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Tort Reform Issues in Georgia


Georgia now has the privilege of being the No. 1 Judicial Hellhole according to the American Tort Reform Foundation. Below are a few of the current hot button issues.

Punitive Damages Cap in flux

Since the enactment of O.C.G.A. §51-12-5.1(g) in the Georgia Tort Reform Act of 1987 punitive damages have been capped at $250,000, except under specific circumstances (a showing that the defendant acted with the specific intent to cause harm), for most tort cases not involving issues of product liability. After twelve years of aggressive challenges by the plaintiff’s bar this fall the Georgia Supreme Court heard oral arguments challenging the constitutionality of O.C.G.A. § 51-12-5.1(g).

In Taylor, exr v. The Devereux Foundation, Inc. the Plaintiff, a deceased fifteen-year-old girl represented by an executor, argued that the statutory cap on punitive damages as applied to premises liability claims violates the Georgia constitution. The case arises out of a sexual assault by an employee at a youth home for sexually abused girls. At trial the minor Plaintiff who was the victim of the sexual assault, was awarded $10 million in non-economic damages and $50 million in punitive damages. After a hearing on attorney’s fees the trial court reduced the jury award to $5 million in non-economic damages and capped punitive damages at $250,000. At the Georgia Supreme Court, the minor’s estate first argued that the reduction of her punitive damages award was unconstitutional because it violates Georgians right to trial by jury because a jury’s value determination of a case is legislatively reduced. Second, the estate argued the cap is a violation of Georgia’s constitution because it gives the legislature remitter powers that are reserved for the judiciary. Finally, the estate argued the cap is unconstitutional because it violates the state constitutions mandate of impartial, complete, and equal protection of the laws. The estate also noted that the $250,000 cap enacted in 1987 fails to keep up with inflation as that same figure holds a present-day value of $657,140.29. Defendants maintained that the cap does not violate the right to a trial by jury because the Georgia Supreme Court previously held that there is no right to jury determined punitive damages. As to the legislative remitter argument Defendants pointed to prior decisions wherein the Georgia Supreme Court determined that the legislature may lawfully limit punitive damages to further policy concerns. Finally, Defendants argued that the absence of an inflation index does not create an equal protection problem.

The Court has not announced when it will issue an opinion on this case, but it is expected in 2023. The Supreme Court upheld the cap on two prior occasions, which in theory should mean they maintain the status quo. However, other recent decisions by the Supreme Court raise concerns about the likelihood of a favorable outcome.

Expansion of Exposure for Employers for Vicarious Liability

In 2020 the Georgia Supreme Court issued a ruling in Quynn v. Hulsey, 310 Ga. 473 (2020) and held that the Georgia Apportionment Statute, O.C.G.A. § 51-12-33, mandates that a jury should consider the fault of an employer for “direct negligence” claims separate from any vicarious liability for the negligence of an employee. Under long-standing prior precedent, if a defendant employer admitted that its employee was in the course and scope of employment at the time of the accident and that it would be liable for the negligence of its employee (if any), a plaintiff’s claims for negligent entrustment, hiring, training, supervision, and retention were subject to summary judgment—absent viable punitive damages claim. In Quynn, the Court held that negligence of the employer for its own independent negligence (in hiring, retaining, supervising the employee) should be considered separately under Georgia’s apportionment statute. As a result, direct negligence claims are no longer subject to summary judgment when the employer admits vicarious liability. As a practical matter, this shift in employer protections under the likely means plaintiffs will be more aggressive in pursuing discovery of the employer’s hiring practices, training, and supervision and lead to the need for more detailed summary judgment motions on each of the direct negligence claims.

