The Father of the 11th Circuit Court Decision

Monday, August 25, 2014 | 0

The Florida 11th Circuit Court decision on Aug. 13 appears to be the first state court decision in many years to declare an entire workers’ compensation statute as unconstitutional. The fingerprints of the Dean of Workers’ Compensation Research John Burton are all over Judge Jorge Cueto’s reasoning.  

Since the 1970s, Burton, with a law degree and PhD in economics, has been the leading academic scholar in workers’ compensation, even now years after his retirement from a faculty position at Rutgers University. Burton surely thinks that this decision is long coming. So, what’s his complaint?

Cueto wrote that through the years, the state has cut back permanent partial disability benefits so severely that the state “no longer provides any benefits for this class of disabled worker.”

 Burton’s writings indicate that he holds that whatever permanent disability benefits there are in Florida, they are so low and PPD so significant, that the entire workers’ comp system in Florida is inadequate. Cueto agrees.

He cites National Council on Compensation Insurance estimates that legislative changes in 1979, 1990, 1994 and 2003 cut PPD benefits severely. Per Burton, Florida “eviscerated the permanent partial benefit system.” The current benefits are “less than available during the 1970s and markedly lower than paid in other states.” Florida is the only state that relies exclusively on permanent impairment ratings for setting PPD benefits, ratings that he considers deeply flawed in method. Other states include wage loss or loss of earning capacity. He points to research showing that impairment ratings poorly predict a worker’s future employment and wages.

Burton has no affection for the tort system. But he sets a bottom-line requirement that no-fault, exclusive remedy systems provide “adequate” benefits, which he defines as cash that replaces a “substantial proportion of lost wages.”  

A 1917 U.S. Supreme Court decision and the National Commission report of 1972 addressed adequacy. New York Central R. Co. v. White, which Burton often cites, is the key Supreme Court decision approving no-fault, exclusive remedy benefit systems,which states began to enact in the 1910s to replace tort-based compensation systems. 

The court said that injured workers deserve a “certain and speedy remedy without the difficulty and expense of establishing negligence or proving the amount of the damages… The benefits prescribed by the new law are “apparently moderate and reasonable… This, of course, is not to say that any scale of compensation, however insignificant, on the one hand, or onerous, on the other, would be supportable.”

The Nixon-era act creating the U.S. Occupational Safety and Health Administration also created a temporary commission to review the adequacy of state workers’ compensation systems. John Burton served as commission chair.

Burton has written that the commission identified five major objectives for a modern workers’ compensation program, broad coverage of employees and of work-related injuries and diseases, substantial protection against interruption of income, provision of sufficient medical care and rehabilitation services, encouragement of safety and an effective system for delivery of the benefits and services.

The commission’s final report, issued on July 31, 1972, won unanimous support for the diverse members because (according to Burton) all were concerned about a general inadequacy of state systems. They fretted about the will and capability of the states to run workers’ compensation systems, but stopped short of endorsing federalization. The commission set minimum standards for wage replacement and other system elements.

According to Burton, the major area where the National Commission was not able to reach a consensus concerned the design of a PPD system. Neither the Commission nor the 1917 New York State decision authored an explicit test for benefit adequacy. Burton has suggested one: compare the income of PPD benefits with the income of cohorts. 

Thus, Cueto’s inadequacy concerns have a long prior history. Burton’s perspectives deeply colored the judge’s decision. 

It is worth noting that the goal of workers’ compensation is not to pay right-sized benefits. The goal is to bring the worker back as close to her pre-injury economic and social status as possible, with certainty and speed, in the words of White.  

Cash benefits play a major part, but so do medical care and vocational recovery. Neither Burton nor Cueto address whether medical and vocational services are adequate.

It would be useful to find out if medical advances (including rehabilitation) and work design over the past 30 years have been so strong as to, in a way, compensate for poor cash benefits. Which do you prefer if you lost most of your ability to use your right shoulder: a generous PPD check or a mechanical device that gave you the strength and dexterity you had pre-injury, and maybe even more?

Correction: An earlier version of this article mis-characterized New York Central R. Co. v. White as a case decided by New York State's highest court. It was decided by the U.S. Supreme Court.