Georgia Supreme Court Lifts Cap on Pain and Suffering Damages in Malpractice Claims

On Monday, a unanimous Georgia Supreme Court overturned one of the more controversial elements of the state’s 2005 Tort Reform act – a cap of $350,000 on “non-economic” damages (known better to you and me as “pain and suffering”).  Chief Justice Hunstein wrote that, “The very existence of the caps, in any amount, is violative of the right to trial by jury.”

Hat tip to local firm Fried and Bonder.  (I wouldn’t line a birdcage with the Atlanta Journal and Constitution, much less read it, so I might not have known about this for a few days.)

Not Every Mediated Settlement is a Good Settlement.

A little caveat for this post.  I am stepping slightly outside my bounds as a neutral here.  Some might say that it is not my place as a mediator to comment on the reasonableness of a settlement.  I agree. When I am the mediator on that case. The rest of the time, I am entitled to my opinions. I certainly don’t disagree with attorneys being fairly compensated for their work. But as an objective observer and as a consumer, this case doesn’t seem right.

Last week, business hardware company Pitney Bowes announced a mediated settlement of a class action “blast fax” lawsuit originally filed here in Georgia.  The suit arose when Pitney Bowes purchased a smaller supplier of printer products and used that customer list to solicit business from the supplier’s customers. The “blast fax” law prohibits companies from sending solicitation faxes without permission of the recipient or an existing business relationship.  Even though the supplier Pitney Bowes purchased had a relationship, the law prohibits companies from buying customer lists to circumvent this prohibition.

I think it was perfectly reasonable for Pitney Bowes to assume it had the right to use the customer list, which is an asset it purchased and which had a distinct value.  It was likely itemized among the various line items in the settlement papers.  The people on the customer list bought toner from the old company.

In any event, the lawyers who specialize in suing for such violations got involved.  Classes were certified.  The case was removed. And the parties decided to go through voluntary mediation. After two days of “some of the most intense mediation [the Plaintiffs' lawyer has] been through,” the parties agreed to settle the claim.  Normally, I’d be all for this.

The final settlement provided that “each member of the class will receive a coupon worth $26 toward any $100 purchase of ink or toner from Pitney Bowes for each week they received one of the faxes, with a $2 million cap on redeemed coupons.”

So what about the plaintiff’s lawyers?  They got roughly $1 million.  In cash.

It just doesn’t sit right with me.  Again, I am not against the plaintiffs bar or for attorneys being fairly compensated.  I understand class actions can be quite expensive, but this just seems out of proportion, to both the length of time the case was active and the actual settlement agreed upon.  As Walter Olson of Overlawyered notes in a 2006 article, it has become quite the cottage industry for a small group of lawyers. Assuming Pitney Bowes is “out” the maximum $2 million in lost revenue from coupon use, the attorneys will have collected 47.5%  of the damages as fees.

In the abstract, I can see the benefit of laws like this.  By creating a civil liability enforceable through the courts, it transfers the power to police the behavior from the state to the individual.  The threat of a potentially crushing monetary judgment for violating the law is meant to deter the violator from engaging in the prohibited activity.  Whether it works or not is debatable.  My guess is that blast faxes have disappeared more from the simple fact that nobody faxes anything anymore when you can scan and email.

Back to the case at hand. Pitney Bowes sent blast faxes to customers of the business it just purchased. Apparently, some customers didn’t want to do business with Pitney Bowes, or just wanted the faxes to stop.  Those blast faxes violated the letter of the law and exposed the company to significant money damages payable to the aggrieved customers.

So what did the plaintiffs’ lawyers negotiate on behalf of the plaintiffs, who supposedly sued to stop receiving faxed coupons, and who were entitled to money damages?  Coupons for the plaintiffs.  Cash for the lawyers.

Of course, we don’t know what happened in this “intense” mediation.   Nor do we know whether the initial demand from the plaintiff’s lawyers was for a cash payout to the relatively small and easily identifiable class.  But it is hard to say that this settlement benefited the interests or needs of anyone except the plaintiff’s lawyers.

The Georgia Office of Dispute Resolution Needs Your Help.

Yesterday, I received an email from Shinji Morokuma, the Director of the Georgia Office of Dispute Resolution. It appears that the future of the GODR is in jeopardy. Last year, the Georgia General Assembly cut their budget by 63% - $250,000. This year, the House Appropriations Committee of the Georgia General Assembly has recommended that this $250,000 budget cut not be restored for the next fiscal year. The office is currently running only thanks to a one-time grant from the Georgia Bar Foundation. Without this funding, the office may be forced to close.

