Florida: An Overview of Recent Decisions on Constitutionality of Workers’ Compensation Act

By Robert J. Grace, Jr., Esq., The Bleakley Bavol Law Firm, and Lyle Platt, Esq., Clarke & Platt, P.A.

For two years now we have written about a collection of cases which represent the most closely watched and eagerly anticipated workers’ compensation cases since our statute went into effect in 1935. At the present time, Florida’s workers’ compensation statute continues to be with small exception the exclusive remedy for workplace accidents. Recent efforts have been unsuccessful in striking down the exclusive remedy or expanding the ability of injured workers to seek potential tort remedies. However, Florida once again has hourly attorney fees in place for claimant attorneys who successfully prosecute the claim of their client. It is difficult to tell whether further legislative change to the attorney fee statute is on the horizon. Indeed, some observers believe the attorney fee statute cannot change again and pass constitutional scrutiny. However, only time will tell whether Florida’s legislature makes yet another attempt to reform the attorney fee statute or simply leaves it alone and allows the added cost to be reflected in the premium base and paid for by business and industry.

1. Castellanos

On April 28, 2016, the Florida Supreme Court issued its long awaited decision in Marvin Castellanos v. Next Door Company, et. al., (No. SC13-2082). It was in March 2014 that the Supreme Court accepted jurisdiction of this case as one of great public importance. The Supreme Court rephrased the certified question from the First District Court of Appeal to:

Whether Section 440.34, Florida Statute (2009), which mandates a conclusive fee schedule for awarding attorney’s fees to the claimant in a workers’ compensation case, is unconstitutional as a denial of due process under the Florida and United State Constitutions.

Castellanos’ attorney prevailed in his workers’ compensation case and was successful in resisting numerous defenses. The judge of compensation claims found that 107.2 hours of work were reasonable and necessary in litigating the case. Based on the statutory fee schedule, which awarded fees based on the amount of benefits secured, the fee awarded to Castellanos’ attorney was equal to $1.53 per hour. Counsel for Castellanos presented testimony at the trial level supporting the unreasonableness of the awarded fee, emphasizing it would be difficult if not impossible for an unrepresented claimant to overcome the complex defenses raised by the employer/carrier. Further, the fee as awarded would have a chilling effect and prevent an attorney from handling a similar case in the future.

In a lengthy historical review of Florida’s workers’ compensation attorney fee schedule, the Supreme Court found itself “confronted again” with a constitutional challenge to the fee statute and determined that the statute was unconstitutional under both the State and Federal constitutions as a violation of due process. The Supreme Court reasoned that § 440.34, Fla. Stat. with its strict fee schedule based on the amount of benefits recovered by the claimant allowed no determination whether the fee awarded by judge of compensation claims was reasonable—either grossly inadequate or grossly excessive. The Supreme Court enunciated its reasoning as follows:

Stated another way, the statute establishes a conclusive irrebuttable presumption that the formula will produce an adequate fee in every case. This is clearly not true, and the inability of any injured worker to challenge the reasonableness of the fee award in his or her individual case is a facial constitutional due process issue.

The Supreme Court, having concluded that the inability of the judge of compensation claims to determine a reasonable attorney fee is a facial violation of the State and Federal constitutional guarantees of due process, was left to consider the remedy until and if the legislature cures the constitutional infirmity. The Court’s holding operated to revive the fee statutes immediate predecessor, in place before 2009. In practical effect, this will result in the judges of compensation claims being guided by Lee Engineering & Const. Co. v. Fellows, 209 So. 2d 454 (Fla. 1968), which outlines eight factors to be considered in an award of a reasonable fee to counsel.

The Castellanos decision did have two strenuous dissents. Justice Canady reasoned that the fee schedule in § 440.34, Fla. Stat. “embodies a policy determination by legislature that there should be a reasonable relationship between the value of the benefits obtained in litigating a workers’ compensation claim and the amount of attorneys’ fees the employer or carrier is required to pay to the claimant.” He stated that while this policy adopted by the legislature may be subject to criticism, it unquestionably passes the rational basis test.

