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Georgia Dept. of Labor v. McConnell

Supreme Court of Georgia

May 20, 2019

GEORGIA DEPT. of LABOR
v.
McCONNELL et al. McCONNELL et al.
v.
GEORGIA DEPT. of LABOR.

          BOGGS, JUSTICE.

         We granted certiorari in these cases to determine, first, whether the Court of Appeals erred in holding that the State has waived sovereign immunity under the Georgia Torts Claims Act ("GTCA"), OCGA § 50-21-20 et seq., for Thomas McConnell's tort action and, second, whether the Court of Appeals erred in holding that McConnell's complaint failed to state a claim.[1] After review, we agree with the Court of Appeals and affirm.

         1. The underlying facts are essentially undisputed. In September 2012, the Georgia Department of Labor created a spreadsheet containing the name, social security number, home telephone number, email address, and age of 4, 757 individuals over the age of 55 in Cherokee, Cobb, and Fulton counties who had applied for unemployment benefits or other services administered by the Department, including McConnell. Almost a year later, a Department employee inadvertently sent an email with the spreadsheet attached to approximately 1, 000 recipients without the permission of the individuals whose information was included in the spreadsheet.

         On January 17, 2014, McConnell filed a complaint, which he later amended on March 12, 2014, against the Department on behalf of himself and a proposed class of all individuals whose information was contained in the spreadsheet, alleging negligence, breach of fiduciary duty, and invasion of privacy by public disclosure of private facts. The complaint alleged that, as a result of the Department's negligent disclosure of McConnell's and the other proposed class members' personal information, they were required to place freezes and alerts with credit reporting agencies, close or modify financial accounts, and closely review and monitor their credit reports and accounts for unauthorized activity. The complaint further alleged that McConnell and others whose information had been disclosed incurred out-of-pocket costs related to credit monitoring and identity protection services and suffered adverse impacts to their credit scores related to the closure of credit accounts. In addition, the complaint alleged that the affected individuals experienced, and would continue to experience, fear, upset, anxiety, and injury to peace and happiness, as the disclosure of their personal identifying information provided the material necessary to facilitate identity theft and unauthorized charges on their credit and bank accounts. The complaint did not allege that any identity theft or resulting unauthorized charges actually had occurred. Nor did the complaint allege that the personal identifying information had been disclosed by or for criminal conduct.

         The Department filed a motion to dismiss, which the trial court granted, ruling that sovereign immunity barred the lawsuit because the GTCA did not waive the State's immunity for the type of "loss" that McConnell alleged. OCGA § 50-21-22 (3).[2] The trial court also held that each count of the complaint failed to state a claim upon which relief could be granted. See OCGA § 9-11-12 (b) (6).

         McConnell appealed, and the Court of Appeals affirmed, pretermitting a decision on sovereign immunity and addressing only the trial court's ruling that each count of the complaint failed to state a claim. See McConnell v. Dept. of Labor, 337 Ga.App. 457 (787 S.E.2d 794) (2016). We granted McConnell's petition for certiorari to decide whether the Court of Appeals erred in considering the merits of McConnell's claims without deciding first whether sovereign immunity barred the lawsuit. We held that the Court of Appeals did err in this regard, and we vacated the Court of

         Appeals' judgment and remanded the case with direction to make the threshold determination. See McConnell v. Dept. of Labor, 302 Ga. 18, 19 (805 S.E.2d 79) (2017).

         On remand, the Court of Appeals first held that the trial court erred in concluding that sovereign immunity barred McConnell's claims. See McConnell v. Dept. of Labor, 345 Ga.App. 669, 670-675 (1) (814 S.E.2d 790) (2018) (physical precedent only). On the merits, the Court of Appeals again held that the trial court properly dismissed the complaint for failure to state a claim. See id. at 675-683 (2) - (4) (full concurrence as to Div. 2). Both the Department and McConnell filed petitions for certiorari, which we granted. After review, we conclude that the Court of Appeals was correct, and we affirm its holdings.

         2. The Department argues that the definition of "loss" set forth in OCGA § 50-21-22 (3) limits the waiver of sovereign immunity in OCGA § 50-21-23 (a) to claims where a plaintiff also has suffered a personal "injury, disease, or death," which the complaint did not allege. We disagree.

         The complaint alleged that a Department employee, acting within the scope of his employment, committed the torts of negligence, breach of fiduciary duty, and invasion of privacy against McConnell and the other proposed class members. And OCGA § 50-21-23 (a) says that "[t]he state waives its sovereign immunity for the torts of state . . . employees while acting within the scope of their . . . employment," subject to the exceptions and limitations set forth in the rest of the GTCA. Thus, absent some express "exception[] or limitation[] set forth in [the GTCA]," the State waived its sovereign immunity from McConnell's lawsuit. See OCGA § 50-21-23 (a). The Department does not argue that the conduct alleged in the complaint is included in any of the exceptions or limitations listed in OCGA §§ 50-21-24 (1) - (13) and 50-21-24.1.

         The Department instead contends that OCGA § 50-21-22 (3) provides an exception or limitation in its definition of "loss." But OCGA § 50-21-23 (a), which waives the State's sovereign immunity from tort claims "in broad language," see Dept. of Transp. v. Montgomery Tank Lines, 276 Ga. 105, 106 (1) (575 S.E.2d 187) (2003), mentions "loss" only in the context of a non-waiver of sovereign immunity that does not apply here.[3] Moreover, as the Court of Appeals noted, OCGA § 50-21-22 (3) ends with a catch-all phrase that unambiguously includes in the definition of loss "any other element of actual damages recoverable in actions for negligence," which clearly encompasses McConnell's tort claims.

         The Department's other arguments - that McConnell's lawsuit does not fit within OCGA § 50-21-22 (3)'s catch-all phrase because Georgia does not recognize as a cognizable injury his alleged economic damages, and that Georgia's "impact rule" bars McConnell's claims for emotional damages - actually are arguments about the validity of McConnell's claims and are irrelevant to the threshold question of whether the State has waived its sovereign immunity from McConnell's lawsuit. See Upper Oconee Basin Water Auth. v. Jackson County, 305 Ga.App. 409, 412 (1) (699 S.E.2d 605) (2010) ("A motion to dismiss asserting sovereign immunity is based upon the trial court's lack of subject matter jurisdiction, rather than the merits of the plaintiff's claim." (Citation and punctuation omitted.)).

         Accordingly, because McConnell's claims for negligence, breach of fiduciary duty, and invasion of privacy sound in tort, are based on the conduct of a state employee while acting within the employee's scope of employment, and do not fall within an express exception or limitation in the GTCA, we agree with the Court of Appeals and conclude that the GTCA waived the State's sovereign immunity from McConnell's lawsuit. Thus, McConnell has carried his burden of showing that the trial court had subject matter jurisdiction over his claims. Therefore, we now address the merits.

         3. McConnell contends that the Court of Appeals erred in holding that his complaint failed to state a claim upon which relief could be granted. The complaint contained counts for negligence, breach of fiduciary ...


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