Atlanta Injury Law Blog

As a trial attorney handling serious injury and wrongful death cases in  Georgia, I have an intense interest in seeing that my clients are dealt with fairly, that the playing field is relatively level, and that the court system works reasonably well.

Currently there is a proposal in the legislature to impose a sales tax on services, including legal services, as part of a plan to eliminate property taxes for support of education. That proposal arises from deeply held feelings that the tax burden falls unfairly upon property owners. As a homeowner, I share that sentiment every time I receive a property tax bill. But as a parent whose children graduated from excellent public high schools, I know what a bargain that can be compared to private school tuition. Georgia should improve, and not diminish, support for quality public education.

Whatever general revenue measures our legislators may choose to support the quality of public education needed to provide Georgia an economically competitive workforce, it is important to examine the ramifications in detail. Specifically regarding the proposed tax on legal services, our legislators should consider a broad range of potential unintended consequences on our system of justice and the delivery of legal services.

Conflict with duty of confidentiality. Under current enforcement statutes, the Georgia Department of Revenue, under its audit authority, could claim access to detailed client billing records which are confidential under Georgia Rule of Professional Conduct 1.6. This could create a serious conflict between lawyers' confidentiality obligations to clients and the requirement to respond to audit requests.

Burden on individuals but not businesses or governments that litigate against them. Individual Georgia citizens would bear the entire burden of the tax as currently proposed, while governments, corporations and insurance companies who litigate against them would be entirely free from the tax. This would make the playing field even more uneven in favor of corporate and governmental litigants and against individual Georgians.

Economic incentive to shift legal services – and law firms’ work, staff and investment – outside Georgia.  A tax on legal services would encourage sophisticated clients, and those in border communities, to use untaxed legal services outside Georgia. It would also create an incentive for Georgia law firms to perform more services outside Georgia, and to shift investment in facilities, staff and support services to other states. Given the ease of gaining admission in many other states by reciprocity, even the smallest firms might find it advantageous to do so. Determining which services are taxable in Georgia would be an administrative nightmare.

Burden on citizens’ constitutional right of access to courts. A tax on legal services would be a burden on the exercise of Georgia citizens’ basic, constitutional right of access to justice and to the courts.

“Misery tax”. The sales tax on legal services as proposed would amount to a “misery tax” levied on individuals and families in Georgia at times of misfortune and vulnerability. It is generally necessity rather than choice that leads Georgians to seek legal assistance in cases involving death, divorce, domestic abuse, end-of-life decisions, injury, accusation of criminal offenses, or bankruptcy.

 Effect on injury cases. Recovery for bodily injury is not taxable under either federal or state income tax laws, as our lawmakers have long recognized that there is no profit when an injured person involuntarily exchanges good health for a specified amount of money. The tax on legal services would erode the injury victim’s recovery for such injury, thereby making it even more difficult – and potentially more expensive – for corporations and insurance companies to reach reasonable compromise settlements. Moreover, an Georgian injured on the job gets no more than $450 per week in workers compensation indemnity benefits. If an attorney is required to obtain the benefits, a 25% attorney fee of $112.50 per week leaves only $337.50 for the injured worker. (The weekly benefit was recently increased to $500 per week for new claims, but you get the idea.)  A tax on legal services would further erode that meager benefit, thus increasing pressure to raise workers compensation benefits, a cost which eventually would be passed on to Georgia businesses.

Experience of other states. Apparently only Hawaii, New Mexico, and South Dakota currently tax legal services. Florida and Massachusetts enacted such taxes, but promptly repealed the measures when they proved to be unpopular and difficult to administer. Several other states, including Maine, Maryland, Ohio, and Vermont, as well as the District of Columbia, rejected similar proposals.

Constitutional questions.  There are numerous unresolved questions as to the constitutionality of the proposed tax on legal services, which the State of Georgia might well have to litigate over the next several years, including but not limited to the following:

