Friday, June 10, 2016
Supreme Court Strikes Down 104-Week Cap on TD
By Sherri Okamoto State: FloridaTopic:
A divided Florida Supreme Court has declared yet another portion of the state's comp scheme unconstitutional.
In April, the court struck down Florida's statutory limit on attorney fees. On Thursday, it said the state's 104-week cap on temporary disability benefits is invalid.
The court reasoned that the cap impermissibly cuts-off compensation to claimants if they remain unable to work but are not eligible for permanent disability benefits because they have not yet reached maximum medical improvement.
Because the workers' compensation system "deprives an injured worker of disability benefits under these circumstances for an indefinite amount of time," but the system is the sole means through which a worker can seek redress for an industrial injury, the court reasoned that the comp remedy being afforded to workers in Bradley Westphal's position was not fair and adequate substitute for a tort claim.
As such, the court said limiting Westphal to a comp remedy was an unconstitutional denial of his right of access to the courts.
Westphal had suffered injuries while fighting a fire for the City of St. Petersburg in December 2009. He collected temporary total disability benefits for 104 weeks, the maximum allowed under Florida Statutes Section 440.15, but he remained medically unable to return to work when his benefits ran out.
Westphal filed a petition seeking an extension of temporary disability benefits beyond 104 weeks, or permanent total disability benefits.
A judge of compensation claims denied his request, finding Westphal could not get more TTD than what was allowed by statute, and that he could not apply for PTD because his condition had not stabilized.
Westphal sought review by the 1st District Court of Appeals, arguing that the statutory 104-week limit on TTD was unconstitutional as applied to him, and a panel of the court agreed with him.
The panel reasoned that severely injured workers such as Westphal who reach the statutory cutoff for TTD without reaching maximum medical improvement face a "gap" in indemnity benefits because they do not qualify for permanent disability benefits until they reach MMI. The existence of such a gap, the panel said, exposes a worker to "potential economic ruination," and "is not merely unfair, but is fundamentally and manifestly unjust."
Seven months later, the 1st DCA issued an en banc decision that backed away from the panel's stance
A seven-member majority of the court concluded that Florida's statutory scheme should be construed as allowing a claimant who remains totally disabled at the 104-week point should be deemed to be at maximum medical improvement and permitted to apply for PTD benefits, which would eliminate the potential "gap" in indemnity compensation that had troubled Judges Philip J. Padovano, Bradford L. Thomas and Marguerite H. Davis.
The court's en banc decision certified the question of whether its solution was appropriate to the Supreme Court, and both the City of St. Petersburg and Westphal petitioned the Supreme Court for an answer.
The Supreme Court heard oral argument almost two years ago, on June 5, 2014.
On Thursday, a five-justice majority of the Supreme Court said the 1st DCA panel was correct that the workers’ compensation law cannot constitutionally permit a statutory "gap" in benefits, and that it "wholeheartedly" agreed with the panel's ruling.
While the 1st DCA's en banc decision "valiantly attempted to save the statute from unconstitutionality by interpreting Section 440.15(2)(a) so that the severely injured worker who can no longer receive temporary total disability benefits, but who is not yet eligible for permanent total disability benefits, would not be cut off from compensation after 104 weeks," the Supreme Court said the judicial branch "is without power to rewrite a plainly written statute, even if it is to avoid an unconstitutional result."
Giving the language of Section 440.15(2)(a) "its plain and obvious meaning," the Supreme Court said a worker who has not reached MMI will have his temporary disability benefits cease after 104 weeks.
Thus, the statute "cuts off a severely injured worker from disability benefits at a critical time, when the worker cannot return to work and is totally disabled but the worker’s doctors — chosen by the employer — deem that the worker may still continue to medically improve," the court said.
As applied to these circumstances, the court concluded, the 104-week limitation on temporary total disability benefits does not provide a “reasonable alternative” to tort litigation.
Because the constitutional viability of the comp system depends on it providing “full medical care and wage-loss payments for total or partial disability regardless of fault,” the court said Section 440.15(2)(a) did not pass constitutional muster, as applied to Westphal.
The court determined that the appropriate remedy for his situation was to employ "statutory revival" and reinstate the last constitutional version of Section 440.15(2)(a). This version of the statute had provided temporary total disability benefits for up to 260 weeks.
Justice R. Fred Lewis wrote separately, saying he believed this remedy was "insufficient."
Reinstatement of the 260-week cap "simply moves the goal posts without eliminating the unconstitutional statutory gap that will still persist for those who remain totally — but not permanently — disabled" once they reach that limit, Lewis complained. "Therefore, I do not believe that this is a situation in which statutory revival is appropriate."
Lewis said he thought "the only appropriate remedy would be to require the Legislature to provide a comprehensive, constitutional workers’ compensation scheme, rather than rely on the courts to rewrite existing law or revive prior law."
Justices Ricky Polston and Charles Canady dissented. They insisted that the threshold question in evaluating an access-to-courts claim is "whether the Legislature has abolished a right of redress that was in existence when the access to courts provision was incorporated into the 1968 constitution."
