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Tamarin Lindenberg v. Jackson Nat'l Life Ins. Co.
Citation: 912 F.3d 348Docket: 17-6079
Court: Court of Appeals for the Sixth Circuit; December 20, 2018; Federal Appellate Court
Original Court Document: View Document
The United States Court of Appeals for the Sixth Circuit addressed an appeal by Jackson National Life Insurance Company concerning a jury verdict in favor of Tamarin Lindenberg, both individually and as the natural guardian of her minor children, ZTL and SML. The jury awarded Lindenberg $350,000 in actual damages, $87,500 in bad faith damages, and $3,000,000 in punitive damages. The district court later reduced the punitive damages to $700,000 due to a statutory cap, which Lindenberg challenged in a cross-appeal. The State of Tennessee intervened to uphold the statute. The court affirmed the district court's judgment regarding the defendant's appeal, but reversed the decision on Lindenberg's cross-appeal, deeming the punitive damages cap unconstitutional. Consequently, the court vacated the judgment concerning punitive damages and remanded the case for recalculation in line with the jury's original verdict. The core issue stemmed from a life insurance policy that named Lindenberg as the primary beneficiary following the death of her former husband, Thomas A. Lindenberg. The claims included breach of contract and bad faith, with Lindenberg’s child ZTL joining the suit as a co-plaintiff upon reaching adulthood. The Policy's contingent beneficiaries are the Decedent's surviving children, specifically ZTL and SML, whom Plaintiff and Decedent adopted during their marriage. Third-Party Defendant Mary Angela Williams is the Decedent’s daughter from a prior marriage. Following their divorce in 2006, the Marital Dissolution Agreement (MDA) stipulated that the Wife would pay for life insurance premiums and that the Husband must maintain insurance on his life with death benefits payable to their children as irrevocable primary beneficiaries. Decedent passed away on January 22, 2013, and Plaintiff filed a claim for the death benefit shortly thereafter. Defendant required Plaintiff to obtain waivers from other potential beneficiaries and court-appointed guardians for the minor children before processing the claim. Communication between Plaintiff and Defendant regarding the claim continued into May 2013, ultimately leading to Plaintiff filing a lawsuit. Defendant included an interpleader complaint, asserting uncertainty about the rightful claimant of the death benefit and requesting the court's determination on the matter. Plaintiff and Williams jointly moved to dismiss the interpleader complaint, which the court granted, subsequently ordering Defendant to disburse $350,000 in benefits plus interest to Plaintiff. While Plaintiff's claims against Defendant persisted, Defendant filed a motion to dismiss regarding punitive damages and bad faith claims, with the court partially granting and partially denying this motion. After discovery, Defendant sought summary judgment, which was denied for Plaintiff's personal claims but granted for those on behalf of the minor children. A trial ensued, where the jury found Defendant liable for breach of contract, awarding $350,000 in actual damages, $87,500 for bad faith, and $3,000,000 in punitive damages, concluding that Defendant's refusal to pay was intentional, reckless, malicious, or fraudulent. Defendant renewed its motion for judgment as a matter of law and contended that the district court should enforce T.C.A. 29-39-104, a Tennessee statute limiting punitive damages to either two times the compensatory damages awarded or $500,000, whichever is greater. Plaintiff countered that this punitive damages cap violates the Tennessee Constitution and subsequently filed a motion to certify this constitutional issue to the Tennessee Supreme Court. The State of Tennessee sought to intervene, which the district court allowed. The court agreed to certify two questions regarding the punitive damages cap's constitutionality: whether it infringes on the right to a jury trial and whether it improperly encroaches on judicial powers as per the Tennessee Constitution. The Tennessee Supreme Court recognized the novelty of these questions but declined to provide an opinion. Ultimately, the district court dismissed Defendant’s renewed motion for judgment, rejected Plaintiff’s constitutional challenge, and applied the punitive damages cap, reducing Defendant's liability from $3,000,000 to $700,000. Both parties filed cross-appeals, with Defendant challenging the dismissal of its interpleader complaint and Plaintiff contesting the constitutionality of the punitive damages cap. Defendant's interpleader complaint, aimed at resolving conflicting claims against a limited fund, was dismissed by the district court. Interpleader can be pursued under Rule 22 or statutory interpleader via 28 U.S.C. 1335, which necessitates proving conflicting claims, a minimum amount in controversy of $500, and minimal diversity among claimants. The interpleader process consists of two stages: initial jurisdiction determination and subsequent litigation to resolve claimants' rights. Defendant does not dispute the merits of the district court's dismissal of its interpleader complaint but argues for reversal based on the court's reliance on extrinsic evidence related to waivers from guardians ad litem of the minor children. However, this argument is deemed unpreserved because Defendant did not raise it during the proceedings. Instead, Defendant invited the court to consider the waivers, arguing they were insufficient for substantive reasons, and requested permission to interplead the life insurance benefits, asserting the existence of multiple adverse claims. Moreover, Defendant sought the court's approval to disburse benefits to Plaintiff, contingent on a finding that the waivers were valid. The court declines to consider Defendant's complaints