The GODR is an important part of the judicial system. They oversee more than 2,200 GODR-registered and regulated mediators, arbitrators and case evaluators. In fiscal year 2008, these neutrals are projected to help resolve 19,000 civil cases – at a direct cost to the State of approximately $400,000 . If those same 19,000 cases were not resolved using alternative dispute resolution methods, they would fill the court calendars of the equivalent of sixteen (16) Superior Court judges – at direct cost to the state (for the judges, clerks, assistants, staff, etc.) of over $6 million.

If you live in Georgia, please e-mail these key legislators and ask them to restore full funding for the ODR office for Fiscal Year 2009:

Senate Appropriations Judiciary Subcommittee Members:
Senator Preston Smith (R-Rome) – preston.smith@senate.ga.gov
Senator Michael Meyer von Bremen (D-Albany) – michael.meyer@senate.ga.gov
Senator Bill Cowsert (R-Athens) – Bill.cowsert@senate.ga.gov
Senator Seth Harp (R-Midland) – sethharp@aol.com
Senator Regina Thomas (D-Savannah) – regina.thomas@senate.ga.gov

Senate Appropriations Conference Committee Members:
Senator Jack Hill (R-Reidsville) – jack.hill@senate.ga.gov
Senator Eric Johnson (R-Savannah) – eric.johnson@senate.ga.gov
Senator Tommie Williams (R-Lyons) – tommie@tommiewilliams.com

House Appropriations Conference Committee Members:
Representative Ben Harbin (R-Evans) – ben.harbin@house.ga.gov
Representative Jerry Keen (R-St. Simons Island) – jerry.keen@house.ga.gov
Representative Mark Burkhalter (R-Johns Creek) – mark.burkhalter@house.ga.gov

House Appropriations Public Safety Subcommittee
Representative Chuck Martin (R-Alpharetta) – chuck.martin@house.ga.gov

If you so desire, the GODR has drafted a form letter for you to use to urge these lawmakers to restore funding. I will keep a copy of it here.

If you have any questions about this issue, please do not hesitate to call or email me.

Georgia Supreme Court Rules That Mediator Can Testify to Competence of Party

Late last year, the Georgia Supreme Court heard an interesting case challenging the scope of the mediator’s confidentiality. In brief, Mr. Wilson and Mrs. Wilson agreed to attend mediation, without counsel, to discuss a divorce settlement. While the case had initially been referred to mediation via the County’s ADR program, the Wilsons did not choose a mediator from the County ADR program’s list, choosing instead to agree to another mediator (who was registered with the State). They also neglected to inform the County ADR Supervisor that they were agreeing to mediation.

The parties reached agreement at mediation and signed a settlement agreement on December 22, 2006. Five days later, the husband wrote to the wife’s attorney claiming that he no longer agreed to the terms of the agreement and declaring it “set aside” under Model Court Mediation Rule 12(d)(2), which gave him three calendar days to object. He also contended that he was not competent to enter the agreement because he “suffered from depression, was bothered by his medication, was exhausted, and lacked the mental and physical stamina to understand the obligations he was undertaking.” Problem was, Rule 12(d)(2) requires him to notify the County ADR Supervisor, not opposing counsel.

More after the jump.

Besieged Judge Hilton Fuller Steps Down in Nichols Case

By now, this probably isn’t even news to Geoff Sharp in New Zealand, but since it was in my backyard, I thought I’d comment. As you may have heard, retired Judge Hilton Fuller stepped down as the presiding jurist in the Brian Nichols/Fulton County Courthouse shooting case after he was quoted in the New Yorker as saying,

“Everyone in the world knows he did it.”

Since taking over the case because every other sitting judge in Fulton County rightfully recused themselves, he has been nothing but a “debacle and embarrassment.” Those aren’t my words. Those are the words of a Fulton County Superior Court Judge in an email to his colleagues.

The defendant, Brian Nichols, is accused of killing four people, the judge presiding over his trial for rape, the court reporter, a Sheriff’s deputy and a federal agent nearly three years ago. He overpowered a 51-year old, 5′2″ female sheriff’s deputy, took her sidearm, entered the courtroom and shot Judge Rowland Barnes in the back of the head.

Judge Fuller allowed the defense team to charge $175 per hour, nearly twice the rate paid to other court appointed counsel, and rack up nearly $2 million in bills, to be paid by the taxpayers. Because the State refused to cave to this extortion, he halted the trial during jury selection. He was also criticized by the Georgia legislature and the Fulton County District Attorney.

Two “tough but fair” jurists have volunteered to take over the case.

I fully understand that he is entitled to a defense, and the potential grounds for appeal, but for nearly three years Judge Fuller has coddled this man and his defense lawyers, compounding this horrible tragedy and rendering it an absurd joke (in the existential, Jean-Paul Sartre sense of the word).

