May 2016


Now that we’ve had time to digest the shock wave of Castellanos (and the current increase of claims), I can analyze where this decision came from and why the Court decided this way.  [See my initial analysis here.]

Its quite clear going back to Emma Murray, that the Supremes were concerned with the role of the JCC.  Since the 2003 changes, the Legislature has done everything to control what and how the JCC decides claims.  From, dictating the amount of IME’s each party gets, to formulating mental injury claims, to attorney fees, the Legislature intent has been to standardize the JCC’s decisions.

A key to the unconstitutional ruling was the fact that 440.34 created an “irrebuttable presumption” that no matter the calculation when applying the fee schedule, it would always be reasonable.  This of course is a fallacy when looking at the facts of Castellanos: his attorney spent 107 hours winning a very complicated case and ended up getting paid $1.52/hour.

In the Court’s analysis, the Supremes finally ruled that fees are penalties against E/C’s to keep them honest and provided deserved benefits to Claimants.  Further, like Emma Murray, the Supremes felt the best protector of a Claimant’s interest in benefits is the JCC to weigh in on whether an attorney’s fee is reasonable or not.

This is an empowering move on the Court to take power of the allocation of not just fees but benefits too from the Legislature and put it back into the hands of the JCC.  The Lee Engineering standard (founded in Florida Bar Rule 4-1.5) allows the Judge to weigh the reasonableness of a fee.  The JCC still must start with a fee schedule calculation and weight it against the hourly fee.  The Supremes defending this ruling by advocating the Lee Engineering standard also protects E/C’s from excessive fees.  But, the JCC must utilize it.

In the end, the Supremes saw that the Legislature cannot take away the authority of the JCC to review a fee. . . it frustrates the purpose of the W/C scheme.

One could take this theory and apply it across the board to any section of chapter 440 where the 2003 changes limited the involvement of the JCC.   The days of the JCC simply punching buttons are over.

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Well they did it.  And, I am back.  After a self-imposed exile, I return to the Workers’ Comp Corner to cover the biggest decision in Florida Workers’ Comp Law since Emma Murray.

It took over 18 months but Supremes overturned the 2009 version of s. 440.34 and declared it unconstitutional.  That decision, Costellanos v. Next Door Co.  can be read here and the entire majority opinion doubles down on the themes from Emma Murray.   In the end, the Court brings back hourly Claimant attorney fees (via the Lee Engineering Standard) and removes the irrebuttable presumption that the mandatory fee schedule is “reasonable.”

The challenge to this thing has been long and coming.  The Castellanos decision itself is long and detailed that weaves the principle of Carrier paid fees as part of the overall fabric of W/C.    Make no mistake, this Court wants the Legislature to know there can be no quick change to 440.34 that will fix this by simply pulling out a marker and crossing out the word “reasonable”.  Per the Court, hourly fees provide access to Florida courts, a constitutional right.

There is so much to digest on this decision, I will have to break it down in more than one post throughout the week.   The consequences of this decision will be the certain increase in claims and Petitions for Benefits for smaller benefits.

Once again, you can read the Castellanos decision here.

I am happy to be back and I look forward to sharing my analysis with you.

Mike