regarding an analysis it requested, adhering to the principle that invited errors do not merit reversal. Regarding Plaintiff’s claim for punitive damages, Defendant contends that the district court should have dismissed the claim entirely rather than allowing it to proceed in part based on breach of contract. The court's review of such dismissals is de novo, requiring acceptance of factual allegations as true and favoring the plaintiff’s position. Defendant references a precedent to support its argument against the district court's decision. In the case of Heil, an insurer initially refused to defend Heil in a wrongful death lawsuit for two years, later taking over the defense. Heil subsequently sued the insurer for breach of contract and bad faith, resulting in a jury ruling in Heil's favor on two claims and awarding punitive damages. However, the court identified a clear error, determining that the statutory remedy for bad faith is the exclusive remedy for an insurer's refusal to pay a claim, thereby disallowing punitive damages in such cases. If Heil's ruling is still valid, the plaintiff's claim for punitive damages should have been dismissed. The defendant referenced the principle that one panel of the court cannot overturn another's decision, although this is not an absolute rule. A Supreme Court decision or an en banc ruling can overrule prior decisions, and state court interpretations can also abrogate earlier federal interpretations if they conflict and certain conditions are met. The Tennessee Court of Appeals later contradicted Heil in Riad v. Erie Insurance Exchange, stating that the plaintiff could recover damages beyond those specified in the bad faith statute, including punitive damages under certain circumstances. The appellate court found that punitive damages could be awarded in breach of contract cases if the defendant acted intentionally or maliciously, affirming that the jury's consideration of punitive damages was appropriate. Notably, Riad explicitly rejected Heil’s assertion of the bad faith statute as an exclusive remedy, emphasizing that it overlooked previous relevant case law. The Tennessee Supreme Court in Myint v. Allstate Insurance Co. established that the bad faith statute does not limit an insured’s remedies to those explicitly stated within it, allowing for additional common law claims alongside statutory claims. This principle was reinforced by the Tennessee Court of Appeals, which holds published opinions as controlling authority unless overturned by a higher court. The current legal framework in Tennessee allows for common law claims in conjunction with statutory bad faith claims, as clarified in Riad. The court rejected the Defendant's argument that Myint and Riad apply solely to tort-related cases, emphasizing that the analysis of the bad faith statute is not contingent on the nature of the plaintiff’s claims. Furthermore, the Defendant's assertion that the 2011 amendment to T.C.A. 56-8-113 overruled the Myint precedent was dismissed, as the statute upholds the availability of common law remedies alongside the statutory framework for insurer misconduct. Overall, the ruling indicates a broad interpretation of remedies available to insured parties under both statutory and common law in Tennessee. T.C.A. 56-8-113 partially overrules Myint but does not affect the conclusion that an insured's remedies are not limited to those in the bad faith statute. Under 56-8-113, a plaintiff seeking bad faith damages cannot recover beyond what the bad faith statute and related employment title provide. However, it preserves the availability of common law remedies, including punitive damages, which may be awarded in breach of contract cases under certain circumstances. The court affirms the district court's denial of the defendant's motion to dismiss the plaintiff's punitive damages claim. The defendant also challenges the district court's refusal to grant judgment as a matter of law. This denial is reviewed de novo, applying the state’s substantive law standard. Under Tennessee law, courts must view evidence favorably to the non-moving party and only grant judgment if reasonable minds could not differ. The defendant claims that the court should have granted judgment concerning (1) statutory bad faith and (2) punitive damages linked to breach of contract. Tennessee's bad faith statute requires insurers to pay a claim within 60 days post-demand or face liability for additional damages, including up to 25% of the loss, provided the denial was not in good faith and caused further harm. To succeed on a bad faith claim under T.C.A. 56-7-105, the plaintiff must demonstrate: (1) the insurance policy was due and payable, (2) a formal demand for payment was made, (3) the insured waited 60 days after the demand (or faced a prior refusal), and (4) the refusal to pay was not made in good faith. Defendant claims entitlement to judgment as a matter of law on Plaintiff's bad faith claim due to insufficient evidence, but fails to substantiate this claim, suggesting a waiver of the issue. The court highlights that issues presented without developed argumentation are typically considered waived. Furthermore, the Defendant’s argument regarding the uncertainty defense in bad faith claims does not hold, as an insurer can refuse payment only if there is substantial legal ground supporting its uncertainty about the policy's coverage. This includes instances where the insurer is unsure of the true beneficiary, even if a court later finds in favor of the claimant. To counter the uncertainty defense, a plaintiff must demonstrate that no legitimate grounds for disagreement about the coverage existed. The burden of proof lies with the party asserting the affirmative defense. Defendant contends that its refusal to pay was due to concerns about multiple liabilities stemming from an ambiguous primary beneficiary status created by a marital dissolution agreement (MDA). However, the court finds