In 2011, Tennessee joined a growing number of states that passed tort reform. In Particular Tennessee Code Annotated § 29-39-102 provides for caps on non-economic damages and Tennessee Code Annotated § 29-39-104 provides for caps on punitive damages. Neither statute provides any guidance as to how those caps should be applied.

In general, punitive damages are capped at the greater of two times the amount of compensatory damages or $500,000, and the cap is lifted if there is specific intent to inflict serious physical injury; the defendant intentionally falsified, destroyed, or concealed records of evidence to avoid liability; the defendant was under the influence of alcohol, drugs, or any other intoxicant or stimulant; or the defendant’s actions resulted in a felony conviction. Tenn. Code Ann. 29-39-104. Punitive damages are not available in a civil action involving a drug or device if the drug or device conformed to FDA standards or was an over-the-counter drug or device marketed pursuant to federal regulations; was generally recognized as safe and effective and as not being misbranded pursuant to the applicable federal regulations; and satisfied in relevant and material respects each of the conditions contained in the applicable regulations and each of the conditions contained in an applicable monograph.

In Part 2, we turn to a deeper analysis of the issues involved in the case, which have already led to an application for en banc review of the decision by the full 16-member Court. Tennessee's Statutory Punitive Damages Cap Punitive damages are awarded not as compensation for a plaintiff's actual damages, but to punish and deter intentional, malicious, and fraudulent misconduct. Tennessee's cap on punitive damages, Tennessee Code Annotated Section 29-39-104, was part of a tort reform bill passed by the Tennessee General Assembly in 2011. In its current form, with certain exceptions not relevant here, the statute caps punitive damages at two times the amount of compensatory damages awarded or $500,000, whichever is greater.

The Business Court found that the requirements for punitive damages had been met and awarded the maximum (2 times compensatory) punitive damages. T.C.A. §29-39-104(a)(5). It noted that the defendant’s assets were unknown (because defendant failed to participate in the litigation).

Effective July 1, 2014, a new law (T.C.A. § 29-39-104) changes the exposure for Tennessee employers subject to the Tennessee Human Rights Act (“THRA”) and the Tennessee Public Protection Act (“TPPA”). The law limits compensatory damages in discrimination suits, eliminates the common law claim of retaliatory discharge, changes the proof necessary for whistleblower claims, and precludes individual liability of supervisors or agents of the employer.

[2] The TCJA went into effect on October 1, 2011.[3] Tenn. Code Ann. §29-39-101(a)[4] Tenn. Code Ann. §29-39-101(b)[5] Tenn. Code Ann. §29-39-104(a)(5)[6] Tenn. Const. art. I, § 6; available at http://www.state.tn.us/sos/bluebook/05-06/46-tnconst.pdf, (last viewed Aug. 20, 2012).[7]Trigaly v. City of Memphis, 46 Tenn. 382 (1869).[8]Watts v. Lester E. Cox Medical Centers, ___ S.W.3d ___, 2012 WL 3101657 (Mo., July 31, 2012).