SB 3 battle ramps up

Cases before state high court involve medical records waivers and a fee-shifting provision

By ALYSON M. PALMER, Staff Reporter
http://www.dailyreportonline.com

A YEAR AFTER striking down a piece of the law that made it harder for plaintiffs to win tort suits, the state Supreme Court is gearing up to hear two more cases testing parts of the 2005 legislation known as SB 3.

On Tuesday, the Supreme Court of Georgia will hear arguments over a section that required medical-malpractice plaintiffs to waive privacy rights to their medical records. Next month the justices will review a provision designed to encourage settlements by making a side that did little better at trial than it would have done by settling to pay the other side’s fees.

The arguments could be a prelude to a battle over a key part of SB 3, a $350,000 cap on pain and suffering damages in medical malpractice cases. But the cases are important in the larger war over the legislation, which was bitterly fought between business groups in favor of the law and plaintiffs lawyers against it.

Tuesday’s medical records waiver case has drawn amicus briefs from the Medical Association of Georgia and the Georgia Hospital Association, which support the waiver rule, and the Georgia Trial Lawyers Association, which opposes it.

Despite those groups’ interest in the waiver issue, the case in March could have broader implications on the whole law.

“If the court wants to strike down any or all of this, they could use [the March case] as a stepping stone,� said William P. Claxton, an Atlanta lawyer at Claxton & Claxton who represents the defendants in next month’s premises liability case dealing with the fee-shifting provision, known as the offer-of-settlement or offer-of-judgment rule.

Atlanta attorney Lyle Griffin Warshauer, who co-chairs the GTLA’s constitutional challenge committee, said the broad nature of the trial judge’s ruling in Claxton’s case—based on the state constitutional concepts of access to courts and limits on “special� legislation—makes it an important juncture in the SB 3 fight. Those issues “are things we’re going to see again because they’re going to be relevant to other provisions as well,� said Warshauer.

She recalled the February 2006 decision where the Supreme Court ruled that a DeKalb County judge was right to strike down a part of SB 3 that allowed medical-malpractice defendants to have cases heard in their home counties. Warshauer said the court’s decision, ECHA Cartersville v. Turner and Garland v. Earle, 280 Ga. 333, was based on narrow constitutional grounds.

The case in March over offer-of-settlement, she said, “is really the first opportunity for the Supreme Court to consider it more broadly.�

The offer-of-settlement rule, found at O.C.G.A. § 9-11-68, requires one side to pay the other side’s attorney fees if the first side rejects a settlement offer but does not do much better at trial than if it had accepted the offer. The case of Fowler Properties Inc. v. Dowland, No. S07A0342, illustrates how the provision works.

At issue is Cynthia Dowland, who fell while walking to her car after work at a Waffle House in Cherokee County.

Claxton said his clients, defendants Fowler Properties and St. Thomas Square, offered Dowland $20,000 before trial, an offer she rejected. A jury awarded Fowler no money, and the defendants moved for about $10,000 in attorney fees on the basis of their settlement offer.

In September, as he had done previously in another case, Cherokee State Court Judge W. Alan Jordan declared the offer-of-settlement provision unconstitutional.

Among other reasons, Jordan found that the provision violated Article I, § 1, ¶ 12 of the state Constitution, which says, “No person shall be deprived of the right to prosecute or defend, either in person or by an attorney, that person’s own cause in any of the courts of this state.� He also said the rule violated the state Constitution because it applied only to tort cases, making it an impermissible “special� law. The judge denied Claxton’s clients their attorney fee request.

Claxton and another lawyer in his firm, Darcy S. DuVal, have argued in their brief that the constitutional provision Jordan cited does not guarantee unfettered access to courts. Instead, they argued, it merely ensures that a person may choose between representing himself and being represented by a lawyer. They say in their brief any special treatment of tort litigants is reasonable given the heavy involvement of the insurance industry in those cases.

Dowland’s lawyer, Lee William Fitzpatrick of Kennesaw, and Claxton agreed that the court has at least two ways to avoid the most broad-sweeping constitutional issues in the case.

Fitzpatrick has appealed Jordan’s decision denying Dowland a new trial—Fitzpatrick argues that the judge should have answered a jury question about Dowland’s testimony differently. Jordan also ruled that the offer-of-judgment provision could not be applied to Dowland’s case because she filed it before SB 3 was approved.

“If the court wanted to avoid the whole kit and caboodle argument,� said Fitzpatrick, “they’ve got a pretty easy way to do that.�

First up, though, is Tuesday’s case over the medical records waiver, Allen v. Wright, No. S06G2018. The statute at issue is O.C.G.A. § 9-11-9.2, which requires plaintiffs making medical malpractice claims to file with their complaints a form authorizing defense attorneys to get the plaintiffs’ medical records and to talk to the plaintiffs’ treating physicians.

In separate decisions last July, two seven-judge panels of the Georgia Court of Appeals struck the waiver provision, splitting 6-1 and 5-2.

Zachary H. Thomas of Savannah’s Savage Turner Pinson & Karsman represents plaintiff Ernestine C. Wright. His brief suggests he will tell the justices that the Court of Appeals panels were right when they ruled that the authorization required by the Georgia law didn’t meet the requirements of a federal law, the Health Insurance Portability and Accountability Act of 1996, or HIPAA.

The day before the Court of Appeals decided

Wright’s case in her favor, a panel struck down the waiver provision in Northlake Medical Center LCC v. Queen, 634 S.E.2d 486.

In that case, then-Chief Judge John H. Ruffin Jr. wrote that the state waiver provision’s problem was that under HIPAA, authorization for medical records must specify the information to be disclosed, an expiration of the authorization and a notice of a right to revoke the authorization. Those points were not included in the waiver required by SB 3, said Ruffin.

Attorneys for the medical defendants to Wright’s suit, David N. Nelson and Norman C. Pearson III of Chambless, Higdon, Richardson, Katz & Griggs in Macon and John C. Daniel III of Martin Snow in Macon, have a road map in a dissent penned by Presiding Judge Gary Blaylock Andrews in the Queen case. He said that the Georgia statute was consistent with HIPAA’s requirements and did not require the disclosure of health information unrelated to the case.

Plaintiffs’ lawyers have said the waivers mandated by the Georgia statute do not give them an opportunity to object to requests for irrelevant information as under the general discovery rules. Defenders of the rule say it’s fair because medical-malpractice plaintiffs place their medical history at issue when they file the case, and early evaluation of the case could lower the cost of defense.

Thomas, the plaintiff’s lawyer, said the case is important for his client and the stakeholders in the SB 3 fight. But he said even if the court rules in his favor by finding pre-emption, “I don’t think that holding would bleed over into the other provisions of SB 3.�
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