Posted by: Bailey Barnes on Jun 1, 2020

Journal Issue Date: June 2020

Journal Name: Vol. 56 No. 6

Divided Tennessee Supreme Court Upholds Constitutionality of Noneconomic Damage Caps, Focuses on Right to Jury Trial

Introduction  On Feb. 26, in McClay v. Airport Management Services LLC, the Tennessee Supreme Court upheld the constitutionality of the noneconomic damage cap provisions of the Tennessee Civil Justice Act of 2011.1 The court’s analysis primarily centered on the constitutional right to a trial by jury. The justices split on whether the General Assembly maintains the authority to alter or abridge the state’s common law when doing so affects a constitutional right.

The three-justice majority concluded that noneconomic damage caps do not violate the right to a jury trial, though one of those justices authored a concurring opinion declaring the issue to be a “much closer question.”2 Meanwhile, the two dissenting justices argued the majority misapplied the court’s precedent and violated the “inviolate” right to a trial by jury.3 This article examines the court’s decision in light of the background of the tort cap legislation’s enactment and highlights the potential consequences of the court’s decision. Moreover, this article situates the Tennessee decision within the recent trends of other states’ high courts. 

The Tennessee Civil Justice Act of 2011

At the request of Gov. Bill Haslam, the 107th General Assembly passed the Tennessee Civil Justice Act of 2011.4 The Act limited noneconomic damages with limited exceptions to $750,000.5 The Act defined noneconomic damages as those for:

physical and emotional pain; suffering; inconvenience; physical impairment; disfigurement; mental anguish; emotional distress; loss of society, companionship, and consortium; injury to reputation; humiliation; noneconomic effects of disability, including loss of enjoyment of normal activities, benefits and pleasures of life and loss of mental or physical health, well-being or bodily functions; and all other nonpecuniary losses of any kind or nature.6

Notably, the legislature carved out a few exceptions. Most prominently, if an injury sustained is “catastrophic” the cap is raised to $1,00,000.7 The Act defines catastrophic injuries as: “spinal cord injury resulting in paraplegia or quadriplegia;”8 “amputation of two hands, two feet or one of each;”9 “third degree burns over forty percent or more of the body as a whole or third degree burns up to forty percent or more of the face;”10 or “wrongful death of a parent leaving a surviving minor child or children for whom the deceased parent had lawful rights of custody or visitation.”11 

Additionally, the limits do not apply to cases where any of the following exist: 

  • Where the defendant intended to harm the plaintiff12
  • Where the defendant attempted to destroy evidence13 
  • Where the defendant was under the influence of alcohol or illicit drugs  during the tortious conduct and such intoxication was a cause of the injury14 
  • Where the defendant was convicted of a felony as a result of their tortious actions.15

In his State of the State Address, Gov. Haslam noted, “I hope that the changes we have proposed in tort reform will make our state even more competitive with our surrounding states in attracting and landing more high quality jobs.”16 Pro-business groups hailed the legislation’s enactment, including Tennesseans for Economic Growth, whose executive director stated, “This legislation will catapult Tennessee ahead of many states in terms of attractiveness to businesses looking to relocate or add operations.”17

The Tennessee Supreme Court’s Opinion

The Tennessee Supreme Court heard the challenge to the noneconomic damage caps on Sept. 4, 2019, via certified question from the United States District Court for the Middle District of Tennessee. The court released its opinion on Feb. 26, 2020, with Chief Justice Jeffrey S. Bivins writing for the majority, which included Justices Holly Kirby and Roger A. Page.18 Notably, Justice Kirby released a concurring opinion.19 Meanwhile, Justices Cornelia A. Clark and Sharon G. Lee each penned dissents.20

The court was presented with three questions. First, the court considered whether the noneconomic damage caps violated the right to a jury trial found in Article I, section 6, of the Tennessee Constitution. Second, it was asked whether the recovery limits infringed on the separation of powers. And third, it analyzed whether the caps discriminated disproportionately against women.21 The majority ruled in the negative on all three questions.22

Chief Justice Bivins acknowledged that the court has consistently proceeded under the strong presumption of constitutionality when considering of acts of the General Assembly.23 The court turned first to the right to a trial by jury.24 The Constitution of Tennessee mandates “the right of trial by jury shall remain inviolate.”25 The court has traditionally defined this provision in accordance with how it existed under the common law of North Carolina when the Tennessee Constitution was adopted.26 The right to a jury thus includes having all the factual issues involved in a dispute tried by a jury of peers “who are unbiased and impartial.”27 The court declared the determination of damage awards is a factual question for the jury.28

