Judge Shoob Holds Georgia’s Post-Judgment Garnishment Statute Unconstitutional …

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Sep 10, 2015

In a decision that may have taken some people by surprise, including most of the debt collectors in Georgia, a federal judge in Atlanta, the Hon. Marvin Shoob, has held that Georgia’s post-judgment garnishment statute is unconstitutional. Strickland v. Alexander, United States District Court for the Northern District of Georgia; Civil Action No. 1:12-cv-02735-MHS.

There is an old saying among lawyers that “facts drive cases” and that is certainly what happened here. In 2004, the plaintiff, Tony Strickland, was diagnosed with cancer. Thereafter, he suffered a stroke and developed a dangerous heart arrhythmia. In 2009, Mr. Strickland was injured at work and received worker’s compensation benefits, including a lump sum settlement of $30,000. Mr. Strickland deposited that money into an account at Chase Bank, which was set up for the sole purpose of paying Mr. Strickland’s living expenses and healthcare costs, including the cost of his medication.

As a result of his inability to work, Mr. Strickland also fell behind on his credit card payments and was sued by Discover Bank. Discover obtained a judgment against Mr. Strickland for more than $18,000. In 2012, Discover attempted to enforce its judgment by serving a garnishment on Chase Bank. Chase immediately froze the funds in Mr. Strickland’s account and later paid the funds in Mr. Strickland’s account into court with its answer to the garnishment. Without access to his funds, Mr. Strickland was unable to pay for his medication, risking another stroke and potentially creating the need for shock therapy, which took an enormous emotional toll on Mr. Strickland and his family.

Obviously, Mr. Strickland’s circumstances were compelling; however, the key to the decision in Strickland was the fact that, under Georgia law, the funds in Mr. Strickland’s Chase Bank account were exempt from garnishment because they were the proceeds of workers compensation. So, the funds should not have been frozen and should not have been paid into the registry of the court. If Mr. Strickland had been informed of his rights at the time the garnishment was filed, he could have effectively protected the Chase Bank account from garnishment.

Under these circumstances, the Court's decision was based on the fact that Georgia’s post-judgment garnishment statute does not require that debtors be informed of their rights, including the fact that certain categories of funds are not subject to garnishment, e.g. the proceeds of a workers compensation settlement. Quoting from Judge Shoob's opinion: “The Court DECLARES that Georgia’s post-judgment garnishment statute, O.C.G.A. § 18-4-60 et seq., is unconstitutional insofar as it (1) fails to require that judgment debtors be notified that there are certain exemptions under state and federal law which the debtor may be entitled to claim with respect to the garnished property; (2) fails to require that judgment debtors be notified of the procedure to claim an exemption; and (3) fails to provide a timely procedure for adjudicating exemption claims.” The Court also enjoined the defendant from issuing any further summons of garnishment until such time as forms and procedures consistent with the Strickland decision were implemented.

As a practical matter, the decision in the Strickland case will put a stop to post-judgment garnishments in Georgia only in the near term. Expect that courts and clerks across the State will quickly move to implement procedures to comply with the decision in Strickland and post-judgment garnishment practice in Georgia will return to normal before long.

Craig E. Bertschi, Partner — McRae Bertschi LLC