Justice Polston in his dissent noted that the majority rewrote the attorney fee statute to avoid the standard governing facial challenges. He was especially critical of the decision, stating that the majority “accomplishes by the backdoor what it could not do by the front door.” Further, “the majority is really deciding that reasonable attorney’s fees are constitutionally required.”

Justice Pariente in the majority opinion made an effort to emphasize “that the fee schedule remains the starting point, and that the revival of the predecessor statute does not mean that claimants’ attorneys will receive a windfall.” It is only when the Lee Engineering factors result in the fee schedule arriving at an unreasonable fee such as in Castellanos, that the claimant attorney will be entitled to a fee that deviates from the fee schedule. This begs the question going forward as to what is a reasonable fee in workers’ compensation. Will we see a wide range of hourly rates dependent on the complexity of the case? Will we see a narrow range of hourly rates, dependent on venue or geographical location of counsel? Will judges of compensation claims closely scrutinize the claimed hours in relation to the complexity of the case? Clearly it is too early to tell, but those questions are on the minds of many.

An equally compelling set of questions arises from the majority holding that “a reasonable attorney’s fees has always been the lynchpin to the constitutionality of the workers’ compensation law.” If that is indeed true, is the legislature able to ever change the attorney fee statute? Could the abolishing of employer/carrier paid attorney’s fees pass constitutional muster? Would there be any valid public policy consideration or any rational basis to not allow hourly attorney fees and the application of Lee Engineering?

These questions will remain but will be answered in the upcoming years in what has been over a decade long battle over workers’ compensation attorney fees.

2. Westphal

The Florida Supreme Court on June 9, 2016 issued its long awaited decision in Westphal v. City of St. Petersburg, et al. (No. SC13-2082). In 2013, the First DCA ruled as a matter of law that a claimant who remains totally disabled at the end of 104 weeks and is not at maximum medical improvement can bring a permanent total disability claim. Westphal v. City of St. Petersburg, 122 So. 3d 440 (Fla. 1st DCA 2013). The First DCA sitting en banc certified to the Florida Supreme Court the following question of great public importance:

Is a worker who is totally disabled as a result of a workplace accident, but still improving from a medical standpoint at the time temporary total disability benefits expire, deemed to be at maximum medical improvement by operation of law and therefore eligible to assert a claim for permanent and total disability benefits?

Justice Pariente writing for a 5-2 majority stated that the en banc majority of the First District “valiantly attempted to save the statute from unconstitutionality” but that the judiciary is without power to “rewrite a plainly written statute even if it is to avoid an unconstitutional result.” When the Supreme Court applied the plain meaning of § 440.15(2)(a), Fla. Stat., it reasoned the only interpretation was that when an employee reaches the maximum number of weeks allowed (104 weeks) or the employee reaches maximum medical improvement, whichever occurs earlier, temporary disability benefits shall cease and the injured worker’s permanent impairment shall be determined. Therefore, the Supreme Court concluded that the 104 week limitation on temporary total disability benefits results in a statutory gap in benefits and is a violation of the constitutional right to access the courts.

The majority noted that the constitutional yardstick, to determine whether an access-to-courts violation occurred as a result of workers’ compensation statutory changes, “is whether the scheme continues to provide adequate, sufficient, and even preferable safeguards for an employee who is injured on the job.” The judicial fix utilized by the Supreme Court in Westphal was to revive the statute in effect proceeding the 1994 amendment to § 440.15(2)(a), Fla. Stat., which provided for temporary total disability benefits not to exceed 260 weeks. While the precise narrow holding of Westphal dealt with the limitation on temporary total disability benefits, a broader reading of case law and § 440.15(2)(a), Fla. Stat. itself makes the decision applicable to temporary partial disability benefits as well.