Meeting the Sin Laws – a blog by a local First Amendment lawyer.

Last night I met a very interesting local lawyer named Cary Wiggins. He represents Georgia’s restaurant and hospitality industry, but has developed a niche representing “adult entertainment” establishments. This can be a hot button issue down here in the buckle of the Bible Belt, despite Atlanta’s cosmopolitan veneer.

Cary maintains a very interesting blog called Meeting the Sin Laws, which focuses on “laws affecting adult entertainment, alcoholic beverages and other “vice” industries” (I also found it interesting that he, too, uses the word “musings” when describing his blog.)

He also has a petition for certiorari that has attracted some attention from the SCOTUS blog’s Petitions to Watch list:

2025 Emery Highway, dba Club Exotica v. Bibb County, Geo.
– Whether a Georgia sheriff’s acts as an “arm of the state” and is thus entitled to 11th Amendment immunity when enforcing county ordinances related to alcoholic beverages and adult entertainment.

Check it out.

Father of Accused Molester Wants to Jail Watchdog Group

The Athens (Ga) Banner-Herald reports that an Oglethorpe County lawyer has asked the Georgia Court of Appeals to reverse a Superior Court Judge’s refusal to issue an arrest warrant for the head of the internet watchdog group “Perverted Justice.” For those unfamiliar with the Dateline:NBC’s “To Catch a Predator” program, Perverted Justice is a “watchdog” group that log into internet chatrooms with fake online personas as underage children to expose sexual predators. They occasionally work with Dateline to expose some of these lowlifes on national TV.

The father of a 32 year old Georgia man caught in the televised sting blames Perverted Justice for “enticing” his his son to drive 175 miles to meet a 15 year old girl. The father claims that if his son is guilty of attempted child molestation and statutory rape, then Perverted Justice is guilty of solicitation of those crimes.

While Superior Court Judge Thomas Hodges found probable cause that von Erck’s actions fit the definition of solicitation, he ruled that von Erck can’t be charged with solicitation because the potential 15-year-old victim did not really exist. “The Court finds that one cannot solicit an attempt when the substantive crime solicited cannot be committed,” Hodges wrote.

Putting aside for a moment what this creep did and the fact that his idiot father is clearly upset at the wrong people, it looks like von Erck and Perverted Justice may not be off the hook just yet. What Perverted Justice has done appears to fit the legal definition of criminal solicitation under OCGA s16-4-7, which states,

A person commits the offense of criminal solicitation when, with intent that another person engage in conduct constituting a felony, he solicits, requests, commands, importunes, or otherwise attempts to cause the other person to engage in such conduct.

The statute further states that,

It is no defense to a prosecution for criminal solicitation that the person solicited could not be guilty of the crime solicited.

The Georgia Court of Appeals will decide within 45 days whether to hear the appeal.

Excellent Resource on Georgia Domestic and Family Law (including mediation)

I recently found an interesting, informative and frequently updated blog about Georgia family law and divorce law, the Georgia Family Law Blog. Run by Stephen M. Worrall, a Marietta based domestic attorney, it contains tons of great information on Georgia domestic and family law, including mediation.

I plan to visit the site often as I hope to expand my practice into domestic mediation in the next few months.

Proposed Change in Georgia Evidence Code Clarifies Confidentiality of Statements Made During Mediation

One of the bedrock foundations of mediation is the confidentiality of its proceedings. It is generally accepted that the matters discussed in a mediation cannot be introduced as evidence or otherwise used in any subsequent legal proceeding. Free from the concern that their willingness to compromise might be used against them later, the parties are encouraged to discuss candidly the strengths and weaknesses of their position, their underlying interests, and options for settlement.

Under Georgia law, however, it is possible that some statements made during settlement negotiations of a claim considered “undisputed” may not be protected. Georgia law makes an obscure distinction between offers to settle an uncontested claim (which are admissible at trial) and offers to compromise a contested claim (which are not admissible at trial). See, e.g. Houston v. Kinder-Care Learning Centers, Inc., 208 Ga. App. 235; 430 S.E.2d 24 (1993).

As part of a comprehensive update of the Georgia Evidence Code, the Evidence Study Committee of the State Bar of Georgia has proposed a new rule which substantially follows Federal Rule of Evidence 408 and specifically excludes “Evidence of conduct or statements made in compromise negotiations or mediation.” See, proposed O.C.G.A. §24-4-408 (at p. 40).

This change will align Georgia with the Federal Rules and with the majority of states that specifically protect all statements made during mediation and other, informal settlement discussions.