Thursday, June 25, 2015

3rd DCA Reverses Summary Judgment in FWA Constitutional Challenge to Exclusive Remedy    

by Sherri Okamoto (Legal Editor)      

The Florida 3rd District Court of Appeal dismissed a district court judge’s ruling that the state workers’ compensation system is unconstitutional, for procedural reasons, failing to address the core arguments of the case.       

The 3rd DCA determined that the constitutional issue in State of Florida v. Florida Workers’ Advocates as rendered moot once Velda Farms abandoned its exclusive remedy defense to Julio Cortes’ comp claim. And it said FWA couldn’t pick up the argument and carry it over into a separate case.

Since the argument wasn’t properly presented to Miami Dade Circuit Judge Jorge Cueto last year, the 3rd DCA said he shouldn’t have ruled on the merits. The court ordered the case remanded for Cueto to dismiss FWA’s complaint.

FWA President Michael Winer said that Wednesday’s decision was “just a set-back on procedural grounds,” and he emphasized that it “does not make the problem go away.”

The “burning question on everyone’s mind” is still whether the benefits available to injured workers have been so eroded that they  shouldn’t be held their trade-off  in the “grand bargain” that  is comp.

“It would have been nice,” if the 3rd DCA had decided this issue, Winer said, since “everyone needs to know,” so the question now is whether to push for resolution in this case, or try again.

He said FWA has yet to make a decision about whether to appeal to the Supreme Court or start over again with a new plaintiff leading a fresh case.

At the very least, Winer noted, “the blueprint for the challenge has been laid” and “all the work has been done.”

“It is going to take a little time to get back to the same pace, but I suspect and hope the result would be he same if another court is confronted with the same evidence in a different procedural posture.”

The procedural history for the FWA lawsuit was indeed unconventional, as it evolved to involve a “completely different set of claims and parties” than it originally had, the 3rd DCA noted.

It started out as a dispute between Julio Cortes and his employer, Velda Farms, over liability for his 2010 work injury. Cortes had filed a workers’ compensation claim. When Velda denied coverage, he filed a tort claim.

Velda sought dismissal of his lawsuit, asserting Cortes’ only remedy lay in the comp system. Cortes countered that the sections of the Florida Workers’ Compensation Law which afford employers immunity rom civil liability for industrial injuries were unconstitutional.

Cortes provided notice of his constitutional challenge to the Attorney General’s Office – as required by the Florida Rules of Civil Procedure – but he never joined the state or the AG as defendants.

In May 2012, FWA and the Workers’ Injury Law and Advocacy Group joined the case as additional plaintiffs for the constitutional claim. Velda then voluntarily dismissed its immunity defense, and it sought dismissal of the constitutional issues as being moot.

In response, WILG and FWA asked Judge Cueto to sever the constitutional claim from the case and allow them to pursue it in a separate action.

Cueto allowed the organizations to maintain the constitutional argument as a separate action for declaratory judgment, and he identified the state as the appropriate defendant for that action.

The judge later gave permission for Elsa Padgett, an injured Miami-Dade county employee, to become an additional plaintiff in the declaratory judgment action.

FWA and WILG then moved for summary judgment, and last summer, Cueto issued an order for Attorney General Pam Bondi to show cause why he shouldn’t do so.

Bondi’s office responded that neither it nor the state had ever been made parties to the declaratory relief action, and that they wouldn’t be the appropriate defendants for that claim anyway. Thus, it took the position that Cueto couldn’t grant summary judgment because there was no defendant to enter the judgment against.

Nevertheless, Cueto in August entered summary judgment for FWA, WILG and Padgett without discussing the arguments made by Bondi’s office.

Bondi appealed his ruling to the 3rd DCA, and FWA then asked the court to pass the case straight up tohe Florida Supreme Court so that workers, employers and carriers would know whether comp will remainhe exclusive remedy for industrial injuries or not.

Historically, Florida’s intermediate appellate courts generally decline to exercise their authority to “pass­hrough” cases to the state Supreme Court, and the FWA dispute proved to be no exception. The 3rd DCannounced that it would hear the FWA case in October and began collecting amicus briefs from interestedparties. The court heard oral argument in March.

On Wednesday, a 3rd DCA panel comprised of Chief Judge Frank Sheperd, Judge Barbara Lagoa andudge Vance Salter said two “threshold legal issuesmootness and lack of standingeach precludePadgett, FWA and WILG from pursuing the constitutional claims. The court reasoned that there was no longer any live controversy over the constitutionality of the exclusive remedy statutes once  Velda was no longer asserting it as a defense.