They contended that Section 440.15(2)(a) simply "restructures an existing right of redress," and it "does not abolish that right."
As the courts "have long recognized that the Legislature should be afforded latitude in the structuring of remedies both outside the worker’s compensation context," Polston and Canady said "(w)e should do likewise here and reject Westphal’s access-to-courts challenge."
Two of the attorneys for Westphal — Richard Anthony Sicking and Mark Andrew Touby of Touby, Chait & Sicking — on Thursday expressed happiness with the Supreme Court's decision, which marked their second victory in less than two months.
They had been claimants' counsel in the Castellanos case, too, which had also been a 5-2 decision with Canady and Polston dissenting.
Touby said they were "very pleased the court understood the significance of the issues and the arguments."
He said he was particularly happy with the language where the court expressly noted "'there has been continuous diminution of benefits and other changes in the law.'"
The court's discussion on page 30 of the decision "pretty much sums up what we all knew to be the case," he said, but it was good to see it acknowledged by the court.
Touby said the decision is "step in getting something fixed" with the Florida comp system, but "there's still a lot of work left to be done to restore the benefits to get back past, as the court put it, 'the tipping point.'"
He suggested that the increase in benefits "needs to be significant" to get the comp system back to the point where it is a reasonable alternative to tort, and the change is likely to come from a combination of legislative adjustments and the future challenges to other problematic statutes.
Touby said these include the statutory allowance for employers to control medical care for workers; the "major contributing cause" standard for the compensability of conditions that are the product of an industrial injury and a pre-existing condition; and the elimination of benefits for a worker's permanent partial loss of wage-earning capacity.
But the Westphal case gives "a roadmap" for litigants to get the constitutionality of this issue before the Supreme Court without their cases being derailed by procedural problems, Touby said.
That's what happened to two other cases that had involved facial challenges to the adequacy of the comp system that came up while Westphal was pending at the Supreme Court.
Stahl v. Hialeah Hospital made it to the Supreme Court, but after the court heard oral argument, it revoked its grant of review in April. Although the court did not give reasons for its decision, the defense argument had been that the case didn't go through the correct process for the court to consider the merits of the dispute.
The court also declined to review the 3rd DCA's decision in The State of Florida v. Florida Workers' Advocates last December. The 3rd DCA had reversed a trial judge's ruling that the comp system was an inadequate substitute for a tort cause of action because it said the issue hadn't been properly presented to the judge.
Touby said he was aware of at least one case that's working its way through the appeals process right now involving a challenge to the constitutionality of the major-contributing-cause standard.
Gearheart v. Securitas Security Services is also challenging the constitutionality of Florida's statutory presumption of correctness for the opinion of the expert medical adviser appointed to a case.
The 1st DCA is set to hear oral argument in the Gearhart case in August.
Jason Fox of Bichler, Oliver, Longo & Fox, co-counsel with Touby and Sicking in the representation of Westphal, said he believed there were "many other challenges already out there," and "there's going to be many more challenges" now that the court "finally recognized the Legislature took away too many benefits."
After years of workers losing benefits and protections, Fox opined, "it's hit critical mass."
He said the court's ruling Thursday is "very narrow," as it "only affects Westphal and those in the same situation," so the claimants' bar has to "keep chipping away" at the "many other issues" with the comp statutes.
Fox said he personally hears complaints almost every day from workers who are unhappy about their inability to choose their treating doctors, so he would expect that to be the subject of a future challenge.
He said the court has made it "very clear that a lot of the takeaways are going to have to be addressed," and "if the Legislature doesn't start giving that back to the injured worker," there will be more cases making their way up to the Supreme Court by workers seeking redress.
Attorney General Pam Bondi's office had no immediate comment on the court's ruling in City of St. Petersburg v. Westphal.
Press Secretary Kylie Mason said the office was still in the process of reviewing the opinion as of Thursday afternoon.
Florida Justice Reform Institute President William Large on Thursday reflected that the state's comp system "has changed dramatically in the last six weeks," given Westphal and the court's earlier decision on the attorney fee statute in Castellanos.
He added that Westphal was "a most extraordinary case " too, in that the Supreme Court "revived a 1991 statute that determined the length of time for temporary total disability is 260 weeks" rather than adhere to "the Legislature's clear, unequivocal declaration that temporary total disability benefits should be 104 weeks."
In doing so, Large said he thought "the Florida Supreme Court has encroached upon the powers of the legislative branch by reviving a previously legislatively rejected time-frame."
He explained that between 1991 and 1994, Section 440.15(2)(a) had provided a 260-week cap, but the Legislature amended the statute to reduce the cap to 104 weeks.
"Under Article 2, Section 3 of the Florida Constitution, only the Legislature has the ability to perform this public policy role," Large said, so "the majority opinion encroaches upon the power of the Florida Legislature by creating a newly revived timeframe."
