Langham: Westphal Is Over, But Questions Remain

Friday, June 10, 2016 | 0

On June 22, 2014, injured worker Bradley Westphal tried his case against the City of St. Petersburg. The decision was appealed and the First District Court of Appeal departed from its own earlier analysis and reinterpreted Fla. Stat. 440.15(2). The specific context is Fla. Stat. 440.15(2)(a), titled "Temporary Total Disability." The appellate process involved two cases, because both Westphal and the city appealed.

Judge David Langham

This was not the beginning of the story of Fla. Stat. 440.15(2)(a). In 2011, Matrix Employee Leasing Inc. v. Hadley was tried, a similar dispute regarding temporary indemnity benefits. The trial judge decided the case following City of Pensacola Firefighters v. Oswald (Fla. 1st DCA 1998), an appellate court decision from 1998. That is how stare decisis and the common law works in America — parties and judges look to previous decisions to guide the decision in the present case. The prior decisions perhaps make the outcome of the current litigation predictable. Predictability is beneficial on a variety of levels, not the least of which is the calculation of appropriate premiums to allow payment of projected losses. 

One party sought review of the Hadley trial outcome by the Florida First District Court of Appeal (1st DCA). The 1st DCA concluded that a different interpretation of the law was more appropriate. And in 2011, Oswald was superseded and Hadley was the law. 

It is worth noting that the majority of intermediate appellate cases are decided by three judges working together in what is called a “panel.” However, sometimes the parties seek to have the entire court consider a case, which is called an “en banc” decision. They do so because it is possible for different panels of a court, in considering different cases, to make decisions that result in confusion among attorneys and parties. To reduce the potential for confusion, the appellate court periodically hears a particular case en banc and issues a decision that represents the conclusion of the entire court, as opposed to a panel of the court. Hadley was an en banc decision. Thus, it was viewed as representative of the whole First District Court of Appeal’s interpretation of the temporary indemnity provisions in Fla. Stat. §440.15(2). It was thought to be solid precedent providing predictability. 

Two years later, a panel of the same court considered a similar indemnity question in Westphal v. City of St. Petersburg. That panel did not follow the interpretation of Hadley, and instead decided that Fla. Stat. §440.15 is unconstitutional. The court panel concluded that this statute was inconsistent with “natural law.” This has since been referred to as the “Westphal panel decision,” because later in 2013 the entire First District Court rendered an en banc decision in Westphal. The court, as a whole, did not find a constitutional problem with the statute (receding from the Westphal panel decision). The court did, however, interpret Fla. Stat. §440.15 in Westphal differently than it had in Hadley. And, again, some in the market thought there was solid authority from the whole court and, as a result, predictability. 

The Supreme Court accepted the Westphal case for review and held an oral argument (OA) on June 5, 2014. Last weekend, we celebrated the OA's second birthday. Then on June 9, 2016, the Florida Supreme Court issued its divided opinion, 1,448 days since the trial concluded (almost four years) and 735 days after the OA. The court described its consideration of "section 440.15(2)(a)" and concluded "this portion of the worker’s compensation statute is unconstitutional under article I, section 21, of the Florida Constitution, as a denial of the right of access to courts." This is not a facial determination that the statute is unconstitutional in all cases, but only "as applied to Westphal and others similarly situated." This is perhaps a critical distinction. How similar a worker in a future case must be to Mr. Westphal may be of import.

The court said that the limitation in this section, to 104 weeks of temporary total disability benefits, "deprives an injured worker of disability benefits under these circumstances for an indefinite amount of time — thereby creating a system of redress that no longer functions as a reasonable alternative to tort litigation." The majority decision was written by Justice Pariente, joined by Justices Labarga, Perry and Quince. Justice Lewis concurred in the outcome with a separate opinion. Justices Canady and Polston dissented with a separate opinion. 

The internet came alive June 9, 2016, with announcements and prognostications about the import of the decision. 