that reasonable minds could doubt this rationale, noting that the Defendant did not initially cite this concern in its interpleader complaint and that its refusal to pay lacked a clear legal basis. The Defendant's argument appears to be a post hoc justification rather than a legitimate reason for its actions, as it did not indicate any uncertainty regarding the children's interests until later in the litigation. Witnesses indicated that the guardianship process proposed by the Defendant for obtaining waivers was overly complex, unusual, and unnecessary. The Defendant’s staff acknowledged a lack of thorough review of the letter demanding waivers from the Plaintiff, and the employee responsible for the letter closed the file on the Plaintiff’s complaint shortly after sending it. Evidence suggested that the Defendant acted to obstruct the Plaintiff’s claim, such as initially rejecting proposed guardians who were later jointly recommended for appointment and failing to send promised waiver forms. The Defendant also did not consider an alternative proposed solution from the Plaintiff involving a hold harmless and indemnification agreement. A reasonable juror could infer that the Defendant's refusal to pay the claim was not genuinely due to legal uncertainties. Regarding the punitive damages claim linked to breach of contract, the Defendant argued entitlement to judgment as a matter of law. Punitive damages aim to punish wrongful conduct and deter similar actions in the future. They may be awarded in egregious breach of contract cases where the plaintiff can show clear and convincing proof of the defendant's intentional, fraudulent, malicious, or reckless behavior. The Supreme Court of Tennessee identifies four intent levels that can lead to punitive damages: intentional conduct, fraudulent misrepresentation, malicious motivation, and reckless disregard of substantial risks. In this case, the jury needed to determine if the Defendant's breach involved egregious conduct. Given the evidence, reasonable minds might conclude that the Defendant's uncertainty was a post hoc rationale for its refusal to pay, suggesting that there was clear and convincing evidence of at least reckless behavior in denying the claim. Defendant acknowledged that its refusal to pay could result in litigation, even threatening to initiate an interpleader action, which it eventually did. The evidence indicated that Defendant disregarded the potential unjustifiability of its litigation threats. The jury found that Defendant misled Plaintiff regarding her legal rights, falsely claiming she had waived her beneficiary status under the Policy without providing justification. Additionally, Defendant lacked proper systems to prevent its employees from making unfounded legal assertions. When Plaintiff raised concerns about the confusion and costs associated with Defendant's litigation threats, Defendant dismissed her complaints, indicating a lack of procedures to resolve claims without litigation, focusing instead on closing complaints. This led to the conclusion that Defendant’s pursuit of litigation against Plaintiff was at least reckless, supporting the district court's denial of Defendant’s motion for judgment as a matter of law. In the cross-appeal, Plaintiff contended that the statutory cap on punitive damages under T.C.A. § 29-39-104 violated the Tennessee Constitution's provisions on the right to a jury trial and the separation of powers. The court reviewed the district court’s interpretation of state law de novo, emphasizing the need to anticipate how Tennessee's highest court would rule, given that lower appellate courts had not addressed the issue. The court noted that Tennessee statutes are strongly presumed constitutional, and its duty is to uphold statutes whenever possible. Ultimately, the court found that the punitive damages cap violated the constitutional right to a jury trial as guaranteed by the Tennessee Constitution, although it recognized that this right is not absolute. The right to trial by jury, as enshrined in Tennessee law, reflects the historical practices at the time of the Tennessee Constitution's adoption in 1796, particularly regarding punitive damages. Tennessee Code Annotated § 29-39-104(a)(5) limits punitive damages to either double the compensatory damages awarded or $500,000, with this limitation not disclosed to the jury but applied by the court. Notably, this cap does not apply in cases involving serious physical injury, intentional falsification of records, injuries caused by intoxicated defendants, or felonious conduct. In the current case, the parties have not contested the applicability of these exceptions or the district court's calculations regarding the cap. Historically, both Tennessee and North Carolina recognized punitive damages as part of the jury's role. The North Carolina Supreme Court in Carruthers v. Tillman (1797) articulated that punitive damages, termed exemplary damages, should only be awarded to compel an abatement of a nuisance after actual loss has been compensated. This precedent was acknowledged in Rhyne v. K-Mart Corp., establishing the legitimacy of punitive damages in North Carolina common law. Similarly, the Tennessee Supreme Court in Wilkins v. Gilmore (1840) affirmed that juries could award damages beyond mere pecuniary loss, factoring in the defendant's malicious conduct. The continuity of this practice is evident, indicating that punitive damages were recognized and awarded by juries in both jurisdictions when the Tennessee Constitution was drafted. The historical context underscores the foundational principles of jury trials and punitive damages in Tennessee law, rooted in its North Carolina origins. The historical context of the right to trial by jury in 1796 included the jury's authority to award punitive damages in appropriate cases. Punitive damages have traditionally been regarded as a "finding of fact" exclusive to the jury. In the 1839 case, Boyers