No. 3
March 19, 2010
Georgia Cases and Comments
Case No. S09A1543, 2010 Ga. LEXIS 215 (March 15, 2010)
The case involves the constitutionality of OCGA § 9-11-68, sometimes called an "offer of judgment" statute. Under its terms, a party may make an offer of settlement to the other party. If the other party declines the offer, but fails to obtain a result better than a particular 25% buffer, the other party may be required to pay the attorney's fees of the offering party.
The Baptiste plaintiffs filed a defamation suit against the defendants, were offered $5,000 to settle, declined it, and then lost the claim on summary judgment. Defendants sought to recover over $50,000 in attorney's fees under OCGA § 9-11-68. The trial court found OCGA § 9-11-68 to be unconstitutional. The defendants appealed, and the Supreme Court reversed.
The main issue on appeal, and the main issue addressed in this blog, was whether OCGA § 9-11-68 violated Art. I, Sec. I, Par. XII of the Georgia Constitution, which provides:
Paragraph XII. Right to the courts. No person shall be deprived of the right to prosecute or defend, either in person or by an attorney, that person's own cause in any of the courts of this state.
On that point, the majority opinion of Justice Carley held that the award of fees does not violate the provision (pp. 2-10). He wrote at p. 3:
Contrary to the finding of the trial court, this Court has held that Art. I, Sec. I, Par. XII was never intended to provide a right of access to the courts, but was intended to provide only a right of choice between self-representation and representation by counsel. Couch v. Parker, 280 Ga. 580, 581 (1) (630 SE2d 364) (2006); State of Ga. v. Moseley, 263 Ga. 680, 682 (3) (436 SE2d 632) (1993); Nelms v. Georgian Manor Condo. Assn., 253 Ga. 410, 412-413 (2, 3) (321 SE2d 330) (1984). "Thus, there is no express constitutional 'right of access to the courts' under the Georgia Constitution. [Cits.]" Couch v. Parker, supra.
He referred to this as a "well-settled principle of Georgia constitutional law" (p.4), and then challenged the dissent on grounds that it should be bound by stare decisis to the cases just cited. (As documented in a later posting, these cases addressed the very different issue of whether our constitutional provision was the differently phrased version in other states, which were held in those states to prohibit the legislature from removing common law causes of action. Justice Carley recognized this at p. 9, but thought that the difference somehow strengthened his argument. The reference to stare decisis is ironic, however, because as shown below, the majority failed to follow a century of its own precedent on this precise issue.) The debate centered on the reliance in the just-cited cases on the 1877 constitutional convention and its revision of what is now Art. I, Sec. I, Par. XII. Justice Carley spent pages 5-9 asserting that a particular book, A Stenographic Report of the Proceedings of the Constitutional Convention Held in Atlanta, Georgia, 1877 (Constitution Publishing Company, Atlanta, 1877), was an authentic source of text which, he concluded,
indicate[s] that the sole purpose underlying the revision and adoption of Art. I, Sec. I, Par. XII was to define and protect the right of an individual to represent himself in the courts of this state."
Id. at 8 (emphasis added), quoting Nelms. (As shown in a later posting, this is demonstrably false.)
He added an argument that even if the constitution provided a right of access, OCGA § 9-11-68 would not violate it, because it "simply sets forth certain circumstances under which attorney's fees may be recoverable." Id. at 9. Contrary to the argument that fees are recoverable only against a party who litigates in bad faith, he concluded that attorney fees are allowable "where authorized by some statutory provision." Id. at 10.
Justice Nahmias filed a 16-page concurring opinion devoted to the subject. He began with a 4-page argument to the effect that stare decisis should have less effect in the interpretation of constitutional texts than in statutory texts because the democratic process has more difficulty correcting the court's constitutional interpretations than its statutory ones. From pages 4-6, he considers the arguments about the reliability of the "Stenographic Report" and finds it useful as a contemporaneous source to reflect on what the convention was thinking. (Up to this point, I might agree with him, except that he may underestimate both the ease with which the Georgia constitution can be amended and the difficulty of getting rid of bad legislation. He then turned to proving that the cases cited above were correct.)
In his view, the question is a matter of the "plain language." The constitutional provision
actually focuses directly on the right of Georgians to litigate their cases in person or by attorney (or, originally, both). It does not, on its face, appear to be an express right of access to the courts provision.
