Haslam touts tort reform as a business-friendly jobs-creation bill

Sunday, April 3, 2011 at 10:05pm
Fred Thompson 

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. 

12 Comments on this post:

By: treehugger7 on 4/4/11 at 6:20

It's going to be a long four years...remeber jobs? This is NOT a jobs proposal, no matter what he says. No one will be employed. Fred is even against it. Haslam is all hat, no cattle.

By: Moonglow1 on 4/4/11 at 6:28

Moonglow1; jobs creation is bogus. This proposed legislation is one more give away to corporate interests. Nashville has become a Tea Party Nation. Mr. Haslam don't pander to National Healthcare or similar businesses. They are causing destruction not job creation. When individuals are harmed the costs to society increases due to lost employment & medical costs. Perhaps if you or members of your family were victims of such malpractice your stance would be different. But regardless, call this move by what it is: another give away to big business of which by the way your business would directly benefit from this legislation.

By: Nathe on 4/4/11 at 6:42

TORT REFORM needs to be more exhaustive than just letting businesses off the hook for liability. Criminal Liablility (i.e. Criminal Negligence, etc.) should always be available, but when was the last time you saw "Swim at your own Risk" or "Skate at your own Risk"?

Tort reform should include NO_FAULT Insurance in place of the automobile insurance schemes we have today. If you own an 120,000 dollar car, your collision insurance should be tailored to cover it. I should have to carry liability insurance to cover the average price of a rich man's car.

Nathe in Inglewood

By: not_guilty on 4/4/11 at 6:57

What do the advocates of limiting liability for damages for pain and suffering propose to do to limit the pain and suffering of negligence victims?

By: treehugger7 on 4/4/11 at 7:10

My guess would be nothing!

By: Moonglow1 on 4/4/11 at 7:22

Moonglow1: The Governor's plan to allow creationism to be taught in schools will not serve to build an educated workforce but will put our students further behind in math & science. My point is this: the Governor has no interest in expanding real jobs for TN. What he is interested in doing is building wealth for corporations which is very different than building jobs hence the "sales effort" for tort reform & creationism in schools. He obviously does not want our students to obtain well paying jobs so perhaps he is pushing creationism so that companies can pay them only the minimum wage. Of course any injuries obtained on the job would be capped. So in summary: attract business, give them a poorly educated workforce at minimum wage, strip them of any bargaining rights meaning safety regulations, and when injuries occur cap them.

By: govskeptic on 4/4/11 at 10:52

Punishment of some industries and companies through punitive damages is the
only way to keep some of these incheck for outrageous behavior toward the public.
Tn example: Large well known Life Insurance Co. denied widow most of the face
amount of life policy that her deceased husband had paid on for many yrs. Would not
get even close to the Face Amount of Policy. She had to sue them for payment, and
all this bad faith dealings by Ins. Co. was brought out in trial. Jury gave her face
amount of policy, plus punitive damages of $500,000. for the aggravation they had
caused her over a year of their poor dealings. If the maximum had been say 150,000
or so knowing she would have to give attorney 1/3 of amount they would attempt this
with lots more customers. Sometimes dollar punishment is the only way to get their attention and it serves the other clients of the companies as well. NO JOBS BILL!

By: repapyticym on 4/4/11 at 11:20

I can see how this will create jobs. Any companies with bad safety records that get sued a lot for killing/injuring their employees can now come to Tennessee.

By: HokeyPokey on 4/5/11 at 5:24

Why is it that the Republicans are so gung-ho about "personal responsibility" for certain classes of citizens, but want to absolve bidness from being similarly accountable?

Oh, I forgot: Campaign Contributions. I think I need more coffee to clarify my thinking.


By: Moonglow1 on 4/5/11 at 6:20

Moonglow 1: Recently Transocean, the company involved with the BP oil tragedy in the Gulf where 11 people died recently gave large bonus checks to their executives for their exemplary "safety" record!! At the same time I read that many of the fishermen have not received any money from BP as promised.

By: pswindle on 4/5/11 at 1:22

Gov. Haslam owns a business, and he is protecting his bottom line. He does not care about the injured , disabled or death of workers. It is all about his money. Have we not forgotten that the first thing that he did was sign a law that allowed him and his family to protect their income or holdings? He is govenor to protect him and his family. He does not have to disclose anything about income or anything about the family business.

By: Gary Lampman on 4/6/11 at 6:44

Dear Legislators,

In this day of Hysteria, Run away Bills ,and Rogue Legislators. I Find that it is time once again ;to voice a opinion that Unfairly and Unjustly rails against Citizens of this State. This Bill I have copied has absolutely NO Justice within it. Protectionism of Business regardless of criminal Intent,Gross Negligence and Harm may serve the Back Pockets of those who seek rewards from their Benefactors.. However ,it unduly places citizens in Harms way , without relief or accountability.
Those who find this Bill as Civil Justice certainly do not apply to our citizenry when business sues Consumers. Such a double standard and Pitiful excuses to foster Criminal Behavior. Also places our Law Makers as conspirator's to commit this crime when it takes place. There is no Honor in screwing your neighbors and Friends.
It is amazing and Fascinating how you can Bash Teachers and Their Unions. While sharing a Bed with Business and opening a Corporate Donating Cash drawer in each of your offices. Certainly, you cannot vote any other way. When you work and sleep together.
This bill does not serve the Best Interests of Tennessee, When it permits Business to Grossly Limit liability at our citizens expense! Congratulations, Instead of bring accountability to the Business world. Your permitting them to Burry Problems; Instead of dealing with them in a responsible way and placing the burden on Tennessee Citizens.
Hospitals ,who seek exclusions and limitations from Medical Error, Hospital Acquired Infections combined. end in 180,000 People Dying each year according to the CDC. Medical Error and Hospital Acquired Infections are PREVENTABLE! However,Hospitals have Ignored ADI Procedures and Best Practices that the CDC has proposed, Literally giving Hospitals a License to Kill.

This bill needs to be tabled until our citizens concerns are also reflected within the Bill as well.