Court Cases Could Threaten TN Liability Caps

July 9, 2019

The Tennessee Medical Association is actively engaged in two court cases challenging Tennessee’s caps on punitive and noneconomic damages.

A 2018 decision by the U.S. Sixth Circuit regarding Lindenberg v. Jackson Life Insurance challenges the constitutionality of the state cap on punitive damages as violative of the constitutional right to trial by jury. TMA and others maintain that a federal court should not decide an issue of Tennessee constitutional law, especially one that passed with overwhelming support in the legislature and is a question of first impression in Tennessee. If overturned, the decision would have major ramifications on Tennessee’s economic and healthcare environment. The defendant in the Lindenberg case, along with the state of Tennessee and chorus of stakeholders like TMA, have urged that the Sixth Circuit be required to ask the TN Supreme Court to rule rather than overturning Tennessee’s cap on its own.

The Tennessee Supreme Court last month accepted a certified question from a federal district court involving another personal injury case. McClay v. Airport Management Services, LLC involves a plaintiff who was injured in the Nashville airport and awarded $444,500 for future medical expenses and $930,000 for noneconomic damages. The defendant asked the federal district court to apply the cap, the plaintiff challenged the constitutionality of the limit and the district court then certified the issue to the Tennessee Supreme Court. The court’s ruling will decide the constitutionality of the state’s $750,000 statutory limit on noneconomic damages for all personal injury cases, including healthcare liability cases.

TMA is part of a coalition or organizations, including The Beacon Center and TN Chamber of Commerce and Industry, filing an amicus brief this week in the McClay case.

While neither of these pending cases are medical liability actions, the court’s decisions will directly affect Tennessee doctors and either uphold or threaten the favorable medical liability climate that TMA has worked so hard to create and sustain. Caps on punitive and noneconomic damages since their inception have reduced the number of lawsuits against physicians by nearly 40% and saved doctors in all specialties thousands in annual malpractice insurance premiums.