Haslam Signs Tennessee Civil Justice Act to Improve Business Climate

Thursday, June 16, 2011 | 05:15am

Bill brings greater consistency and predictability to businesses looking to move to or expand in Tennessee

NASHVILLE – Tennessee Gov. Bill Haslam signed today the Tennessee Civil Justice Act in the Old Supreme Court Chamber on the first floor of the State Capitol.  The legislation offers businesses predictability and a way to quantify risk as they decide where to locate.

The bill was part of the governor’s legislative jobs package, which also included education reform legislation and was ultimately focused on Haslam’s first priority: making Tennessee the No. 1 location in the Southeast for high quality jobs.

Tennessee offers an attractive business climate to companies looking to relocate or expand.  It is a right-to-work state with no personal income tax and with this legislation, now gives businesses a clearer picture when it comes to tort liability and litigation risk.

“Business recruitment is incredibly competitive , and Tennessee is not  only competing against other states but against foreign countries as we go out and market ourselves as the best place for  business,” Haslam said. “This tort reform legislation will help us attract and retain jobs by offering businesses more predictability and a way to quantify risk.”

House Majority Leader Gerald McCormick (R-Chattanooga) and Rep. Vance Dennis (R-Savannah) led the House version of the legislation, and Senate Majority Leader Mark Norris (R-Memphis), Sen. Brian Kelsey (R-Collierville) and Sen. Doug Overbey (R-Maryville) guided it in the state Senate. The bill received bipartisan support in both houses of the General Assembly.

The Tennessee Civil Justice Act:

  • Clarifies and defines the venue where a business can be sued;
  • Places a $750,000 cap on non-economic damages, except in instances of intentional misconduct, records destruction, or conduct under influence of drugs or alcohol;
  • Raises the cap to $1 million on non-economic damages for catastrophic losses resulting in paraplegia, quadriplegia, amputation, substantial burns or the wrongful death of a parent leaving minor children;
  • And places a cap on punitive damages of two times the compensatory damages or $500,000, whichever is greater, except in instances of intentional misconduct, records destruction, or conduct under influence of drugs or alcohol.

Tennessee was one of two states in the 12-state Southeast region without caps on punitive damages, and this act continues the state’s history of responsible changes to its tort system. A complete rundown of the legislation can be viewed here.