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State tort limits reduce record verdict

Robert Houk • Mar 19, 2020 at 9:00 AM

A record $22.5 million verdict for punitive damages handed down in February by a jury in Bristol has been reduced by a Tennessee law that was also upheld last month by the state Supreme Court.

Tony Seaton, a Johnson City attorney who represents the victim, said his client will receive $1.5 million in punitive damages — 93% less than the amount the civil jury awarded her — as a result of Tennessee Civil Justice Act of 2011.

That business-friendly tort reform law caps non-economic damages at $750,000 per plaintiff and limits punitive damages to the greater of two times the total amount of compensatory damages or $500,000. As a result, his client will receive a total of $2.5 million in the case.

A jury in Bristol awarded the 69-year-old woman a record $22.5 million in punitive damages on Feb. 28. The verdict was the largest since Tennessee’s high court upheld the constitutionality of the caps, and is one of only seven verdicts exceeding $20 million in the state since 2004.

Seaton said his client suffered substantial injuries when her vehicle was struck on Volunteer Parkway by a box truck hauling expired drugs, The truck was driven by a man police said had five controlled substances in his system at the time of the wreck.

The man was employed by Stericycle, a company based in Lake Forest, Illinois, that specializes in medical and pharmaceutical waste disposal. Seaton argued the company, which does an annual global business of $3 billion, failed to properly supervise its employee.

“This was a driver who had a history of drug use, and the company did not drug test him after he was employed,” Seaton said.

He said the two prongs of tort law are compensation and deterrence. Seaton said the latter is to discourage “bad actors” from repeating their bad behavior.

The attorney said the Bristol jury realized this could have happened to anybody “and meant to teach Stericycle a lesson and make it an example so something like this will never happen again.”

During the middle of Stericycle trial, Seaton said the state Supreme Court decided 3-2 to uphold the punitive caps as constitutional. Seaton and others who believe the Tennessee Civil Justice Act to be unconstitutional had hoped the state’s highest court would concur with an earlier federal appellate court ruling.

“We felt we won the battle, but lost the war,” he said of his client’s verdict.

The U.S. 6th Circuit Court of Appeals had previously ruled that the punitive damages cap violated Tennessee's Constitution in Lindenberg v. Jackson National Life Insurance Co., a case which the state Supreme Court had declined to weigh in on. Opponents believe the tort reform law infringes on the separation of powers, and violates a provision in the state’s Constitution that says "the right of trial by jury shall remain inviolate."

He said the Supreme Court ruling means the tort reform issue is likely dead unless the state General Assembly takes it up again.

“I guess if we have enough of these horrible scenarios, the General Assembly might take another look,” Seaton said.

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