But Richard W. Ervin of Fox & Loquasto, author of the amicus brief filed by FWA, on Thursday said the court's decision was what he had been expected it to be.
Section 440.15(2)(a) "didn't really take into account" a claimant who could be temporarily totally disabled for longer than 104 weeks, he said, which was "contrary to the long established rule that a claimant is entitled to comp benefits for so long as he remains disabled."
When a statute "clearly and unambiguously says something, you have to accept what the statute says," and the problem for Section 440.15(2)(a) was that it said there were no more benefits after 104 weeks, Ervin opined.
He said he "would imagine that in a majority of cases, a worker will be able to return to the workforce before hitting 104 weeks," so the fiscal impact of the Westphal decision won't be all that widespread, "but there could be others who are in the same boat," and for them, the case will mean a world of difference.
Rayford Taylor, a defense attorney who had filed an amicus brief in the Westphal case on behalf of the Associated Industries of Florida, said Thursday that he thought it was "going to be awhile before anyone knows" what impact the Westphal ruling will have.
Earlier this month, the National Council on Compensation Insurance recommended a 15% rate increase in response to the Supreme Court's decision in Castellanos, and Taylor said he was sure NCCI would recommend another increase in light of the Westphal ruling.
Taylor said he didn't expect the recommendation to double, but he "certainly expect(ed) to see it go up."
As Westphal has increased an employer's potential exposure for temporary disability benefits from roughly two years to five, Taylor said he thought that was likely to drive up the cost of settlements.
Taylor said he also thought the Castellanos decision gives claimants and their attorneys an incentive to "keep their cases going," and so the next effect of the two cases will be an increase in litigation and costs to the comp system.
Although Taylor said he doubted Westphal would have as big of an impact as Castellanos, he said, "we'll have to wait an see what NCCI has to say."
NCCI spokesman Chris Bailey issued a statement Thursday saying the group "is currently evaluating the Westphal decision" and will amend the pending rate filing currently under review by the Florida Office of Insurance Regulation to reflect what it believes the impact of the decision will be.
Michael Winer, a claimant's attorney who also happens to be chair of the Florida Bar Workers' Compensation Section and a past-president of FWA, said he expected "the industry cry is going to be, 'Oh, my goodness, we need to raise rates even more,'" but "when you peel the layers of the onion back, there's no real basis in logic or in fact" for such a lament.
"Westphal really only applies to workers who are temporarily and totally disabled after 104 weeks," he explained. Most of the time workers who hit that point file claims for permanent-total disability benefits, so they start collecting PTD benefits and supplemental benefits.
Because the Supreme Court has said workers can collect more than 104 weeks of temporary disability benefits, Winer said, that means fewer people will be collecting PTD and supplemental benefits, which may actually save employers and carriers money.
He said the court also addressed the particular issue before it "with a scalpel, and not a hammer," so the ruling itself will not apply broadly to a large number of workers.
Winer suggested that the widespread effect of Thursday's decision would be that it was an indication that the court has "a very deep level of understanding as just how inadequate workers' compensation benefits have become."
Based on his read of the decision, Winer said the court seemed "open" to applying the same analysis to other limitations in the workers' compensation system, and he expected the "next battle" is going to be about what happens when a worker is partially disabled, but not at MMI, when the worker hits the 104-week mark.
Alan Pierce, president of the national Workers' Injury Law and Advocacy Group, said the Westphal decision is a recognition that "the so-called grand bargain for reasonable and adequate workers' compensation benefits in exchange for the employer being granted immunity from a tort action has been breached by the systematic diminution of compensation benefits over the past several years" in Florida.
It's the same story in other states, such as Oklahoma and Utah, he said. The Oklahoma Supreme Court struck down two statutes earlier this year — one had required 180 days of continuous employment for a cumulative trauma injury to be compensable, the other had allowed employers to take an offset from their permanent partial disability liability to an employee who was able to return to work.
The Utah Supreme Court last month declared its attorney fee statute unconstitutional, too.
"The trend seems to be that at long last the progressive deform of the workers' compensation laws across the country, when exposed to careful judicial scrutiny, establishes that the goal of simply reducing premiums by reducing benefits has left the injured workers of America with the very short end of the proverbial stick," Pierce said.
He added that he was sure "we have not seen the last of such supreme court decisions."
David Langham, the deputy chief judge of the Office of Judges of Compensation Claims in Florida, said that from his perspective, the Supreme Court's decision in Westphal is finally giving the system "predictability."
In his experience, Langham said, "attorneys tend to be really good at figuring out problems as long as they have transparency and predictability," so he didn't expect the Westphal decision to drive up the volume of cases the OJCC will have to handle.
The law is basically going back to what it was in 1991, Langham said, and as much as he was loath to admit he was practicing law back then, "it wasn't like we were litigating cases all over the place."
Langham said there is ample case law as to when and how the 260-week cap comes into play, and he was sure "the lawyers are going to get it all down pat in a couple of weeks."
To read the Westphal decision, click here.
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