On April 28, just 540 days after oral arguments, the Florida Supreme Court, issued its highly anticipated decision in the Castellanos v. Next Door Company case, declaring that the attorney fee schedule in the Florida Workers’ Compensation statute is unconstitutional.
The claimant in this case, Marvin Castellanos, injured his neck, back and shoulders while working at Next Door Company in Miami, Florida and was eventually awarded $822.70 in benefits.
Castellanos’ lawyer worked 107 hours on the case and billed $36,817.50 in fees. Under a 2009 statute, plaintiff attorney’s fees are limited to: 20% of the first $5,000 in benefits, 15% of the next $5,000, 15% of the next $5,000, 10% of the remaining during the first 10 years of the claim and 5% percent after 10 years. So accordingly, the attorney received $164.54 for his work, which amounted to $1.54 per hour.
The high court struck down the fee schedule part of the statute as unconstitutional on the grounds that:
- The claimant must be able to obtain a competent attorney “to navigate the thicket” of the complex workers’ compensation system.
- The statutory attorney fee schedule is so low, in some cases, that it can prevent the injured person from hiring an attorney and from receiving benefits.
- Therefore, the statutory fee schedule is unconstitutional because it denies the claimant due process and it violates the intent of the statute, which from the onset, is to provide disability and medical benefits to the injured worker.
- The mandatory fee schedule “precludes any consideration of whether the fee award is reasonable to compensate the attorney”.
The long, fascinating history of this Florida attorney fee issue, with twists and turns like a trip down Lombard Street, is explained in detail in the Court’s 55-page opinion. Basically, from 1941 to 2009 the law provided for “reasonable attorneys fees”. In 1968, the Lee Engineering case outlined “reasonable fee factors, that were later codified in the statute in 1977. Fast forward to 2008, to the highly publicized case of Emmy Murray v. Mariner Health, where the Florida Supreme Court refused to rule on the constitutionality issue but upheld the “reasonable attorneys fees” part of the statute. Then in 2009, the Florida Legislator struck the “reasonable attorneys fees” language from the statute, leaving only the mandatory fee schedule. And now, in 2016, in Castellanos v. Next Door Company, the Florida Supreme court struck down the mandatory fee schedule.
This decision in Castellanos v. Next Door Company is seen as a victory for the injured workers and their attorneys and a crushing defeat for the business and insurance communities who fear the return of higher workers’ compensation costs. One thing I think is certain: This is not the last we will hear of this issue.
To view, Castellanos v. Next Door Company, SC13-2082 April 28, 2016, click here.
To view a 2.17.2011 Medivest blog on the Florida claimant attorney fee issue click here.