The Tort Report: Summer 2023

Southern States Chemical, Inc. v. Tampa Tank & Welding, Inc.: A Case to Watch Becomes a Decision to Cite

By: Lauren Woodrick

In the Spring 2023 edition of the Tort Report, Rachel Mathews wrote about the pending appeal in Southern States Chemical, Inc., et al. v. Tampa Tank & Welding, Inc., et al., and its potential impact on construction defect cases and constitutional challenges to new or amended statutes. Since that publication, the Georgia Supreme Court issued its decision, which is a victory for defendants raising statute-of-repose defenses.¹

This years-long litigation arose out of a leak in an above-ground storage tank owned and operated by Southern States Chemical, Inc. (“Southern States”). Tampa Tank & Welding, Inc. (“Tampa Tank”) renovated the tank under a contract signed in 2000 between the parties, which included a one-year, express warranty. Tampa Tank’s renovation work was completed in 2002. The leak was discovered in 2011 and Southern States filed suit in 2012, asserting claims for breach of warranty against Tampa Tank. The trial court dismissed the breach of warranty claims because they were barred by O.C.G.A. § 9-3-51, the statute of repose for claims arising out of construction defects. That dismissal was affirmed by the Georgia Court of Appeals in 2019. While Southern States’ petition for certiorari was pending, the Georgia legislature amended the statute of repose to exclude breach of contract actions from the scope of the statute. Due to this amendment, the Georgia Supreme Court vacated the Court of Appeals decision and remanded for reconsideration based on the new amendment. On remand, the trial court granted Tampa Tank’s motion to dismiss and found the retroactive application of the 2020 amendment to O.C.G.A. § 9-3-51 violates Tampa Tank’s constitutional right to due process.

In the current decision, the Georgia Supreme Court agreed with the trial court and affirmed the dismissal. The court engaged in a two-part analysis: (1) is there a clear indication in the statutory text that the statute is to be applied retroactively; and (2) would retroactive application of the statute be unconstitutional and “injuriously affect the vested rights of citizens.”² While the court found the legislature intended for the 2020 amendment to apply retroactively, it concluded that retroactive application would be unconstitutional.³

Specifically, the Georgia Supreme Court held the right created by O.C.G.A. § 9-3-51(a) vests in a person who relies on such a statute of repose as a defense to a claim brought against it.⁴ The court explicitly held, for the first time, statutes of repose differ from statutes of limitations because statutes of repose are substantive in nature.⁵ Because a statute of repose creates a substantive right to be free from liability after a fixed period of time, retroactive application of the amended statute would violate that vested right in violation of the Due Process Clauses of the U.S. and Georgia Constitutions.⁶

The Georgia Supreme Court addressed Southern States’ argument that the pre-2020 version of the statute of repose would not bar its breach of warranty claim because O.C.G.A. § 9-3-51 only applies to tort claims and does not apply to contract claims. To support this argument, Southern States noted that O.C.G.A. § 9-3-51(b), which creates a two-year extension of the statute of repose in certain circumstances, includes the word “tort.”⁷ The court rejected this argument, recognizing that subsection (b) of the statute is limited to tort claims, but the limitation in subsection (b) does not apply to the pre-2020 statute as a whole.⁸ The Georgia Supreme Court also rejected Southern States’ argument that statutes of repose are generally limited to tort claims.⁹

Southern States is a helpful precedent for several reasons. Its analysis provides a roadmap for examining whether retroactive application of a new statute or statutory amendment violates a party’s due process rights. The decision also establishes statutes of repose are substantive in nature. Further, in rejecting Southern States’ arguments to the contrary, the Georgia Supreme Court made clear statutes of repose are not always limited to tort claims. Thus, Southern States is a crucial decision for defendants raising statute-of repose defenses or facing new statutes or statutory amendments. Swift Currie partners Michael O. Crawford and Bradley S. Wolff represented Tampa Tank in its victories in the trial court and on appeal.

¹ S. States Chem., Inc. v. Tampa Tank & Welding Inc., No. S23A0273, 2023 WL 3727986 (Ga. May 31,  2023).
² Id. at *5.
³ Id. at *5-*8.
⁴ Id. at *6.
⁵ Id. at *6-*7.
⁶ Id. at *8.
⁷ Id. at *9.
⁸ Id.
⁹ Id.

Attorney Contact Info

Lauren Woodrick
lauren.woodrick@swiftcurrie.com 
404.888.6122