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Georgia

The “Peach State” once again finds itself on the Judicial Hellholes list thanks to a continued rise in nuclear verdicts, the increasing role of third-party litigation financing, and ever-expanding premise liability. Trial lawyers have spent millions of dollars on advertisements, publicizing their jackpot verdicts and looking for their next big pay day. And while the Georgia legislature seemed poised to address lawsuit abuse plaguing the state’s judicial system, its efforts were derailed by the COVID-19 pandemic.

NUCLEAR VERDICTS ON THE RISE

Nuclear verdicts are multi-million-dollar awards, usually to compensate for a person’s subjective and immeasurable pain and suffering that cannot be justified as compensating a person for an injury. These awards typically result from a plaintiffs’ lawyer’s urging the jury to return a specific, extraordinary amount and misleading them to think that level is the norm. It can also result from plaintiffs’ lawyers’ inflaming the jury to improperly punish a defendant for conduct that would not qualify for punitive damages.

TRUCKING INDUSTRY A MAIN TARGET

The trucking industry has been one of the hardest hit by nuclear verdicts in Georgia. The American Transportation Research Institute indicates that while there were only four cases in 2006 where the awards exceeded $1 million, there were 70 in 2013. From 2017 to 2018, the average size of a trucking jury verdict grew an astounding 483 percent.

As discussed in last year’s report, a $280 million verdict was handed down in Columbus, Georgia, the largest verdict in the county’s history. The Muscogee County verdict was delivered after a mere 45 minutes of jury deliberation. The plaintiffs’ lawyers at Butler, Wooten & Peak LLP then advertised their success to solicit more business.

The case arose out of a tragic accident in which five people were killed after a tractor-trailer operated by a Schnitzer Southeast driver collided with their vehicle. The jury awarded an astounding $150 million for the value of the life of one passenger, $30 million for pain and suffering, plus $100 million in punitive damages and $65,000 in attorneys’ fees. The jury expressed frustration over the company not apologizing for the accident; however, the plaintiffs’ attorney moved to exclude the mention of any apologies during the trial. The plaintiffs’ attorney also accused the company of putting a fatigued driver on the road; however, the driver had been on vacation for four days and the morning of the accident was his first day back at work. Finally, local nightly news coverage contained “inflammatory inaccuracies” that may have impacted the jury.

Truckers point to the “reptile theory” in part for the large verdicts. This is a psychological trick that influences juries to believe they are personally threatened by the trucking company. It triggers the jury to believe it is in survival mode.

Because of the increasing nuclear verdicts, the insurance market is “brutally tough” for truckers. To make matters worse, the Federal Motor Carrier Safety Administration is considering raising the statutory minimum coverage limit from $750,000 to $2 million. Trucking insurance premiums rose 12 percent in 2018, and 42 percent from 2010 to 2018. Many truckers face 20 percent or even 30 percent increases in premiums. The median verdict rose from $23 million to $44 million over the second half of 2018 and all of 2019.

These verdicts have led to carrier bankruptcy and higher insurance premiums. Trucking insurance premiums, in part, have compelled Georgia based carrier CSS to shut down. After 38 years in business, when its insurance renewal for 2020 came around, the costs were just too high for them to continue operating. Many other midsize and large carriers also closed their doors in 2019 including Celadon, HVH Transportation, New England Motor Freight Inc., Falcon Transport, Stevens Tanker Division, GDS Express, and LME.

In February 2020, a plaintiff was awarded $21 million in Georgia federal court in a lawsuit against a tractor-trailer driver following an accident that killed a pedestrian. The driver suffered a sudden medical emergency while behind the wheel and was found unresponsive in the vehicle. The initial verdict was $15 million, but it was later increased to $21 million after the jury heard evidence that traces of opioids were found in his system. $6 million was added for litigation expenses.

OTHER NUCLEAR VERDICTS

These “nuclear verdicts” follow several extraordinary awards in 2019.

For example, a Muscogee County jury returned a $125 million verdict in a case in which the family of a 62-year-old steelworker who had significant health issues sued the owner and management of his apartment building for his death. The lawsuit blamed his death on the building’s failure to fix the broken air conditioning in his room.

Lawsuits stemming from criminal attacks in a CVS and Kroger parking lots ended in verdicts of $43 million in Fulton County and $69.6 million in DeKalb County, respectively, in 2019. The businesses, not the criminals, were held liable for these extraordinary sums on the basis that they should have had more security.

In December 2019, the survivors of a stuntman, who died while jumping off a balcony on the set of “The Walking Dead”, were awarded $8.6 million in a Gwinnett County court. In another case that month, a young man was awarded $15 million by a Greene County court after injuring his leg in a motocross accident. Despite the fact that the boy’s father signed an “assumption of risk” waiver, the court still awarded $14.2 million to the rider and nearly $800,000 to the parents for medical expenses.