v. Pratt, the Tennessee Supreme Court recognized the difficulty in quantifying damages for an assault on an innocent individual and emphasized the need for damages to deter future offenses. The Court ruled that the jury had not exceeded its discretion in determining the damages awarded. Similarly, in Southeastern Greyhound Lines, Inc. v. Freels (1940), the Court upheld a jury's decision to award punitive damages despite minimal actual damages, reiterating that the jury must assess whether the defendant's conduct warranted additional damages. The Tennessee General Assembly's cap on punitive damages, as outlined in T.C.A. 29-39-104, was challenged as unconstitutional, infringing on the right to trial by jury as guaranteed by the Tennessee Constitution. The court ruled that this cap is unenforceable concerning punitive damages, rejecting arguments from the defendant and the state that punitive damage awards are not factual determinations. The court maintained its position against capping punitive damages, emphasizing the jury's role in these decisions. The Indiana Supreme Court upheld a cap on punitive damages, reasoning that the jury’s determination of such damages does not constitute a "finding of fact" entitled to jury trial protections under the Indiana Constitution. This distinction is supported by the U.S. Supreme Court, which noted that punitive damages differ from actual damages, which are factual matters for jury consideration. In contrast, Tennessee law treats punitive damages differently, as evidenced by cases like Wilkins, Boyers, and Southeastern Greyhound. The U.S. Supreme Court, in Cooper Industries, acknowledged a lack of uniformity on punitive damages, referencing its decision in Honda Motor Co. v. Oberg, which held that Oregon's constitution's prohibition against reexamining jury-tried facts violated due process when applied to punitive damages. The Missouri Supreme Court further illustrated this inconsistency by striking down a punitive damages cap, asserting that such caps infringe upon the jury's role, as established by common law at the time Missouri's Constitution was adopted. The court ruled that this cap violated Missouri's constitutional right to a jury trial, similar to provisions in Tennessee's Constitution. Given this context, the Tennessee Supreme Court is likely to rule that Tennessee's punitive damages cap (T.C.A. § 29-39-104) infringes on jury trial rights. Additionally, while the North Carolina Supreme Court upheld a statutory punitive damages cap in Rhyne, Tennessee courts have occasionally followed North Carolina's lead, as demonstrated in Jernigan v. Jackson, where the Tennessee Supreme Court referenced North Carolina case law regarding jury trial rights in civil matters. The North Carolina Legislature has never authorized jury trials in tax cases, a stance that has remained unchanged since 1941 and reflects the law in effect in 1789 and 1796 when Tennessee’s first Constitution was adopted. Consequently, the North Carolina Supreme Court has ruled that juries are not constitutionally required in tax cases, a decision based on the North Carolina Constitution's provision for jury trials in property-related legal controversies. However, this rationale does not apply in Tennessee, where the Constitution guarantees a broader right to jury trials without such limitations. The Tennessee Constitution states that the right to trial by jury shall remain inviolate, contrasting with North Carolina's more restrictive language. The argument presented by the Defendant and the State that the Tennessee General Assembly can cap punitive damages is challenged on the basis that such power is subject to constitutional limits. This claim is compared to an analogy where rulemakers ignore constraints on their authority. The preexisting constraint in this scenario is the constitutional right to submit factual questions for jury determination. The State's reference to the case of Lavin to support legislative power in capping punitive damages is deemed unpersuasive, as the plaintiffs in Lavin did not raise constitutional objections. The Tennessee Supreme Court found the punitive damages cap in Lavin to be "distasteful" but limited its ruling to statutory interpretation rather than addressing broader constitutional implications. The case at hand raises the constitutionality of Tennessee's punitive damages cap, which is claimed to align with the due-process standards established in BMW of North America, Inc. v. Gore. The State's argument posits that the cap, set at either double the compensatory damages or $500,000, ensures compliance with constitutional limits. However, the text asserts that this cap does not correlate with the federal standards discussed in Gore. It emphasizes that a rigid mathematical formula does not define constitutional boundaries for punitive damages, and variations in compensatory damages should not restrict the ratio of punitive awards. The document reiterates the importance of reasonableness in assessing punitive damages and suggests that extreme ratios, such as 500 to 1, warrant judicial scrutiny. Furthermore, the State contends that plaintiffs cannot contest the punitive damages cap, as punitive damages are not compensatory. Nonetheless, Tennessee law historically allows juries to determine punitive damages to deter misconduct, establishing that a plaintiff retains the right to challenge the cap's validity. The State's argument that the cap merely reflects legal consequences post-finding by the jury is also discussed, asserting that the jury's role remains intact since they are unaware of the cap during deliberations. However, it is argued that the application of the punitive damages cap by the district court effectively diminished the jury's awarded damages, allowing for a legitimate challenge from the plaintiff. T.C.A. § 29-39-104 is identified as a regulation concerning remittitur, yet the terminology "remittitur" is deliberately avoided by the parties due to the Tennessee Supreme Court's historical rejection of legislative attempts to control this judicial power. The court has maintained that while the General Assembly may influence remittitur, it cannot regulate it. Significant cases, such as *Borne v. Celadon Trucking Servs. Inc.