Where the majority disagreed with the petitioner was the extent to which the General Assembly may alter the state’s common law.29 Recalling the long-held view that the legislature has the power to alter the common law, the Chief Justice found that the General Assembly acted pursuant to this authority when it limited the recovery a plaintiff may be awarded for noneconomic losses. However, the court recognized the legislature’s power to abridge common law rights and remedies is restrained by the constitution.30 

The court held the legislature’s decision to alter the common law right to recover noneconomic damages did not infringe the right to a jury. The court stressed the right to a trial by jury is not so broad as to include access to any particular claim or remedy. Accordingly, the General Assembly may declare the causes of action a plaintiff may bring.31

The majority also emphasized that juries decide award amounts without the knowledge of the caps. Thus, the jury is free to make its factual determinations, including damages, and only then may a judge modify, as a matter of law, the noneconomic damage award to accord with the caps. This procedure satisfies a plaintiff’s right to have a jury decide all factual issues because the jury is unrestrained in determining the noneconomic damages. At this point, the jury’s role in trying the factual claims is discharged. Only after the proceedings before the trier of fact have concluded does the judiciary, acting through the trial judge, institute the statutory damage caps.32

The court found support in decisions from other states.33 The Court of Appeals of Maryland, in 1992, held that “[a] remedy is a matter of law, not a matter of fact. … A trial court applies the remedy’s limitation only after the jury has fulfilled its fact-finding function. Thus, [the statutory cap] does not infringe upon the right to a jury trial.”34 Having determined the General Assembly may alter common law remedies, and imposition of caps by a trial judge occurs after a jury has discharged its duty, the court ruled that the noneconomic damage caps do not infringe on the right to a trial by jury.35

Next, the majority quickly dispensed with the separation of powers and equal protection claims.36 For the separation of powers analysis, the court noted the General Assembly is prohibited from contradicting the judiciary’s procedural rules but may alter the substantive law applied by the courts. Therefore, because a statutory cap on damages is substantive, the General Assembly did not infringe on the judiciary’s powers by enacting noneconomic damage limits.37 On the equal protection issue, the court found the statute was facially neutral, and the only claim made by the petitioner was that the caps have a disparate impact on women. Because both the U.S. Supreme Court and the Tennessee Supreme Court have rejected disparate impact claims absent a showing of discriminatory intent, the majority denied the equal protection challenge.38

Interestingly, Justice Kirby concurred, and called the right to a jury challenge a “closer question.” While Justice Kirby agreed that Tennessee’s founders prioritized the right to a jury, she remained unconvinced that the framers intended to prevent the legislature from limiting damages when they enshrined the “inviolate” right to a jury trial.39 Justice Kirby noted that the history of juries indicates the main reason for an enumerated right to a jury was to prevent judges from usurping juries in resolving factual questions. Here, Justice Kirby asserted, the judge who enforces noneconomic damage caps is imposing the legislature’s will as a matter of law, and this does not frustrate the framers’ intent because the judge is not substituting her judgment for the jury’s.40

Justices Clark and Lee filed dissents arguing the majority allowed the General Assembly to violate the right to a jury. Notably, neither questioned the majority’s holdings related to separation of powers or equal protection.41 In a thorough dissent, Justice Clark relied on the court’s precedent, dating to the nineteenth century, to contend that the responsibility to determine damages is solely the province of the jury.42 Specifically, Justice Clark quoted an 1887 opinion stating, “[I]n actions for damages for personal torts, it is within the strict province of the jury to estimate the extent of the injury, and assess the damages.”43 Accordingly, Justice Clark argued the damage caps commandeer the jury’s authority by imposing an arbitrary limit largely divorced from the circumstances of the case.44

