Are Some Florida Workers’ Comp Judges Bending to the Political Winds on Fees?
Attorney fees in Florida workers’ compensation cases seem to be part of a story that will never end, and a state appeals court has added new life to the story with decisions that give support to both sides of the divide.
In one long-awaited ruling, the 1st District Court of Appeals struck down a compensation judge’s decision that had slashed a claimant’s lawyer’s $805,000 fee by 90%. But other opinions by the same court last week dismissed requests to bar another comp judge from future cases because of his stinging excoriation of plaintiffs’ attorneys who had accepted large fees.
Claimants’ lawyers said the cases highlight an apparent trend among some comp judges to knock down large fees – in keeping with the pro-business, pro-insurance-company political winds blowing through the state.
“I believe judges want to be reappointed and they don’t want to be viewed by a conservative governor as awarding hourly fees that seem high,” said Michael Winer, of Tampa, the claimants’ attorney who represented attorney Michael Rudolph in his appeal on the fee reduction. “But that’s my own suspicion and nothing more.”
Others on the plaintiffs side agreed.
“I think it is a trend,” said Randy Porcher, a longtime claimants’ lawyer with the Morgan & Morgan law firm.
“It’s a form of judicial activism, and there has been a spike in those types of decisions,” said Bradley Smith, a claimants’ lawyers who was slammed by compensation court Judge Erik Grindal in a 70-page opinion in November. (See sidebar article, below.)
The sentiment toward holding the line on legal fees, even when parties involved have agreed on a contingency fee, began two years ago, the plaintiffs’ attorneys said. That was when compensation Judge Thomas Sculco upheld a $1 million fee on a $3.9 million total award. Looked at one way, the fee equated to about $9,000 an hour, and some judges and defense lawyers were outraged.
Six months later, Florida Gov. Ron DeSantis declined to appoint Sculco to another term in office. Claimants’ attorneys said that sent a strong message to the other 29 judges of compensation claims.
“Sculco not getting reappointed was ominous for people trying to do the right thing,” Porcher said.
In the current political environment in Florida, in which DeSantis has attempted to remove other public officials, including a Tampa prosecutor and some local school board members – and the Florida Legislature in 2022 made limits on attorney fees a cornerstone of property insurance reform laws – some comp judges now appear to be toeing the line, the plaintiffs representatives argued.
“Self-preservation is everyone’s greatest motivation in life,” Winer said. “They want to perpetuate existence, keep a roof over their heads and keep their profession. For a judge, there might be political pressure that’s being exerted by the governor. I don’t know.”
Florida’s head compensation judge said those conclusions have no basis in fact.
“That’s their perception and rallying cry, but I have not spoken with Ron DeSantis on this topic,” said Judge David Langham. “So I can’t tell what his reasoning was in not appointing Judge Sculco. I assume these people that are saying this have spoken with Ron and have a better insight than I have.”
To ascribe motivation to the governor’s actions without speaking with him would be “preposterous,” he said.
Langham noted that Sculco was not the only judge who was not reappointed in 2022, and some 16 others were reappointed. The Florida Office of Judges of Compensation Claims’ 2023 annual report shows that claimants’ attorney fees on settlements have, in fact, dropped slightly in the last year or so, after rising steadily in the years before that.
But that is probably more a product of lower aggregate settle amounts, which also dropped by 3.5% last year, Langham noted.
In the Jan. 24 Rudolph opinion, seen here, the 1st DCA judges found that the comp judge had overstepped the law and the intent of previous court rulings.
“Although the JCC had the discretion to deviate from the presumptive fee by applying the statutory factors, this Court has cautioned that he should do so only in ‘exceptional circumstances’ where the presumptive amount under the formula is ‘manifestly unfair,'” appeals court Judge Stephanie Ray wrote.
“Because there were no exceptional circumstances that would justify a reduction in the presumptively reasonable fee set by statute, we reverse,” she added.
Ray, by the way, was appointed in 2011 by then-Gov. Rick Scott, who is also seen as a pro-employer, staunch conservative in his political views. Ray at one time also was a member of the Federalist Society, which advocates for textualist and, some plaintiffs lawyers have said, a hard-right interpretation of the U.S. Constitution and statutes.
Winer said the appeals court made the correct decision in the Rudolph case.