Id. at 7. (As shown in a later posting, this is demonstrably false.) Like Justice Carley, he contrasted this language with the text of constitutions of Florida, Kentucky, and Alabama. (As noted above, the contrast is irrelevant to this case.) He added an argument on the importance at the time of assuring that people had the right to self-representation, as against a view that only lawyers should handle cases. Id. at 8-9. He then asserted (at p. 9):
As discussed in the dissenting opinion, the "right to the courts" provision emerged first during the 1877 convention as a proposal by Mr. Key to amend the due process clause, and then the following day in an amendment by Mr. Tift, as recounted in Nelms and Bloomfield v. Liggett & Myers, Inc., 230 Ga. 484 (198 SE2d 144) (1973).
(It is unclear whether Justice Nahmias meant that the provision appeared for the first time in Georgia history in this process, or just for the first time at that convention. It is, however, demonstrably false that the "right to the courts" provision "first" emerged in the 1877 convention. Indeed, as shown below, it appears that the same Mr. Nelson Tift was the first beneficiary of the rule that fees could not be awarded in such cases!) He considered that Mr. Tift's statements
explained that the problem to which a right of choice provision was the solution was widespread in Georgia and otherwise corroborated the conclusion that the words of the provision mean exactly what they appear to mean.
(Again, the "plain meaning" argument will be shot down in a later post. Justice Nahmias, however, gave zero justification for describing the issue of self-representation as "the" problem, i.e., the sole problem, at which the provision was aimed. As the reference to what Mr. Key addressed makes plain, as will be shown, it was not the "sole purpose" for that provision.) Although Justice Nahmias agreed with the concept that the people have some right of access to the courts (pp. 11-12), he took the word "unfettered" as used by the appellees (following prior decisions) and characterized the appellees' and dissent's positions as arguing that the legislature could make no laws whatsoever regarding
the myriad of restrictions and limitations that the legislature and our case law have placed upon who can go to court, when they can go to court, what it costs to file a case or pleadings, what causes of action may be brought, what evidence is allowed or prohibited in support of those claims, the standards and burden of proof for such claims, etc.
Id. at 12. (Neither the appellees nor the dissent made such an argument. They were always concerned with statutes that punished the exercise of "the right to prosecute or defend, either in person or by an attorney, that person's own cause in any of the courts of this state.")
He concluded by noting that a party could challenge a statute on grounds that it chilled his right of access to the courts, but that it would have to be "reviewed under more well-established standards for due process and equal protection claims." Id. at 13. He argued that the plaintiffs were not chilled in this case because they proceeded to suit with the statute on the books. Id. at 14-15. On the evaluation of settlement proposals in such cases, he stated:
(That final judgment, by the way, determines as a matter of fact and law that the value of appellees' claims was zero, so that appellants' settlement offer of $ 5,000 was reasonable.) ... [I]t is clear that the statute may be constitutionally applied in ... the many cases in which parties can reasonably estimate the value of their case and nevertheless refuse to accept a settlement offer in that range (plus or minus 25%).
Id. at 14, 15. (He did not elaborate on the techniques by which one can estimate the settlement value ex ante and thus enforce the penalty imposed on the exercise of this constitutional right, "the right to prosecute or defend, either in person or by an attorney, that person's own cause in any of the courts of this state.")
An important aspect of these 30 pages of opinions is that they do not discuss a single case cited by the trial court, the appellees, or the GTLA as controlling on this issue. They do not even mention them. Not a single one! Before they completely disappear down the memory hole, they are discussed here.
Chief Justice Hunstein, joined by Justice Benham, filed an 8-page dissent devoted to the subject. She began:
Art. I, Sec. I, Par. XII provides that "[n]o person shall be deprived of the right to prosecute or defend, either in person or by an attorney, that person's own cause in any of the courts of this state." This language plainly and unambiguously accords the people of this State the fundamental right to access the courts.
Id. at 1. She then attacked the line of cases on which the majority based its opinion, showing that it rested on the slim evidence of a statement by one member, Mr. Tift, of the constitutional convention as recounted by a news reporter's account (id. at 1-6), concluding that
The majority does not and, indeed, cannot deny that its interpretation of Art. I, Sec. I, Par. XII is based entirely upon the account of Mr. Small, a newspaper reporter for the Atlanta Constitution.
