Part 2 in this series, reviewing the significant developments in Tennessee tort reform over the last two years, addresses the punitive damages cap enacted as Tenn. Code Ann. § 29-39-104. The statute codifies many aspects of Tennessee Supreme Court’s 1992 decision in Hodges v. S.C. Toof & Co., which limited the availability of punitive damages to instances where the defendant is found, by clear and convincing evidence, to have engaged in intentional, reckless, malicious or fraudulent conduct which caused injury to the plaintiff.
The cap generally limits punitive damages awards to two times the compensatory damages awarded to the plaintiff, or $500,000, whichever is greater. Like the cap on non-economic damages, there are exceptions were the cap does not apply, such as where the defendant intended serious physical injury; the defendant’s conduct resulted in a felony conviction; the defendant intentionally concealed or destroyed evidence; or the defendant was under the influence of alcohol, drugs or other intoxicant or stimulate. The statute also contains provisions limiting the availability of punitive damages against product manufacturers and requires that the culpability of a defendant, whose liability for punitive damages alleged to be vicarious, be determined separately from that of any agent or employee.
The punitive damages cap was enacted as part of the Tennessee Civil Justice Act of 2011 and applies to causes of action accruing on or after October 1, 2011, meaning that the provisions apply if the incident which is the subject of the lawsuit occurred on or after the effective date.
Dan Berexa
Nashville, Tennessee
Comments