill Haslam, and he is expected to sign it into law soon.

The Senate vote was 21-12; the House vote was 72-24.  Several amendments that would have weakened the bill were defeated.   

Highlights of the bill include:

  • $750,000 limit on noneconomic damages in personal injury cases, which increases to $1 million for defined catastrophic injuries.
  • Punitive damages reform:
    • Punitive damages limited to the greater of 2 times compensatory damages or $500,000.
    • No punitive damages where the activity was in substantial compliance with government regulations or product was sold in accordance with the approval of a government agency.
    • Bifurcation of trials with liability and compensatory damages determined first, then punitive damages.
    • No punitive damages for FDA-approved drugs or devices when in compliance with terms of approval.
    • No punitive damages for product sellers.
    • Consumer protection reform.  This may be the first significant narrowing of private lawsuits under a consumer protection act and could be used as a model for other states:
      • No class action enforcement of the consumer protection act.
      • No private right of action for “catch all” section of the statute – only AG may enforce.
      • No punitive or exemplary damages where court awards treble damages provided by statute.
      • No private right of action involving marketing or sale of a security.
      • Interlocutory appeal of class certification.
      • Appeal bond limit of lesser of $25 million or 125% of the judgment, not including punitive damages.
      • Generally, product sellers will not be liable in product liability actions.
      • Venue reform.

Volunteer State obsevers of the plaintiffs’ bar there eventually expect constitutional challenges to the new law.

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