Thursday, June 6, 2013

How Far Will the Ripples Travel?

One time, I figure it's an anomaly.

But twice. In the same state. Just weeks apart - something is going on.

I'm talking of course about Florida and the sudden penchant for that state's first court of review in workers' compensation cases, the 1st District Court of Appeals (1st DCA), to find various elements of Florida's workers' compensation laws violative that state's constitution.

First there was the Westphal case which found that the current time limitation on payment of temporary total disability indemnity created an unconstitutional situation for workers who had not reached maximum medical improvement by that time and thus could not be rated for permanent disability.

Now the 1st DCA has found in Jacobson v. Southeast Personnel Leasing Inc./Packard Claim Administration that a statute that prohibits workers' compensation claimants from hiring attorneys to represent them against motions to tax costs is unconstitutional.

There are going to be numerous news reports, prognostications, advise pieces and other musings about this precedential case so I won't go into the facts here (here's the opinion) - needless to say that the court's activity is noteworthy not just for finding statutes unconstitutional, but twice and in such short order.

The actual ruling in the Jacobson case is quite narrow and in the long run may actually benefit the Florida system by providing claimants with counsel in disputes over cost petitions by employer/carriers, which may in fact reduce the quantity of such litigation. Certainly the opinion that is being widely accepted is that the Jacobson case is not really going to be much of anything.

But to me, the real question is whether the court's willingness to review a constitutional challenge denotes an emerging trend.

State constitutions are, by nature, limited in application to the particular state for which the constitution was drafted, so making some grand pronouncement about a trend is not going to happen. There are too many variables from state to state to say that something is up on the constitutionality of laws in workers' compensation because work comp is a statutory creature - there are no "common law" elements that would trigger a United States Constitutional challenge.

But a court hearing and ruling on constitutional challenges on a particular topic within just weeks of each case challenge is very unique, and the 1st DCA has yet another constitutional challenge it will be hearing in Davis v. Nascar Holdings.

Davis had reached MMI for her physical injuries in March 2011, but she has not yet reached MMI for her psychological injuries. Her employer, however, stopped paying for her psychological care six months after she reached physical MMI, based on Section 440.093 which provides that a worker can receive indemnity benefits for a mental injury for only up to six months from the date the worker achieves MMI for the physical injury.

Davis is relying on the court's holding and the arguments in Westphal to make her case. Whether the 1st DCA finds in favor of Davis of course is subject to speculation, but it seems to me that the Westphal logic is applicable and that Davis has a good chance of prevailing given the 1st DCA's current track record.

Speculation in Florida is that claimant attorneys are attacking the 2002 reform law, SB 50A (which was implemented over the 2 year period from 2003 to 2004), in piece meal fashion by challenging the constitutionality of small parts of the law.

Get enough unconstitutional rulings against the law, the theory goes, and there is a real possibility that the Florida Supreme Court could eventually declare the entire act unconstitutional forcing a renegotiation of the grand bargain.

I don't know whether this is a viable strategy or even whether these rumors have an iota of validity - certainly though claimant representatives in other big states that have seen significant changes to their systems (e.g. California, New York, Illinois) are looking to the Sunshine State for inspiration and perhaps strategic education.

Westphal and Jacobson were heard and written by different panels of justices working in the 1st DCA. Westphal has been granted rehearing before the 1st DCA En Banc (meaning the entire court will weigh in on the issue), so the issue in Westphal is far from over. There is no indication that Jacobson will go any further.

But if you're a work comp wonk, what's going on in Florida is fascinating. California stirs things up in the legislative ring and 3500 miles away Florida is stirring things up in the judicial ring.

Is there a trend towards constitutional challenge to work comp reforms? Certainly it is too early to tell.

But one can't deny that these are indeed interesting times.

As Chief Workers' Compensation Judge, David Langham, in his blog on the subject has written, "The stone is in the pond, whether a pebble or boulder, how far the ripples travel, and their effect on the distant shores remains to be seen."

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