Tuesday, February 14, 2017

An Act Relating to Workers' Compensation

Valentines Day 2017 brought a news release from Associated Industries of Florida (AIF). Last summer AIF formed a task force to study Florida workers' compensation. Meetings were held, and suggestions discussed. Then on Valentines Day, AIF released its proposed bill to the public. 

Many will remember that workers' compensation has been on the "front burner" in Florida from many perspectives for the last several years. There was hand-wringing and "what iffing" about the constitutional challenges to the Florida act. Last spring the decisions started coming from the courts, and several decisions included constitutional conclusions by the courts. 

The first decision was Miles v. City of Edgewater Police, reported in Fla. Stat. 440.34 (Florida Attorney Fees) Unconstitutional. There was a  follow up in Some Interesting Questions on Miles. Miles was rendered April 20, 2016. The Court concluded that injured workers in Florida have the right to contract with attorneys as they wish, a right based in "Equal Protection, Due Process of Law and First Amendment freedoms." The court concluded that there was a "general interest in regulating fees" that related “specifically to the state’s interest in protecting the amount of benefits secured by an injured worker under chapter 440 from depletion to pay a lawyer’s bills."  

It recognized that the state has "police powers" and that those powers might justify limiting fees. But, the Court concluded that the state's interest is not advanced by limiting attorney fees. It concluded that the constraints on fees "do not actually prevent a public harm," but do prevent injured workers in some cases from being able to hire an attorney. And, the Miles court concluded that “[laypersons] cannot be expected to know how to protect their rights when dealing with practiced and carefully counseled adversaries.” The Court noted that only claimant fees were constricted, and "the restrictions on her right to contract for legal work" were "being arbitrarily and capriciously applied," as only claimant fees were constrained. 

Eight days after Miles, the Florida Supreme Court rendered Castellanos v. Next Door CompanyThat was covered in Castellanos is Decided by Supreme Court. There, the majority concluded that "a reasonable attorney’s fee has always been the linchpin to the constitutionality of the workers’ compensation law." (Emphasis added). The Court did not expound upon that statement further. Whether this statement confines "the linchpin" based upon the kind or source of attorney fees is therefore perhaps left open to discussion?

In an interesting approach, the Court declined to decide Castellanos using traditional constitutional analysis, and instead concluded that the constraints on fees in section 440.34, Fla. Stat. were an "irrebutable presumption" and therefore unconstitutional. The Court based its decision on Recchi Am. Inc. v. Hall, 692 So. 2d 153, 154 (Fla. 1997)(a case interpreting a statute that actually included a presumption, "it shall be presumed").

The Court did not explain how the "presumption" conclusion about a statute that does not use the word "presumption" might implicate other statutory constraints which likewise do not use the word or infer "presumption." For example, arguably any statute which imposes a "minimum" prison term for a criminal conviction likewise, under the Castellanos logic, could be viewed as creating an irrebutable presumption. In those cases, as in pre-Castellanos workers' compensation fee cases, "the statute prevents . . . challenging the reasonableness . . . in his or her individual case." If such a resulting inferred presumption is constitutionally critical regarding fees in workers compensation, some may argue it is as inferrable and as critical when liberty itself is at stake in the criminal conviction context? 

A third case, Westphal v. City of St. Petersburg was decided June 9, 2016. See Westphal Decided, Questions Remain. The Court's analysis in this case was that the 104 week limitation on temporary total disability benefits. The Court struck that provision, reviving the prior statutory limitation of 260 weeks. The First District Court of Appeal interpreted that decision as also extending to temporary partial disability in Jones v. Food Lion, Case Number 1D15-3488 (November 9, 2016).

These developments were all discussed recently in an OJCC mid-year (fiscal year) report on case filings and attorneys fees. And, last fall a bill was proposed to change Florida workers' compensation. It is described in Legislative Seismic Shift in Florida. The bill was apparently not filed, but it generated a great deal of discussion. 