The court acknowledged the "valiant" efforts of the First District to avoid the constitutional question through statutory interpretation. Florida courts are "obligated to construe statutes in a manner that avoids a holding that a statute may be unconstitutional" (Murray v. Mariner, 994 So.2d 1051, 1053 [Fla. 2008]). The default, essentially, is to find an interpretation by which a statute can be valid before resorting to the constitutionality analysis. This the 1st DCA did twice, en banc, in Hadley and in Westphal. 

In eschewing this "interpretation" approach in Westphal, the court said "the judiciary, however, is without power to rewrite a plainly written statute, even if it is to avoid an unconstitutional result." The majority of the court essentially decided that there was no interpretation of the statute that could reach a constitutional result, essentially finding that the 1st DCA was wrong twice.  

The court concluded that Fla. Stat. 440.15(2)(a) "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." In this manner, the court says, the "workers’ compensation law undoubtedly fails to provide 'full medical care and wage-loss payments for total or partial disability regardless of fault.'"

The court specifically admonished that this finding "does not render the entire workers’ compensation system invalid." And, as a result the prior statutory provision — that is, before the 1994 amendments, with the 104 week limitation — is revived. The court directed "that the limitation in the workers’ compensation law preceding the 1994 amendments to section 440.15(2)(a) is revived, which provides for temporary total disability benefits not to exceed 260 weeks — five years of eligibility rather than only two years, a limitation we previously held 'passes constitutional muster.'” 

Of critical note, the majority eschewed Justice Lewis' concurring logic regarding the appropriate outcome. It noted "Justice Lewis’s ... opinion suggests as a remedy that chapter 440 should be 'invalidated where defective.'" The court noted that the Florida Workers' Advocates urged the "remedy of invalidating the entire workers’ compensation law," but that was not "not raised by the parties" and so not appropriately before the court. So, the majority said that "the remedy of invalidating other sections in chapter 440 beyond section 440.15(2)(a) is not properly before us."

Despite its decision to not address the arguments of broader constitutional infirmity, the court nonetheless noted its perceptions of the stated of benefits under the law. It noted (italics are all direct quotes):

• Continuous diminution of benefits and other changes in the law. 
• The Legislature also gave employers and insurance carriers the virtually unfettered right to select treating physicians in workers’ compensation cases. 
• The right of the employee and the employer to “opt out” of the workers’ compensation law, and preserve their tort remedies, was repealed. 
• A heightened standard that the compensable injury be the “major contributing cause” of a worker’s disability and need for treatment.
• A requirement that the injured worker pay a medical copayment after reaching maximum medical improvement.
• Apportionment of all medical costs based on a pre-existing condition. 

The meaning to be derived from the court's recitation of issues it would not address has raised questions from the marketplace. There are those who are searching for the "unwritten message" in the tea leaves of this dicta. To what end is this list published, regarding issues not before the court, according to its ruling?

Interestingly, the court noted that "both Westphal ... and the city ... argue before this court that the First District’s previous construction of the statute" in Hadley and Oswald was correct. Both parties advocated for the restoration of the statutory interpretation that was rendered in 1998. Despite that, the court eschewed statutory construction and this almost 20-year-old interpretation (1988) that arguably (to some, including the parties in this case, apparently) sufficed until the 1st DCA's departure in its Westphal en banc decision. Without finding that the Hadley interpretation was unsupportable, the court concluded that "the clear language of the statute simply does not allow us to agree with the First District’s interpretation." 

In 1994, Section 440.15(2)(a), which was found unconstitutional in Westphal, provided in part as follows:

Subject to subsection (7), in case of disability total in character but temporary in quality, 66 2/3 percent of the average weekly wages shall be paid to the employee during the continuance thereof, not to exceed 104 weeks except as provided in this subsection, s. 440.12(1), and s. 440.14(3).

Thus, the court concluded that under this statute, "temporary total disability benefits are payable for no more than 104 weeks, after which the worker’s permanent impairment rating must be determined." And, therefore it is unconstitutional because it terminates benefits based on an absolute cap or limit of 104 weeks.  

