Lindenberg v. Jackson Nat'l Life Ins. Co.
| Decision Date | 28 September 2016 |
| Docket Number | No. 2:13–cv–02657–JPM–cgc,2:13–cv–02657–JPM–cgc |
| Citation | 304 F.Supp.3d 711 |
| Parties | Tamarin LINDENBERG, Individually and as Natural Guardian of her minor child S.M.L., and Zachary Thomas Lindenberg, Plaintiffs, v. JACKSON NATIONAL LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
Molly A. Glover, Charles Silvestri Higgins, Burch Porter & Johnson, Memphis, TN, for Plaintiffs.
Daniel Warren Van Horn, Michael C. McLaren, Robert Campbell Hillyer, Butler Snow LLP, Memphis, TN, for Defendant.
ORDER ON DEFENDANT'S MOTION FOR JUDGMENT AS A MATTER OF LAW AS TO PUNITIVE DAMAGES
The Tennessee Supreme Court having denied certification of two questions regarding the constitutionality of the Tennessee punitive damages caps by Order docketed in this cause on June 27, 2016 (ECF No. 200), the case was remanded to this Court for determination of whether punitive damages are appropriate in the instant case and, if so, the proper amount of said damages.
For the following reasons, the Court finds that punitive damages are appropriate, that the Tennessee punitive damages cap is constitutional, and that the punitive damages to be awarded in the instant case are $700,000.
On December 22, 2014, the jury in the instant case rendered its verdict, awarding $350,000 in actual damages and $87,500 in bad faith damages to Plaintiff Tamarin Lindenberg ("Plaintiff") and her children. (ECF No. 151.) The jury also awarded $3,000,000 in punitive damages. (ECF No. 152.)
On December 18, 2014, during the jury trial in the instant case, Defendant Jackson National Life Insurance Company ("Defendant") moved for judgment as a matter of law. (Min. Entry, ECF No. 139.) Defendant filed a brief in support of its motion on January 5, 2015. (ECF No. 156.) Plaintiff responded in opposition on January 12, 2015. (ECF No. 159.) The Court denied the motion on November 24, 2015. (ECF No. 187.) In the order denying Defendant's motion for judgment as a matter of law, the Court deferred ruling on the amount of punitive damages to which Plaintiff is entitled because the constitutionality of the Tennessee statutory damages cap was an unresolved issue. (Id. at 26–29.) Also on November 24, 2015, the Court certified two questions to the Tennessee Supreme Court:
On June 23, 2016, the Tennessee Supreme Court denied certification. (ECF No. 200–1.) The Court held a telephonic status conference on July 1, 2016. (Min. Entry, ECF No. 202.) In the conference it was determined that Plaintiff, Defendant, and Intervenor State of Tennessee ("the State") would submit and rely on in the instant case their briefing before the Tennessee Supreme Court and the supporting amicus briefs. The Court would then resolve the remaining issues in this case. (See ECF Nos. 203–208.)
The mandate of the Tennessee Supreme Court issued on June 23, 2016 and was docketed in this Court on July 11, 2016. (ECF No. 209 ().)
"It is well-settled in Tennessee that ‘courts do not decide constitutional questions unless resolution is absolutely necessary to determining the issues in the case and adjudicating the rights of the parties.’ " Waters v. Farr, 291 S.W.3d 873, 881 (Tenn. 2009) (quoting State v. Taylor, 70 S.W.3d 717, 720 (Tenn. 2002) ). When facing state constitutional challenges, Tennessee statutes receive "a strong presumption" of constitutionality. Lynch v. City of Jellico, 205 S.W.3d 384, 390 (Tenn. 2006) (citing Osborn v. Marr, 127 S.W.3d 737, 740–41 (Tenn. 2004) ); see also Waters, 291 S.W.3d at 881 (). Tennessee courts must construe statutes in a way that "sustain[s] the statute and avoid[s] constitutional conflict if at all possible, and ... indulge every presumption and ... resolve every doubt in favor of the statute's constitutionality." Howell v. State, 151 S.W.3d 450, 470 (Tenn. 2004) (citing Taylor, 70 S.W.3d at 721 ); see also In re Schafer, 689 F.3d 601, 605 (6th Cir. 2012) . The presumption of constitutionality is especially burdensome in facial challenges to a statute, where "the challenger must establish that no set of circumstances exist under which [a challenged act of the legislature] ... would be valid." Lynch, 205 S.W.3d at 389.