The AIF bill released on Valentine's Day 2017 does not address constraints on indemnity benefits (Westphal). But, it does attempt to refine pleading practices. The apparent point to this language is reducing litigation through greater clarity in pleading. The bill does some "cleaning up," with removal of the requirement of social security numbers in section 440.192(2)(a), Fla. Stat., and requirements regarding pleading the location of an accident/injury in (2)(c). It also makes pleading more specific for indemnity benefits in 440.192(2)(f) and calculation of the average weekly wage in 440.192(2)(j).

It would amend section 440.02(40), Fla. Stat. as follows (underline is added language and strikethough would be removed (all italics are direct quote).

"Specificity" means information on the petition for  benefits sufficient to put the employer or carrier on notice of the exact statutory classification and outstanding time period for each requested benefit, the specific amount of each requested benefit, the calculation used for computing the requested benefit, of benefits being requested and includes a detailed explanation of any benefits received that should be increased, decreased, changed, or otherwise modified.

The bill would remove the criminal prohibition on workers compensation attorney fees in section 440.105(3)(c)(all italics are direct quote):

(c) It is unlawful for any attorney or other person, in his or her individual capacity or in his or her capacity as a public or private employee, or for any firm, corporation, partnership, or association to receive any fee or other consideration or any gratuity from a person on account of services rendered for a person in connection with any proceedings arising under this chapter, unless such fee, consideration, or gratuity is approved by a judge of compensation claims or by the Deputy Chief Judge of Compensation Claims. 

The bill would legislatively overrule two First District Court of Appeal decisions regarding the process and procedure for an injured worker to obtain a "one time change" of treating physician, see A Victory (Whose?) on One Time Change. The law currently allows an employer/carrier 5 days to respond to such a request. If they fail to respond in that time, then the recovering worker may select their own doctor. The "5 days" has been mentioned in the context of "gamesmanship" by the Court, but it has directed critics to have this addressed by the legislature. The AIF bill would amend section 440.13(2)(f) as follows (underline is added language and strikethough would be removed (all italics are direct quote).

The carrier shall authorize an alternative physician who shall not be professionally affiliated with the previous physician within 5 days, excluding Saturdays, Sundays, and legal holidays, after receipt of the request. If the carrier fails to provide a change of physician as requested by the employee, the employee may select the physician and such physician shall be considered authorized if the treatment being provided is compensable and medically necessary. 

The bill would strive for more communication and perhaps thereby less litigation. It significantly amends section 440.192(4) in this regard as follows (underline is added language and strikethough would be removed (all italics are direct quote). 

 (4) Before filing a The petition, must include a certification by the claimant or, if the claimant is represented by counsel, the claimant's attorney, must make stating that the claimant, or attorney if the claimant is represented by counsel, has made a good faith effort to resolve the dispute. A petition for benefits must include a certification by the claimant or, if the claimant is represented by counsel, the claimant's attorney, and that the claimant or attorney made such a good faith effort but were was unable to resolve the dispute with the carrier or employer, if self-insured. Upon determining that the claimant or, if the claimant is represented by counsel, the claimant's attorney, has not made such a good faith effort to resolve the dispute, the judge of compensation claims shall dismiss the petition and may impose sanctions to ensure compliance with this subsection. Certification by the division that the claimant or attorney has made a good faith effort to resolve the dispute is prima facie evidence of compliance with this subsection. 

The bill would further constrain judges in terms of compelling rapid decisions on motions to dismiss for lack of specificity. The Judge would have ten days after a motion to render such a decision, or twenty days after a hearing on such a motion. It amends section 440.192(5)(b) in this regard as follows (underline is added language and strikethough would be removed (all italics are direct quote). 

(b) Upon motion that a petition or portion of a petition be dismissed for lack of specificity, the judge of compensation claims shall enter an order on the motion, unless stipulated in writing by the parties, within 10 days after the motion is filed or, if good cause for hearing is shown, within 20 days after hearing on the motion. 

