Punitive Damages -- 2016

Lindenberg v. Jackson Nat'l Life Ins. Co.   (Tennessee Supreme Court)

Limiting excessive punitive damages awards

For several decades, legislatures and courts have been placing limits on punitive damages because the availability and size of these awards have expanded significantly. Punitive damages are, by definition, penalties awarded in addition to compensatory damages. Limiting punitive damages ensures that the civil litigation environment is balanced and respects due process. Without a statutory limit on punitive damages, businesses are at a risk of significant and unwarranted liability exposure.

In this case, the Tennessee General Assembly made a policy decision to limit punitive damage awards in ways that properly balance judicial and economic considerations. The statute is in line with punishments typical at common law; is similar to other penalties for comparable wrongdoing; is similar to statues in other states; provides proper safeguards; fosters settlement; and is supported in its constitutionality by nearly all courts to consider the issue.

The NAM and other groups filed an amicus brief on 4/15/16 urging the Tennessee Supreme Court to uphold the statutory limit on excessive punitive damages awards. Limits prevent unpredictable awards and promote public confidence in the civil justice system while encouraging sound economic policy. Most courts have upheld such limits.

On 6/23/16, the court decided not to answer the questions about punitive damages caps that it had earlier agreed to decide. It found that the jury awarded statutory bad faith damages under a Tennessee statute and punitive damages under common law. It left open the question whether punitive damages under common law can be awarded in addition to the bad faith penalty.

Related Documents:
NAM amicus brief  (April 15, 2016)


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