With Limits on Work Comp Attorney Fees and Benefits Unconstitutional, What will Florida’s Republican Governor and Legislature Do?

Rafael Gonzalez, Esq. Vice President, Optum/UnitedHealthcare Group

On June 9, 2016, the Florida Supreme Court published its decision on Westphal v. City of St. Petersburg, finding that section 440.15(2)(a), Florida Statutes (2009), which cuts off disability benefits after 104 weeks to a worker who is totally disabled and therefore incapable of working, but who has not yet reached maximum medical improvement, is unconstitutional under article I, section 21, of the Florida Constitution, as a denial of the right of access to courts. The Court rules that because the statute deprives an injured worker of disability benefits under these circumstances for an indefinite amount of time, the law no longer functions as a reasonable alternative to tort litigation, and is therefore unconstitutional, reverting back to the workers’ compensation law preceding the 1994 amendments to section 440.15(2)(a), providing for temporary total disability benefits not to exceed 260 weeks.

Facts and Procedural History

In December 2009, Bradley Westphal, then a fifty-three-year-old firefighter in St. Petersburg, Florida, suffered a severe lower back injury in the course of fighting a fire. As a result of the lower back injury, Westphal required multiple surgical procedures, including an eventual spinal fusion. Shortly after his workplace injury, Westphal began receiving benefits pursuant to the workers’ compensation law set forth in chapter 440, Florida Statutes (2009). Specifically, the City of St. Petersburg began to provide both indemnity benefits, in the form of temporary total disability benefits pursuant to section 440.15(2), Florida Statutes, and medical benefits.

Under section 440.15(2)(a), entitlement to temporary total disability benefits ends “when a totally disabled injured worker reaches the date of maximum medical improvement or after 104 weeks, whichever occurs earlier.” The “date of maximum medical improvement” is defined in section 440.02(10), Florida Statutes (2009), as “the date after which further recovery from, or lasting improvement to, an injury or disease can no longer reasonably be anticipated, based upon reasonable medical probability.” Westphal did not reach maximum medical improvement prior to the expiration of the 104-week limitation on temporary total disability benefits. At the expiration of temporary total disability benefits, Westphal was still incapable of working, based on the advice of his doctors and the vocational experts that examined him.

The Judge of Compensation Claims Order

Westphal filed a petition for benefits, claiming either further temporary disability or permanent total disability pursuant to section 440.15(1), Florida Statutes (2009). The Judge of Compensation Claims (JCC) held a hearing on Westphal’s petition and subsequently denied the claim for permanent total disability benefits. In his final order, the JCC found that Westphal had not reached maximum medical improvement and that it was “too speculative to determine whether he will remain totally disabled after the date of maximum medical improvement has been reached from a physical standpoint.” Thus, Westphal fell into the “statutory gap”— still totally disabled at the cessation of temporary total disability benefits, but not yet entitled to permanent total disability benefits because he could not prove that he would still be totally disabled when he reached maximum medical improvement. He was, in essence, completely cut off from disability benefits for an indefinite amount of time, unless and until he could claim entitlement to permanent total disability benefits at some future date and, even then, without any ability to recover disability benefits for his time in the statutory gap.

The District Court of Appeal Decisions

Westphal appealed the JCC’s decision to the First District, contending that the JCC erred in determining that he was not entitled to permanent total disability benefits. He further argued that the 104-week statutory limitation on temporary total disability benefits, as applied to him, was an unconstitutional denial of access to courts. A panel of the First District agreed with the constitutional claim, holding that the 104-week limitation on temporary total disability benefits was unconstitutional as applied to the facts of this case. Specifically, the First District panel concluded that “the 104-week limitation on temporary total disability benefits was an inadequate remedy as compared to the 350 weeks available when voters adopted the access to courts provision in the 1968 Florida Constitution.” The First District panel also observed that “the 104-week limitation on temporary total disability benefits was the lowest in the United States.“ The First District panel applied its decision prospectively and instructed the JCC to grant Westphal additional temporary total disability benefits, not to exceed 260 weeks, as would have been provided under the relevant statutory provisions in effect before the 1994 amendment of section 440.15(2)(a).