The bill would remove the prohibition on fee payments for non-specific petitions. This is a section that has been ridiculed for its poor phraseology. See, Langham, 1994 Obviation of Carrier Paid Fees for Valid Petitions, News and Four-Forty Report, Summer, 1997. It amends section 440.192(7) in this regard as follows (underline is added language and strikethough would be removed (all italics are direct quote). 

(7) Notwithstanding the provisions of s. 440.34, a judge of compensation claims may not award attorney's fees payable by the carrier for services expended or costs incurred prior to the  filing of a petition that does not meet the requirements of this section. 

Notice that statute currently says that no fees or costs can be paid "prior to the filing of a petition that does not meet the requirements." Thus, fees can only be paid if an incomplete or unintelligible petition is filed pursuant to the current language. This language has been in the statute for over 20 years. 

What will draw the most discussion and attention, however, is the AIF bill's near complete removal of section 440.34 from the statute. Paragraphs (2) through (7) are all stricken (but see special treatment for paragraph (3) below). Paragraph (1) would be all that remains, as follows  (underline is added language and strikethough would be removed (all italics are direct quote).

(1) A claimant is responsible for payment of her or his own attorney fees fee, gratuity, or other consideration may not be paid for a claimant in connection with any proceedings arising under this chapter, and a judge of compensation claims may not award attorney fees payable by the carrier or employer. Any retainer agreement between a claimant and her or his attorney must be unless approved by the judge of compensation claims or court having jurisdiction over such proceedings as consistent with The Florida Bar's rules of professional conduct, and attorney fees payable by the claimant must be approved by  the judge of compensation claims to ensure compliance with the retainer agreement.

What is currently in section 440.34(3) would become a new section, 440.341 Fla. Stat., as follows  (underline is added language and strikethough would be removed (all italics are direct quote).

440.341 Costs.—If any party should prevail in any proceedings before a judge of compensation claims or court, there shall be taxed against the nonprevailing party the reasonable costs of such proceedings, not to include attorney fees. 

It is an interesting proposal. It will undoubtedly receive significant attention and discussion in days to come. Some will question whether injured workers will have funds to pay for attorney fees. In an instance such as Miles, where a third party (union) is willing to pay fees for representing an injured worker, this may be less of a concern. However, some injured workers may simply lack the funds for such representation. Faced with the denial of a small bill such as a prescription, some recovering workers may elect to pay the prescription cost themselves or do without the medication rather than paying an attorney to pursue the payment. Critics may argue that some employers might withhold authorization for some benefits in the belief that they are too inconsequential for a recovering worker to pursue. This may be related to a logic mentioned by the Supreme Court in Castellanos: fees “'discourage the carrier from unnecessarily resisting claims' and encourages attorneys to undertake representation in non-frivolous claims."

The bill would impact the Office of Judges of Compensation Claims. It would statutorily require judges to prospectively approve attorney fee retainer agreements. However, only the attorney fee agreements between recovering workers and their attorneys. It is not clear if this distinction would be permissible within the analysis of the court in Miles"being arbitrarily and capriciously applied." An argument might be made that this (claimant but not defense) is a distinction without basis. However, an argument might likewise be made that this contract approval is part of the overall approval of claimant fees (and there is no similar approval of defense fees), and is for the protection of the recovering worker. 

If this bill becomes law, it is possible that some disputes will arise between recovering workers and their attorneys regarding the appropriateness of fees. The Supreme Court noted in Castellanos that "a 'lengthy and expensive contest' with an E/C, a claimant proceeding 'without the aid of competent counsel' would be as 'helpless as a turtle on its back.'” The District court in Miles that “[laypersons] cannot be expected to know how to protect their rights when dealing with practiced and carefully counseled adversaries.” Some have questioned whether an injured worker in a contest against any attorney, such as in a dispute over the amount of fees, would be any less helpless or any more able to "protect their rights" "without the aid of competent counsel." 

It will be interesting to hear what thoughts, comments, and criticism, are voiced regarding this proposed bill. Things in Florida are rarely dull.  



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