Georgia Supreme Court Affirms Constitutionality of Statutory Punitive Damages Cap
By: Lisa Northrop
In March 2023, the Georgia Supreme Court affirmed the constitutionality of Georgia’s $250,000 statutory punitive damages cap, O.C.G.A. § 51-12-5.1(g).1 This subsection of the punitive damages statute applies in tort cases that do not arise from product liability and where there is no finding that the defendant had specific intent to cause harm or was substantially impaired by drugs or alcohol.
Taylor v. The Devereux Foundation, et al. stemmed from the sexual assault of a minor by an employee of the defendant while the minor was living at the defendant’s behavioral health facility.2 A Cobb County jury originally rendered a verdict for $10,000,000 in compensatory damages and $50,000,000 in punitive damages against the defendant employer, based at least in part on the employer’s trial admission of negligence and the admission that its negligence contributed to its employee’s sexual assault of the minor. Judge Maria Golick ultimately reduced the jury’s punitive damages award to $250,000 pursuant to O.C.G.A. § 51-12-5.1(g).
The plaintiff argued on appeal the statutory punitive damages cap violates three provisions of, or rights guaranteed under, the Georgia Constitution: (1) the right to trial by jury; (2) separation of powers; and (3) equal protection. In challenging the cap’s constitutionality, plaintiff must show a “clear and palpable” conflict between the cap and the Georgia Constitution.3 In its decision, the court noted “[d]uly enacted statutes enjoy a presumption of constitutionality.”4 The Georgia Supreme Court ultimately concluded the plaintiff did not satisfy her burden on any of the three constitutional challenges raised.5
In its ruling, the court reasoned that the right to trial by jury only attaches to a claim if the same right would have existed had the plaintiff brought the same claim, when the Georgia Constitution was enacted in 1798. Therefore, the plaintiff in Taylor had to show: (1) at least one of the liability claims against defendant could have been brought in 1798; and (2) punitive damages would have been within the scope of the right to a jury trial on that underlying claim. While the underlying premises liability claim was entitled to a jury trial in 1798, the pre-1798 cases examined by the court limited an award of punitive damages to cases involving intentional misconduct. Accordingly, the court determined Taylor could not show that a 1798 jury would have been authorized to award punitive damages in this case.
Next, the court addressed the plaintiff’s argument that the cap violates the Georgia Constitution’s separation of powers provision because the cap, when applied, amounted to remittitur by the legislature, which is a function reserved for the judicial branch of the government. The Georgia Supreme Court rejected this argument as well, relying on its prior opinions that the legislature has the power to “define, limit, and modify available legal remedies,”6 even where the legislation “departs from the common law.”7 The court also distinguished the function of statutory damages caps from a remittitur, noting that a judge is required to weigh evidence and is only authorized to issue a remittitur where a jury’s damages award is clearly excessive.8
Lastly, the court addressed the plaintiff’s equal protection argument. Because the plaintiff was not a member of a protected class and no fundamental right was at issue, the court applied a rational basis test to its analysis. Under the rational basis test, the party challenging the constitutionality of a statute “bear[s] the burden of establishing that they are treated differently than similarly situated individuals and that there is no rational basis for such different treatment.”9 The court held that, even if the plaintiff could successfully argue she and other plaintiffs affected by the statutory cap were “similarly situated,” public policy supports the punitive cap. While the plaintiff also argued the $250,000 cap was “arbitrary,” the court noted the plaintiff could not explain how the specific amount of $250,000 could possibly treat similarly situated plaintiffs differently.
Justice Ellington dissented in part reasoning that the punitive damages cap violated the plaintiff’s right to trial by jury. While Justice Ellington’s dissent may provide limited fodder for future attacks by plaintiffs’ attorneys on the constitutionality of the punitive damages cap, the court’s majority opinion should serve as a deterrent to future similar constitutional challenges O.C.G.A. § 51-12-5.1(g). For now, this significant limitation on punitive damages awards remains intact.
1Taylor v. Devereux Foundation, Inc., Nos. S22A1060 and S22A1061, 2023 WL 2519243 (Ga. March 15, 2023). The court also affirmed the trial court’s awards of punitive damages, attorney fees and calculation of post-judgment interest in light of The Devereux Foundation’s cross-appeal, but those issues are not the focus of this article.
2McGee was named as plaintiff in the original action, but, due to her death, the executor of her estate was substituted.
3Barnhill v. Alford, 315 Ga. 304, 311 (2022) (citation and punctuation omitted).
4Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, 286 Ga. 731, 732 (citations and punctuation omitted).
5The court’s opinion on the single issue of a violation of a constitutional right to jury trial was somewhat mixed. In a dissent penned by Justice Ellington, he opined that the majority opinion improperly relied on the Nestlehutt framework that set 1798 as the controlling date and argued that some of the pre-1798 cases had allowed punitive damages where there was no intentional misconduct. Three additional Justices opined in special concurrences that they disagreed with the analysis of the majority on this portion of the opinion, although they ultimately agreed with the result.
6Nestlehutt, 286 Ga. at 737.
7Dion v. Y.S.G. Enterprises, Inc., 296 Ga. 185, 189 (2014) (citation and punctuation omitted).
8Nestlehutt, 286 Ga. at 737-38 (citing O.C.G.A. § 51-12-12 (b)).
9Harvey v. Merchan, 311 Ga. 811, 826 (2021) (citations and punctuation omitted).
Attorney Contact Info
Lisa Northrop
lisa.northrop@swiftcurrie.com
404.888.6147