First DCA, Florida Supreme Court Use 1, 2 Punch To Knockout Workers’ Compensation Fee Provisions, But Exclusivity Maintained

April 29, 2016

In a span of less than 10 days, two decisions issued by the First District Court of Appeal and the Florida Supreme Court have resulted in the evisceration of the statutory fee requirements in Chapter 440. The First District Court of Appeal issued its decision in Miles v. City of Edgewater, Case No. 1D15-1065, on April 20, 2016, and determined sections 440.105 and 440.34 are unconstitutional to the extent they restrict a claimant’s right to free speech and to contract. That opinion, however, focused on agreements between a claimant and his or her counsel. Possibly not wanting to be beaten to the punch, the Florida Supreme Court issued its opinion eight days later in Castellanos v. Next Door Company, Case No. SC13-2082, and determined the provisions of section 440.34, mandating schedule-only fee awards, are an unconstitutional and inflexible limitation of the fees that can be awarded to a claimant’s counsel.

Based on the extent of the Castellanos decision, the impact of the Miles ruling is somewhat overshadowed, but the Miles decision is independently important based on the additional determination that the applicable provisions of section 440.105, imposing criminal sanctions for improper fees, are unconstitutional. The Castellanos Court, while acknowledging that portion of the Miles decision, noted that issue was not before it.

Certainly, much can be (and will be) written and said about the analysis and the nuances of the Castellanos majority, concurring and dissenting opinions. Importantly, though, the practical effect is not that the fee schedule is discarded completely. Even where section 440.34 is described as improperly inflexible, the majority noted that the fee schedule has been and should remain the starting point for fee determinations. Moreover, the majority emphasized that point in the last section of its opinion to provide guidance to Judges of Compensation Claims during this interim before the Legislature takes action to address the matter.

From a practical standpoint, it appears that, while there must be an opportunity to present evidence that a schedule-based fee is not appropriate, the decision imposes the burden to deviate from the schedule on the party seeking to increase OR decrease that amount based on the work performed, the issues in the claim, and the experience and skill of the attorney seeking the fee. Accordingly, while the Castellanos decision can be viewed as a boon for claimants’ counsel, it is important not to lose sight of the same opportunity to effect fee awards that is provided to employers and carriers.

What will be important is making very timely determinations in what issues represent defensible claims. The employer/carrier has 30 days to make that decision from the time a petition for benefits is filed. Therefore, it is imperative to promptly gather facts and assess the strength of a defense to a claim to be able to make the right decision on what may be worthwhile to risk the possibility of a fee award.

Fortunately, the news is not all about fees. The Florida Supreme Court also issued a determination in Stahl v. Hialeah Hospital et al., Case No. SC15-725, on the issue of the exclusivity of workers’ compensation as a remedy for workplace injuries. The Supreme Court reviewed the briefing of the parties and determined it would not accept jurisdiction of the case. This result means that the First DCA’s decision that the exclusivity of workers’ compensation is constitutionally valid will control for the present.