*, emphasize the independence of the judicial process concerning remittitur, rejecting rigid rules and legislative restrictions on jury assessments. The court further clarifies that the right to a jury trial belongs to litigants, not jurors, highlighting that the jury's awarded damages of $3,000,000 should stand, irrespective of subsequent reductions. This reduction infringes upon the plaintiff's rights and is not comparable to permissible legal consequences such as statutory multipliers. The ruling concludes that the statutory cap on punitive damages violates the Tennessee Constitution, necessitating the reversal of the punitive damages judgment and remanding for recalculation in line with the jury's verdict. The court also notes that the constitutional violation negates the need to address alternative arguments regarding separation of powers. Additionally, Circuit Judge Larsen concurs in part and dissents in part, stating the importance of state courts as the primary authority on state law, and acknowledging the uncertain questions presented by the case regarding the interpretation and constitutionality of Tennessee statutes. The Tennessee Supreme Court has indicated a willingness to address two state law questions through certification, a mechanism that allows it to interpret its statutes and Constitution. However, the majority opts to resolve these issues independently. It concludes that Tennessee's bad faith statute (Tenn. Code Ann. § 56-7-105(a)) permits plaintiffs to seek punitive damages alongside statutory penalties, overruling the prior decision in Heil Co. v. Evanston Insurance Co. (690 F.3d 722, 6th Cir. 2012) based on a controversial ruling from Riad v. Erie Insurance Exchange (436 S.W.3d 256, Tenn. Ct. App. 2013). This ruling incorrectly assumed that the Tennessee Supreme Court had already settled the issue, which it did not, as clarified in Lindenberg v. Jackson Nat’l Life Ins. Co. (No. M2015-02349-SC-R23-CV, 2016 Tenn. LEXIS 390). With Heil overruled, the majority also invalidates Tennessee’s punitive damages cap (Tenn. Code Ann. § 29-39-104), asserting a conflict with the jury trial right under the Tennessee Constitution. The dissenting opinion argues that both the constitutional issue and the interpretation of the bad faith statute are unsettled questions lacking authoritative guidance from the Tennessee Supreme Court, making them suitable for certification. The dissent emphasizes that the majority's decisions are unnecessary and expresses disagreement with the merits of the majority's conclusions. It also highlights that Tennessee Supreme Court Rule 23 allows for certification when there is no controlling precedent, which applies to both questions at hand. Certification of state law questions to state courts is endorsed to conserve judicial resources and promote cooperative federalism, particularly when federal courts may mistakenly invalidate state laws without adequate state court review. The U.S. Supreme Court emphasizes the importance of state court interpretation before federal courts speculate on state statutes. In this case, the Tennessee Supreme Court declined to address certified questions regarding the constitutionality of punitive damages caps because the federal district court failed to certify a related issue concerning the preclusive effect of the bad faith statute. The Tennessee Supreme Court indicated that it would be unwise to answer constitutional questions without first resolving the underlying issue of the availability of punitive damages alongside statutory remedies. However, the court expressed openness to receiving both statutory and constitutional questions if properly certified. The central issue of the case involves the remedies available to an insured claiming bad faith by their insurer for not fulfilling policy obligations. In 1901, Tennessee enacted the bad faith statute, Tenn. Code Ann. 56-7-105, which imposes a 25% penalty when an insurance company refuses to pay a claim in bad faith. Tennessee courts have consistently held that this statute eliminates the common law tort of bad faith failure to pay. The central issue in this case is whether the bad faith statute also precludes punitive damages for a common law breach of an insurance contract, which essentially involves proving bad faith. The court previously affirmed in Heil Co. v. Evanston Ins. Co. that the bad faith statute does preclude punitive damages for such breaches. The majority in the current litigation argues otherwise, citing Lindenberg’s entitlement to punitive damages for Jackson National’s bad faith breach. However, this breach arises from the failure to pay the insurance claim, necessitating proof of conduct exceeding mere breach of contract. Jackson National contends that punitive damages should not be added to the statutory penalty. The court acknowledges that Heil governs this case unless there are compelling reasons to believe the Tennessee Supreme Court would disagree. The majority's reliance on Riad v. Erie Insurance Exchange, which criticized Heil, is questioned as Riad's underlying assumption about the Myint v. Allstate Insurance Co. decision being determinative has since been deemed incorrect by the Tennessee Supreme Court. The availability of punitive damages alongside the statutory remedy remains an unresolved issue for this Court. Riad's analysis is undermined by the Tennessee Supreme Court's decision in Myint, which did not address the breach of contract issue or punitive damages, focusing instead on the applicability of the Tennessee Consumer Protection Act (TCPA) to the insurance industry. The court ruled that insurers are not exempt from the TCPA, highlighting that the