On December 21, 2018 the Sixth Circuit issued an opinion in Lindenberg v. Jackson National Life Insurance Company holding that Tennessee's statutory cap on punitive damages violates the right to trial by jury set forth in Article I, § 6 of the Tennessee Constitution. The cap on punitive damages was enacted as Tenn. Code Annotated §29-39-104 and was part of the Tennessee Civil Justice Act of 2011, which was one of Governor Haslam's major legislative initiatives upon taking office. The cap statute provides that punitive damage awards are generally limited to the greater of either double the compensatory damages awarded or $500,000. The statute sets forth various exceptions, for which the cap is inapplicable, and defines the requisite level of conduct and burden of proof necessary to sustain a punitive damages claim.
Linderberg also held that an insurance company can be held liable for punitive damages for the bad faith failure to pay a claim, in addition to the remedy available under Tennessee's bad faith statute, Tenn. Code. Ann. § 56-8-113. Previous decisions held that the bad faith statue was the exclusive remedy permitted for bad faith claim against an insurer.
More commentary on this decision will follow shortly. The opinion can be viewed with the link below.
Download Lindenberg v. Jackson Nat'l Life Ins. Co.
Dan Berexa
Nashville, Tennessee
