6th Circuit Declares Tennessee’s Cap on Punitive Damages Unconstitutional
Punitive damages, that is, damages designed to punish the person against whom the punitive damages are assessed rather than simply compensate the person or entity harmed, are available in certain types of cases where the person or entity sued is found to have acted intentionally or recklessly in causing serious harm. Traditionally, punitive damage awards could be quite large and thus much feared by defendants.
Several years ago Tennessee legislators opted to severely limit punitive damages in an effort to make the state friendlier to manufacturers and other business interests. Specifically, Tennessee’s punitive damages statute, Tennessee Code Annotated Section 29-39-104, caps punitive damages at two times the amount of compensatory damages awarded or the sum of $500,000, whichever is greater.
Recently, that cap was overturned judicially. In Lindberg v. Jackson National Life Insurance Company, Nos. 17-6034/6079, 2018 WL 6712507 (6th Cir. Dec. 21, 2018), the plaintiff sought and was awarded punitive damages in the trial court related to a dispute regarding entitlement to the proceeds of a life insurance policy. In a two to one decision, a panel of the U.S. Court of Appeals for the Sixth Circuit held that Tennessee’s punitive damages statutory cap is unconstitutional because it violates the right to trial by jury under the Tennessee Constitution.
by Ken Jones