state's insurance statutes do not limit the application of the TCPA and that its remedies are cumulative to other state law remedies. Riad's inference that plaintiffs could recover both the statutory bad faith penalty and punitive damages for breach of contract lacks strong support, as prior cases established that the bad faith statute serves as the exclusive remedy for damages due to an insurer's bad faith refusal to pay. Specifically, the bad faith statute has been interpreted as precluding common law claims for bad faith, a stance reinforced by earlier rulings, including the Tennessee Court of Appeals' decision in Chandler, which remains valid and has not been overruled by the Tennessee Supreme Court. Tennessee law does not recognize a common law tort for bad faith by insurers; instead, the sole remedy for such conduct is through the statutory bad faith penalties. The cases of Watry v. Allstate and 6111 Ridgeway Grp. LLC v. Phila. Indem. Ins. Co. reaffirm that Tennessee courts have adhered to this principle for decades. Riad v. State Farm acknowledged this framework but did not clarify the recovery possibilities in breach of contract actions. The interpretation suggests that while the bad faith statute excludes tort claims for bad faith failure to pay, punitive damages may be sought if framed as a breach of contract. However, Riad's reasoning may be limited by prior rulings, particularly Myint v. Allstate, which the General Assembly effectively overruled with the enactment of Tenn. Code Ann. § 56-8-113 in 2011, stating that the statutory remedies provided are exclusive. The majority's view that Myint's conclusions remain intact overlooks that prior case law did not support the availability of punitive damages for breach of insurance contracts. Ultimately, § 56-8-113 does not imply that punitive damages are preserved for such claims post-enactment. Riad’s interpretation of Myint is questionable due to several factors: Myint’s specific focus on the TCPA, a lack of supporting caselaw for Riad’s view, inconsistency with the Chandler line of cases, and the legislative abrogation of Myint. The Tennessee Supreme Court has indicated that Riad misinterpreted Myint, particularly regarding the common law availability of punitive damages alongside statutory remedies. Consequently, there is significant doubt about whether the Tennessee Supreme Court would endorse Riad's interpretation. The author advocates for adherence to the precedent set in Heil, proposing to reverse the district court’s punitive damages award. The discussion on whether Tennessee’s recently enacted punitive damages cap aligns with the state constitution is deemed unnecessary. Certification would unnecessarily delegate constitutional interpretation to those responsible for safeguarding the document. The majority's ruling that Tennessee Code § 29-39-104 violates the jury trial guarantee is questioned for its relevance and clarity, as the constitutional jury trial right may not apply in this federal diversity case under the Erie doctrine. Since a federal jury assessed punitive damages, Tennessee’s punitive damages cap should govern unless overridden by federal law or conflicting state constitutional provisions. Furthermore, the author notes that Lindenberg, having abandoned her Seventh Amendment challenge to the punitive damages cap in the district court, would not have succeeded had she pursued it. Binding case law in this circuit has upheld state-imposed caps on medical malpractice damages against Seventh Amendment challenges, reinforcing that a jury's role is to ascertain the extent of a plaintiff's injuries rather than determine legal outcomes. In Smith v. Botsford General Hospital, the court referenced Boyd v. Bulala, affirming that legislative caps do not violate the Seventh Amendment as they represent rational policy decisions in the public interest. Similar conclusions have been reached in other circuits, such as Schmidt v. Ramsey and Davis v. Omitowoju, which also rejected Seventh Amendment challenges related to state damages caps. Furthermore, the Supreme Court has clarified that punitive damages are not a 'fact tried' by the jury, thus allowing federal courts to apply state caps on punitive damages without infringing on Seventh Amendment rights. However, in Jones v. United Parcel Service, the Tenth Circuit recognized that the jury's role in determining punitive damages must be preserved, despite acknowledging state laws that might assign this task to judges. The applicability of Tennessee’s punitive damages cap in federal courts raises questions about whether the state's jury trial right is substantive or procedural. The right to a jury trial is generally viewed as procedural, as indicated by Shady Grove Orthopedic Associates. The Supreme Court has ruled that the right to a jury trial in federal courts is determined by federal law, including in diversity cases, which means that federal plaintiffs retain their right to a jury trial, regardless of state law provisions that might differ. State law cannot expand federal jury trial rights in federal court, as established in precedent. A litigant cannot demand a jury trial in federal court if it is not available under federal law, even if state law would permit one. Federal courts have consistently applied federal law regarding jury trials, rejecting state provisions that would grant such rights. The case law, including rulings by the Supreme Court, indicates that federal jurisdiction overrides state law in determining jury trial rights. The ruling in the current case aligns with established precedent, which confirms the federal court's authority to set the terms of jury trials, regardless of state constitutional guarantees. There is skepticism about the relevance of Tennessee’s procedural rights in this context, as the majority opinion suggests a substantive right to unlimited punitive damages based on state law. However, the distinction drawn by the majority between