Justices Strike Down Workers Comp Fee Law

April 28, 2016/in Gainesville Sun

JUSTICES STRIKE DOWN WORKERS COMP FEE LAW

By JIM SAUNDERS
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, April 28, 2016………. In a major ruling, the Florida Supreme Court on Thursday said that a state law limiting attorney’s fees in workers-compensation insurance cases is unconstitutional.

The 5-2 ruling in the closely watched case was a victory for attorneys who represent injured workers — and a blow to business groups that have long argued legal fees drive up the costs of workers-compensation insurance. The fee issue will bounce back to the Legislature, where it could spark a fierce debate.

Justice Barbara Pariente, writing for the court’s majority, said the 2009 law is a violation of due-process rights under the Florida Constitution and the U.S. Constitution because it prevents challenges to the “reasonableness” of attorney’s fees awarded in workers-compensation cases. The ruling stemmed from a case in which an attorney was awarded the equivalent of $1.53 an hour in successfully pursuing a claim for benefits for a worker injured in Miami.

Pariente wrote that the goal of the workers-compensation system is to quickly provide benefits to get injured people back on the job at a reasonable cost to employers.

“This case, and many others like it, demonstrate that despite the stated goal, oftentimes the worker experiences delay and resistance either by the employer or the (insurance) carrier,” wrote Pariente, who was joined in the majority by Chief Justice Jorge Labarga and justices R. Fred Lewis, Peggy Quince and James E.C. Perry. “Without the likelihood of an adequate attorney’s fee award, there is little disincentive for a carrier to deny benefits or to raise multiple defenses, as was done here.”

But Justice Charles Canady wrote a dissent that said the law involves a “policy determination” by the Legislature that there should be a relationship between the amount of benefits obtained in workers-compensation cases and the amount of attorney’s fees awarded. The law includes a formula that links benefits and attorney’s fees.

“In reaching the conclusion that the statute violates due process, the majority fails to directly address the actual policy of the statute,” wrote Canady, who was joined in dissent by Justice Ricky Polston. “Instead, the majority assumes — without any reasoned explanation — that due process requires a particular definition of ‘reasonableness’ in the award of statutory attorney’s fees. The definition assumed by the majority categorically precludes the legislative policy requiring a reasonable relationship between the amount of a fee award and the amount of the recovery obtained by the efforts of the attorney. Certainly, this legislative policy may be subject to criticism. But there is no basis in our precedents or federal law for declaring it unconstitutional.”

The case, known as Marvin Castellanos v. Next Door Company, was one of three major challenges to the workers-compensation system that have been pending at the Supreme Court. The other cases have focused on a workers-compensation overhaul that lawmakers and then-Gov. Jeb Bush approved in 2003 to reduce insurance rates for employers.

Business groups received a partial victory Thursday when the Supreme Court said it will not rule in one of the other cases, brought on behalf of former Hialeah Hospital nurse Daniel Stahl who was injured on the job. Justices heard arguments in that case April 6, but it was clear they had questions about the procedural history of the case and a lack of a factual record.

Attorney’s fees have long been one of the most-contentious issues in the workers-compensation system, which handles disputes through a legal process outside of more-typical civil courts. Under the formula included in the 2009 law, for example, attorneys who successfully represent workers can receive fees equal to 20 percent of the first $5,000 in benefits obtained and 15 percent of the next $5,000 in benefits.

The attorney’s fee ruling Thursday stemmed from a case that started in 2009 when Marvin Castellanos was injured while at work at Next Door Company, a manufacturer of metal doors and door frames, Pariente wrote in the majority opinion. But a dispute about the injuries ultimately led to a case going before a judge of compensation claims.

Pariente wrote that the dispute resulted in Castellanos securing benefits with a value of $822.70. His attorney spent 107.2 hours on the case and was entitled to fees of $164.54 — or $1.53 an hour — under the formula. In the dissent, Canady wrote that the amount of attorney’s fees sought in the case were $36,817.50.

In a concurring opinion, Lewis described the attorney’s fees part of the workers-compensation system as “emasculated” and pointed to the example of the $1.53 an hour in fees in the Castellanos case, which he wrote is “clearly unreasonable and insufficient to afford workers the ability to secure competent counsel.”

In striking down the fee law, the majority directed the state to return to a previous law “until the Legislature acts to cure the constitutional infirmity.” Under that previous law, workers will be able to present evidence about how using the fee schedule would lead to “unreasonable” attorney’s fees.

