ATLANTA - Georgia stands to rake in a windfall of up to $77.3 million following a ruling by the state Supreme Court Monday that the state can retain the lion's share of certain liability awards.
In two separate decisions. the court allowed a 1987 state law to stand, permitting Georgia to withhold 75% of two multimillion dollar punitive damage payments: $101 million assessed against General Motors, and $2 million against Mack Trucks Inc. Under the law, the costs of litigation and attorneys' fees are deducted from the state's share.
Legislators gave the state the authority to place the three-quarters portion of damage payments into its general fund as part of comprehensive reform of tort laws intended to hold down the size of such suits.
In each case, a lower court found the 1987 law violated the equal protection clauses of the United States and Georgia Constitutions.
"By virtue of the ruling, the state gets a very substantial monetary interest in these awards," attorney general Mike Bowers said yesterday in a telephone interview. "This is good news for Georgia."
Bowers said that the possibility exists, however, that a petition could be filed to rehear the cases before the U.S. Supreme Court.
In the case of a similar Colorado law. the Supreme Court ruled unconstitutional a law authorizing the state to collect a portion of a damage award, Bowers said.
"But as far as we are concerned, the Georgia suits have played themselves out in Georgia," he said.
Bowers said he had not heard from any of the three people who sued General Motors and Mack Truck and appealed the Georgia law.
In the General Motors case, which attracted national attention, the company was sued by the parents of Shannon Moseley, who was killed when the side-mounted gas tank on his pickup truck exploded. Mack Truck was taken to court by Daniel Conkle, who claimed the company was liable for an Oct. 1988 accident in which the frame of a tractor trailer he was driving cracked.
"We think that the purpose of this subsection [of the tort reform law] is to authorize punishment of a defendant who has the potential to greatly damage society at large," the justices wrote in a 6-to-1 ruling in the Mack Truck case.
In his dissent, Benham wrote: "I conclude, therefore, that the confiscatory provisons of [the law] cannot fairly be said to be rationally related to any legitimate state interest. Accordingly, I would hold that the statute violates the Equal Protection guarantees of the Constitutions of the United States and Georgia."'
The General Motors case was decided on a 6-0 vote, with Benham disqualified.
Lawyers for the Moseleys or Conkle could not be reached for comment.
According to an analysis presented in Benham's opinion, only three other states besides Georgia and Colorado - Florida, Iowa, and Illinois - have statutes permitting the state to withhold a portion of punitive damage payments.