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Sams: Inaction by Lawmakers Not Always a Partisan Divide

By Jim Sams (Senior Editor)

Monday, June 26, 2017 | 543 | 0 | min read

Single-party rule clearly is no guarantee that government will find solutions to the problems at hand. 

Sams

Sams

In both Oklahoma and Florida, state lawmakers failed to amend any of the laws that their high courts ruled were unconstitutional. In each state, Republicans hold solid majorities in the Legislature and governor’s office, but the workers’ compensation statutes that are now unenforceable remain on the books after lawmakers adjourned for the year. 

Was it collective incompetence on the part of elected officials?

It would be easy to think so from the perspective of Florida employers. Business lobbyists predicted a doomsday scenario if lawmakers failed to react in response to the Supreme Court’s April 2016 ruling in Castellanos v. Next Door Co. and Westphal v. City of St. Petersburg. They said a 14.5% rate hike approved by the Office of Insurance Regulation — most of it in response to those rulings — was just the beginning as claimants’ attorneys milked the new cash cow that the high court had given them.

Florida lawmakers could not come to a meeting of minds about how much “reasonable” should cost. 

It was clear from Castellanos that some sort of hourly fee structure was needed for complicated cases that require more effort than contemplated by a statute that capped fees according to a strict percentage of benefits awarded. Lawmakers introduced competing bills in the House of Representatives and the Senate to set maximum hourly fees. The Senate wanted $250; the House opened with $150 and wouldn’t budge past $180 as the session wound down to a close.

With only a $70 difference between the two versions, it seems easy enough to split the difference and call it a day. But Michael C. Duff, a former claimants’ attorney and now law professor at the University of Wyoming, told me that lawmaking often becomes so emotional that it’s impossible for two camps to find middle ground.

“At a certain point you’re involved in some kind symbolic struggle,” Duff said. “It’s not about the $70 difference. It’s about neither side wanting to be seen as having given ground.”

As it stands now, decisions about what’s reasonable are being made, case-by-case, by judges with the Florida Office of Judges of Compensation Claims. If you take a close look at some of the contested attorney fee decisions made by those judges, you’ll see that Florida attorneys are about as far apart in agreeing to what is “reasonable” as Florida lawmakers were.

Take the case of Juan M. Miranda v. Pinnacle Engineering & Development in the Miami district. Miranda wanted his employer to pay for a doctor to treat a rash. Miranda's attorney, Robert M. Rivera, said he spent 50.3 hours getting a judge to award medical benefits and wanted to be paid $300 an hour for the trouble — more than $15,000 in all.

In a June 15 order, Judge Edward Almeyda said Rivera’s requested rate “shocks the judicial conscience,” and the amount of hours billed “border on frivolous litigation,” especially considering that Miranda never did go to the doctor his attorney spent so much time arguing for. To top it off, the judge said the case didn’t require any skill or expertise “greater than that of a paralegal.” Ouch. 

The judge awarded Rivera 39.5 hours at $100 per hour, for a total of $3,590. Not bad for paralegal work, I guess. I hope Miranda’s rash cleared up by itself.

But not every case is such a train wreck. Over in St. Petersburg, attorney William A. Heller went to bat for claimant Cathaleen Casper-Fernandez for temporary partial disability benefits. The parties settled for $8,400. Heller asked for a fee of $250 per hour for 103 hours, a total of $25,750. 

Judge Stephen L. Rosen decided June 15 that in light of Castellanos, Florida’s attorney fee statute would clearly produce an inadequate payment. He said Heller is a “skilled” attorney with 30 years' experience, and awarded every penny that was asked. If the carrier’s attorney objected, Rosen’s findings make no mention.

So, clearly in some cases, Florida attorneys will be paid more for their work than the amount of benefits the claimants were awarded for their injuries. Does that mean the Supreme Court has created a statutory vacuum that will suck money out of employers’ pockets as attorney fees spiral out of control?

David Langham, deputy chief judge of the Office of Workers’ Compensation Claims, said pandemonium isn’t inevitable when a statute is ruled unconstitutional and lawmakers fail to pass a new law to fill the void. Under Florida case law, when a statute is overturned, judges revert to the most recent version of the statute that hasn’t been struck. In the case of Castellanos, that means the version of Section 440.34 that existed before 2003, when the Legislature enacted an absolute cap based on a percentage of benefits.

Langham said there are even ground rules in place to help workers’ comp judges arrive at appropriate fees. Those are spelled out in a 1968 decision known as Lee Engineering. Judges can consider five specific factors when deciding the proper amount of the fee, including the skill of the attorney, and the novelty and difficulty of the questions involved. 

But there’s no doubt that claimants’ attorneys are finding more cases worth pursuing now that Castellanos has lifted the statutory cap. Langham said the number of petitions filed has increased 6% since the decision came out. 

But Langham said the impact of that on costs remain to be seen. Claimants’ attorneys argued during the legislative session that there won’t be any dramatic increase in costs; employers and carriers will stop denying legitimate claims and pay less on defense attorneys in cases they would lose anyway. 

Langham said the numbers will tell the story as time passes. He offered an analogy: What if a wildfire devastated much of the California countryside? Undoubtedly, some interest groups would demand that lawmakers do something to mitigate the risk. But how much action is too much action? 

“Do we really want to jump in with both feet?” Langham asked. “Why don’t we wait a while to see if we have more fires. How radical do we want them to go, and how radical do they want to go?”

The National Council of Compensation Insurance will make another workers’ compensation rate filing this fall. Langham said the amount of that increase will likely have a bearing on the willingness of state lawmakers to work out their differences and decide on a course of action.

Jim Sams is senior editor of WorkCompCentral.

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