“One of the biggest takeaways in this opinion is that, as a judge, you don’t get to decide just what you think is right and fair. You have to make a decision based on the evidence before you,” Winer said. “In this case, all of the evidence that was presented to the judge suggested that the fee claim was reasonable.”
The comp judge, Edward Almeyda, had written in his order that Rudolph’s stipulated fee amount “shocks (his) conscience,” noting that it was about $4,000 an hour, it is coming out of a settlement awarded to a quadriplegic on a ventilator, and the settlement must last the remainder of the man’s life.
Winer said that Almeyda had overlooked the fact that the injured worker’s litigation over medical benefits had been going on for 30 years, that Rudolph had been working on it for much of that, and had invested significant resources, and was taking a big risk: There was no guarantee that he would be paid, especially if the paralyzed claimant died before a settlement was final.
Other lawyers were involved in the prolonged litigation, and they and Rudolph had agreed to share a total fee of $1.3 million – almost a $700,000 reduction from the amount prescribed by Florida’s statutory guidelines.
The worker, Darien Smith, was catastrophically injured in 1993 when he was a stocker at a Home Depot in Miami. A loaded pallet fell on his head, crushing his spine and paralyzing him from the neck down, requiring a lifetime of care. Liberty Mutual Insurance and National Union Fire Insurance are the workers’ compensation carriers in the claim.
Smith settled the indemnity benefits part of his claim in 1995. But many of his medical needs continued to be litigated for the next three decades, including his need for a powered wheelchair, a computer to allow him to communicate through eye movements, home modifications, and more.
In his 2022 order on the attorney fees, Judge Almeyda noted that at the time of the accident Florida law mandated a sliding scale on fees: 25% of the first $5,000 in benefits; 20% for the next $5,000 and 15% of the remainder. That statute was struck down by the landmark Castellanos vs. Next Door Co. decision by the Florida Supreme Court in 2016, but the scale remains as a guideline in the statute.
Also in 2016, another landmark decision, by the 1st DCA, upheld the right of claimants to contract with their attorneys on fees. While most plaintiffs’ attorneys customarily ask for 30% to 40% of the final award in personal injury cases, the concern in comp cases was that awards are generally much smaller than in other injury cases, don’t include punitive damages, and a contingency fee would come out of the injured workers’ benefits. A limit on fees also helps limit loss costs and loss adjustment expenses for comp insurers – and helps keep premiums lower for employers.
Almeyda acknowledged that Rudolph’s agreed-on fee was less than what the guidelines called for, and that the case was complex. But he said the payment was still too high and did not meet another standard known as the Lee Engineering factors test, which speaks to reasonableness of fees.
Rudolph had submitted 205 hours over a seven-month period. Winer argued that the number of hours didn’t tell the whole story, that Rudolph had already agreed to a “huge reduction,” and that he had agreed to represent Smith for the rest of his life. The claimant and his mother were very happy with the job Rudolph did, and at a hearing she thanked all the lawyers for being so patient and working so hard, Winer said.
The appeals court seemed to agree. Citing other appeals court rulings, the DCA said that Almeyda had placed too much emphasis on an hourly fee.
“The JCC’s hyperfocus on a reasonable hourly rate reduced the fee analysis to nothing more than a simple mathematical formula (hourly rate x number of hours) and strayed from the contingent fee arrangement inherent in the statute,” the 1st DCA opinion reads. “Lost in the JCC’s well-intentioned calculation was any recognition that the stipulated fee amount was already substantially less than what the statute deemed as presumptively fair.”
Because Almeyda raised his concerns, that created a conflict between Rudolph and his client, forcing Rudolph off the case. Going forward, Rudolph won’t be able to represent Smith in Medicare set-aside, Social Security offsets and new medical issues that inevitably will arise, Winer said. As of now, Smith does not have a lawyer on his comp case.
“The judge in essence created conflict where there was resolution peace,” Winer argued. “The judge approached this from mindset of wanting to help Mr. Smith, but in actuality he really hurt him.”
Winer’s fee for representing Rudolph will come out of Rudolph’s pocket, not from Smith’s benefits, he noted.
The attorney for the employer/carrier, Kimberly Fernandes of the Kelley Kronenberg firm, could not be reached for comment.