In what has become a constitutional buzzword, Justice Pariente again used the word “lynchpin,” stating that the reasonable alternative test is “the lynchpin and measuring stick” when analyzing whether the workers’ compensation statute continues to provide adequate and sufficient safeguards for the injured employee and is thus an alternative remedy to tort litigation. Perhaps most striking in the majority opinion was the comment that the limitation on temporary total disability benefits and the resulting gap cannot be viewed in isolation from the rest of the workers’ compensation statute. It was noted that there has been a continuous reduction in benefits to injured workers with specific reference to the right of the employer/carrier to select the treating physicians, the implementation of the major contributing cause standard and the post-maximum medical improvement co-pay. Even more noteworthy was Justice Lewis’ concurring opinion where he did not believe that statutory revival of the pre-1994 limitation of 260 weeks was an appropriate remedy. He wrote “in my opinion, the only appropriate remedy would be to require the legislature to provide a comprehensive scheme, rather than rely on the courts to rewrite existing law or revive prior law.” Justice Lewis believes the workers’ compensation scheme as a whole is unconstitutional and in need of a major legislative—not judicial—reform. Justice Pariente, addressing Justice Lewis’ concern, stated in a footnote of the majority opinion that the parties to Westphal did not raise the expansive remedy of invalidating the entire workers’ compensation statute so such a remedy would not be considered. An amicus curiae brief did suggest invalidating the entire workers’ compensation law, but precedent does not allow the consideration of arguments raised by amici curiae that were not raised by the parties.

Clearly, the Westphal decision is an invitation to the Florida Legislature to address the entire workers’ compensation statute and revisit some of the changes made in the last 25 years. It is unclear, however, whether there is the political will to do so. Probably by the 2017 legislative session we will have a better idea whether not only attorney fees will be addressed but medical and indemnity benefits as well.

3. Padgett

Last year, on June 24, 2015, the Third District Court of Appeal reversed the decision of Judge Jorge Cueto, Circuit Court for Miami-Dade County, who held that the exclusive remedy provision of Florida’s workers’ compensation law was unconstitutional. The appellants, Florida Workers Advocates, petitioned the Florida Supreme Court for review, however the Court declined review in stating:

This cause having heretofore been submitted to the Court on jurisdictional briefs and portions of the record deemed necessary to reflect jurisdiction under Article V, Section 3(b), Florida Constitution, and the Court having determined that it should decline to accept jurisdiction, it is ordered that the petition for review is denied. No motion for rehearing will be entertained by the Court. See Fla. R. App. P. 9.330(d)(2).

4. Miles

Miles v. City of Edgewater Police Department/Preferred Governmental Claims Solutions and the State of Florida is an opinion from the First District Court of Appeal on April 20, 2016, and was rendered in the shadow of the Castellanos decision. The Miles case reviewed the Order of the judge of compensation claims denying claimant’s motion to approve two attorney fee retainer agreements. In one agreement between the claimant’s attorney and the Fraternal Order of Police (FOP), there was a provision for the FOP to pay a retainer fee of $1,500.00 for representation of the claimant, a police officer. The second agreement provided that once the retainer was exhausted, the claimant agrees to pay an hourly fee to her attorneys in order to prosecute a claim for workers’ compensation benefits related to an alleged chemical exposure. Pursuant to the provisions of the Workers’ Compensation Act, the judge of compensation claims denied both motions to approve these attorney fee agreements. The claimant challenged these denials, alleging infringement on her First Amendment Rights.

The First District Court of Appeal reversed the judge of compensation claims’ orders and held that the provisions challenged under the Workers’ Compensation Act, § 440.105, Fla. Stat. and § 440.34, Fla. Stat. did violate the claimant’s first amendment guarantees of free speech, freedom of association and the right to petition for redress. The Appellate Court applied strict scrutiny to their review of § 440.105, Fla. Stat. and § 440.34, Fla. Stat. in finding that an individual’s First Amendment Rights are fundamental. The court goes on to find that the claimant’s first amendment rights which guarantee freedom of speech, association and to petition for redress of grievances are the “right to hire and consult an attorney.” The claimant argued that the fee statutes, as they currently stood, violated her right to free speech, because the evidence established that no attorney would take her case if counsel’s compensation was limited to a “guideline” fee, regardless of whether that fee was paid by the employer/carrier or by the claimant. In this opinion, the court cites the prior Jacobson ruling in which a claimant was allowed to contract hourly in a matter concerning defense of the employer/carrier’s motion to tax costs. The court found that the two statutes operated as an unconstitutional infringement on the claimant’s right to hire an attorney. The court determined that the analysis that led to the holding in Jacobson applies in the Miles case.

