Oct 07, 2015

Federal Court Finds Georgia Garnishment Statute Unconstitutional

On September 8, 2015, Judge Marvin H. Shoob of the United States District Court for the Northern District of Georgia issued an order holding that Georgia’s post-judgment garnishment statute, O.C.G.A. § 18-4-60 et seq., is unconstitutional in part. The District Court’s decision was issued in the case of Strickland v. Alexander, Civil Action No. 1:12-cv-02735-MHS (N.D. Ga. Sept. 8, 2015).  Plaintiff Tony Strickland filed the lawsuit against the Clerk of Court of the State Court of Gwinnett County, Georgia after his bank account, that included his workers’ compensation settlement for a work injury and Social Security disability payments, was garnished in Gwinnett County by a credit card company that had obtained a default judgment against him. The District Court found the Georgia garnishment statute unconstitutional, in large part because there is no requirement in the law that creditors provide notice to the debtor that statutory exemptions exist to protect certain types of funds from garnishment (such as workers’ compensation funds, Social Security benefits, and welfare payments) and what the procedures are to assert those statutory exemptions. The District Court’s order enjoined Gwinnett County courts from issuing garnishment summons under the current forms and procedures.

Although the order enjoins only Gwinnett County from issuing garnishment summonses, the order has led to uncertainty throughout the state regarding the garnishment law and procedures. Gwinnett County has stopped issuing garnishment summonses in light of the order, and the chief judges of the state courts in Cobb County, DeKalb County, and Fulton County issued standing orders with new garnishment procedures in order to allow garnishments to continue in their respective counties. The chief judge of Fulton County Magistrate Court also issued a standing order that significantly limits garnishment proceedings. On October 5, 2015, the District Court Court amended its decision in Strickland v. Alexander in response to a motion filed by the Defendant. The District Court’s October 5th Order clarifies that the initial September 8th Order applies only to enjoin Gwinnett County from issuing summonses to garnish a debtor’s bank accounts and does not apply to wage garnishments filed against a debtor’s employer. Although wage garnishments rely on the same Georgia statutes that the District Court found unconstitutional for bank account garnishments in its September 8th Order, that decision did not determine the constitutionality of the statutes as applied to wage garnishments as that issue was not, and could not have been, raised by Plaintiff Strickland.

Georgia’s Attorney General also filed a motion asking the District Court to reconsider its opinion in Strickland v. Alexander, but that motion has not yet been ruled upon by the Court. Even with the narrowed scope provided by the October 5th Order, the decision in Strickland v. Alexander leaves parties involved in garnishment actions with questions as to the legality of garnishment proceedings. However, the federal decision does not invalidate current garnishment actions and has been narrowed to exclude wage garnishments. Therefore, any employer served with or subject to a garnishment summons should continue to comply with its garnishee obligations, including garnishing wages and submitting answers with funds, until instructed otherwise. If checks are returned from a court, the safest course of action is to retain those funds until instructed to do otherwise by the court that issued the garnishment summons.

If you have any questions regarding these issues, please contact your labor and employment counsel at Smith, Gambrell & Russell, LLP.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice.

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