She added in footnote 8 the observation that the statements of Mr. Key, who had offered the same text as an amendment to the due process clause, and utterly without the suggestion that it was intended exclusively to grant a right of self-representation in Georgia courts. (Far from it, as will be shown later.) She concluded by arguing that the statute violates the constitution:
Unlike parties subject to statutory penalties under OCGA §§ 9-15-14 and 13-6-11 because of their own actions in bringing frivolous suits or behaving stubbornly and unreasonably when litigating matters in the courts, OCGA § 9-11-68 (b) (1) penalizes plaintiffs with meritorious causes of action for an impossibility, namely, their failure to see into the future so as to calculate the precise amount a factfinder may award them for the damages they reasonably believed they sustained at the hands of the defendants. Yet this impossible act is required of plaintiffs by OCGA § 9-11-68 (b) (1) in order for them to decide whether to accept or reject a defendant's settlement offer; this same impossibility applies to defendants under OCGA § 9-11-68 (b) (2). No party intending to file a cause of action in tort can foresee whether she will recover "enough" money to avoid the effect of OCGA § 9-11-68 (b) (1). ... OCGA § 9-11-68 (b) (1) does not merely "set forth certain circumstances under which attorney's fees may be recoverable" as the majority holds, Maj. Op., p. 10: rather, as the trial court correctly held, OCGA § 9-11-68 (b) (1) serves to impede, if not outright deter, plaintiffs with meritorious causes of action from filing suit to obtain judicial resolution of their grievances because of the financial peril in which that statute places them.
Id. at 7, n.9.
This summarizes the positions taken on the central issue. Justice Carley's majority opinion also rejected a challenge to OCGA § 9-11-68 based on the constitutional provision against special legislation (pp. 10-13) and a contention that an earlier version of OCGA § 9-11-68 should have been applied (which would have invalidated the fee request). Any comment on those points will be reserved until a later time.
COMMENT
This blog is being pressed into service sooner than I would like, but that cannot be helped.
This is the first of a series of posts on Smith v. Salon Baptiste. Following posts on this case will examine:
The following documents are posted to help make sense of the case: The trial court's order, the defendant's brief, the plaintiffs' brief, the GTLA's amicus brief, defendant's supplemental brief, plaintiffs' supplemental brief, defendant's second supplemental brief, the Georgia Chamber's amicus brief, the defendant's third supplemental brief, the plaintiff's second supplemental brief, and the GTLA's post-hearing amicus brief. As a matter of full disclosure, I was the author of the GTLA's briefs. These links will show what the actual contentions were, and what the majority disregarded.
It is difficult to overstate the importance of this case. The statute is a stealth attack on the system that has hitherto enabled middle class citizens to contend with the wealthy and powerful on a basis of equality before the law. This is essentially conceded by its proponent, the Chamber of Commerce, in its amicus brief. It stated that a ruling against OCGA § 9-11-68 would "have a profoundly negative impact on Georgia commerce and business." Chamber Amicus Br. at 1. Since OCGA § 9-11-68 did not exist before 2005, the "negative impact" must be attributed to the loss of "a pro-business environment" (id.) created by that statute. Though couched in neutral terms, the real targets are those whom the Chamber describes as "parties who risk no meaningful adverse consequences for taking unreasonable litigation positions" (id. at 4), which it identifies as "tort plaintiffs [who] typically bear no responsibility for paying their own attorneys' fees" because of contingent fee arrangements. Id. at 28. OCGA § 9-11-68 is in reality a stealth attack on the contingent fee system and those who must use it to have access to justice.
OCGA § 9-11-68 is a tool of fear and intimidation. It uses fear to coerce an ordinary citizen, who cannot afford to pay his opponent's attorney's fees, into abandoning a claim that the ordinary citizen believes is meritorious. Intimidating a juror to reach a particular conclusion is a crime. OCGA § 16-10-97. The Supreme Court condemns judicial instructions that are "coercive so as to cause a juror to abandon an honest conviction for reasons other than those based upon the trial or the arguments of other jurors." McMillan v. State, 253 Ga. 520, 523 (1984). But OCGA § 9-11-68 exists to coerce a party to do so.
Nor is the coercion insignificant. The defendants sought an award of $53,087.15 to punish the plaintiffs for pursuing their claim in the courts of law in good faith but without clairvoyance. This award would impose more monetary punishment on the plaintiffs than the law imposes for the following crimes: misdemeanors ($1,000 - OCGA § 17-10-3); misdemeanors of a high and aggravated nature ($5,000 - OCGA § 17-10-4); second offenses of using credit card swiping to defraud (up to $50,000 - OCGA § 10-15-7(a)); altering a vehicle identification number for the purpose of falsifying the vehicle's identity (up to $50,000 - OCGA § 16-8-83(b)); knowingly selling diseased animals for human consumption ($10,000-$50,000 - OCGA § 26-2-88(b)); forging state lottery tickets (up to $50,000 - OCGA § 50-27-27); and arson in the first degree (up to $50,000 - OCGA § 16-7-60(c)).
