Across Georgia, employers are opening their mailboxes to discover that courts have returned checks that employers previously submitted to satisfy garnishment actions.
Executive Summary: Across Georgia, employers are opening their mailboxes to discover that courts have returned checks that employers previously submitted to satisfy garnishment actions. This is the result of decisions by many courts across Georgia to stop accepting garnishment checks in light of a decision issued by Judge Marvin Shoob of the United States District Court for the Northern District of Georgia, in which Judge Shoob ruled that Georgia's garnishment law is unconstitutional. Strickland v. Alexander, No. 1:12-CV-02735 (N.D. Ga. Sept. 8, 2015).
The Strickland Decision and Aftermath
Debtors in Georgia can avail themselves of certain exemptions to ensure that they have the ability to purchase basic necessities of life, such as food, health care, and shelter. In the Strickland case, Judge Shoob determined that Georgia's garnishment statute violates due process by (1) failing to require debtors be notified of the existence of exemptions which they may be entitled to claim with respect to the garnished property, (2) failing to notify debtors of the procedure to claim such exemptions, and (3) failing to provide a timely procedure for adjudicating exemption claims.
The Strickland decision has left Georgia's garnishment statute unsettled. The court in Strickland specifically enjoined the Gwinnett County Clerk of Court from issuing any new summons for garnishment actions. However, the practical effect of this decision is that many courts – in addition to Gwinnett courts – have ceased processing garnishment actions.
As of the date of this Legal Alert, three metro counties have issued notices/orders altering their handling of garnishments in light of the Strickland case: Gwinnett (9/10/2015), Fulton (9/14/2015), and Cobb (9/22/2015). While all three counties have stated that they will continue to accept new garnishment filings, they will not issue any new summons and will return any new monies received to the garnishee. Fulton County Magistrate Court has further stated that it will refuse the remittance of any deposits in the registry and will not accept any new deposits pending a show cause hearing on whether the funds are subject to any legal exemptions. As a result of these measures, many Georgia employers have received checks returned from courts responsible for receiving garnishment funds.
It is anticipated that courts in other counties may follow Gwinnett, Fulton, and Cobb counties.
The Bottom Line
While the Strickland decision found Georgia's garnishment statute unconstitutional, that decision does not invalidate current garnishment actions. 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 funds are returned from the court, based on the current state of the law as of the date of this Legal Alert, 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, please reach out to the authors of this alert, Leanne Mehrman, lmehrman@fordharrison.com, or Henry Warnock, hwarnock@fordharrison.com, both of whom are attorneys in our Atlanta office. You may also contact the FordHarrison attorney with whom you usually work.