Tennessee and federal jury authorities regarding punitive damages does not hold, as both systems allow juries to award punitive damages. The assertion that Tennessee juries uniquely possess the authority to award punitive damages as a "finding of fact" is challenged, as federal standards do not categorize punitive damages in the same manner. Caps on non-punitive damages have been upheld based on the principle that the jury's role is to assess the extent of a plaintiff's injuries rather than the legal implications of those findings. Tennessee law differs from federal law in its allocation of decision-making authority over punitive damages, a distinction characterized as procedural rather than substantive. In federal court, federal procedural rules are authoritative, though the Supreme Court’s Erie doctrine suggests that certain state procedural rules may need to be applied if they define substantive rights and remedies. If Tennessee’s jury trial guarantee is interpreted as providing a substantive right to unlimited punitive damages, not applying this rule in federal diversity cases could lead to significant outcomes and possibly encourage forum shopping. There remains uncertainty about how the Supreme Court would approach this issue, particularly regarding the application of federal procedural rules in instances where they may influence case outcomes. The text highlights that a federal procedural rule remains valid even if it alters case outcomes in a way that could promote forum shopping. The author expresses concern about the lack of basis for assessing the constitutionality of Tennessee’s punitive damages cap within the context of a federal diversity action, noting that the parties involved did not address this issue in their arguments. In discussing the challenge under the Tennessee Constitution, the majority acknowledges the need for federal courts to be cautious about introducing substantive changes in state law. The excerpt concludes by questioning whether the state constitutional issue is appropriately before the court. Tennessee statutes are presumed constitutional when challenged under the state constitution, as established by Lynch v. City of Jellico. The Tennessee Supreme Court mandates resolving any reasonable doubt regarding the constitutionality of a statute in favor of legislative action. To invalidate a punitive damages cap, the majority must prove beyond reasonable doubt that it violates the Tennessee Constitution, a burden they have not met. The statute 29-39-104 does not hinder the jury's role in fact-finding, as juries remain unaware of the cap during deliberations. The trial court subsequently applies state law to limit punitive damages post-verdict. This reasoning mirrors that used to uphold Michigan’s medical malpractice cap against Seventh Amendment challenges and is supported by similar rulings from other state supreme courts. The decision to cap damages is viewed as a policy choice rather than a factual reassessment by juries, which retain the authority to determine damages. Legislative caps on damages do not infringe on jury rights, as demonstrated by statutes allowing for treble damages, where the jury first assesses actual damages before any multiplication occurs. The analogy suggests that if increasing a jury award does not violate jury rights, then decreasing it similarly cannot. Several state supreme courts have acknowledged damage multipliers as justification for upholding caps on damages. The historical existence of damage multipliers suggests that the Framers did not intend to prohibit laws altering jury awards, as the Idaho legislature had modified the common law of damages upon the Constitution's adoption. The majority posits that damage multipliers do not undermine a jury's damage assessment, distinguishing them from damages caps. However, any statute that alters a jury's award interferes with what the jury deemed appropriate compensation or punishment. The jury in this case awarded damages it found sufficient to punish the defendant, and the majority's view implies that the General Assembly could double this figure without violating the jury trial right but could not reduce it. The dissent questions the rationale behind this distinction, emphasizing that both plaintiffs and defendants in Tennessee share the protections of a jury trial. The majority's characterization of the punitive damages cap as a mere regulation of remittitur is seen as a misunderstanding, as the General Assembly's attempts to regulate remittitur have been rejected by the Tennessee Supreme Court. Furthermore, the dissent argues that the General Assembly's authority to eliminate common law rights suggests it could limit punitive damages, raising reasonable doubt about the constitutionality of such limitations. The majority claims this argument is circular, referencing constitutional limits on the General Assembly’s power. The dissent points out that the majority misinterprets Tennessee case law on remittitur, clarifying that the 1911 remittitur statute was enacted to address excessive verdicts, and the case of Grant did not reject this statute but affirmed the trial judge's authority to suggest remittitur based on jury bias. The excerpt emphasizes that the statute in question is not the sole basis for remittitur, as Grant applies it without rejecting its validity. It clarifies that Foster v. Amcon International, Inc. does not indicate a constitutional dismissal of rigid rules regarding additurs and remittiturs established by the General Assembly. Instead, Foster references earlier guidance from Smith v. Shelton, which aimed to provide appellate courts with flexible guidelines rather than strict rules. Moreover, Foster modifies the Shelton standard to align with the statute's intent, thereby confirming the General Assembly's authority to regulate remittitur. The argument presented suggests that while the General Assembly possesses the power to alter common law remedies, it could