A state appeals court allowed a 14.5 percent increase in workers’ compensation insurance premiums to take effect on schedule Thursday, amid legal scrambling over whether the hike was illegal.
The 1st District Court of Appeal acted even before a trial judge could decide on a request to delay her ruling last week invalidating the increase under Florida’s open-government laws.
For her part, Leon County Circuit Judge Karen Gievers ruled following a brief hearing in her chambers that no stay was warranted.
“It would not be appropriate for this court to approve further violation of the Sunshine Law and Public Records Law,” Gievers said.
But she bowed to the inevitability that the case would be resolved on appeal.
“I’m just trying to get you to the appellate court, where you want to be,” she told attorneys present in person and participating by telephone.
Even before resolution of the legal situation, businesses were treating the increase as a fact of life.
The Florida Chamber of Commerce, for example, issued a written statement complaining that the increase, as applied to new and renewal policies written during the next 12 months, would cost employers $1.5 billion.
“Many businesses are telling us they will be forced to delay hiring, or even cut existing jobs, in order to cover this increase in their premiums,” Carolyn Johnson, director for business policy for the Florida Chamber of Commerce, said in a written statement.
“A rate like this puts Florida’s competitiveness and job creation directly at risk.”
The Florida Office of Insurance Regulation approved the increase in September, based on recommendations by the National Council on Compensation Insurance, or NCCI.
The office has designated NCCI as the rating agency for workers’ compensation insurers in the state.
James Fee, a Miami workers’ compensation attorney, filed suit, arguing that NCCI’s quasi-official status required it to operate under Florida’s open-government laws.
Fee complained that the council failed to open its deliberations to the public or provide its data to an actuarial expert he’d retained.
Gievers agreed Friday, and issued an order blocking the new rates from taking effect.
On Tuesday, Insurance Commissioner David Altmaier filed a notice of appeal to the 1st District Court of Appeal. His office said that filing placed an automatic hold on Gievers’ ruling.
Altmaier appeared to rely on language in Section 9.310(b)(2) of Florida’s Rules of Appellate Procedure, allowing such stays when sought by public bodies or public officers.
But the rules make an exception for appeals in public records and public meetings cases. In that event, the stay “shall exist for 48 hours after the filing of the notice of appeal.”
In other words, Thursday.
A spokesman for Florida Workers Advocates, which represents workers’ compensation attorneys, said the organization believed the 48-hour rule applied. So did John Shubin, of Shubin & Bass, Fee’s attorney, in arguments to Gievers.
The matter was resolved when the 1st DCA issued an unusual order extending the stay for 10 days.
“On the court’s own motion, we temporarily extend the automatic stay of the order of appeal for 10 days following the trial court’s ruling on the motion to stay which appellant represents has been filed in the circuit court,” the appeals court wrote.
Thursday evening, NCCI released the following statement:
“We continue to believe that NCCI, Commissioner Altmaier, and the Office of Insurance Regulation have fully complied with the law. NCCI looks forward to presenting its case to the Appellate Court.”
Meanwhile, Johnson argued the rate hike amounts to a massive transfer of wealth from businesses to the workers’ compensation trial bar. NCCI and most business leaders blame the increase on escalating litigation costs — pointing to Florida Supreme Court rulings declaring unconstitutional business-friendly restrictions the Legislature approved in 2003.
Specifically, they cite Castellanos v. Next Door Co., striking caps on attorney fees in workers’ compensation cases.
“This accounts for nearly two-thirds of the rate increase,” the Chamber said. “And although the rate officially increases today, since the decision in April, the number of lawsuits and trial lawyer paydays have already increased.”
Business and insurance leaders hope the Legislature will find a way around the Supreme Court rulings when lawmakers reconvene in the spring.