The prior year, a Clayton County jury issued a $1 billion verdict against a security company after an employee committed a sexual assault at an apartment complex. The plaintiff alleged that the company should not have hired the employee because he did not have a license to be an armed security guard.

As the mega-million verdicts become more prevalent in Georgia, mindsets have shifted. According to those on the ground, the largest verdicts in the state used to be around $20 million, “Now the benchmarks are $125 million and $280 million.”

TRIAL LAWYERS ADVERTISING

COVID RELIEF MONEY USED FOR ADVERTISING

Plaintiffs’ lawyers are always looking for new ways to expand their business and this year was no different. Several plaintiffs’ firms, including the powerhouse firm Morgan & Morgan, received millions of dollars from the COVID-19 federal Paycheck Protection Program. This money was meant to help struggling businesses cover operating expenses including rent and employee salaries and benefits, but at least some of the money was used by law firms to recruit potential plaintiffs for future litigation. Morgan & Morgan applied for and received $12 million to $27 million in relief from five different states. During this same time period, the firm increased its advertisement spending from $50,000 per day to $300,000 per day.

TRIAL LAWYER ADVERTISING DATA

Trial lawyers are aware of the increasing prevalence of nuclear verdicts and are looking to capitalize on the momentum in the state. During the third quarter of 2019, Georgia lawyers spent $10 million on advertisements on local television stations. In addition to these ads, Georgia viewers also saw $71 million worth of national legal advertisements.

In Atlanta, local legal ads are 9 times more frequent than those for clothing stores. In Savannah, local legal ads are 8 times more frequent than those for furniture stores.

In addition to the Butler, Wooten and Peak LLP firm’s advertising of its $280 million nuclear verdict, Morgan & Morgan also plays a big role in advertising in Georgia. The firm looks to circumvent important procedural rules by including specific messaging on its website. At trial, evidence of insurance or issues relating to insurance coverage are not allowed to be introduced, but Morgan & Morgan skirts that policy by speaking about insurance prior to trial. On its website, the company explicitly talks about insurance and how it is recovering against insurance companies rather than the defendant.

This approach pays dividends even in the smallest cases. In 2019, the firm recovered $1.2 million in a dog bite case in Atlanta.

THIRD-PARTY LITIGATION FINANCING PLAYING AN INCREASING ROLE IN GEORGIA'S JUDICIAL SYSTEM

Georgia’s third-party litigation funding (TPLF) industry is thriving. Funders are a quick Google search away, and a federal judge, in January 2020, ruled that litigation funding agreements are not subject to Georgia’s statutory interest rate caps. The Georgia Supreme Court clarified that TPLF does not qualify as lending, and therefore, funders can charge any usurious rate they want. Instead of applying state lending laws, the Court asked the legislature to regulate the industry. Because the Georgia Supreme Court declined to restrict the industry it labeled “insidious,” TPLF will likely continue to grow in the state.

TPLF may be propelling Georgia’s excessive trucking litigation. Doctors and funders, in conjunction with plaintiffs’ lawyers, are increasingly steering litigation. ProMed Capital and Spine Center Atlanta have engaged with numerous plaintiffs’ attorneys in agreements where Spine Center Atlanta’s founder, Dr. Chappuis, recruits plaintiffs and ProMed Capital pays their medical bills, which are up to 3.5 times the market rate. The plaintiff’s attorney then recovers the enlarged medical bills against a trucker and its insurer, and rewards ProMed Capital for its role.

YET ANOTHER YEAR OF LIABILITY-EXPANDING DECISIONS IN PREMISES CASES

“MURDER KROGER”

In June 2020, a three-judge court of appeals reversed a lower court’s dismissal of a suit against Kroger and its security company, finding that a jury should decide whether they should be held liable for a murder that occurred in the supermarket’s parking lot.

In this case, a construction worker was shot in front of a store that was colloquially named the “murder Kroger” because of its reputation for violence outside of it. When the construction worker confronted a man who was attempting to break into his truck, the man shot him.

The deceased’s spouse filed a suit against Kroger alleging it failed to properly secure its premise and “remediate a very long history of crime at this property.” Kroger had contracted with a security company, Norred & Associates, to protect the store and customers.

The trial court granted the defendant’s motion for summary judgment, finding the construction worker put himself in harm’s way by confronting the man. The appellate court ruled, however, that the case should go to trial, allowing a jury to decide whether confronting the thief showed a lack of ordinary care.

As noted above, this follows a 2019 case in which a DeKalb County jury awarded $81 million to a plain- tiff who was shot by carjackers in another Kroger Store parking lot. Despite a security presence, Kroger was responsible for paying $69.6 million of the award (just 14 percent of the fault was placed on the two attackers). The supermarket was located in a high-crime area and had a security guard at the store entrance but not in the parking lot.

OUTRAGEOUS ‘SLIP-AND-FALL’ VERDICT

In May 2020, a woman was awarded $1.2 million in a slip-and-fall case against a restaurant in Gwinnett County. Lisa Ruede was injured when she slipped down wet stairs caused by a leaky ceiling pipe. This award is exponentially larger than the national average for slip-and-fall settlements ($15,000-$45,000).

