Thursday, February 4, 2016

Vexatious Litigants and Disqualifying Judges

WorkCompCentral reported recently that Arizona has introduced a bill to reform or reshape some aspects of its workers' compensation statute. 

One of the changes would "would allow unrepresented injured workers to be declared vexatious litigants." Another would change the disqualification process for judges. The provisions of the bill are said to represent compromises "hammered out between employers and attorneys who represent injured workers." We have seen that compromise bills sometimes fare better in the legislative world of workers' compensation that contentious bills, perhaps this will pass. 

Arizona currently has a process for parties to seek assignment of a new judge in a case. The attorney files an affidavit setting forth the "grounds for the request, such as an appearance the judge is biased or has a conflict of interest." This sounds similar to the process that is in place in Florida. 

The Florida Rules of Procedure for Workers Compensation Adjudications, Rule 60Q6.126 incorporates Florida's Rule of Judicial Administration, Rule 2.330. Under that Rule, a party to a case can seek to have the judge removed ("disqualification") or the judge can remover her/himself of their own accord ("recusal"). This process has been used in the majority of U.S. jurisdictions. The American Bar Association (ABA) has advocated change from this process however. 

One of the ABA advocated changes is the "one free change" concept. This is what Arizona may adopt if the bill passes in its current form. The right to seek change of the judge as it currently exists would remain, but the bill "would also give them the right to request one change without establishing cause on each case." For the sake of clarity, the "employer and the employer's carrier are considered a single party unless they have conflicting interests." 

Under the current system, there is generally a time limit for filing a motion to disqualify. under the Arizona proposal, the filing would have to be made "within 30 days of the notice of hearing, or within 30 days after a new judge is assigned to the claim." Essentially, on any case, it would apparently be possible for the first judge (say the worker objects), and second judge (say the employer objects), and even the third judge (say the employer and carrier have different interests) to be removed from the case with no explanation or reason stated. 

This could be a troublesome process in having cases move to trial in an orderly manner. Some critics of the ABA recommendation, who would therefore likely be critical of the Arizona bill, feel that this "one free change" process could be abused. They see the potential for removing judges from cases due to ideology or other perceptions, separate from the issue of bias. They see this type of arrangement prone to "judge shopping." 

Another interesting element of the bill "would allow the chief administrative law judge to declare an unrepresented worker a 'vexatious litigant' if the worker engages in" vexatious conduct. The statute would provide examples of (italics quoted from WorkCompCentral) what would be vexatious such as: 

* Repeated filing of documents solely for the purpose of harassment. 
* Unreasonably expands or delays proceedings. 
* Brings claims without substantial justification. 
* Abuses the discovery process or engages in conduct during discovery that results in sanctions. 
* Makes unreasonable, repetitive and excessive requests for information. 
* Repeatedly files requests for relief in matters that have already been decided by the Industrial Commission. 

The Florida OJCC sees such filings as this list might describe. That they occur is indisputable. However, this does not seem to occur frequently. 

There have been few cases in which a pro-se litigant has filed a petition, proceeded to trial, been denied, appealed the result to the First District Court, and upon losing the appeal has filed a new petition seeking the same benefits. In our system, judges cannot give litigants advice. So our role is to decide their case and if they wish to seek review of the appellate court that is between them and the court. Thus, the Court has to sometimes repeatedly reiterate its affirmance in serial appeals. 

There have been cases in which the injured worker, somewhere in the midst of that process, has successfully sought the disqualification of the assigned judge. Thus, when the process begins anew, it does so before a new judge. 

In a very few instances, this cycle has been repeated more than twice. The current procedures for summary disposition of claims, Rule 60Q6.120, seems to have addressed this issue here however. I perceive that when such "repeat" claims are filed, the employer/carrier is seeking summary disposition of the new petition, pleading the existence of the prior disposition (attaching the prior JCC order and Appellate disposition(s)). While this Arizona proposal may be intended to address a larger issue there, it would not seem necessary in the Florida system. 

In another interesting amendment, the Arizona bill would change the calculation of interest payable in workers' compensation cases. In Florida, the interest on unpaid indemnity benefits is 12%, stated in Fla. Stat. 440.20(8). It has been 12% for many years. That is close to the rate banks paid on certificates of deposit in 1984, but bank rates have generally and somewhat steadily declined since then. I do not know anyone that is earning 12% on any savings in today's America. 

It the Arizona bill passes, the interest calculation there would use "the lesser of 10%, or the prime rate published by the board of governors of the Federal Reserve Bank, plus 1%." According to WorkCompCentral, that would make the rate about "4.5% per year" at the present. 

There has been discussion in Florida regarding the use of such benchmarks as the Prime Rate in the statute. In the 1990s there was discussion of establishing a statutory rate for employer/carrier paid attorney fees, and tying that rate to the consumer price index (CPI) or other benchmark. The idea never took flight, and the new century brought other attorney fee amendments (2003) that are currently under Florida Supreme Court review for the second time. 

I wonder, if the Arizona bill becomes law, will there be constitutional challenges to this kind of benchmarking statutory reference? We have been reminded recently that the legislative and regulatory power of workers' compensation includes the ability to "adopt" or "incorporate" other tools. The Division of Workers' Compensation can adopt Guides to Permanent Impairment or a drug formulary, or a fee schedule. 

However, the Pennsylvania Appellate Court last year in Protz held that such an adoption or incorporation is effective only as to the Guide, or formulary, or schedule then in existence. The Pennsylvania legislature deferred to the "latest edition of" the American Medical Association Guides to Impairment. The Court concluded that this language, currently adopting something that will be created in the future (the next edition, or the one after that, etc.) violated the Pennsylvania constitution by delegating the government function to the AMA. 

Is the delegation of an interest calculation potentially similarly unconstitutional? Unlike the Pennsylvania delegation to an entity, the AMA, this proposed Arizona delegation is to parties unknown. Who sets the "prime rate?" Well, although the Arizona bill relies on the Federal Reserve, the Fed does not set the "prime rate," it merely publishes it. The "prime rate" is set by a variety of lenders, according to the Federal Reserve Board

Because the population of banks that the Fed deems appropriate to report can change, this delegation seems compounded. Almost like a "hearsay within hearsay" manner, the Arizona law will delegate to the rate published by the Fed (up to the Fed what to publish), and the Fed is in turn using what various banks it chooses report regarding their individual rates. 

An interesting legislative proposal in Arizona. It illustrates just how different various states can be in their approach to workers' compensation. Whether one agrees or disagrees with the interest delegation/adoption, the legal analysis is intriguing. Does Arizona have such a volume of pro se litigants to necessitate a vexatious designation? Is the process served with the potential of repeated reassignment of cases in instances in which the moving party cannot state any reason therefor? An interesting legislative proposal indeed.

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