Westphal v. City of St. Petersburg

As most of the Florida workers' compensation community now know, last Thursday saw the handing down of an opinion by the First District Court of Appeal which will, if it stands, have immediate and far reaching impact on the Florida workers' compensation system. Here's a link to the raw opinion, which is 24 pages in length: Westphal v. City of St. Petersburg/City of Risk Management and State of Florida. But keep reading for the executive summary :)

The outcome of the opinion is easily summarized - Florida's statutory cap on temporary total disability benefits, which has been 104 weeks since 1994, as codified in s. 440.15(2)(a), Florida Statutes, has now been declared unconstitutional. That section of the statute, as a result, has reverted to its pre-1994 state which provided for a 260 week cap. Said differently, the cap on temporary total disability benefits has now been extended from 2 to 5 years.

The rationale given by the Court is that the statutory "gap" which occurs when an employee exhausts their temporary total disability but is not yet at maximum medical improvement (and can't yet be permanently and totally disabled) violates the employee's right of access to the courts, the swift administration of justice, and principles of fundamental fairness.

I'd prefer not to dive into the intricacies of the constitutional analysis (this blog is meant to be friendly to non-lawyers, after all) and those interested in that aspect of the analysis can follow the link above. Having said that, the tone of the opinion is that of a steaming kettle which finally blew its top. Clearly the Court had finally had enough of what it viewed as the gradual, but steady, erosion of an employee's right to compensation since the 1994 amendments.

I'd like to hone in on 2 things - the immediate impact, and some reading of my (admittedly cloudy) crystal ball for the future.

First off, there is no immediate IMMEDIATE impact. This opinion is non-final and the City and State of Florida will almost certainly be seeking rehearing and rehearing en banc (for non-lawyers the former is rehearing before the panel which wrote the opinion, and the latter before the entire 1st District Court of Appeal at large). The striking down of a statute as unconstitutional is a big deal, and rarely done - rehearing en banc is very likely. Assuming the opinion still stands, the Florida Supreme Court will then take a swing, since they have mandatory jurisdiction in any case where a state statute is struck down. That will be the real battleground, as Florida's 7 member Supreme Court is generally regarded as politically balanced at the moment. It's very hard to predict what they'll do with this.

If the decision stands, however, it's fair to say that there are thousands of active workers' compensation claims which will be immediately impacted. Exactly how that impact will materialize, though, is a subject for a lot of speculation. Simply put, implementation of this new cap is going to be messy and generate a lot of litigation in the short term. The opinion states it has "prospective" application only, and "shall not apply to rulings, adjudications, or proceedings that have become final prior to the date of this opinion." This leaves open a number of challenging questions having to do with penalties and interest, reclassification of benefits (thanks to Jeff Novell for pointing this out), and attorney's fees and costs.

There is also the economic impact of employers and carriers having to pay out millions of dollars in past benefits and having to significantly adjust reserves going forward. Conversely, there is also an impact on a large number of injured workers who, in some cases, will be getting checks for tens of thousands of dollars.

This will undoubtedly not be my last blog post on the subject, and there are hints in the opinion that there may be more changes coming - particularly if the Florida Supreme Court affirms the opinion and emboldens the First DCA to make more tweaks to the statute. That will almost certainly provoke legislative action and we are about due for another set of changes of Chapter 440 anyway (Florida historically does a sweeping set of revisions every 10 years or so, and the last set was in 2003). Stay tuned.

Brian D.

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