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Due Process, Or Just More Process?

Florida Supreme Court Justice Barbara Pariente. Photo courtesy The Village Square on Flickr.

I wonder whether some Florida Supreme Court justices dozed off when their law professors discussed “due process.” A recent decision suggests they cannot distinguish between the concepts of due process – and more process.

In a 5-2 ruling, the court struck down a statute limiting attorneys’ fees in workers’ compensation cases, the Miami Herald recently reported. That law specified that lawyers who successfully represent injured workers are entitled to 20 percent of the first $5,000 awarded, and 15 percent of the next $5,000.

The case in question began when Marvin Castellanos suffered head, neck and shoulder injuries that he claimed he sustained in the course of his work. He filed a workers’ compensation claim, but his Miami-based employer’s insurance carrier denied coverage. At that point, as permitted by Florida law, Castellanos hired an attorney.

Castellanos’ attorney poured over 107 hours into the case and ultimately won his client a benefit of a little over $800. Or, put another way, Castellanos received less than $7.50 for each hour his attorney worked on his case.

But the attorney, who presumably knew before taking the case that Florida law would cap the fee at $1,750 – and would grant that much only for an award of at least $10,000 – wanted more. Much more. Castellanos’ attorney petitioned the court to award fees of $36,817.50, or over $300 per hour. Instead of the fee he sought, he received $164.54 under the existing rules.

The Florida Legislature considered this exact scenario back in 2009 and came to the reasonable conclusion that the purpose of workers’ compensation is primarily to compensate workers, not their lawyers. Lawmakers therefore opted to tie the amount a worker’s lawyer is entitled to be paid to the amount received on the worker’s behalf, not simply the number of hours logged. The point of the rules is to remove claims that have no merit, or whose economic value does not justify the cost of pursuing a case, from the system. This leaves more money for everyone else: the injured workers themselves as well as the employers, who cover workers’ compensation insurance premiums with money they could otherwise pay to the rest of their labor force.

The only parties injured by the Florida Legislature’s original approach are attorneys who cannot find anything better to do with their time than to devote, say, 107 hours of work to an $800 case.

But the Florida Supreme Court concluded that the state’s cap on attorney fees violates the due process rights of … somebody. Is it the workers? No; workers will get the same amount of money either way, since their award determines the permissible fee, not the other way around. Is it the employers, whose insurance premiums must cover any increase in the fees awarded to plaintiffs’ attorneys? Obviously not. Apparently, the due process rights in question are those of Florida’s underemployed attorneys.

Justice Barbara Pariente, writing for the majority, said that the law unconstitutionally barred challenges to the “reasonableness” of legal fees in workers’ compensation cases, which implies that it is the appropriate role of judges, rather than legislators, to determine what is reasonable as a matter of public policy.

Since the Florida high court found both a state and federal constitutional basis for its conclusion, it is highly unlikely that the U.S. Supreme Court will change this result, or even consider the case at all. Instead, the Florida Legislature may convene in a special session this year to attempt to find a compromise that will prevent the state’s workers’ compensation premiums from skyrocketing.

Unless lawmakers intervene, such a result is inevitable. It represents the price of providing due process for a select class of lawyers, and more process for those of us (like me, since I am a Florida employer) who must pay for it.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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