Holden: Workers' Compensation Act Withstands Another Constitutional Attack

Tuesday, November 11, 2025 | 0

On Nov. 7, 2025, the Alabama Court of Civil Appeals, in Carter-Shepherd v. Royal Furniture Co. and State of Alabama, affirmed a Jefferson County Circuit Court’s decision rejecting constitutional challenges to two provisions of the Alabama Workers’ Compensation Act:

• 

  Joshua G. Holden

  The 15% cap on claimant attorney fees (§ 25-5-90).
• The nonseverability clause (§ 25-5-17).

Tracia Carter-Shepherd settled her workers’ compensation case for $50,000. After the settlement was approved, she moved for the court to declare the statutory 15% attorney fee cap unconstitutional and to award her attorney a 16% fee. She also challenged the act’s nonseverability clause. The trial court denied both requests, and she appealed.

The attorney general argued that Carter-Shepherd lacked standing because the fee cap benefits employees by preserving more of their recovery. The court disagreed, holding that the cap directly affects an employee’s ability to contract for legal services, thus creating a sufficient, legally protected interest to confer standing.

Carter-Shepherd contended that the fee cap violates Alabama’s separation-of-powers doctrine by allowing the Legislature to regulate attorney compensation. The Court of Civil Appeals disagreed, reasoning that:

• Courts retain discretion to award fees up to the statutory cap.
• The Alabama Rules of Professional Conduct expressly allow attorney fee limits imposed by law.
• The Legislature has long exercised its police power to regulate fees in workers’ compensation matters.
• Decisions from Utah and Minnesota striking down similar caps were inapplicable, as those states’ constitutions grant their courts exclusive authority over attorney regulation, unlike Alabama’s.

Carter-Shepherd also argued that the nonseverability clause violated her First Amendment right to petition, since a successful challenge to any part of the act could invalidate the entire statute. However, once the fee cap was upheld, that claim became moot, since no constitutional violation remained to trigger the clause.

The Court of Civil Appeals affirmed the trial court’s judgment, holding that the 15% cap on claimant attorneys’ fees remains valid and that the challenge to the nonseverability clause was properly dismissed as moot.

Joshua G. Holden is a partner of Fish Nelson & Holden LLC, headquartered in Birmingham, Alabama. This entry is republished, with permission, from the firm's Alabama Workers' Comp Blawg.