The monetary penalty in this civil case would fit more in the range of punishments for these crimes: hijacking a vehicle ($10,000-$100,000 - OCGA § 16-5-44.1); making bombs ($25,000-$100,000 - OCGA § 16-7-82(b)); terroristic threats against informants ($50,000 or more - OCGA § 16-11-37(d)(2)); sexual exploitation of children (up to $100,000 - OCGA § 16-12-100(g)(1)); aggravated assault and battery during the theft of cargo from commercial transport ($50,000-$200,000 - OCGA § 16-5-21(g)); and trafficking in ecstasy of 200-400 grams ($50,000-$250,000 - OCGA § 16-13-31.1(2)).
Such fines exist to deter a party from behaving in such anti-social ways by punishing those who do. Nobody doubts that criminal sanctions have punitive and deterrence effects. There should be no doubt that imposing similar punishments in a case such as this would equally punish and deter parties from exercising their constitutional rights to the courts.
OCGA § 9-11-68 attacks a core principle of equality under the law, a principle that is so close to American values that it is called "the American Rule" on this subject. The American Rule holds that each party bears its own legal fees. Unlike systems that impose litigation costs on the losing side, thereby allowing economically stronger parties to be more aggressive toward economically weaker ones, and thereby forcing more submission and submissiveness from the weaker parties, the American Rule supports a system of equality before the law. The history of the rule was extensively discussed, and re-affirmed as the default federal rule, in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247-271 (1975). In addition to an exception for bad faith litigation, that court has recognized other exceptions involving bad faith in the underlying transactions, common fund situations, and instances in which the legislature chose to accomplish a public benefit by funding private litigation through cost-shifting (e.g., environmental and civil rights litigation). Yet, the American Rule remains the standard for typical tort cases between private parties who disputed in good faith their mutual rights and obligations. The moral reasons underlying the American rule are clear:
We have observed that "one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents' counsel." Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967).
F. D. Rich Co. v. United States, 417 U.S. 116, 129 (1974).
Any other practice would be too great a movement in the direction of some systems of jurisprudence that are willing, if not indeed anxious, to allow litigation costs so high as to discourage litigants from bringing lawsuits, no matter how meritorious they might in good faith believe their claims to be.
Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 235 (1964).
OCGA § 9-11-68 is fundamentally unjust because, in a system like ours, outcomes cannot be fully predicted, either because liability is uncertain or the evaluation of damages is uncertain. We lack a system like Germany's, for instance, in which results of prior verdicts are tabulated and made available to lawyers and the verdict-finders in order to ensure a high degree of consistency and predictability. Without such a basis for accurate foresight, OCGA § 9-11-68 punishes behavior that can only be determined to be faulty in hindsight. It gives no guidance to behavior at the time of the settlement offer, and thus it runs afoul of the constitutional requirement that a rule imposing such sanctions "provide fair warning to persons of ordinary intelligence as to what it prohibits so that they may act accordingly." Johnson v. Athens-Clarke County, 272 Ga. 384, 387 (2000).
[I]t is important that a [] court resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. This kind of hindsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success. No matter how honest one's belief that he has been the victim of discrimination, no matter how meritorious one's claim may appear at the outset, the course of litigation is rarely predictable. Decisive facts may not emerge until discovery or trial. The law may change or clarify in the midst of litigation. Even when the law or the facts appear questionable or unfavorable at the outset, a party may have an entirely reasonable ground for bringing suit.
Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978).
"Legislative acts in violation of this Constitution or the Constitution of the United States are void, and the judiciary shall so declare them." 1983 Ga. Const. Art. I, Sec. II, Par. V. There is always time for repentance.
PS (4/16/2010) On the issue of hindsight, I note that on the same date this opinion was decided, Justice Nahmias concurred in Merritt v. the State , No. S09A1476 (March 15, 2010). He took issue with an oft-repeated concept that judges should consider whether a statutory construction would cause unreasonable consequences, asserting that judges should look only at the text of the statute and avoid reading their own prejudices into it. He added that this precept imposes unfair hindsight requirements on "our citizens."
Moreover, this approach, in my view, is quite unfair to our citizens, who are required to obey not the law that the lawgiver actually promulgated but rather the law that the lawgiver is later determined to have intended to promulgate.
Would that the majority were so solicitous of protecting litigants from the unfairness of having to act as if they knew in advance how the court or a jury will later view their claims! Would that the majority would look only to the text of this constitutional provision and not read its prejudices into it!
Author: Charles M. Cork, III
Author's Email: cmc@corklaw.com
Author's Home Page: http://corklaw.com
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