Subsequent to the panel decision, the First District granted motions for rehearing en banc filed by the City and the State. In Westphal v. City of St. Petersburg, 122 So. 3d 440, 442 (Fla. 1st DCA 2013), the First District issued an en banc decision withdrawing the panel opinion that had declared the statute unconstitutional. In addressing the issue of Westphal’s entitlement to disability benefits, the en banc majority determined that “the First District’s construction of the statute fifteen years earlier in Oswald, and then again two years earlier in Hadley, was incorrect.” Specifically, the First District noted that “the statute requires a medical evaluation either when an injured worker reaches maximum medical improvement or six weeks before the expiration of the 104-week period of eligibility for temporary total disability benefits, whichever occurs earlier, and that the doctor must assign an impairment rating as part of this evaluation.”

Accordingly, the First District held that “a worker who is totally disabled as a result of a workplace accident and remains totally disabled by the end of his or her eligibility for temporary total disability benefits is deemed to be at maximum medical improvement by operation of law and is therefore eligible to assert a claim for permanent and total disability benefits.” As a result of this new interpretation of the statute, which eliminated the statutory gap, the First District found it “unnecessary to consider whether its prior, now discredited interpretation of the statute in Hadley, which recognized the gap, rendered the statute unconstitutional as a denial of the right of access to courts.”

The First District then certified to the Florida Supreme Court the following question as one of great public importance: "IS A WORKER WHO IS TOTALLY DISABLED AS A RESULT OF A WORKPLACE ACCIDENT, BUT STILL IMPROVING FROM A MEDICAL STANDPOINT AT THE TIME TEMPORARY TOTAL DISABILITY BENEFITS EXPIRE, DEEMED TO BE AT MAXIMUM MEDICAL IMPROVEMENT BY OPERATION OF LAW AND THEREFORE ELIGIBLE TO ASSERT A CLAIM FOR PERMANENT AND TOTAL DISABILITY BENEFITS?"

The Supreme Court’s Opinion

In answering the question, the Court here concludes that “section 440.15(2)(a) of Florida’s workers’ compensation law is plainly written and therefore does not permit the Court to resort to rules of statutory construction.” Instead, the Court gives the statute its plain and obvious meaning, which provides that “once the employee reaches the maximum number of weeks allowed 104 weeks, or the employee reaches the date of maximum medical improvement, whichever occurs earlier, temporary disability benefits shall cease and the injured worker’s permanent impairment shall be determined.” Because the Court concludes that the First District’s interpretation of the statute cannot withstand scrutiny, to the extent the certified question simply asks whether the Florida workers’ compensation law constitutionally permits the statutory “gap” at issue, the Court answers that question in the negative.

Applying the statute’s plain meaning, the Court concludes that “the 104-week limitation on temporary total disability benefits results in a statutory gap in benefits, in violation of the constitutional right of access to courts.” The stated legislative intent of the workers’ compensation law is to “assure the quick and efficient delivery of disability and medical benefits to an injured worker and to facilitate the worker’s return to gainful reemployment at a reasonable cost to the employer.” Section 440.015, Fla. Stat. (2009). Section 440.15(2)(a), however, operates in the opposite manner. The court points out that the “statute cuts off a severely injured worker from disability benefits at a critical time, when the worker cannot return to work and is totally disabled but the worker’s doctors deem that the worker may still continue to medically improve.” As applied to these circumstances, the Florida workers’ compensation law undoubtedly fails to provide “full medical care and wage-loss payments for total or partial disability regardless of fault.” Martinez v. Scanlan, 582 So. 2d 1167 (Fla. 1991).