also restrict them under certain conditions without violating Tennessee's jury rights. The text questions whether punitive damages could have been awarded by juries in North Carolina at the time the Tennessee Constitution was adopted, noting that such damages were generally not available for breach of contract at common law, with only limited exceptions. The Tennessee Supreme Court has consistently applied a narrow inquiry to assess if state statutes infringe upon the jury right, often upholding the statutes in question, such as in cases concerning mandamus and tax trials, where no jury was traditionally impaneled. Common law historically allowed actions to recover possession of real property, but the specific action of unlawful detainer emerged in Tennessee only after the 1821 statute was enacted. The relevant inquiry involves whether North Carolina recognized civil forfeiture proceedings with jury trials as of 1796. The majority opinion evaluates the case through the lens of whether punitive damages were determined by North Carolina juries at that time. It posits that since punitive damages were available in certain cases, Lindenberg should have the right to a jury determination of such damages, implying that Tennessee cannot impose a cap on these damages. However, Tennessee courts appear to follow a different rule established in Helms, which holds that the jury trial guarantee does not apply to new rights or remedies created by the General Assembly, regardless of their legal or equitable nature. The majority suggests Lindenberg's challenge to a statutory cap is facial, which presents a higher burden of proof since she must demonstrate that there are no circumstances under which the statute could be valid. The Tennessee Supreme Court has emphasized the difficulty of such facial challenges. The presumption of constitutionality is particularly strong in facial challenges to statutes, as established in *Waters v. Farr*. If Tennessee's punitive damages cap is validly applicable in a breach of contract action, Lindenberg's challenge would fail. Among the cases cited, only *Rhyne v. K-Mart Corp.* addresses whether the legislature can impose limits on punitive damages, affirming North Carolina’s cap on such damages. The Tennessee courts have not definitively resolved this issue, suggesting that it may be appropriate to certify the constitutional question. Historically, it is believed that a North Carolina jury in 1796 could not have awarded punitive damages for breach of contract. Currently, North Carolina law prohibits punitive damages in breach of contract cases unless accompanied by an identifiable tort, as noted in *Shore v. Farmer*. The Restatement (Second) of Contracts and legal scholars support the general rule that punitive damages are not recoverable for breach of contract, even in cases of malicious or intentional breach. North Carolina recognizes two exceptions to this rule, notably in breach of marriage contracts. Beginning in the 1970s, some jurisdictions, influenced by California, have permitted punitive damages for bad faith refusals by insurers to pay claims. The North Carolina Supreme Court in *Newton v. Standard Fire Insurance Co.* did not definitively decide on this issue due to improper allegations in that case, though subsequent North Carolina Court of Appeals rulings allowed punitive damages for insurance contract breaches where tortious conduct was sufficiently alleged. Punitive damages in North Carolina are only permissible in breach of contract cases when accompanied by an identifiable tort, maintaining the state's traditional stance on breach of contract claims. Historical legal precedents indicate that North Carolina juries have never had the discretion to award punitive damages for breach of contract, as established by early Supreme Court rulings. An 1843 decision emphasized that juries' authority to determine damages is strictly limited to compensatory or nominal damages, without allowance for punitive awards. The court underscored the absence of any statutory provision or contractual terms permitting punitive damages, asserting that the legislature, not the courts or juries, holds the authority to permit such damages. This principle aligns with common law traditions in both England and America, where motives behind contract breaches do not affect the amount of damages awarded. The cited nuisance case of Carruthers v. Tillman does not support the notion of punitive damages in breach of contract contexts. The excerpt analyzes the right to a jury trial as it pertains to punitive damages in breach of contract cases, referencing North Carolina law as of 1796. It suggests that at that time, juries were not permitted to award punitive damages for such breaches. The author questions whether the Tennessee Supreme Court would find that capping punitive damages violates the right to trial by jury, given that a North Carolina jury could not award punitive damages at all in 1796. The author notes the lack of Tennessee Supreme Court decisions invalidating laws for violating the jury trial guarantee and emphasizes the court's tendency to favor legislative discretion when uncertainties arise regarding jury rights. Furthermore, the excerpt mentions that while modern Tennessee law has diverged from traditional rules regarding punitive damages, Tennessee interprets its jury trial rights through the lens of North Carolina law, which historically did not allow punitive damages for breach of contract. The author asserts that there are substantial grounds for upholding the statute that caps punitive damages, arguing that the majority's decision to invalidate it overlooks critical issues and fails to consider counterarguments. The excerpt concludes with the suggestion to certify questions to the Tennessee Supreme Court to avoid potential friction in federal-state relations, noting that the majority did not address claims regarding separation of powers under the Tennessee Constitution.