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Analysis of Georgia Offer of Judgment Case



Gwinnett County Superior Court Judge Michael C. Clark struck down the offer of judgment provisions added to Rule 68 by the 2005 Georgia tort reform bill in a September 22, 2005 decision in Muenster v. Suh.

The decision, clearly written for further review, is the first case to assess the constitutionality of Georgia's Rule 68.

Judge Clark's decision advances three primary arguments:

1) The offer of judgment provisions in Rule 68 are unconstitutional under Georgia�s Constitution because they �effectively chill �the right to prosecute or defend� a cause of action in the courts of this state � a right that is secured and protected from legislative interference by Art. I, Sec. 1, para 12 of the Constitution of the State of Georgia.�

2) Rule 68 applies to tort plaintiffs only, and not to plaintiffs with contractual rights of action, thereby violating Georgia Constitutional rights of equal protection. Ga. Const. Art. I. Sec. 1, para 2.

3) The 2005 tort reform bill has a retroactive effect, applying to cases filed before the adoption of the law, and therefore violates Georgia Constitutional prohibitions against �retroactive laws�. Ga. Const. Art. I. Sec. 1, para 10.

While space will not permit a full analysis here, a few points bear mentioning.

The decision's analysis of the "access to the courts" clause of the Georgia Constitution is weak, relying primarily on dicta in an 1879 Georgia Supreme Court case to conclude that any rules that place a burden on litigants unconstitutionally limits their access to the courts.

The dicta in the 1879 case of Tift v. Towns (63 Ga. 237) makes for interesting reading:

�No counsel fees ought to have been allowed by way of damages. The case is one fairly open to controversy in all its branches. The plaintiff commenced by insisting upon too high a standard both of liability and compensation. The defendant has had to resort to this court for protection in a previous instance and again on the present occasion. No man is bound to forego litigation at the expense of yielding rights apparently well founded, much less those which prove to be so founded in the end. Where there is a bona fide controversy for the tribunals to settle, and the parties cannot adjust it amicably, there should be no burdening of one with the counsel fees of the other, unless there has been wanton or excessive indulgence in litigation.�

What makes the court's citation of Tift v. Towns interesting is that the case reversed a trial court's judgment that included an award of attorneys' fees in favor of a plaintiff. The dicta cited above supported the defendant's recourse to litigation, ruling that the plaintiff's demands were unreasonable and that the defendant should not be taxed with attorneys' fees simply because he resisted the plaintiff's unreasonable demands.

The facts in Muenster v. Suh, of course, are precisely opposite. The plaintiff in Meunster refused an offer of judgment from the defendant that ultimately proved to be more generous than what the jury awarded.

The 2005 amendment to Rule 68 allowed the defendant to recover its attorneys fees, expressing the legislature's view that a party who is willing to settle a case should not be burdened by litigation when that party offers a judgment that is 25% more generous that what the plaintiff was ultimately capable of recovering at trial.

This story is just beginning as other courts will offer their views on Rule 68 and the Georgia legislature is likely to re-write the law again in the coming 2005-2006 session.

(Past coverage: Sept. 27).

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.