    •    Access to courts. Would the proposed tax on legal services  impermissibly burden  access to and use of the state or federal courts in violation of Art. 1, § 1, ¶ 9 Ga. Const. of 1983, Article III of the U.S. Constitution and the 5th, 6th and 14th      Amendments to the U.S. Constitution?
    •    Equal protection and due process. Would unequal treatment of individuals and corporations, whereby a tax would be imposed on an individuals party’s access to the courts but no tax would be imposed upon a corporate party in the same litigation, be a violation of the Georgia Constitution under Art. 1, § 1, ¶ II  (equal protection) and under Art. 1, § 1, ¶ I (due process of law), and the 14th Amendment to the U.S. Constitution?
    •    Separation of powers.  Would the proposed tax on legal services constitute an unauthorized regulation of the practice of law by the Legislature in violation of the constitutional guarantee of separation of powers under Art. 1, § 2, ¶ III of the Georgia  Constitution?
    •    Tax on litigation in federal courts may violate U.S.  Constitution Supremacy Clause.  Would the proposed tax on legal services, in connection with litigation before the federal courts, violate the Supremacy Clause contained in Article VI of the U.S.  Constitution?
    •    Breach of confidentiality burdening right to counsel. Would the proposed tax on legal services breach the attorney-client privilege and confidentiality, and thus impermissibly burden the right to counsel under both Art. 1, § 1, ¶ I of the Georgia  Constitution and the 6th and 14th Amendments of the U.S. Constitution?
    •    Taxing some professions while exempting others may violate equal protection of law. Would imposing a tax on services performed by the legal, accounting, architectural and other professions, while exempting services rendered by the medical profession, be a violation of equal protection rights under Art. 1, § 1, ¶ II of the Georgia Constitution, and the 14th Amendment to the U.S.  Constitution?
    •    Burden on rights guaranteed in U.S. Constitution. Would the  proposed tax on legal services impermissibly burden the exercise  of rights secured by the 5th, 6th, and 8th Amendments to the U.S. Constitution?

We should encourage efforts to make our system of taxation more fair and efficient. At the same time, we should be careful to avoid the “law of unintended consequences," which could wreak havoc if a tax on legal services were enacted.

Fri., 3/9/07, Calhoun, GA. 

In a scene reminiscent of the 1982 Paul Newman movie, "The Verdict," the jury after three hours of deliberation Thursday afternoon sent a note to the judge asking if they were limited by the amount the plaintiff asked for.   In closing argument I had asked for a verdict of approximately $1.2 million for our client's permanently disabling leg injury.  When we got that question from the jury, my first thought was that I don't drink anywhere near enough to fit the Paul Newman role in the movie.

Today we won a $2,345,940.17 jury verdict against a Pennsylvania trucking company in the Superior Court of Gordon County, Calhoun, Georgia.  The verdict was broken down as follows: compensatory damages:  $1,742,845.70, attorney fees due to bad faith in the transaction, $580,948.57, expenses  of litigation $ 22,145.90.  Medical expenses were $112,228.  The highest offer from defendant's insurance company before trial was $125,000, going up to $400,000 on third day of trial. This was nearly three times the highest previous verdict in the history of Gordon County.

The specificity of the figures, down to the penny, helps to refute any allegation that it was a random verdict by a "runaway jury."  These jurors were all deeply conservative northwest Georgia folks who were determined to follow the law and the facts wherever they led, and to do the right thing.

It was a very good week.

Johnson v. Clarendon National Insurance Company, American Trans-Freight, LLC, ATF Trucking, LLC, ATF Logistics, LLC, and Robert W. Carnley, CIVIL ACTION FILE NO. 04-CV-43532

I have been writing to everyone I know this week to urge them to vote to reelect Justice Carol Hunstein to the Supreme Court of Georgia.  The future of an independent judiciary in Georgia is at stake.  We cannot afford to stand by and allow the financial assassination of our judiciary by big business.

The first in her family to attend college, Carol Hunstein built a distinguished career as a moderate conservative during her 22 years as a judge.  Unaffiliated with any political party, she has wide support among both Republicans and Democrats who respect her skill, independence and fairness.

However, a largely anonymous group of billionaires and large corporations acting through  "independent" committee have funneled $1.8 million into aiding the campaign of her opponent, Mike Wiggins, through "independent expenditures" that are not subject to the limits on campaign contributions.  One Washington-based committee whose donors have not been identified is spending $1.3 million to defeat one nonpartisan Georgia judge. 

One must ask what promises Mike Wiggins made about what he would do on the bench in return for such extremely generous financial support for his campaign. The folks who are willing to pump $1.8 million into a state judicial race have to have a financial motive and an assurance of a financial payback.

Carol Hunstein was forced at an early age to learn the value of hard work, discipline and dedication. Born into poverty, she contracted polio when she was two, survived her first bout of bone cancer at age five, and lost her mother at age 11.  Her father did not think girls needed a college education, so she married at 17 and had a child at 18.  When she was 22, her husband abandoned her, she lost a leg to cancer, and doctors told her she had only a year to live.  Struggling to support herself and her child, she entered a community college on a vocational rehabilitation scholarship.  She made her way through college and most of law school while raising her son on less than $200 per month.  After remarrying she had two daughters.  Her kids are all grown, and she has one grandson.