Accordingly, the Court holds that the statute as written by the Legislature is unconstitutional. However, it concludes that this unconstitutional limitation on temporary total disability benefits does not render the entire workers’- compensation system invalid. Rather, the Court employs the remedy of “statutory revival” and directs that “the limitation in the workers’ compensation law preceding the 1994 amendments to section 440.15(2)(a) is revived, which provides for temporary total disability benefits not to exceed 260 weeks, five years of eligibility rather than only two years, a limitation the Court previously held passes constitutional muster.”

As I have often spoken about publicly, all of this seems to come down as to whether the statutory scheme the legislature comes up with is fair, is reasonable, and remains a fair and reasonable alternative to the tort system as a remedy for the injured worker. The Florida Supreme Court here indicates that “reductions like the 104-week limitation on temporary total disability benefits and the statutory gap must be looked at by asking whether the workers’ compensation law continues to provide adequate and sufficient safeguards for the injured worker and thus constitutes a constitutional, reasonable alternative to tort litigation.” In other words, the “reasonable alternative test is the linchpin and measuring stick.” Although the Court has undoubtedly upheld as constitutional many limitations on workers’ compensation benefits as benefits have progressively been reduced over the years and the statutory scheme changed to the detriment of the injured worker, “if there eventually comes a tipping point, where the diminution of benefits becomes so significant as to constitute a denial of benefits, it creates a constitutional violation.” The court therefore indicates it will review not only this issue, but what has occurred to the workers’ compensation system since the 1968 adoption of the access to courts provision, as it relates to providing “full medical care and wage-loss payments for total or partial disability regardless of fault,” in order to determine whether such reductions have now reached that constitutional “tipping point.”

In comparing the rights of a worker such as Westphal injured on the job today with those of a worker injured in 1968, the extent of the changes in the workers’ compensation system is dramatic. “A worker injured in 1968 was entitled to receive temporary total disability benefits for up to 350 weeks. Section 440.15(2), Fla. Stat. (1968). In 1990, the Legislature reduced the availability of temporary total disability benefits from 350 to 260 weeks—a 25.7% reduction of two years. See ch. 90-201, § 20, Laws of Fla. Then, in 1993, the Legislature again reduced the availability of temporary total disability benefits, this time from 260 weeks to 104 weeks—a 60% reduction. See ch. 93-415, § 20, Laws of Fla. This means that an injured worker such as Westphal is now eligible to receive only 104 weeks of temporary total disability benefits—a massive 70% reduction when compared to the temporary total disability benefits available in 1968. It is uncontroverted that decreasing substantially the period of payments from 350 weeks to 104 weeks, standing alone, results in a dramatic reduction from almost seven years of disability benefits down to two years. Whereas almost seven years or even five years post-accident should be a reasonable period for an injured worker to achieve maximum medical improvement, clearly two years is not for the most severely injured of workers, like Westphal, who might be in need of multiple surgical interventions.”

The Court concludes “we have now reached that point at which the claimant’s cause of action has been effectively eliminated”—the constitutional “tipping point.” The Court therefore concludes that the 104-week limitation on temporary total disability benefits, as applied to a worker like Westphal, who falls into the statutory gap at the conclusion of those benefits, does not provide a “reasonable alternative” to tort litigation. Under the current statute, workers such as Westphal are denied their constitutional right of access to the courts.

The Court however does not stop there, indicating that there are other components of the statute which are problematic, possibly unconstitutional. For example, “during the same period of time in which the Legislature reduced the provision of disability benefits, the Legislature also gave employers and insurance carriers the virtually unfettered right to select treating physicians in workers’ compensation cases.” See section 440.13(2)(f), Fla. Stat. (2009). Further, the right of the employee and the employer to “opt out” of the workers’ compensation law, and preserve their tort remedies, was repealed. See sections 440.015, 440.03, Fla. Stat. (2009). Other changes have included a heightened standard that the compensable injury be the “major contributing cause” of a worker’s disability and need for treatment, and a requirement that the injured worker pay a medical copayment after reaching maximum medical improvement. See sections 440.09(1), 440.13(14)(c), Fla. Stat. (2009). The current law also allows for “apportionment of all medical costs based on a preexisting condition.” See section 440.15(5), Fla. Stat. (2009).