The majority’s reasoning that the General Assembly may alter the common law, including the Tennessee Constitution’s right to a jury, was particularly unconvincing to Justice Clark. To support this conclusion, Justice Clark noted that the majority conceded the right to a jury is protected in the same way it existed at the constitution’s adoption and such an interpretation requires a conclusion that the jury determines all factual issues including damages. The legislature, when it enacted these noneconomic damage caps, posited Justice Clark, was not altering the common law, but was unlawfully modifying the state’s constitution. The United States Supreme Court has articulated exactly that for federal cases, declaring, “[When] dealing with a constitutional provision which has in effect adopted the rules of the common law in respect of a trial by jury as these rules existed in 1791 … to effectuate any change … is not to deal with the common law … but to alter the Constitution.” Therefore, the legislature may not alter the right to a jury.45

Justice Clark also found the majority’s fact-law distinction degrading to juries. This dichotomy pays lip service to the function of juries by allowing them to make factual determinations and then immediately ignores the jury’s judgment and substitutes the General Assembly’s adjudication instead, according to Justice Clark. This is a substantive deviation from the jury’s function.46

Justice Lee’s dissent questioned the majority’s opinion in light of the real-world consequences of the caps. Justice Lee noted Tennessee does not have a runaway jury problem as the caps apply only to a few cases per year, but when the limits do apply, they typically only affect those with the most severe injuries. For individuals who suffer traumatic injuries, the legislature’s edict that recovery be limited only further harms an already devastatingly injured plaintiff.47

As for the majority’s legal arguments, Justice Lee found neither persuasive. She resisted the assertion that the legislature only altered the common law. Instead, the General Assembly abridged a common law right enshrined in the constitution, which is an unlawful legislative amendment to the Tennessee Constitution. As Justice Lee expressed, “[T]he right to a jury trial is a constitutional right that cannot be eliminated by the enactment of a statute.”48 Justice Lee condemned as “smoke and mirrors” the majority’s use of the fact-law dichotomy to declare that judges only enforce the caps as a matter of law and this does not encroach on the province of the jury. Justice Lee posited that if a jury’s award of damages is so easily unheeded, there is no need for the jury to deliberate and issue a decision on damages.49 Justice Lee concluded with a striking comment: “The majority’s decision … tells the citizens of Tennessee that their right to a trial by jury … [is] trumped by the desire to limit the financial exposure of big corporations and insurance companies in civil negligence lawsuits. I will not join in sending this message.”50

Analysis

Read in the context of the court’s own precedent, this decision represents a break from the court’s jury right jurisprudence. Since the nineteenth century, the Tennessee Supreme Court has had multiple occasions to interpret the constitutional right enjoyed by Tennesseans to a trial by jury. The general consensus gleaned from these opinions present two themes: (1) the jury has discretion to determine whether the defendant’s conduct merits damages; and (2) the decision to award damages and the amount thereof is a matter of fact, not law, that is determined by the jury.51 The court has specifically noted, “While the legislature has a broad discretion in regulating the mode of asking jury trials, and the like, it cannot unreasonably hamper or impair the right of trial by jury.”52 Accordingly, given the majority’s reasoning that the General Assembly may alter the common law, allowing such a modification of the right to a jury is a major shift from the court’s previous decisions. 

In one of the most recent cases on Tennessee’s right to a jury trial, the United States Court of Appeals for the Sixth Circuit declared the state’s cap on punitive damages as violative of the state’s constitution.53 After conducting a thorough analysis of Tennessee and North Carolina common law, the federal court concluded that the General Assembly may not abridge that right held by litigants in Tennessee by limiting punitive damage awards.54 Therefore, though not ruling on punitive damages but noneconomic damages in McClay, the Tennessee Supreme Court has disagreed with the Sixth Circuit’s determination that the legislature is powerless to abridge Tennesseans’ rights to have the jury decide damage awards. 

The court’s decision also breaks with a growing trend from other states, where tort cap legislation has been struck down. Though states have invalidated tort reform statutes for many reasons, there has been a concerted trend among state high courts to rule against tort cap statutes. Certainly, there are exceptions to the rule, such as in Oregon and Nevada,55 both of which the majority cited. But neither is substantially applicable. In the Oregon case, that court considered whether a tort reform statute aimed at preventing liability for the state government violated that state’s constitution.56 That case is distinguishable from a direct claim of unconstitutionality for cases where neither party has sovereign immunity. The Oregon court stated so itself, noting, “Our holding today is limited to the circumstances this case presents, and it turns on the presence of the state’s constitutionally recognized interest in sovereign immunity. … We express no opinion on … other types of damage caps.…”57 For the Nevada case, the legislation at issue capped medical malpractice recovery actions.58 Nevertheless, the Tennessee opinion pits the state against the trend of ruling against tort cap legislation. Below is an analysis of a group of a sample of recent cases from state high courts that invalidated noneconomic damage limits. 