In 1977, Carol opened a law practice in Decatur, where she represented ordinary people in a wide variety of domestic, criminal and civil cases. Spurred by a county judge who repeatedly called her “little lady” in court, she ran for Judge in 1984, defeating four men to become the first woman elected to DeKalb Superior Court.

In 1992, then-Governor Zell Miller appointed Carol to the Supreme Court of Georgia.  During 14 years on the Supreme Court, Carol has participated in more than 5,000 cases and authored more than 600 published opinions.  She has ruled against me more than for me, but I respect her integrity and independence. She is widely regarded as one of the hardest working members of the Court, a model of impartiality and fairness, and a judge who strictly adheres to the rule of law.  She is particularly known for being hard on repeat criminal offenders, deadbeat dads, purveyors of domestic violence, and lawyers who violate ethical rules.

Justice Hunstein has achieved national stature based on her work and her character.  In 1999, the American Bar Association gave her an award given to less than 90 women in history.  Other winners include U.S. Supreme Court Justice Sandra Day O’Connor.

No matter what her well-funded opponent’s TV ads may tell you, Justice Hunstein is not a “liberal activist judge” and she is not “soft on crime.” I have read hundreds of her published decisions and have found absolutely no such pattern.  Any judge who has ruled fairly on thousands of cases, based on the facts and the law, is vulnerable to having  a few individual decisions taken out of context and misrepresented by a political opponent in slick TV ads.

She has struck back with a tough but truthful ad about the fact that her opponent's mother sued him and his sister gave an affidavit saying he threatened to kill her.  I don't know about his family dynamics, but I have seen copies of the court documents and the statements in the Hunstein ad are as true as they are tough. Now I have seen a statement released by Mr. Wiggins' sister's lawyer in Alabama, confirming that she stands by the statement in her 1997 affidavit that Mr. Wiggins threatened to kill her.

The extremely well funded campaign against Justice Hunstein is part of a coordinated nationwide assault on judicial independence that seeks to overwhelm with big money state Supreme Court justices around the country, and thereby intimidate all other state judges. In state after state, these campaigns have used very similar TV ads to misrepresent judges’ records and mislead voters.  In this instance, the candidate running against Justice Hunstein is an academically bright ideologue and has been a political appointee in Washington, but he has never tried a case in any trial court and has never argued a case in a Georgia appellate court.  The one published court decision in which he was lead counsel was a federal case several years ago in which he unsuccessfully argued that a drug dealer’s sentence was too harsh.  That sounds like a prescription for a politically active judge who would legislate from the bench, rather than simply applying the law to the facts in each case. 

It appears to me that folks who don’t like independent judges simply picked out someone they thought looked vulnerable – a non-political, one-legged woman with a Jewish-sounding name  (though she is a Christian) --  raised a few million dollars, and recruited an ambitious candidate to try to knock her off. 

Please don’t fall for that.  Please vote to re-elect Carol Hunstein, and urge your friends and family members to do likewise.

Last month there was a news story about the New Jersey Committee on Attorney Advertising, a panel appointed by the Supreme Court of New Jersey ruling that attorney advertisements that tout listings such as the "Super Lawyers" listings violate professional responsibility rules against ads that compare lawyers’ services or create an "unjustified expectation about results."  That gave me pause, as it did the marketing folks at every big law firm in Atlanta, since the profile on my web site includes listings in the "Super Lawyers" issue of Atlanta Magazine, "Legal Elite" issue of Georgia Trend magazine, and the Bar Register of Preeminent Lawyers.

However, the Fulton County Daily Report published an article on August 11th reporting an analysis to the effect that,  while Georgia’s ethics rules contain proscriptions against comparative advertisements and ads that create unwarranted expectations, the language in Georgia is more permissive than that found in New Jersey’s ethics rules. The New Jersey rule prohibits as false and misleading any advertisement that "compares the lawyer’s services with other lawyers’ services." Under Rule 7.1(a)(3) of the Georgia Rules of Professional Conduct, the rule against comparisons does not apply if the comparison "can be factually substantiated."

The "Super Lawyers," "Legal Elite," and "Preeminent Lawyers" lists are all based upon periodic surveys of our peers in the legal profession, and cannot be purchased.  While the methodology is certainly not perfect, neither is it meaningless or factually unsubstantiated.  Therefore, we will continue to include those designations on the web site.

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