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Opinions Released – March 22, 2010

March 22, 2010

This morning, the Supreme Court released opinions in five civil cases, including unanimously declaring the caps on damages as part of the tort reform efforts unconstitutional.  Summaries of each case and opinion with links are below.

S09A1432. ATLANTA OCULOPLASTIC SURGERY, P.C., d/b/a OCULUS v. NESTLEHUTT et al.

On September 15, 2009, the Court heard argument in an appeal of this high-profile trial court ruling striking down the pain and suffering limits in statute for medical malpractice lawsuits.  The recovery limits were a centerpiece of Georgia’s 2005 tort reform legislation.  Betty Nestlehutt and her husband sued a plastic surgery practice for permanent scars and discoloration left on her face after a procedure.  The jury returned a verdict of $1.27 million, and the Nestlehutts filed a motion to lift the caps imposed by Georgia’s tort reform statutes and declare the law unconstitutional, and the trial court granted the motion.

The surgery practice argues that the Supreme Court has upheld statutes limiting recovery since 1848, and found the caps on non-economic damages do not violate the right to trial by jury.  The Nestlehutts argue the legislature is forbidden from curtailing any element of trial, the caps violate the separation of powers and equal protection, and that the caps create a special law in an area governed by general laws.

We recapped the oral argument, which is the other major tort reform case we have been expecting from the Supreme Court.

In a unanimous decision authored by Chief Justice Hunstein, the Supreme Court held that the caps on noneconomic damages as part of the tort reform efforts violate the right to trial by jury guaranteed by the Georgia Constitution.  In a wide-ranging opinion walking through the rights to trial by jury at different stages of the development of the Georgia Constitution, the majority found that the caps nullify the jury’s findings of fact, and thus violate the jury trial right guaranteed in the Constitution. The Court also applied its decision retroactively, to all decisions across the five years the caps have been in place.  Justice Melton dissented from the retroactive application, and Justices Nahmias, Carley and Hines concurred specially, concurring in the retroactive application but on different grounds.

S09G0990. HUFF, TAX COMMR. v. HARPAGON COMPANY, LLC

The Court heard argument in this case on September 9, 2009.  The case involving a dispute between a corporation and the Tax Commissioner for Muscogee County.  The Court of Appeals (Blackburn, Adams, and Doyle) unanimously reversed an award of summary judgment to the Tax Commissioner which held that additional fees and expenses added to a property tax bill were appropriate.

All the Justices concurred with the grant of certiorari for the review of the following issue:

  1. The Court is particularly concerned with Divisions One and Two of the opinion of the Court of Appeals.

Division One of the Court of Appeals ruling dealt with the power of the county to impose fees over $50.  The Court of Appeals found the county without authority to impose the $165 fee it imposed.  Division Two dealt with whether the fee, if appropriate authorized, was imposed in a timely manner.  The Court of Appeals found the fee was not timely imposed because no levy had been made.

We recapped the oral argument.

In a unanimous opinion, the Court affirmed in part and reversed in part.  Writing for the Court, Chief Justice Hunstein affirmed Division Two of the Court of Appeals opinion that no levy occurred in this case that authorized the fee at issue, but reversed Division One relating to the power of the county to impose fees, finding that it would be advisory only.  The Court found that there was no official entry of levy by the levying officer and issuance of a writ of execution cannot qualify as a valid levy.

S09A2016. DEKALB COUNTY v. PERDUE et al.

This case relates to the incorporation of the City of Dunwoody and litigation against Governor Perdue and the state revenue commissioner.  Georgia law allows voters in 159 “special districts” (which match the state’s counties) to approve a one percent “Homestead Option and Sales Use Tax” (HOST) for the area, which replaces revenue lost due to “additional homestead exemptions.”  DeKalb County voters approved a HOST in 1997, along with additional exemptions on their property taxes paid for with the HOST revenue.  After an amendment to the HOST Act in 2007, the city of Dunwoody incorporated and became the only city in the state eligible for payment of HOST funds.  DeKalb County, represented by former Governor Roy Barnes, sued Governor Perdue, alleging that the amendments were unconstitutional and could not take effect without a referendum.  The trial court ruled against the County and it appealed, arguing that the trial court’s findings of fact were incorrect and that voters must approve changes in the HOST Act.  The state argued that the HOST Act imposes taxes for special tax districts, not counties, and does not create a non-uniform tax classification.

The Supreme Court unanimously affirmed the trial court, finding that the amendments to the HOST Act were not unconstitutional or illegal.  Writing for the Court, Chief Justice Hunstein explained that there was no clear error in the trial court’s finding that there would be no gross tax increase in unincorporated DeKalb County.  The Court also found that the HOST tax is a district tax, not a county tax, and nothing restricts the use of the funds to the county only.

S09A1799. BRALEY v. CITY of FOREST PARK

This case involves a civil constitutional challenge against the City of Forest Park originally brought in April 2007 by Paul Braley, an operator of a retail salvage store.  In March 2007, the City changed its ordinances to prohibit display of items on sidewalks and public rights of way.  Braley challenged the law as unconstitutional and on March 31, 2009, the Superior Court judge granted summary judgment to the City of Forest Park, and Braley appealed.  The Supreme Court decided this case on the briefs without oral argument.

The Court unanimously affirmed the trial court’s ruling finding the ordinance is constitutional.  Justice Hines wrote for the Court, rejecting each ground Braley contended made the ordinance unconstitutional.

S09A1413. CARDINAL ROBOTICS, INC. v.MOODY, EXR.

This case involves the ethics of a lawyer’s representation if he or she formerly represented a client in a substantially related matter.  Although the case history is complicated, Cardinal Robotics deeded slightly more than half of a 33-acre tract in question to Leonard Moody, who in turn hired a law firm to represent Cardinal Robotics in litigation against the City of McCaysville.  After the trial was complete, Moody sued Cardinal Robotics, using the same law firm, to have the property divided.  The trial court refused to disqualify the law firm and later ordered that the land be sold at a public auction.  Cardinal Robotics appealed to the Georgia Supreme Court, arguing that the law firm should have been disqualified because the ownership of the property was involved in both cases.

The Court heard oral argument in this appeal on September 9, 2009.

The Supreme Court unanimously affirmed the trial court’s judgment.  Writing for the Court, Justice Hines found that Cardinal Robotics, as the party seeking disqualification, bore the burden of proof and had to bear that burden by showing the matters in the pending litigation were substantially related to the previous litigation.  The Court found that Cardinal Robotics had not raised any issue on appeal that showed the similarity of the cases.  The Court found the trial court did not abuse its discretion in its decision refusing to disqualify the law firm.  Justice Carley concurred to explain the language of the trial court’s order.

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