The court has not explained how an absolute cap at 260 weeks is any more constitutional. It would seem to be as arbitrary as the 104-week limit. One might argue that the higher arbitrary limit will statutorily preclude benefits in a smaller population of cases, but the effect on the worker in those cases is arguably identical in effect, though later in application? The court as much as concedes this, noting "260 weeks of temporary total disability benefits amounts to two and a half times more benefits — five years of eligibility for benefits rather than only two — and thus avoids the constitutional infirmity created by the current statutory gap as applied to Westphal." (Emphasis added). Not "as applied to all injured workers."

This is a critical point. The Court has clearly stated that its decision "thus avoids the constitutional infirmity created by the current  (104 week) statutory gap as applied to Westphal." (Emphasis added). But the Court has also said that this determination is "as applied to Westphal and others similarly situated." (Emphasis added). Thus, one might infer that a "similarly situated" employee who reaches 260 weeks from the accident, without reaching maximum medical improvement, might likewise experience the very gap decried by the court in this case. Would that hypothetical worker be instead entitled to more temporary total — the 350 week maximum entitlement period that was statutorily stated before the Legislature reduced it to 260? 

Some are already arguing that the impact of the court's decision on June 9, 2016, is minimal. They contend that very few injured workers reach the 104-week anniversary without actually reaching MMI. Thus, they argue the revival of the 260-week limitation is of minimal impact as far as system costs. However, the Supreme Court observed already that "Westphal’s case is not an isolated one." This, the court seems to have concluded, is an issue in some population of cases, though the record evidence to support that arguably gratuitous conclusion is less clear. 

It is interesting that the court's decision striking the 1994 version of Fla. Stat. 440.15(2)(a) "automatically revives the predecessor unless it, too, would be unconstitutional.” This is the specific finding, however, that leaves some interesting questions for another day. 

The limitation in Fla. Stat. 440.15(2)(a) (temporary total disability, or "TTD") is statutorily linked to another provision, Fla. Stat. 440.15(4) (temporary partial disability, or "TPD"). That provision provides:

Fla. Stat. 440.15(4)TEMPORARY PARTIAL DISABILITY.

(e)Such benefits shall be paid during the continuance of such disability, not to exceed a period of 104 weeks, as provided by this subsection and subsection (2). 

Thus, the "104-week cap" has been interpreted as a combined 104 weeks of total potential entitlement to any combination of TTD and TPD. That statutory interconnection was not expressed until the 1994 statute. Thus, the provision of section (4) now references a non-existent 104-week limitation in (2)(a). The limitation in (2)(a), by the court's resuscitation or revival of the 1993 statute, is now 260 weeks. The (4) statutory nexus is now perhaps ambiguous at best. 

By implication, it is possible that the nexus in (4) is therefore actually broken. If this is the interpretation, then the combined entitlement to temporary benefits might today be:

• 260 weeks of combined benefits (preserving the spirit of the nexus language in (4) but substituting the newly revived 260-week period. Thus a combined five years of temporary indemnity entitlement.
• 260 weeks of TTD under the revived 1993 (2)(a) plus 104 weeks of TPD under the (by the court) unaddressed and undiscussed (4), for a total of 364 weeks or seven years of combined temporary indemnity.  

Or, is the 104 weeks in (4) as invalid as the 104 weeks in (2)(a), thus reviving the 1993 version of (4) and allowing a second, independent, period of 260 weeks of TPD in addition to the TTD? Thus a combined 10 years (520 weeks) of temporary indemnity entitlement?

Or, ultimately, is the revival of the 350-week limitation an eventuality? If so, again, is it so in only the TTD or each of TTD and TPD when and if the appropriate injured worker reaches the current limit without achieving MMI?

And how will the market find out the answers and the parameters? There will be cases filed and arguments raised. There will perhaps be appeals filed and briefs written. What we have learned from Westphal may include the conclusion that answers could take a long time. And while the marketplace patiently awaits those answers, there may be debate as to how the insurance coverage that pays such benefits should be priced. 

The court has taught us a great deal in Westphal, and recently in Castellanos. But questions also remain. 

David Langham is deputy chief judge of the Florida Office of Judges of Workers' Compensation Claims. This column was reprinted with his permission from his Florida Workers' Comp Adjudication blog.