Fungal Meningitis, Tort Reform, and Damages in Tennessee Personal Injury and Wrongful Death Cases

The fungal meningitis outbreak discovered in Nashville and now spread to other states (Minnesota, Ohio,  Florida, North Carolina, Indiana, Michigan, Virginia and Maryland) will shed new light on compounding pharmacies and epidural steroid injections.  But it will also shed a light on the tort reform statutes that placed limitations on the amount of money that wrongdoers have to pay when their conduct kills or injures a human being.

Usually, the effects of tort reform remain hidden, known only to the those who get harmed and find out their rights are limited, the legal community, and of course  those members of the business and insurance communities who persuaded the General Assembly to pass the laws.  But now that we have a tragedy that is in the national spotlight, millions of people will come to know that the Tennessee General Assembly does not permit Tennesseans to put a value on human life or on suffering or pain.  Rather, the value of those losses has been arbitrarily capped by  lobbyists and business interests.

In other words, the public will soon find out that tort reform will provide yet another harm to the victims of fungal meningitis and their families.

So what damages are available to the victims of the fungal meningitis outbreak?  Under Tennessee law, the personal injury victims (those who contract fungal meningitis and survive) will be able to receive medical expenses and lost wages.  Those losses – called economic damages – are not limited under the law.  (Note,however, that to the extent that insurance ()government or private)) pays any of the medical bills the insuring entity probably will have to be repaid.)

 Likewise, those personal injury victims will be able to recover damages for pain, suffering, and loss of enjoyment of life.  These damages are called non-economic damages. 

in addition, the spouse of the person who got fungal meningitis can recover damages for loss of consortium.  All of these damages (economic, non-economic and loss of consortium damages are called "compensatory damages."

If the fungal meningitis is successfully treated and if there are no permanent effects, the only other damages that he or she might be able to  recover are punitive damages.  Punitive damages will be discussed below.

Economic damages are not limited under the law.  Non-economic damages are limited to $750,000 except under very limited circumstances.  The General Assembly lumped the victim and the spouse’s damages together for purposes of the damage cap.   This means that fungal meningitis patient and his or her spouse can recover only $750,000 for non-economic damages, even if the total amount awarded by a jury for such losses exceeds that for either or both of them.

Thus, a person who survives fungal meningitis without any ongoing problem as a result will have been able to recover all of his or her economic damages, but both the patient and his or her spouse will be able to recover no more than $750,000 in non-economic damages.  (Note:  once again, there are a couple of exceptions to this damages cap.  Much more information is needed about the specific case and the conduct of the defendant to now whether an exception will apply.  Some exceptions raise the non-economic damages cap to $1,000,000.  Other exceptions lift the cap completely..  The statute that discusses this area of the law is T.C.A. Sec. 29-39-102.)    Under prior law there was no cap on non-economic damages.

If the person contracting fungal meningitis has a permanent injury as a result, he or she can recover damages for loss of future earning capacity and for future medical bills that are likely to be incurred as a result of having fungal meningitis.  There is no cap on the damages that may be awarded for these economic losses. 

In addition, damages may be awarded for the future pain, suffering, loss of enjoyment of life, and other non-economic damages.  And the patient’s spouse can recover damages for future loss of consortium.  But the damage cap still applies – $750,000 for the combination of the patient’s losses and the spouse’s losses. T.C.A. Sec. 29-39-102.

In other words, past and future non-economic losses for both the spouse and the patient are capped at $750,000 unless one of the limited exceptions to the damage cap applies.  Under former law, there was no artificial cap on non-economic losses.

If the fungal meningitis patient dies, his or her family can recover economic losses (related medical bills, funeral bills, loss of earning capacity reduced by future defined living expenses) and non-economic losses (pain, suffering and the loss of enjoyment of life before death, as well as the damages for the loss of a loved one after death) but the non-economic damages are capped at $750,000 absent certain circumstances.  T.C.A. Sec. 9-39-102.

Under prior Tennessee law non-economic damages in wrongful death cases were not limited by an artificial cap.

Punitive damages can be awarded if it is determined that the defendant acted "recklessly." Reckless conduct occurs when the defendant "is aware of, but consciously disregards, a substantial and unjustifiable risk of such a nature that its disregard constitutes a gross deviation from the standard of care that an ordinary person would exercise under all of the circumstances." Hodges v. S.C.Toof  & Co, 833 S.W.2d 896, 901 (Tenn. 1992)  (Punitive damages can also be awarded for intentional, malicious, or fraudulent conduct.) 

The new tort reform law limits punitive damages to two times the compensatory damages or $500,000, whichever is greater.  There are four  exceptions to this cap on punitive damages – it is too early to tell whether any of those exceptions will be applicable to these cases.  (T.C.A. 29-39 -104 (a)

I wrote yesterday about the limited liability of the sellers of the steroid that caused fungal meningitis under Tennessee law.  Even if a seller is determined to be liable, the seller has liability for punitive damages under extremely narrow circumstances.  T.C.A. Sec. 29-39-104 (c).

There was no artificial cap on punitive damages under prior law.  It is certainly true that judges – both trial and appellate – tended to examine punitive damage awards very carefully, but there was not a predefined limit on the amount of damages that could be awarded.

We can see that the cap on compensatory damages also provides yet another limitation on punitive damages.  How? When compensatory damages are capped it means that there is a smaller number than can be multiplied by two to fix the punitive cap.

We can also see that those with higher economic losses (medical bills or loss of income or earning capacity) will be able to recover higher punitive damages than others. Why/  The punitive damages cap based on a multiplier of two.  Thus, for an example, a person who is killed by fungal meningitis who was working will be able to recover more punitive damages (if they are warranted under the facts) than would a retired person.

In summary, those who are victims of this tragedy and whose rights are determined by Tennessee law will have less rights than they would have if they had been injured or killed before October 1, 2011 (when the new law went into effect).  These people, and their families, will now see what others are beginning just beginning to see: our General Assembly and Governor have limited the responsibility of those who cause harm to others at the expense of those who suffer the consequences of wrongful acts.  And, because of very public nature of this tragedy, perhaps the public will begin to understand what our elected officials have done to us.

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