Fresh from his first legislative achievement — passage of his proposal to make it harder for teachers to earn and to keep tenure — Gov. Bill Haslam has begun pushing his next major initiative.
An army of influential business interests has gathered to help the governor enact sweeping tort reform, capping jury awards and imposing other new restrictions on lawsuits for injuries and deaths caused by negligence or wrongful actions, from medical malpractice to wrecks on the highway. The first vote on the bill is expected this week in a House subcommittee.
Haslam is touting it as a job-creation bill — his one and only such proposal, in fact. Everywhere he goes, the governor insists Tennessee cannot legislate its way to economic recovery, with this one exception.
“We want to have the best business climate, and to do that, we want to make sure we’re competitive with our neighboring states,” Haslam said. “It’s one of the reasons we’re addressing tort reform. We want to make certain that there aren’t states around us that have a more welcoming climate for businesses than we have.”
Tort reform would make Tennessee so much more business-friendly that, by itself, it would add 122,422 jobs and $16 billion in output to the state’s economy over the next decade, according to a much-criticized report by businesses backing the bill.
Herbert Slatery, the governor’s legal counsel, said businesses looking to expand have a checklist of favorable and unfavorable factors. Is the state offering incentives? Is there good access to transportation systems? Whether the state has enacted tort reform is one major issue, he said.
“Today if you ask what the tort liability risk is in Tennessee, we have virtually no answer,” Slatery said. “It’s open-ended. This has put Tennessee in a precarious position in competing for businesses. The executives who make the decisions are focusing on quantifying risks. They turn to us and they say, ‘I’m assuming risk. Just tell me what it is.’ Our response is largely silence. The governor wants to correct this. He wants to create a predictable environment for businesses.”
To bolster the administration’s position, the Tennessee Medical Association polled 620 Tennesseans and said 61 percent favored placing limits on “pain and suffering” damages in medical malpractice lawsuits.
The bill’s foes — led by trial lawyers who stand to benefit from the jury awards the legislation would cap — argue that Haslam would promote irresponsible behavior and deny justice to victims of outrageous disregard for human life.
“We let Tennessee juries put a man to death. I think that maybe we ought to consider letting them decide how much damages there ought to be in a lawsuit,” said former Sen. Fred Thompson, an old trial lawyer himself and the star lobbyist against tort reform.
Haslam’s bill wouldn’t limit compensatory damages in lawsuits, including medical expenses and loss of pay or earning capacity. But in its original form, it would place a $750,000 cap on so-called noneconomic damages — such as physical and emotional pain and suffering, mental anguish, emotional distress, loss of companionship, humiliation and loss of enjoyment of life.
The proposal would limit punitive damages, which are intended to punish wrongdoers, to twice the amount of compensatory damages or $500,000, whichever is greater.
After negotiations with both sides in the legislative fight, the administration has offered to amend the bill to raise the cap to $1.25 million for certain catastrophic cases — spinal cord injuries, amputations, severe burns and the death of a parent leaving young children. The amendment also lifts the cap for wrongdoers who are committing felonies or who are drunk. But the trial lawyers aren’t satisfied.
Both sides in this debate tell their own horror stories. For proponents, it’s “jackpot justice” in states that haven’t limited damages, with runaway juries dishing up enormous awards, causing businesses and physicians to pack up and leave to avoid skyrocketing liability insurance premiums.
For opponents, it’s the death and disfigurement of people victimized by negligent and callous acts. Testifying before a House subcommittee, Thompson seemed to choke up as he told about meeting the parents of a 5-year-old girl who died because of medical mistakes during a tonsillectomy. They were lobbying Thompson, then a senator, against tort reform legislation before Congress.
“I remember them sitting there asking me, ‘Don’t do anything up here that’s going to make it any easier for folks to hire people like those who did this to our little girl,’ ” he said.
One of the prime forces behind the legislation is National Healthcare Corp., which owned the Nashville home where 16 residents died in a fire seven years ago. The bill’s caps would apply to lawsuits deriving from the neglect and abuse of nursing home residents.
That led the American Association of Retired Persons to lobby against Haslam’s bill. The nursing home industry has an abysmal record of neglectful patient care in Tennessee. Yet it has tried unsuccessfully for years to limit its liability through separate legislation. Opponents derided that bill as the “Kill Old People Cheap Act,” and it always had failed.
National HealthCare is one member of Tennesseans for Economic Growth, the group of businesses formed to lobby for Haslam’s bill.
Pat Crouch, whose 84-year-old mother died from complications of a nursing home bed sore, appeared at one press conference to denounce the industry.
“The money issue is the only thing that keeps these people kind of under control,” Crouch said. “And if they think they can get out of it cheaply, there are going to be more people to suffer.”
Only five states rank worse than Tennessee in the overall quality of nursing homes, according to AARP Tennessee advocacy director Shelley Courington.
“There’s nothing in this bill that would require nursing homes to improve the quality of care that they offer,” she said.
One point of the argument over the bill is whether it’s even necessary. The governor points out that Tennessee and Kentucky are the only Southeastern states without caps on punitive damages.
“This is what the [business] executives look at,” Slatery said. “It’s a very competitive environment across the nation. They say, ‘Well we just won’t consider Tennessee and Kentucky. We’ll just look at these other states.’ We need to change that.”
The other side points out that business executives ranked Tennessee in the top 10 of states for its treatment of tort cases in the most recent U.S. Chamber of Commerce survey.
“We’re about to kill a mouse with a bazooka here,” Thompson said.