Florida workers'
compensation is sometimes a polarizing subject. The process of workers' comp
was designed for the benefit of employees and their employers. Much has been
written on the subject of the "grand compromise" and whether this
proverbial handshake between labor and business remains balanced and
sufficient.
Some allege that
the "reforms" of the last several decades have tilted the system too
far and this compromise is no longer constitutional. That debate will play out
in the courts. The case that has become known as Padgett concluded
that the balance is not sufficient, and that therefore exclusive remedy in
Florida is unconstitutional. The Third District Court is considering that now,
in case 3D14-2062. Briefs have been filed, but no oral argument has been
set. The court does not have to hold such an argument, time will
tell. Intellectually, we live in an interesting time.
Another
constitutional challenge is proceeding in Florida regarding the more
specific subject of workers' compensation claimant attorney
fees. Castellanos v. Next Door Company has been under review at the
Florida Supreme Court for several months. Oral arguments were held November 5,
2014. Shortly thereafter, the parties in some other attorney fee challenges were
asked to brief those cases as well. They are being called collectively the
"companion cases." Some feel it is likely the Court will rule on all
of these fee constitutionality challenges collectively.
So, attorney fees
are a topic on the minds of many in Florida right now. The subject is not
isolated to Florida though. Last week, WorkCompCentral (subscription)
reported that Texas is having discussions about how attorneys are compensated
there. Texas, like Florida, has a limitation on attorney's fees.
According
to WorkCompCentral, claimant's attorneys in Texas "are limited to 25%
of an injured worker's recovery." In Florida, the limitation is "20
percent of the first $5,000 of the amount of the benefits secured, 15 percent
of the next $5,000 of the amount of the benefits secured, 10 percent of the
remaining amount of the benefits secured to be provided during the first 10
years after the date the claim is filed, and 5 percent of the benefits secured
after 10 years." At the outset, one might conclude that the Texas formula
is easier.
Florida's
provision requires us to do a bit more math in some cases than the Texas law.
If the benefits are $5,000 or less, the process is similar in each state. The
fee on $5,000 in Florida is 20% of this, or $1,000; in Texas 25%, or $1,250.
Some might argue this is not a significant difference. The difference would be
more pronounced as the value of the recovered benefits increased.
Without the
intricacy of hypothesizing how many years after the claim, for simplicity,
compare a recovery of $100,000 in benefits. The Texas calculation would be 25%
or $25,000. Under the Florida calculation, without regard to the time
definition, would be 20% of $5,000, or $1,000; then 15% of the next $5,000, or
$750; then 10% of the remaining $90,000, or $9,000; the total in Florida would
be $10,750 ($1,000 + $750 + $9,000). The fee in Florida ($10,750) is about 43%
of the fee in Texas. That disparity would become more pronounced as the value
of recovered benefits increased.
WorkCompCentral
reports that Texas also allows hourly attorney fees in some instances. Their
current issue with that topic is whether to increase their cap on hourly fees.
Since 1991, the hourly rate has been capped at $150.00 per hour. Last year, the
Texas Division proposed raising that cap to $175.00 per hour.
Incidentally, WorkCompCentral reports that this cap applies in Texas
to claimant fees and to defense attorneys in workers' compensation indemnity
disputes. Defense attorneys are not limited by the cap in other disputes. It
also appears from the context that claimant fees in this regard are payable by
the injured worker.
After Texas
published its proposal to increase this hourly cap, comments were received from
the public. Some of the quoted comments were focused on the level of the cap.
One commenter suggested the hourly cap should be $400 per hour. The Texas Bar
suggested that the cap should be the "median billing rate for all
attorneys (in Texas) at $238.00."
The cap change
was not thereafter "adopted," and so it is no longer on the table for
discussion or adoption. In Texas, after "publication of a proposed
rule" the agency, similar to our Florida Division, has six months "to
adopt it, amend it or withdraw it." Thus, the passage of time without
action essentially allowed the proposed increase to expire.
The crux of the
WorkCompCental article is when and whether the Texas Division may address the
subject again. Their interview with the Texas Division supports that no further
administrative or rule action is anticipated during the current term of the
Texas legislature, which ends in June. So, for now, attorney fees are a
subject of discussion in Texas. The discussion seems focused on when they may
know more.
In this regard,
the discussion is similar to Florida. Here the system participants question
when they will know more, and what they will know. In Texas, they seem to be
asking the same questions. In Florida, the wait is for a decision by the
Supreme Court. In Texas, it is for action by the Texas Legislature or the
Division perhaps reopening the cap discussion.
In Florida, the
decision could go either way. I long ago gave up prognosticating on how any
given court would rule on a particular topic. Assuming that the Court
finds Fla. Stat. §440.34 (2009) unconstitutional, that decision
would be retrospective. In other words, it would affect cases in the past. That
is precisely what occurred in 2008 when the Court interpreted the statutory
language of Fla. Stat. §440.34 (2003), finding that the language
was ambiguous in Murray v. Mariner Health. That 2008 interpretation
affected all claimant fee claims dating back to the effective date of the
statute language, July 1, 2003.
Similarly, a
conclusion of the Court that the current statute is unconstitutional would
render it unenforceable. The current statute was passed in the 2009
legislature and became effective July 1, 2009. Thus, the immediate effect of a
conclusion that it is unconstitutional could be on those cases with a date of
accident between July 1, 2009, and the date upon which the Florida Court renders
its decision. The decision could be limited to the facts of a particular case, that is unconstitutional "as applied" to the facts in that case, or the decision might address the statute in all contexts, that is unconstitutional "on its face."
The Court's decision likewise may apply to all cases thereafter, or to all cases thereafter in which the application of the statute is similar. To whichever population such a decision applies, that application will continue thereafter until
and unless the legislature addressed attorney fees through legislation.
There are those
who vow the legislature will act should the court
determine Fla. Stat. §440.34 (2009) is unconstitutional. Some
even prognosticate that a legislative "special session" might be
called for that purpose in the event the Court's decision comes after the regular
session. It seems logical that the extent and application of the Court's decision, as well as the decision itself, might influence whether the legislature acts and how rapidly.
Many eyes on Tallahassee, and the wait continues. But, Florida is not
alone.