The Court makes it known that in their opinion, the current version of the law presents a materially different situation than the Court previously reviewed in Martinez. “The Court is now presented with a different iteration of the Workers’ Compensation Law from that addressed in Martinez—one which today provides an injured worker with limited medical care, no disability benefits beyond the 104-week period, and no wage-loss payments, full or otherwise. And, the lack of disability compensation occurs only because the severely injured worker has not reached maximum medical improvement as to the very injury for which redress is guaranteed under the Florida constitution. The natural consequence of such a system of legal redress is potential economic ruination of the injured worker, with all the terrible consequences that this portends for the worker and his or her family. A system of redress for injury that requires the injured worker to legally forego any and all common law right of recovery for full damages for an injury, and surrender himself or herself to a system which, whether by design or permissive incremental alteration, subjects the worker to the known conditions of personal ruination to collect his or her remedy, is not merely unfair, but is fundamentally and manifestly unjust.”

The Concurring Opinion

If the majority’s opinion wasn’t concerning enough, the concurring opinion would take it a step further by requiring the Legislature to provide a comprehensive, constitutional workers’ compensation scheme, as “the Workers’ Compensation scheme is unconstitutional and in need of major reform. The system is fundamentally unconstitutional and in need of legislative—not judicial—reform. Over time, the Florida judiciary has repeatedly rewritten provisions of the Workers’ Compensation law to avoid a declaration of unconstitutionality. Florida needs a valid Workers’ Compensation program. The charade is over. Enough is enough. Florida workers deserve better.” The concurring opinion goes on to say that “the truth of the matter is that section 440.15 is hopelessly broken and cannot be constitutionally salvaged. The judicial branch must terminate the practice of rewriting the statute. Under the plain language of the statute, many hardworking Floridians who become injured in the course of employment are denied the benefits necessary to pay their bills and survive on a day-to-day basis.”

The concurring opinion says out loud what many in Florida and around the country have been saying about the current workers compensation system, “the reality is that Workers’ Compensation benefits have been steadily chipped away and reduced by the Legislature to such an extent that the entire statutory scheme should be declared unconstitutional.” Without any apologies, the concurring opinion indicates that “the time has come for this Court to uphold its sacred and constitutional duty and simply apply the words of the Legislature. In lieu of continuing to uphold the Workers’ Compensation law with rewrites, judicial patches, and flawed analyses, Chapter 440 should be invalidated where defective and the Legislature required to provide a valid, comprehensive program.”

If the Court’s recent decision in Castellanos, returning hourly fees to injured workers attorneys, made the Florida work comp industry wonder whether the pendulum had started to swing the other way, this decision makes it clear. It has. This decision may also start the beginning of continuing and endless challenges to the many provisions within Florida’s workers compensation law that injured workers’ advocates have been complaining about for more than 20 years. From the right to choose their own physician, to the massive reduction in permanent partial disability benefits, to the heightened burden of proof, to the lack of scientific evidence to back the major contributing cause provision, to the limited benefits available for a compensable psychiatric impairment, just to name a few, the Florida claimant bar has been collecting evidence on a number of issues since 1993. As these challenges and constitutional attacks on the workers compensation law that then Governor Jeb Bush demanded and the 1993 Florida Legislature pushed through, despite heavy opposition from labor groups, disability advocates, and injured workers concerns, become louder and louder, it will be interesting to see what current Governor Rick Scott and the 2017 Florida Legislature will do, considering the fact that NCCI has already called for a close to 20% increase in Florida work comp insurance rates. Stay tuned!

About Rafael Gonzalez

Rafael Gonzalez, Esq. is Vice President of Strategic Solutions at Optum in Tampa, FL. A part of the insurance, medical, and disability industry since 1983, he has served as a thought leader on all aspects of liability, workers compensation, social security, Medicare, and Medicaid compliance since 1990. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, CMS approval, and MSA and SNT professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael can be reached at [email protected] or 813.967.7598.