Are fee caps legal? Supreme Court hears workers comp case today

The Florida Supreme Court will hear oral arguments in a case today that asks the justices to decide whether the fee caps in the state’s workers compensation laws are legal.

The high-profile case is Castellanos v. Next Door Company and it is slated to be heard at 9 a.m. in the Supreme Court building in Tallahassee.

In the case before the court, attorney Mark A. Touby  was awarded $164.54 in attorneys fees for helping Marvin Castellanos obtain $822.70 in benefits that the employer carrier initially denied. A Judge of Compensation Claims noted that the attorney was skilled and that the case required nearly 107 hours of work. The fees translated to $1.53 per hour.

The Judge of Compensation Claims certified the case to the First District Court of Appeal in Tallahassee which in October 2013 affirmed the JCC’s ruling.  The Tallahassee appellate court certified the case to the Florida Supreme Court asking whether the award of attorney’s fees is adequate and consistent with the state’s constitutional guarantee to access to courts.

Workers compensation rates in Florida have decreased more than 50 percent since the Legislature passed the sweeping reforms back in 2003. The Florida Office of Insurance Regulation denied an average rate decrease of 3.3 percent and directed the National Council on Compensation Insurance to file for a net overall decrease of 5.2 percent instead.

In a written release regarding the October rate reductions, Associated Industries of Florida General Counsel Tami Perdue warned that “any change in current law and operation of the system will certainly impact behaviors and functions, resulting in Florida employers bearing increased workers’ compensation costs.”

Perdue was referring in part to another workers compensation case before the high court:  Westphal v. City of St. Petersburg, which addresses the provision of benefits under the law. The Supreme Court already heard arguments in the case over the summer. In that case attorneys argued that the 104 limitation on temporary benefits under the law.

The court has not yet issued an opinion on that case.

This is not the first tim the workers compensation attorneys’ fees are being reviewed by the court.In 2008 the First District Court of Appeal in Tallahassee certified a case–Murray v Mariner Health–asking the Supreme Court to decide whether the caps passed constitutional muster. The court, though, did not rule on the constitutionality, choosing instead to focus on an ambiguity in the law that allowed “reasonable” fees to be awarded in one section but in another section of the law requiring that fees strictly adhere to the outlined schedule.

The fee schedule is set at 20 percent of the first $5,000; 15 percent of the next $5,000 and 10 percent of the remaining amount of benefits secured provided during the first 10 years after the date the claim is filed and 5 percent of benefits secured thereafter.

The court resolved the ambiguity in favor of allowing “reasonable” fees. In 2009 a business-friendly Legislature  passed a bill in response to the Supreme Court decision. The bill deleted the word “reasonable” from the statute and mandated that the fee be tied to the level of benefits.

Meanwhile the Supreme Court recently ruled 5-2 that fee caps for non economic damages in n wrongful death cases are unconstitutional. The court issued that ruling on March 13, 2014, the same day it agreed to hear the Castellanos v. Next Door Company.