OTHER LIABILITY-EXPANDING DECISIONS BY GEORGIA SUPREME COURT

ATTRIBUTING CYBER CRIMINAL ACTS TO LAW ABIDING BUSINESSES

The Georgia Supreme Court has placed businesses that keep customer information on the hook for attacks    by cyber criminals, even if the plaintiffs have not experienced any harm. The case arose after an anonymous hacker known as the “Dark Overlord” demanded ransom after accessing an orthopedic clinic’s patient data- base, including their social security numbers and health insurance details, in 2016. The clinic refused to pay    the ransom and notified patients of the data breach. Three current and former patients then filed a class action against the clinic. Both the trial court and intermediate appellate court ruled that Georgia law does not recognize a claim seeking damages for future, speculative harms. In December 2019, however, the Georgia Supreme Court reversed in Collins v. Athens Orthopedic Clinic, finding this lawsuit could move forward even when the patients had not shown actual misuse of their information from the breach. Instead, the Court followed a “chain of inferences” to conclude that the risk of identity theft was “imminent and substantial” because at least one person’s personal data had been offered for sale on the dark web. Justice Nels Peterson, who authored the Court’s opinion, acknowledged that the decision allowed compensation for a “fairly new   kind of injury.” While he allowed the case to move forward even while acknowledging “traditional tort law

is a rather blunt instrument for resolving all of the complex tradeoffs at issue in a case such as this” and that “tradeoffs that may well be better resolved by the legislative process.”

EXPANSION OF WORKERS’ COMPENSATION LIABILITY

In June 2020, the Georgia Supreme Court expanded coverage of workers’ compensation policies to include coverage for injuries sustained while employees are on break. In Frett v. State Farm, an employee was on a scheduled break when he slipped and fell leaving the break room to go outside. The lower courts found that there was no coverage because break time is personal time. The Supreme Court reversed, finding break time constituted time incidental to employment.

DEFINITION OF “VICIOUS DOG”

The Georgia Supreme Court ruled that dogs that are not on leashes are considered legally vicious, and there- fore, owners are subject to strict liability. In this case, a dog escaped its home at a towing yard and attacked the plaintiff and his dog. The Court recognized that this definition “departs from the common understanding of the term and as parsed out in the common law,” but argued that this was the best interpretation in order to avoid future litigation over what constitutes “vicious.”

CASES TO WATCH

STATUTORY LIMIT ON PUNITIVE DAMAGES UNDER FIRE

Additionally, trial lawyers are gearing up to challenge the constitutionality of the state’s limit on punitive dam- ages. A Cobb County jury awarded a plaintiff $5 million plus $50 million in punitive damages, which under the statute would be reduced to $250,000. The plaintiff’s lawyer, Naveen Ramachandrappa, has stated that once the judge enters a final judgment, “We’re going to ask the court to hold that the punitive damage cap cannot be constitutionally sound, because, under the Georgia Constitution, the issue of punitive damages is one for the jury to decide, not the Legislature.”

2020 LEGISLATIVE SESSION

In early 2020, Georgia Republicans “renewed their push for tort reform in a big way.” Unfortunately, their efforts were derailed by the COVID-19 pandemic, and they were unable to address the state’s lawsuit abuse. The bills they were poised to consider would have addressed priorities from premises liability to damages based on compensation beyond the actual cost of medical care, as well as allowing juries to consider whether occupants of a vehicle were wearing seat belts in car accident cases.

COVID-19 LIABILITY LEGISLATION

Several states have enacted robust liability protections for businesses and health care providers from COVID-19 related lawsuits, and Georgia took a step in the right direction in addressing these concerns. On August 5, 2020,

Governor Brian Kemp (R) signed a COVID-19 liability bill that raises the standard for a plaintiff to recover for a claim alleging that he or she was exposed to COVID-19 on any premise, a claim of injury from receiving medical care effected by the pandemic, or a claim that personal protective equipment made, sold, or donated in response to the pandemic is defective. The law also provides an assumption that a person assumed the risk of exposure to COVID-19 at a public gathering or premises if a warning is conveyed on a sign, receipt, ticket, or event wristband. A plaintiff can overcome these liability protections by claiming that a defendant was grossly negligent, reckless, or engaged in willful misconduct.

The Georgia COVID-19 Pandemic Business Safety Act will be active for less than a year: From August 5, 2020, to July 14, 2021. The law does not cover COVID-19 liability for acts or transmission prior to the bill’s implementation, leaving businesses exposed when the disease was least understood and most unpredictable.

The bill only protects against lawsuits “accruing” prior to July 14, 2020 but fails to define “accruing.” So even if the virus is contracted during the bill’s effective period, a court may allow the claim to proceed if the lawsuit was filed after the sunset period.

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