In 2020, Illinois and Georgia nullified their states’ respective tort caps.59 In Illinois, the court found the limit on noneconomic damages violated the separation of powers.60 Specifically, although the legislature possessed the authority to alter common law remedies, such authority is not absolute and is subject to constitutional scrutiny.61 Comparably, the Georgia Supreme Court struck down its legislature’s cap on noneconomic damages because it violated the right to a trial by jury.62 The court reasoned that even if the legislature may abrogate the common law, that power does not authorize the legislature to nullify state constitutional rights.63

The Supreme Court of Florida has also declared noneconomic damage caps unconstitutional.64 In 2014, a plurality of the court struck down the state’s tort reform statute because it had “the effect of saving a modest amount for many by imposing devastating costs on a few — those who are most grievously injured, those who sustain the greatest damage and loss, and multiple claimants for whom judicially determined noneconomic damages are subject to division and reduction simply based upon the … cap.” Accordingly, the court declared such a provision violates the fundamental notion of equal justice under law.65 Then, in 2017, the court added that the caps arbitrarily limited the recovery of those with the most serious injuries.66 The Supreme Court of Wisconsin, also in 2017, offered a similar analysis to Florida’s. It declared that caps on noneconomic damages harm those who suffer the most devastating injuries. Accordingly, the court ruled such an arbitrary cap violated the state’s equal protection clause.67

Finally, just last year, the Supreme Court of Oklahoma declared the state’s limit on noneconomic damages to be a special law, thereby rendering it invalid.68 The court expressed that the cap created a preference and established an inequality, which is the definition of a special law; therefore, the court held the law was unconstitutional.69

Interestingly, in upholding the validity of the Tennessee Civil Justice Act, Chief Justice Bivins did not cite to any of the above cases to address the counterarguments offered by courts across the nation. While the majority pointed to a number of cases from other states to support its ruling, it did not acknowledge the increasing number of states that have chosen to construe their constitutions against damage caps in the last decade. 

Conclusion

The Tennessee Supreme Court’s decision offers two key conclusions. First, the court is content to defer to the legislature’s judgment even when faced with limiting the province of the jury. Second, the court’s majority is unwilling to prevent the legislature from altering traditional Tennessee common law, even those facets of it that are a traditional part of the court’s jurisprudence, like the right to a jury. Strikingly, under this view, the legislature may feel empowered to alter an additional common law right, even one enshrined in the in the state’s constitution, with very little restriction. Moreover, if the legislature chooses to replace its judgment, as a matter of law, for any of the jury’s factual determination, so long as it does so after the jury’s functions are discharged, this seems allowable under the Tennessee Constitution. 

BAILEY D. BARNES is a rising third-year student at the University of Tennessee College of Law, where he currently serves as the managing editor of the Tennessee Law Review. Prior to law school, he received a master’s degree in history from Middle Tennessee State University and a bachelor’s degree in political science from Tennessee Tech University.

The author wishes to thank Professor Zack Buck of The University of Tennessee College of Law for his comments on prior drafts of this article.



NOTES

1. McClay v. Airport Mgmt. Services LLC, No. M2019-00511-SC-R23-CV, 2020 WL 915980, at *6 (Tenn. Feb. 25, 2020).

2. Id. at *16 (Kirby, J., concurring).

3. Id. at *6 (Clark, J., dissenting); id. at *10 (Lee, J., dissenting).

4. Michael Adams, “Tennessee Approves Caps on Lawsuit Damages,” Ins. J. (May 25, 2011),https://www.insurancejournal.com/news/southeast/2011/05/25/199910.htm.

5. Tenn. Code Ann. § 29–39–102(e).

6. Tenn. Code Ann § 29–39–101(2).

7. Tenn. Code Ann § 29–39–102(c).

8. § 102(d)(1).

9. § 102(d)(2).

10. § 102(d)(3).

11. § 102(d)(4).

12. § 102(h)(1).

13. § 102(h)(2).

14. § 102(h)(3).

15. § 102(h)(4).

