Georgia law can hold a business owner civilly liable for a criminal act that happens on his property, one that the business owner had nothing to do with.
The consequences to the business owner are often severe.
The fact that Georgia law permits this might surprise you. If it does, then you should also know that it’s enabled through a legal mechanism known as premises liability. As National Federation of Independent Business-Georgia Director Hunter Loggins puts it, premises liability is not good for business owners, nor is it good for the communities they serve.
By now, many Georgians know that the state’s business leaders want tort reform. They also know that Gov. Brian Kemp agrees with them and has called upon members of the Georgia General Assembly to act. But many Georgians may not know enough about premises liability, which the state’s business owners consider a particularly insidious aspect of our litigation system.
‘FOOD ISLANDS’
Last October, businessmen and businesswomen who represented Walmart, RaceTrac, Home Depot, and Waffle House held a roundtable discussion with Gov. Kemp at the Waffle House Corporate Office in Norcross.
The broader topic was tort reform, but many of these business officials zeroed in on premises liability. They said they had noticed an uptick in crime in their respective areas over the past five years. As one business owner said, insurance rates “skyrocketed.”
Some businesses had no other choice but to reduce services, relocate or close.
Insurance and Safety Fire Commissioner John King, after speaking with his counterparts in neighboring states, said at the roundtable that when it comes to premises liability, “Georgia is an outlier.”
“A problem we are seeing in the metro areas is that the small convenience stores cannot afford insurance. That is creating what we call ‘food islands.’ People are having to drive farther and farther away to get their basic necessities,” King said.
“We are starting to see companies decide whether they will open or run businesses in parts of our state. We can’t afford to do that. We have to have the same level of access for our consumers for products and services.”
Add your name: Georgia needs tort reform!
Georgia’s legal environment has deteriorated to the point that it threatens all the other good work policy makers have done over the decades. This can be fixed!
THE CVS CASE
Charles Tarbutton is president of the Sandersville-based B-H Transfer Co. When interviewed, Tarbutton said premises liability hurts all businesses and not just those that sell food or liquor.
“Any property owner that has liability insurance on their property is subject to this,” Tarbutton said.
This can include businesses that are office based or, in one notorious example, a drug store.
In that case, as documented by Legal Newsline, a man named James Carmichael decided to sell his iPad in December 2012 to a prospective buyer he met online. He chose to meet that person, shortly after 7 p.m., outside a CVS pharmacy in Atlanta, believing it was safe.
A still unidentified third person saw Carmichael and put a gun to his head in an attempt to rob him. To protect himself, Carmichael took out a gun of his own, but it jammed. The other man shot Carmichael in the stomach, back, and shoulder. According to Legal Newsline, “Carmichael ran into the store for help [before] collapsing into a coma for a month.”
Carmichael, whose medical bills cost nearly $726,000, reportedly “blamed his severe and long-term injuries on CVS for failing to implement simple security measures to protect customers like adequate lighting or security guards.”
As you might expect, Carmichael sued CVS. During the trial, CVS employees testified that they worked in a high-crime area. Carmichael’s lawyers argued that CVS knew something bad could happen in the immediate vicinity of their store, but the company didn’t take proper precautions.
In that trial, jurors were asked only to consider the negligence of third parties.
Jurors did not blame the unknown shooter. They awarded Carmichael nearly $43 million. Jurors said CVS was 95% at fault and Carmichael was 5% at fault. They placed 0% fault on the unknown shooter.
The Georgia Court of Appeals affirmed the verdict and said that the crime was foreseeable.
Tarbutton disagrees.
“CVS can’t post a security guard to prevent people from coming into their parking lot,” Tarbutton said.
“They can’t take extraordinary measures to prevent crime on their property. That is what the police are for.”
At the Georgia Supreme Court, CVS fared no better.
Georgia Supreme Court justices, though, did acknowledge some of CVS’ reasoning.
Justice Shawn Ellen LaGrua wrote that she was concerned that Georgia’s premises liability law hurts people who live in high-crime areas. These individuals, she went on to say, “could face the harsh and mounting reality that businesses — faced with an increased exposure to liability because of the very area in which they have chosen to do business — will cease operations or raise their prices to offset the costs of additional security measures.”
Justices wrote that they are “bound by what the law is and not what the parties of the members of this Court think it should be.”
“Such considerations are reserved to the General Assembly,” the justices wrote.
WHAT IS REASONABLE? WHAT IS FAIR?
Members of the Georgia General Assembly tried last year to address premises liability, but Loggins said the attempt didn’t go far.
“It was shot down in committee by legislators who said it wasn’t needed,” Loggins said.
“You would think it would be common sense to have a bill saying that a business owner cannot be held liable for what a criminal does on the business owner’s property. We even gave specific examples from the recent [state] Supreme Court case where the judges literally said the only reason they are ruling this way was because of how the law was written.”
Tarbutton, meanwhile, said that “the balance in Georgia’s civil justice system is lost.”
“Juries don’t have any concept of money and what is reasonable and fair,” Tarbutton said.
In 2023 the American Tort Reform Foundation ranked Georgia as America’s No. 1 Judicial Hellhole, although as of last year it ranks fourth.
“We cannot call Georgia the top state for business while at the same time be deemed a judicial hellhole. It can’t be both of those at the same time for very long,” Tarbutton said.
“Either we will reform our civil justice system to balance the scale, or we will cease to be an attractive place for businesses to grow and invest in, hire people and pay taxes and all of the things that a growing pro-business economy provides.”
As the debate over premises liability continues, Loggins said he wanted to make one thing clear.
“We 100% think that if a business or property owner is in the wrong then they need to make the other side whole,” Loggins said.
“But with the vagueness in the code and everything else going on, it has gone so far the other way that it is not fair at all to our business owners.”