The Tennessee Supreme Court stated in its order declining certification that "it would be imprudent for it to answer the certified questions concerning the constitutionality of the statutory caps on punitive damages in this case in which the question of the availability of those damages in the first instance has not been and cannot be answered by [it]." (ECF No. 200–1 at 2.) It is correct that "[t]he issue of the availability of the common law remedy of punitive damages in addition to the statutory remedy of the bad faith penalty ... was not certified [by this Court] ...." (Id. ) This Court, like another court in this district, "sees no persuasive data that the Tennessee Supreme Court would rule contrary to Riad [v. Erie Ins. Exchange, 436 S.W.3d 256 (Tenn. Ct. App. 2013) ]." Carroll v. Nationwide Prop. & Cas. Co., No. 2:14-cv-02902-STA, 2015 WL 3607654, at *5 (W.D. Tenn. June 8, 2015). The court in Riad found that a plaintiff's damages were "not statutorily limited to the recovery of the insured loss and the bad faith penalty." Id. at *4 (quoting Riad, 436 S.W.3d at 276 ). Further, this Court has previously determined that Plaintiff was both eligible for punitive damages (ECF No. 187 at 20–25) and entitled to punitive damages (id. at 25–26).2 Thus, the Court must next determine the proper amount of punitive damages Plaintiff may recover.3
The jury awarded Plaintiff $3,000,000 in punitive damages. (ECF No. 152.) There exist, however, punitive damages caps in Tennessee; section 29–39–104(a)(5) of the Tennessee Code provides that: "Punitive or exemplary damages shall not exceed an amount equal to the greater of: (A) Two (2) times the total amount of compensatory damages awarded; or (B) Five hundred thousand dollars ($500,000) ...."4 The Tennessee punitive damages statute does not prevent a jury, such as the jury in the instant case, from awarding punitive damages greater than the statutory limit because the punitive damages caps cannot be disclosed to a jury. Tenn. Code Ann. § 29–39–104(a)(6). Rather, a court is to apply the caps "to any punitive damages verdict." Id. The punitive damages statute also states:
Nothing in this section shall be construed as creating a right to an award of punitive damages or to limit the duty of the court ... to scrutinize all punitive damage awards, ensure that all punitive damage awards comply with applicable procedural, evidentiary and constitutional requirements, and to order remittitur when appropriate.
Id. § 29–39–104(b) (emphasis added).5
Plaintiff argues that the Tennessee Constitution guarantees Plaintiff's right to trial by jury and that "[b]ecause a limitation on punitive damages did not exist at the time of the creation of the Tennessee Constitution, the punitive damages cap ... infringes on the fundamental right to a trial by jury." (Pl.'s Br. at PageID 4617, ECF No. 205–1.) Defendant argues that there has never been a constitutional right in Tennessee to a jury's punitive damages award such that the right to trial by jury would be infringed by the cap. (Def.'s Br. at PageID 4341, ECF No. 203–1.) While the Court agrees with Plaintiff that the right to trial by jury is guaranteed by the Tennessee Constitution, the Court agrees with Defendant that the punitive damages caps do not violate such a right.
The Tennessee Constitution's Declaration of Rights secures a number of individual rights, including the right to a trial by jury. Tenn. Const. art. I, § 6. The Tennessee Constitution has always guaranteed "[t]hat the Right of trial by Jury shall remain inviolate." Tenn. Const. of 1796, art. XI, § 6 (amended 1870), http://share.tn.gov/tsla/founding_docs/33633_Transcript.pdf.6 In its guarantee of a right to trial by jury in civil cases, the Tennessee Constitution preserves all the features of a jury trial "as [they] existed at common law ... ‘under the laws and constitution of North Carolina[7 ] at the time of the adoption of the Tennessee Constitution of 1796.’ " Young v. City of LaFollette, 479 S.W.3d 785, 793 (Tenn. 2015) (quoting Helms v. Tenn. Dep't of Safety, 987 S.W.2d 545, 547 (Tenn. 1999) ).
The Tennessee Constitution's guarantee of a right to trial by jury includes "the right to have the factual issues in the case determined by a fair and unbiased jury." Ricketts v. Carter, 918 S.W.2d 419, 421 (Tenn. 1996). The assessment of damages is "a question [of fact] peculiarly within the province of the jury." Thompson v. French, 18 Tenn. 452, 459 (1837) ; see also Bonner v. Deyo, No. W2014-00763-COA-R3-CV, 2014 WL 6873058,...
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