16. Bill Haslam, Governor, State of Tenn., State of the State Address 6, Tennessee General Assembly (Mar. 14, 2011).

17. Adams, supra note 4.

18. McClay, 2020 WL 915980, at *1.

19. See id. at *16 (Kirby, J., concurring).

20. See id. at *6 (Clark, J., dissenting); id. at *10 (Lee, J., dissenting).

21. McClay, 2020 WL 915980, at *1. 

22. Id. 

23. Id.

25. Id. at 2. 

25. Tenn. Const. art. I, § 6.

26. McClay, 2020 WL 915980, at *2 (citing Young v. City of La Follette, 479 S.W.3d 785, 793 (Tenn. 2015)).

27. Id. (quoting State v. Smith, 418 S.W.3d 38, 45 (Tenn. 2013)).

28. Id. (citing Spence v. Allstate Ins. Co., 883 S.W.2d 586, 594 (Tenn. 1994)).

29. Id. at *3.

30. Id. (citing Hodge v. Craig, 382 S.W.3d 325, 338 (Tenn. 2012)).

31. Id. 

32. Id. at *4.

33. Id.

34. Id.. (quoting Murphy v. Edmunds, 601 A.2d 102, 117–18 (Md. 1992)).

35. Id.

36. Id. at *5–6.

37. Id. at *5.

38. Id. at *5–6.

39. McClay, 2020 WL 915980, at *16–18 (Kirby, J., concurring).

40. Id. at *17–18.

41. See McClay, 2020 WL 915980, at *6 (Clark, J., dissenting); McClay, 2020 WL 915980, at *10 (Lee, J., dissenting).

42. See McClay, 2020 WL 915980, at *6–7 (Clark, J., dissenting).

43. Id. at *7 (quoting Tenn. Coal & R.R. Co. v. Roddy, 5 S.W. 286, 290 (Tenn. 1887)) (emphasis omitted).

44. Id. at *7–8.

45. Id. *8–9 (quoting Dimick v. Schiedt, 293 U.S. 474, 487 (1935)).

46. Id. at *9–10.

47. McClay, 2020 WL 915980, at *13 (Lee, J., dissenting).

48. Id. at *14.

49. Id. at *15.

50. Id. at *16.

51. See State v. Bobo, 814 S.W.2d 353, 356 (Tenn. 1991); Harbison v. Briggs Bros. Paint Mfg. Co., 354 S.W.2d 464, 469 (Tenn. 1962); See Greyhound Lines v. Freels, 144 S.W.2d 743, 746 (Tenn. 1940); Warren v. Scudder-Gale Grocery Co., 36 S.W. 383, 384 (Tenn. 1896); Tenn. Coal & R.R. Co. v. Roddy, 5 S.W. 286, 290 (Tenn. 1887); Goodall v. Thurman, 38 Tenn. 209, 218 (Tenn. 1858); Wilkins v. Gilmore, 21 Tenn. 140, 141 (Tenn. 1840); Boyers v. Pratt, 20 Tenn. 90, 93 (Tenn. 1839).

52. Warren, 36 S.W. at 384.

53. Lindenberg, 912 F.3d at 370.

54. Id. at 369–70. 

55. Horton v. Or. Health & Sci. Univ., 376 P.3d 998 (Or. 2016); Tam v. Eighth Jud. Dist. Court, 358 P.3d 234 (Nev. 2015).

56. Horton, 376 P.3d at 1028.

57. Id. at 1030.

58. Tam, 358 P.3d at 237.

59. Lebron v. Gottlieb Mem’l Hosp., 930 N.E.2d 895 (Ill. 2010); Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 691 S.E.2d 218 (Ga. 2010).

60. Lebron, 930 N.E.2d at 914.

61. Id. at 912.

62. Nestlehutt, 691 S.E.2d at 731.

63. Id. at 736.

64. N. Broward Hosp. Dist. v. Kalitan, 219 So.3d 49 (Fla. 2017); Estate of McCall v. United States, 134 So.3d 894 (Fla. 2014).

65. Estate of McCall, 134 So.3d at 903.

66. Kalitan, 219 So.3d at 58–59.

67. Mayo v. Wisconsin Injured Patients & Families Comp. Fund, 901 N.W.2d 782, 785 (Wis. 2017).

68. Beason v. I.E. Miller Services, Inc., 441 P.3d 1107, 1109 (Okla. 2019).

69. Id. at 1114.