“We emphasize, however, 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,” Pariente wrote. “Only where the claimant can demonstrate … that the fee schedule results in an unreasonable fee — such as in a case like this — will the claimant’s attorney be entitled to a fee that deviates from the fee schedule.”

The ruling drew quick rebukes from the Florida Chamber of Commerce, Associated Industries of Florida and the business-backed Florida Justice Reform Institute, all of which raised the specter of increased insurance rates. The Florida Chamber, anticipating the possibility of the ruling, had earlier formed a task force to make recommendations to the Legislature about how to respond.

Chamber President and CEO Mark Wilson said in a prepared statement the “potential impact of the high court’s ruling could threaten Florida’s improving business climate. The Florida Chamber remains laser focused on ensuring workers’ comp rates are fair, and we will lead the effort before lawmakers and in the halls of justice to ensure the voices of job creators are heard.”

–END–
4/28/2016

https://www.gainesville.com/news/20160428/justices-strike-down-floridas-workers-comp-fee-law/1

A New Approach to Fixing Florida’s Mortgage Crisis

June 20, 2011/in Gainesville Sun

William Large: A new approach to fixing Florida’s mortgage crisis

Posted Jun 20, 2011 at 9:42 AM

Perhaps no other state in the country has been harder hit by the country’s mortgage crisis than Florida.

Our state accounted for nearly a quarter of all homes in foreclosure during the first quarter of 2011 and 23 percent of loans here are in some stage of delinquency, according to a quarterly report released last month by the Mortgage Bankers Association.

In fact, Florida has more homes in foreclosure than 22 other states have loans, according to the group.

While the market continues to erode, we must find a way to preserve the American dream of homeownership, without forcing aggressive government intervention. That’s why I support Florida Attorney General Pam Bondi’s decision to take a step away from proposals that seek to use the courts to fix the country’s mortgage crisis with national loan remodification programs.

General Bondi recognizes the detrimental impacts such broad national housing policy could have on homeowners in our state if government-induced litigation is the standard by which we modify mortgage contracts in Florida.

Such a move would only worsen the state’s current mortgage crisis by enabling a moral hazard where people will stop paying mortgages because they think that they will now get them modified. Government intervention, including the bailouts, is always bad.

The proposed multi-state lawsuit against the mortgage servicers is just the latest example of an increasing trend of “regulation through litigation” where multi-state lawsuits are used as a financial and political lever to drive overly broad public policy.

Such an approach seeks to use the courts to impose sweeping mortgage-industry changes with the same economic detriment and consequences as administrative regulations.

General Bondi was right to join Attorneys General from three other states in voicing concern about the impacts and application of an overly broad national mortgage remodification program.

In a letter to their colleagues in other states, Bondi and General Greg Abbott of Texas, General Alan Wilson of South Carolina, and General Ken Cuccinelli of Virginia, address various concerns with proposals and warn that lenders “who may prefer to avoid responsibility for their improper conduct have been aided by [the] proposal for a broad, new regulatory regime.”

They caution their colleagues, that if adopted, some of the proposals would force Attorneys General to be deeply involved in the review and monitoring of mortgage providers everyday business practices and would go so far as mandating automatic review of modification denials whether or not requested by the homeowner, and even dictating how payments should be applied.

These and other terms could have the unintended effect of unnecessarily prolonging the foreclosure process and further delaying the recovery of the housing market, proving yet again that government-imposed solutions to problems in the financial markets are more hindrance than help.

Florida’s housing crisis is real and continues to threaten the state’s economy. Courts, lawyers, and our General Bondi all have roles to play in resolving it, but if new regulations are needed, they should come from the Legislature rather than being mandated by the courts.

William Large is president of the Florida Justice Reform Institute. The Florida Justice Reform Institute’s mission is to fight wasteful civil litigation through legislation, promote fair and equitable legal practices, and provide information about the state of civil justice in Florida.

https://www.gainesville.com/opinion/20110620/william-large-a-new-approach-to-fixing-floridas-mortgage-crisis

Bills Limiting Floridians’ Ability to Sue are Progressing

April 11, 2011/in Gainesville Sun

Bills limiting Floridians’ ability to sue are progressing

By Lloyd Dunkelberger

Tallahassee bureau

Published: Saturday, April 16, 2011 at 11:05 p.m.

TALLAHASSEE — Injured Floridians’ ability to sue nursing homes, doctors and hospitals for compensation when they are hurt by negligence could be curtailed under legislation pitting some of the capital’s most powerful lobbying groups against each other.

Doctors, trial lawyers, nursing homes and insurance companies are all vying for influence over an issue that will be decided as the Legislature moves toward its scheduled May 6 adjournment.

