AG wants feds out of state constitutional issues

Slatery tries to defend legislation placing caps on civil damages

NASHVILLE —Tennessee’s attorney general is asking the U.S. Supreme Court to deliver a simple message to federal courts: Butt out of state constitutional issues.

Attorney General Herbert S. Slatery III filed a petition late last week with the U.S. Supreme Court in his ongoing bid to defend — and rescue — a package of Tennessee legislation that places caps on damages awarded by juries in civil lawsuits.

In December, the U.S. Court of Appeals for the Sixth Circuit struck down the state’s cap on punitive damages, calling it a violation of the Tennessee Constitution. The federal court ruled the state legislature has no right under the state’s constitution to usurp the authority of juries to award punitive damages.

Slatery’s office cried foul, saying the federal court should instead have asked the Tennessee Supreme Court to first decide the matter. Slatery sought another hearing, but in a divided opinion, the 6th Circuit rejected the request in March.

Now, Slatery is urging the U.S. Supreme Court to step in, saying states’ right to decide their own constitutional issues is at stake.

“Few issues implicate the State’s sovereign prerogative more directly than the interpretation of its constitution,” the petition states. “Federal courts sitting in diversity should not — as the court did below — exercise the authority to declare a state law invalid under the state constitution unless it follows directly from existing state constitutional law.”

Pro-business law at issue

The state Legislature in 2011 enacted the Tennessee Civil Justice Act, a package of legislation designed, legislators said, to create a pro-business climate in Tennessee by protecting businesses from hefty damages awards in cases of civil wrongdoing.

The legislation imposed a cap on punitive damages — awarded in cases in which a jury finds the wrongdoer acted maliciously, fraudulently or recklessly — no matter a jury’s decision on the amount to be paid.

When a jury in U.S. District Court in the Western Division of Tennessee slapped Jackson National Life Insurance Co. with $3 million in punitive damages for trying to keep from shelling out $350,000 in life insurance benefits to two children whose father died in 2013, the insurance firm invoked the cap law.

A federal judge in that case asked the state Supreme Court to decide if the punitive damages cap violated Tennessee’s constitution. Tennessee’s high court refused. The judge then imposed a $750,000 cap, and the children’s mother appealed to the 6th Circuit.

Some judges on the 6th Circuit wanted to again ask the state Supreme Court to rule on the constitutionality of the law, but a majority ultimately opted to decide the issue itself and struck it down.

‘State courts equal participants’

The same package of laws that included a cap on punitive damages also imposed a similar cap on “noneconomic damages” — ongoing pain, mental anguish and the like — awarded in cases in which the wrongdoer is deemed negligent.

With just one day left on the deadline for Slatery’s office to seek a U.S. Supreme Court review of the 6th Circuit’s decision, the state high court announced last week it would now tackle the constitutionality of the noneconomic damages cap.

The state Supreme Court says it will use as a vehicle to test the constitutionality of the cap law a case from the U.S. District Court in the Middle Division of Tennessee involving an accident at a Hudson News shop at the Nashville airport in 2006.

In that case, Jodi Mcclay, a California resident, stopped by the shop in the airport to buy bottled water before boarding her flight. When she closed the cooler door, a 5-foot-long board that had been leaned against the bottom of the cooler fell, crushing her ankle, court records show.

A federal district court jury ruled in Mcclay’s favor and awarded her

“Federal courts sitting in diversity should not ... exercise the authority to declare a state law invalid under the state constitution unless it follows directly from existing state constitutional law.”

$930,000 in “noneconomic damages” for her continued pain and suffering, loss of work opportunities and diminished quality of life.

Hudson News’ attorneys then invoked Tennessee’s cap of $750,000 on “noneconomic damages” and insisted U.S. District Judge Eli Richardson impose it in place of the jury’s verdict. Richardson again asked the state Supreme Court to decide.

The court has now agreed, but that’s not stopping Slatery.

His office contends federal appellate courts are all over the legal map when it comes to deferring to state Supreme Courts to interpret state constitutions. Some always defer. Some do occasionally. Some don’t at all.

“State courts are equal participants in our court system and deserve equal respect,” Slatery’s petition stated. “That is particularly true when an issue implicates their sovereign authority to interpret their state constitution.”

Slatery concedes in the petition federal courts have ultimate authority over whether state laws violate the U.S. Constitution.

“Federal courts must perform that delicate duty when necessary with respect to the federal Constitution,” the petition stated. “But when a state constitutional question is one of first impression — as all acknowledge the constitutional questions here are — the state’s highest court should be given an opportunity to address it. Only that court has the sovereign authority to interpret its state constitution definitely.”

Kingston workers could face cap

The U.S. Supreme Court receives thousands of petitions annually and only selects a handful for review. It could be months before the nation’s high court decides on whether it will hear Slatery’s appeal.

The Tennessee Supreme Court, in the meantime, has asked Slatery to make his case to them, using the Nashville case as a backdrop. If the state high court strikes down the noneconomic damages cap as unconstitutional, the punitive damages cap would suffer a similar fate since the language in both sections of law is identical.

If the cap legislation is ultimately allowed to stand, it would directly impact the case of disaster relief workers who allege they were sickened, some fatally, by exposure to coal ash in the cleanup of a massive 2008 spill from the Tennessee Valley Authority’s Kingston coalfired power plant in Roane County.

At least 40 workers are dead, and more than 400 sick, according to an ongoing tally pulled from court records by the Knoxville News Sentinel as part its now three-year investigation into TVA’S handling of coal ash and the treatment of the Kingston relief workers.

Some workers are suing TVA’S chief contractor, Jacobs Engineering, in U.S. District Court in the Eastern District of Tennessee. The workers allege Jacobs misled them about the risks of exposure, denied them adequate protective gear and decontamination facilities and tampered with threat level testing.

A jury ruled in November Jacobs breached its contract with TVA and its duty to protect the workers. The jury opined that breach was “capable of causing” the illnesses from which the workers suffer.

That ruling, though, did not include a decision on damages and instead merely paves the way for more trials.

U.S. District Judge Tom Varlan has ordered Jacobs to try to negotiate a settlement. Jacobs, which denies wrongdoing, is trying to appeal.

If Jacobs fails in its appeal effort and no settlement is reached, a second series of trials would be held at which workers must definitely link their illnesses to the ingredients in coal ash. If juries in those trials rule against Jacobs and assess damages, Tennessee’s cap law could then be invoked by Jacobs.

Attorney General Herbert S. Slatery III