The court then went on to say that Padgett, FWA and WILG lacked standing to pursue the constitutional claim, even if it weren’t moot.

“Standing” represents a party’s legal right to prosecute or defend a claim, because their interests will be affected by the outcome of the claim.

But a party that intervenes in a claim that is part of someone else’s lawsuit has standing to pursue that claim only as long as the lawsuit continues, the court explained. “The case law does not support some sort of ‘piggy-back’ standing by an intervenor based exclusively on a predecessor plaintiffs subsequently­ dismissed claim,” the  decision states.

WILG’s immediate-past president, Louisiana attorney Charles Davoli of Davoli Krumholt & Price, said that he 3rd DCA’s decision “wasn’t unexpected,” even though it wasn’t what the group had been hoping for.

“We suspected that the intermediate appellate court didn’t want this issue to get to the Supreme Court, and we figured they were going to try to knock it out on some sort of procedural ground,” he said.

While this delays the resolution of the constitutionality question, Davoli said appellate courts often try toavoid ruling on constitutional challenges “the way people avoid going to the dentist,” because “you know it’s going to hurt.”

But Davoli said the continued erosion of workers’ compensation benefits for claimants across the countryeventuallycometohead.

Trey Gillespie, the senior workers’ compensation director for the Property Casualty Insurers Association ofmerica, on Wednesday said the 3rd DCA’s ruling “leaves in place the central tenants of the state’s workers’ compensation system that balance the interests of injured employees and employers that seekpredictability in costs.”

William Large of the Florida Justice Reform Institute, which filed an amicus brief in support of the attorney general’s position, said Wednesday’s ruling “recognized this case was flawed from the start,” as “there was no proper claimant, there was no proper defendant, and there was no proper controversy in front of the trial court.”

He said it seemed the constitutional cause of action “was manufactured out of thin air to cause chaos“within the workers compensation system,” when “the workers compensation system works and has  worked in Florida because it is pro employee and adequately compensates injured workers.”

Tamela Perdue, the general counsel for the Associated Industries of Floridaanother supporter of theattorney generalsaid she thought it was “telling” that the 3rd DCA didn’t have to go through a   constitutional analysis to find that the summary judgment was unwarranted.

“The path that this judge took to be able to reach that conclusion just flies in the face of every goodcannon of justice,” Perdue opined. “They got to this ruling of unconstitutionality in a forum that wasn’t open or accessible to the opposing side at all,” she said, “and that’s just not how we do things.”

David Langham, the deputy chief judge of the Office of the Judges of Compensation Claims, on Wednesday remarked that  “due process is the bedrock of our legal system,” and since the 3rd DCA  found it was lacking in the FWA case, he said it was “absolutely appropriate” for the court to stop its analysis at  that point.

While he said he was sure attorneys and judges in Florida would have liked to have had the substantive issues of the case addressed, Langham warned it is a “slippery slope” for courts to start ruling on things if due process is lacking.

As this was “just a procedural reversal,” Langham said, he didn’t anticipate any impact on pending claims or the OJCC’s caseload, but he said “the doubt will still be out there” as to whether the exclusive remedy statutes are constitutional, and since “nobody likes doubt,” he said he was sure another challenge will arise.

Sam Miller, the executive director of the Florida Insurance Council, on Wednesday observed that “the ole workers’ compensation system in Florida has been under an unprecedented legal attack” in recent years.

As “the exclusive remedy is the absolute heart of the workers’ compensation system,” Miller said he was “happy” the 3rd DCA didn’t see fit to find it unconstitutional, but he said “we’re still looking over the horizon” for what else might be coming.

There are two cases currently pending at the Florida Supreme Court which challenge aspects of the workers’ compensation law, he said, and those also have the potential to shake things up.

The dispute in Westphal v. City of St. Petersburg is about the statutory limits on the payment of temporary total disability benefits, and Castellanos v. Next Door Co. involves a challenge to the cap on claimant attorney fees.

“So far we’ve dodged a bullet,” Miller said, but if either Supreme Court case results in parts of the comp system being invalidated, he said employers and carriers are likely going to have to contend with increased costs and groups like his are going to have to put pressure on lawmakers for a legislative fix.

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