Among the most contentious issues is a provision that would limit lawsuits when a nursing home patient dies. The survivors would be limited to a $250,000 cap for non-economic damages — such as pain and suffering — although there would be no cap on economic damages, which cover medical bills, funeral costs and related items.

Randolph Gray, a Madison County man who lost both his parents in nursing home negligence incidents, has been lobbying lawmakers to remove the damage cap from a major Medicaid bill (SB 1927) that is ready for a Senate floor vote. He said his father choked to death after a meal, while his mother died because of negligence involving a breathing tube.

“It is wrong to limit the rights of Floridians to have their voices heard in the one place open to all — the courts,” Gray, who works for the state Department of Financial Services, told the Senate Budget Committee.

Sen. Joe Negron, R-Stuart, the chief architect of the Medicaid bill, called the $250,000 cap a “reasonable amount,” noting survivors could still claim unlimited economic and punitive damages, if they can prove the nursing home acted wrongfully. But he also said “the policy is certainly debatable.”

The issue encapsulates the competing forces lawmakers face as they debate lawsuit limits — known as “tort reform” in the Legislature.

Lawmakers must balance the rights of victims of negligence against the claims that costly litigation is adding to the financial burden of government programs like Medicaid or of Florida businesses, ranging from health-care companies to auto manufacturers.

“These will always be difficult discussions because you’re trying to fit things together that you care about deeply,” said Rep. Dennis Baxley, R-Ocala, one of the House leaders on lawsuit limits.

“You want victims to be properly cared for. But on the other hand, you don’t want to drive up the cost of health care, drive up the cost of the insurance, simply because of a lot of windfall cases that have to be paid.”

Other major lawsuit limits moving in the last weeks of the annual session include:

• A cap on non-economic damages on claims made by Medicaid patients against doctors or other medical providers. A per-incident cap of $300,000 would be set, with no single health-care provider having to pay more than $200,000. Critics say the cap discriminates against Medicaid patients, since other patients can claim up to $500,000 in non-economic damages.

• A bill (HB 479 and SB 1590) that is a top priority for the Florida Medical Association would give more legal protections to doctors and hospitals facing malpractice lawsuits. Among the provisions, hospitals would not be liable for most actions by doctors if they were independent contractors. The measure also sets new standards for expert witnesses and allows lawsuit defendants more power to question the medical care of the injured patients.

Trial lawyers say those proposals as well as the nursing home cap would shift the balance from the injured patients — who already face restrictions on lawsuits against hospitals, nursing homes and other medical providers — to the providers.

“Those rights and the safety of nursing home residents are in great jeopardy if these bills were to become law,” said Debra Henley, executive director of the Florida Justice Association, a trial lawyer advocacy group.

“None of what they are considering will bring any jobs to Florida,” Henley said. “What it will do instead is it will shift the costs from the health-care providers that are responsible for injuring Floridians to the taxpayers.”

The lawsuit restrictions are riding a wave of political momentum this spring pushed by a conservative Legislature and Gov. Rick Scott, who called the excessive filing of lawsuits part of the “axis of unemployment” blocking the state’s economic recovery.

And aside from the legislation related to nursing homes and the health-care professionals, several other major “tort” bills remain in play.

Among them is a bill (SB 142), which already passed the Senate, that would shield automakers from paying some damages if they can show the driver was partially negligent for the accident.

The bill would overturn a Florida Supreme Court decision that determined that automakers could be held solely at fault for defective vehicles even if the drivers were partially at fault for the accidents.

Another measure (SB 1694) would cap legal fees in auto-insurance injury cases.

But other tort bills have stalled despite Scott’s advocacy for lawsuit limits and the conservative bent of the Legislature. Among them is a bill that would have made it harder for consumers to sue insurance companies if they acted in “bad faith” in paying claims.

Supporters of lawsuit limits say while they remain optimistic that this year’s Legislature will eventually agree on many of these bills, they also concede that the fight remains difficult, in large part because of the opposition from the politically influential trial lawyers.

“There are no guarantees in this process,” said William Large, head of the Florida Justice Reform Institute. “A lot of people campaigned on tort reform but it turns out getting tort reform across the finish line is a lot harder than just using rhetoric.”

https://www.gainesville.com/article/LK/20110416/News/604136985/GS?template=ampart

JUSTICES STRIKE DOWN WORKERS COMP FEE LAW

Bills limiting Floridians’ ability to sue are progressing

Florida Justice Reform Institute

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