Invalidation of Georgia Garnishment Statute – Ok Now What?

[co-author: Daniel Wells]

On September 8, 2015, a federal district court invalidated part of the Georgia publish-judgment garnishment statute in Strickland v. Alexander, No. 1:12-CV-02735-MHS (N.D. Ga.). Senior Judge Marvin Shoob discovered that the statute was constitutionally deficient on due process grounds, insofar because it does not require:

  • Notice to judgment debtors that there are certain exemptions under state and federal law which the debtor may be entitled to claim with respect to the garnished property;
  • Notice to judgment debtors of the procedure to claim an exemption; and
  • A timely procedure for adjudicating exemption claims.

A legal court also enjoined the Gwinnett County Clerk from giving any summons of garnishment pursuant to existing forms and methods which are sporadic using the court’s ruling.

On October 5, a legal court granted a motion to amend its order, clarifying that it is ruling and injunction were restricted to garnishment orders against banking institutions having a judgment debtor’s account or any other property and didn’t affect ongoing wage garnishments filed against a judgment debtor’s employer. In granting the motion to amend, a legal court found ongoing wage garnishments presented distinct problems that the complaintant was without standing to boost.

Response from Atlanta Area Courts

There’s been considerable confusion concerning the court’s original order, most of which continues despite the amended order. Several areas stopped giving garnishment orders of any sort although the injunction, by its terms, only applied straight to Gwinnett County.

  • On September 9, the Gwinnett County Clerk stopped issuing summons or disbursements in all pending garnishment cases.
  • On September 14, the Chief Magistrate Judge in Fulton County instructed the Clerk to stay and withhold all issuances of summons or notices in garnishment cases.
  • On September 22, Cobb County, which initially modified its procedure through a standing order, cancelled all scheduled garnishment cases and ceased issuing summons for garnishment cases filed after September 8.
  • On the other hand, on September 21, DeKalb County modified its garnishment case procedure by standing order (the DeKalb Order) to address the deficiencies by clarifying that a debtor may file an exemption claim immediately and will receive an expedited hearing within four days.

Further Proceedings in District Court

Two key issues remain prior to the court, elevated inside a separate motion filed by Georgia Attorney General Samuel Olens. The Lawyer General has asked for, first, the court clarify that it is ruling doesn’t address garnishments against commercial debtors and, second, the court revisit its discovering that the statute embeds a constitutionally untimely process.

The Lawyer General argues the statute as put on commercial debtors doesn’t enhance the same due process concerns a legal court recognized since the exemptions don’t affect commercial debtors which the person debtor-complaintant lacks standing to challenge commercial debtor garnishments. In the response, the complaintant didn’t oppose this part of the Attorney General’s motion.

The Lawyer General’s second request addresses the claim of the constitutional deficiency the court found baked into the process needed by statute. Judge Shoob discovered that the process established in O.C.G.A. § 18-4-95, as described through the Georgia Court of Appeals in Terrell v. Larger, 160 Ga. Application. 56, 286 S.E.2d 50 (1981), needs a debtor to hold back between 30 and 45 days to file for an exemption claim, a period of time where the debtor cannot connect to the funds at issue, even where such money is exempt. Judge Shoob found this method violated due process, stating federal situation law in other areas locating a 15-day delay to become too lengthy. See, e.g., Finberg v. Sullivan, 634 F.2d 50, 59 (three dimensional Cir. 1980).

However, the lawyer General argues in the motion (because the DeKalb Order provides) that, under newer situation law in the Georgia Court of Appeals, a debtor could make an exemption claim without depending around the procedure targeted by Judge Shoob. The Lawyer General argues that Georgia law presently requires an exemption claim hearing within ten days. The Lawyer General is asking Judge Shoob to reconsider his holding concerning the timeliness from the state’s process considering this situation law which was not formerly introduced towards the court’s attention.

If Judge Shoob denies the lawyer General’s motion and finds the legal process to acquire a hearing with an exemption claim is simply too extended, an amendment from the statute would probably be necessary before this kind of garnishment situation can resume.

Summary

As things stand now, the needed response for any person receiving a garnishment summons and also the needed action for condition courts or even the legislature is determined by the way the district court rules around the Attorney General’s pending motion, and the kind of garnishment at issue.

  • With respect to continuing wage garnishments against a debtor’s employer, there are no immediate issues in light of the district court’s amended order, although Gwinnett, Fulton, and Cobb counties will need to amend their current standing orders to resume continuing wage garnishment cases.
  • With respect to commercial debtor garnishments, their continued viability may depend on whether Judge Shoob exempts them from the order (as he did with continuing wage garnishments) and, if not, whether he denies the Attorney General’s motion and declares that the unconstitutional process is required by the statute. Based on the court’s recent amended order and the similarity between the arguments accepted in that order and the standing and exemption arguments made by the Attorney General in his motion, the argument to remove commercial garnishment from the effect of the court’s judgment seems compelling.
  • Finally, with respect to garnishments of individual accounts held by a financial institution, it seems unlikely that Gwinnett, Fulton, and Cobb counties will alter their moratoriums on such garnishments, at least until the district court rules on the pending motion. If the court denies the motion and declares that the unconstitutional process is mandated by the statute, a number of counties (particularly Gwinnett) may be unwilling to resume issuing this type of garnishment unless and until the legislature amends the statute.

Because of the current uncertainty surrounding publish-judgment garnishments under Georgia law, anybody who received a garnishment summons (apart from for any ongoing wage garnishment) that requires an answer after September 8, 2015, including for any garnishee’s answer, should seek legal counsel.