March 06, 2006

By Jonathan B. Wilson

"High Court Overturns Part of Tort Reform Law" trumpeted the Atlanta Journal Constitution the other day, when the Georgia Supreme Court struck down (PDF) one of two venue-shifting provisions enacted by the legislature in 2005 as part of a wide-ranging liability reform package. Many readers doubtless assumed—whether with dismay or pleasure, according to their predilections—that the Georgia high court had signaled an essentially ideological hostility to the whole project of tort reform, and was making use of whatever constitutional materials came to hand toward that end. After all, that has essentially been the modus operandi of high courts in a number of other states, where jurists have resorted to strained if not acrobatic readings of state constitutional language to do away with legislated limits on liability.

Georgia's situation, however, is quite different. The latest ruling should be seen not as an ideological victory for anti-tort-reform forces, but as a narrow decision driven by specific provisions in Georgia's Constitution and reflective of ill-considered drafting choices by some reform advocates.

The 2005 Tort Reform Act contains two separate venue-shifting provisions, which reached the Georgia Supreme Court in the cases of EHCA Cartersville, LLC v. Turner and Garland v. Earle, resolved together in one ruling (Feb. 13, 2006, Sears, C.J.). Both of the provisions were intended to prevent venue-shopping by plaintiffs; one survived judicial review and the other did not. The differences between the two are revealing.

In the past, some have criticized industry-specific tort reforms as a less than ideal method of reforming our litigation system. The present case could serve as an excellent example of what they are talking about. Georgia's 2005 tort reform campaign was largely a creature of the Medical Association of Georgia, a coalition of doctors and health care providers. As a result, many of the reform provisions were narrowly tailored to specific medical malpractice situations. One of the med-mal-specific provisions wasAmong them were the venue reform that failed to pass constitutional muster.

Codified at O.C.G.A. 9-10-31(c), it provides that, in a medical malpractice action, "a nonresident defendant may require that the case be transferred to a county of that defendant's residence if the tortious act upon which the medical malpractice claim is based occurred in the county of that defendant's residence."

Whether or not that Section 31(c) makes sense as a policy matter, it runs into a problem in light of Article VI, Section II, Paragraph IV of the Georgia Constitution, which provides that "[s]uits against . . . joint-tortfeasors . . . residing in different counties may be tried in either county." In the Cartersville case, a trial court had held Section 31(c) to be unconstitutional in light of that provision, and the Georgia Supreme Court agreed, reasoning that by giving one of the defendants a vested power to change venue it effectively overruled the Constitution's provisions holding open the option of venue in the county of either tortfeasor's residence.

The other venue-shifting provision in the 2005 Act, by contrast—O.C.G.A. 9-10-31.1(a)—provides that a trial court may decline to exercise jurisdiction and instead transfer a case to "a different county of proper venue within this state" if the court determines that "the interest of justice" and "the convenience of the parties" warrant that course of action. The provision sets forth seven factors for the trial court to consider in determining whether to transfer venue. The trial court in the Garland case had upheld the constitutionality of Section 31.1(a) and approved a transfer of venue over the plaintiff's objections. On appeal the plaintiff contended that Section 31.1(a) violated Georgia's constitutional venue provisions and was further unconstitutional because it was improperly applied to have retroactive effect.

In Garland, the Georgia Supreme Court upheld the statute and the trial court's conclusions, reasoning that the law was consistent with the Georgia Constitution's having vested questions of venue in the court and simply added considerations for the court's review in making such decisions. The Supreme Court also rejected the argument that the provision's retroactive effect was unconstitutional, holding that the reform was "procedural" rather than "substantive" and therefore could be given retroactive effect without offending the Constitution.

Anti-reform groups tried to make lemonade out of what was, at best, a lemon peel. Hyperbolic Allie Wall of the consumer watchdog group, Georgia Watch applauded the decision, saying "Big insurance companies were trying to convince us that the innocent plaintiffs were shopping for venue . . . But the way they wrote the law was to give insurance companies and their defense attorneys the right to shop for the most lenient, friendliest courtroom."

The local bar, however, provided a measured response and properly saw the decision as a reasoned analysis of the statute and the state constitution. Daniel S. Reinhardt of the Troutman Sanders firm represented the defendant hospitals in both cases and was quoted saying that the Court's decision on Section 31.1 upholding its retroactive effect "should help foster the goals of fairness in venue."

In a similar vein, Senate President Pro Tem Eric Johnson said that the ruling was not unexpected and that many legislators had questioned the constitutionality of the venue-shifting provisions in the debate surround the 2005 legislation.

In all, the Court's ruling was a measured ruling that hewed carefully to specific provisions of the Georgia Constitution and, not an yideological exercise in judicial activism. It also conveys a cautionary lesson for some reform advocates who might be temptedinclined to be careless about avoiding conflict with constitutional language, namely that you'd better not count on courts to rescue you from the resulting collisions. In any case, it will have at most a limited effect, as the stricken reform involved only medical malpractice cases and any defendant who might have utilized the mandatory venue-shifting provisions of Section 31(c) may still request the court to exercise its discretion under Section 31.1(a).

The more interesting constitutional questions surrounding the 2005 Tort Reform Act are yet to be decided. Among those are a constitutional challenge to the Act's attorney fee-shifting offer of judgment rule. One trial court declared that provision unconstitutional in a 2005 decision, but the parties settled the case before an appeal was taken. The local trial bar has written a generic brief that makes a constitutional challenge to the offer of judgment provisions but no other trial courts have yet made a ruling and the Court of Appeals has not yet had an opportunity to consider the argument.

Friends, in short, should relax, and foes have scant cause to jubilate. Both tort reform and the rule of law are alive and thriving in Georgia.

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Jonathan B. Wilson is an attorney in Atlanta, Georgia and the author of Out of Balance: Prescriptions for Reforming the American Litigation System. He blogs at Point of Law as well as at www.jonathanbwilson.com.