Double Recovery of Attorneys’ Fees

In March 2022 the Georgia Supreme Court issued its ruling in Junior v. Graham, 313 Ga. 410 (2022). The facts of the case arise out of a motor vehicle accident. After the plaintiff filed his complaint but before trial, plaintiff sent a settlement offer of $600,000 to the defendant. The defendant did not respond within the statutory timeline and the offer was deemed denied. At trial plaintiff was awarded $3 million in compensatory damages plus $1.2 million in attorney’s fees and $51,555 in litigation expenses under O.C.G.A. § 13-6-11. Because the jury’s award for compensatory damages exceeded plaintiffs’ settlement offer by more than 125%, he filed a post-trial motion for attorney’s fees and litigation expenses under O.C.G.A § 9-11-68. The trial court denied this motion and reasoned that to allow both awards would be to permit double recovery. On appeal the Supreme Court determined that awarding attorneys’ fees under both O.C.G.A. §13-6-11 and O.C.G.A. § 9-11-68 did not permit double recovery because the while text of both statutes are similar, they have significant differences. The main difference is that O.C.G.A. § 13-6-11 is read as an award as part of damages while O.C.G.A. § 9-11-68(b)(2) is read as a sanction for improper behavior. The second difference is that O.C.G.A. § 13-6-11 is a permissive award while O.C.G.A. § 9-11-68(b)(2) is a required penalty. Finally, the legislature placed no limitation on plaintiffs’ ability to collect under both statutes as it has done with past statutes on attorneys’ fees.

Third-party Litigation Financing

Third-party litigation funding companies frequently provide loans to plaintiffs for a percentage of their award. The loans are provided at shockingly high interest rates and are predatory in nature. While these practices would typically be illegal as usury, in Ruth v. Cherokee Funding, LLC, 802 SE.2d 865 (2017), the Supreme Court held that litigation funding companies are not subject to Georgia’s Payday Lending Act because repayment of the loans is contingent on the lawsuit outcome. The Georgia legislature has not taken any action to address the issue although these loans can make cases more difficult (or impossible) for both sides to settle. Funding companies are also not required to disclose their involvement in the litigation and are not subject to any real regulatory oversight.

Funding company involvement in financing medical treatment is also rampant. Because Georgia law allows Plaintiffs to “blackboard” the billed charges for treatment (as opposed to what is actually paid), lien-based medical providers and funding companies are incentivized to “bill” at exorbitant rates which are much higher than the usual and customary rates. These bills are known as “phantom bills” since they are not actually a bill anyone would ever pay. Since their recovery is based on what a plaintiff collects in settlement or by jury award, these outfits are also incentivized to perform more treatment and procedures. The result is cases involving low speed or minor accidents which result in hundreds of thousands of dollars in treatment—thereby driving up settlements and verdicts alike. The Georgia Legislature has taken up “phantom medical bill” legislation on multiple occasions, but the legislation always dies in committee (it is worth noting that the legislature is full of plaintiff attorneys).

Apex Doctrine in Question

The apex doctrine prohibits a plaintiff attorney from demanding the depositions of high-level corporate employees with no unique knowledge relevant to a particular case. In order to avail itself of the apex doctrine, the company must show (1) the corporate executed lacks unique, first-hand knowledge of the facts at issue and (2) other, less intrusive means of discovery, such as questioning other employees, have not been exhausted. If shown, a presumption of “good cause” for granting a protective order as to the deposition arises.  In Gen. Motors v. Buchanan, 313 Ga. 811 (Ga.  2022), the Georgia Supreme Court refused to expressly adopt the apex doctrine. Instead, the court imposed a multi-factor balancing test and reiterated that the burden for obtaining a protective order rests with the party seeking the entry of the order (i.e., the company). Thus, decisions as to whether the deposition of high-ranking corporate executive is appropriate in any given case will be decided on an ad-hoc basis and the corporation will bear the burden of establishing that a protective order is warranted.

Seatbelt Gag Rule Updates

Under Georgia law, evidence of seat belt use (or lack thereof) is not admissible as evidence (known as the “seatbelt gag rule”. When it was enacted in 1988, there were questions about the effectiveness of seatbelts in preventing injuries, which obviously no longer exist. In Dominque v. Ford Motor Co., 314 Ga. 59 (Ga. 2022), the Supreme Court declined to address constitutional concerns surrounding the seat belt gag rule, finding that the rule applied in response to a certified question from the Federal trial court. However, the Court noted “serious concerns” about the constitutionality of a statute that strips a defendant of the ability present evidence that is critical to its defense. Dominque involved claims that the air bag system in the plaintiff’s vehicle was defective. Ford argued that questions about the safety of its airbag system could not be plausibly evaluated without considering occupant seatbelt use.  Ford also argued that denying admission of seatbelt use evidence amounted to a violation of its right to due process and equal protection. The Court declined to resolve the constitutional issues given the early stage of the litigation. However, the dicta in the Dominique opinion gives some glimmer of hope for the elimination of the seat belt gag rule down the road.