As part of the claimant’s case, she presented the affidavits of six attorneys supporting the claimant’s argument that she was not able to secure representation due to the fact that it would not be economically feasible for an attorney to undertake representation in a case as complex as an exposure claim knowing that a fee would be payable only if the claim was successful. The court went on to determine that there is no significant governmental interests being served as a result of the provisions of § 440.105, Fla. Stat. and § 440.34, Fla. Stat. Additionally, there was argument heard concerning the claimant’s freedom of contract and right to retain an attorney to represent her interests. This is an element of civil liberty possessed by all persons who are sui juris, said the court.

The court determined that the restrictions contained in § 440.105, Fla. Stat. and § 440.34, Fla. Stat., when applied to the claimant’s ability to retain counsel under a contract that calls for the payment of reasonable fee by a claimant, are unconstitutional violations of claimant’s rights to free speech, free association and these restrictions on the claimant’s rights are not permissible. The court also found that the unconstitutional provisions of the Workers’ Compensation Act hinder the claimant’s right to enter into contracts. Ultimately, the court stated that criminal penalties found in § 440.105(3)(c), Fla. Stat., are unenforceable against an attorney representing a workers’ compensation client seeking to obtain benefits under Chapter 440.

The Miles decision allows a claimant and an attorney to enter into a contract of representation and provide for the payment of reasonable attorney’s fees associated with moving forward with prosecuting a claim for workers’ compensation benefits. The claimant’s attorney would no longer be limited to a guideline attorney’s fee paid by the claimant based upon the value of benefits obtained.

5. Stahl

In Stahl v. Hialeah Hospital and Sedgwick Claims Management Services, 160 So. 3d 519 (Fla. 1st DCA 2015), the claimant, Daniel Stahl, a nurse at Hialeah Hospital, brought a challenge to the Workers’ Compensation Act, alleging that the $10.00 copay for medical visits after a claimant has attained maximum medical improvement and the elimination of permanent and partial disability benefits rendered the workers’ compensation law as an inadequate exclusive replacement remedy for a tort action. The First District Court of Appeal found that both amendments did withstand the rational basis review and that the copay provision had a legitimate stated purpose of ensuring reasonable medical costs after the injured worker has reached maximum medical improvement. The court went on to provide that permanent partial disability benefits were supplanted by impairment income benefits. It is this court’s opinion that physical impairment is one accepted criterion for measuring benefits, and it was within the legislature’s discretion to utilize this standard. Essentially, the claimant in this case, was challenging the constitutionality of the entire Florida Workers’ Compensation System. The attorney arguing on behalf of the claimant took the position that the changes made to the Workers’ Compensation Act render the Act no longer constitutionally permissible because of cumulative reduction in medical and indemnity benefits.

The Florida Supreme Court, after hearing oral arguments with regard to their discretionary jurisdiction, did find, “after further consideration and hearing oral argument in this case, we have determined that we should exercise our discretion and discharge jurisdiction and refuse to hear the issues presented in the Stahl case.”

Dubreuil’s Florida Workers’ Compensation Handbook, Editorial Consultants

Robert J. Grace, Jr., Esquire
The Bleakley Bavol Law Firm

Lyle Platt, Esquire
Clarke & Platt, P.A.

© Copyright 2016 LexisNexis. All rights reserved. This article is excerpted from the upcoming 2016 Edition of Dubreuil’s Florida Workers’ Compensation Handbook.