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Ramsey: Keeping Non-Economic Damages Cap at $750K Preferable

Lt. Gov. Ron Ramsey said this week he believes Republicans in the Senate prefer the original version of Gov. Bill Haslam’s tort reform bill, and that the legislation will likely move through the Senate simultaneously with that in the House.

Ramsey said he anticipates Senate activity on the bill next week. He said his prediction would be that the Senate would adopt part of the governor’s bill, but not the current House version as amended.

“I think the majority of our caucus likes the governor’s original bill without the amendment,” Ramsey told reporters. “I think the bill to begin with was a compromise.”

A subcommittee of the House Judiciary Committee on Wednesday passed a version of the tort reform measure, which is one of the main legislative efforts on Haslam’s agenda, and it is headed to the full House Judiciary Committee on Tuesday.

The thrust of the legislation, HB2008/SB1522, is to put caps on monetary awards for victims in civil suits. Haslam says the caps will create a more stable business climate for the state. He believes the bill will help create jobs, his top priority as governor.

Ramsey also sees the bill as a way to help create jobs, but he has refused to speculate on a specific number of jobs that could come from the action.

Haslam originally offered a proposal that put caps on non-economic damages in such lawsuits at $750,000. But the legislation immediately became the subject of negotiations behind the scenes among various parties involved.

The administration offered a subsequent version of the legislation that would raise the cap in “catastrophic” cases to $1.25 million. But by the time the subcommittee took up the bill Wednesday, the $1.25 million had been reduced to $1 million.

Herbert Slatery, Haslam’s legal counsel, attributed the changing figures to “the legislative process.”

The $1 million would apply to the most severe cases, such as those that involve amputations or spinal cord injuries that leave victims with paralysis. The $750,000 cap remains in the bill for most cases, and Ramsey’s comments suggest the Senate would like to keep the $750,000 in all cases, as Haslam first proposed.

Advocates for reform say there should be some level of predictability of how big awards could be in cases where victims are harmed. Opponents say such figures should be left to the judicial system, and that legislated caps significantly take away the opportunity for justice in such cases.

The issue has become a matter of emotional appeal, with opponents of the caps offering examples of people who have suffered serious losses. Testimony in committee hearings has included people affected by such cases.

Opponents of the bill have used the star power and persuasiveness of actor and former U.S. Sen. Fred Thompson to head the lobbying effort against the bill. Thompson has appeared before lawmakers but did not address the subcommittee on Wednesday.

Haslam has emphasized that caps will not apply in cases where intentional misconduct comes into play.

The bill includes caps on punitive damages that are two times the amount of compensatory damages in a case, or $500,000, whichever is greater.

It is possible other amendments will be offered on the legislation.

“On any kind of issue, you can argue extremes on both sides,” Ramsey said. “You kind of look at what’s reality in real life, and I think that’s what we’re doing.”

The legislation defines “catastrophic loss or injury” as cases that involve spinal cord injury resulting in paraplegia or quadriplegia; amputation of two hands, two feet or one of each; third-degree burns over 40 percent or more of the body as a whole or third-degree burns up to 40 percent or more of the face; 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.