What Stahl v. Hialeah Hospital Means for Florida’s Workers’ Compensation Laws

Episode Notes

Transcript

Workers Comp Matters: What Stahl v. Hialeah Hospital Means for Florida’s Workers’ Compensation Laws – 2/4/2015

Advertiser: This is Workers Comp Matters, hosted by attorney Alan S. Pierce. The only Legal Talk Network program that focuses entirely on the people and the law in workers compensation cases. Nationally recognized trial attorney, expert and author, Alan S. Pierce is a leader committed to making a difference when workers comp matters.

Alan Pierce: Welcome to Workers Comp Matters here on the Legal Talk Network. This is attorney Alan Pierce, I am the host of Workers Comp Matters, and I want to welcome you to our show today. Before we start, I’d like to thank our sponsors, Case Pacer, a practice management software dedicated to the busy trial attorney. To learn more, go to CasePacer.com. And also PINow; find a local qualified private investigator anywhere in the US. Visit PINow.com to learn more. On today’s show, we are featuring a special guest, Mark L. ZIentz. Mark is an attorney in Florida. He is an emeritus member of the executive council of the Workers’ Compensation Section of the Florida Bar, and a former vice chair of the Workers Comp Rules committee of the Florida Bar. He is also an arbitrator for the NFL players association management council. And he is a very active practitioner in the field of workers’ compensation. He has a particular case that we are going to discuss, Stahl v. Hialeah Health, and its companion cases that have to do with whether or not the current law involving workers compensation in Florida is constitutional. So, Mark, I’d like to first of all welcome you to Legal Talk Network and to Workers Comp Matters.

Mark Zientz: Thank you, I’m very happy to be here.

Alan Pierce: Mark, I think a good place to start would be a discussion of four terms that are pretty much synonymous and I’m going to mention those four terms which I think many of our listeners – hopefully most of our listeners – will have some familiarity with. And have you give a discussion of what they mean and we can then go into the impact of those terms. So the terms I’m referring to are grand bargain, otherwise known as the great trade off, otherwise know as a quid pro quo, or exclusive remedy. So tell us what those terms mean in the context of the workers compensation statutes across the country.

Mark Zientz: Workers compensation statutes are state statutes, they are different in every state. And they began around 1911 with statutes that were tested constitutionally to determine whether or not the grand bargain, the quid pro quo, the exclusive remedy, whether those things were constitutional under the federal statutes and federal laws in the constitution. What we’re talking about is not so much an agreement between labor and management, but a legislative solution to a preceding problem that people were getting hurt on the job and that became laws of the state. It became welfare recipients, they turned to crime, they used medical services even though the injury was related to the job. So the idea was to provide a system whereby employers would provide less than normal – by normal I mean what you would get if you sued the employer in court – and the employees would only be allowed to collect workers compensation. They couldn’t sue their employer for negligence. So that was the tradeoff. Some fair, adequate compensation and medical care in exchange for giving up the right to be able to go into court and to sue. Workers comp did not have certain things that you could get in court such as pain and suffering. So employees also gave up any right to pain and suffering in order to obtain what was described as fast and sure and adequate compensation.

Alan Pierce: And even more importantly, the issue of whether the employee was at fault or whether the employer was at fault or whether nobody was at fault was removed from the equation, that in order for somebody to collect workers compensation benefits, albeit at a lesser amount, usually at a percentage of his or her salary or wages – usually two thirds or something like that – plus medical expenses, they would not have the ability to sue the employer, nor would the employer have to worry about being sued. And adjudicators and claims people wouldn’t be looking at who caused the accident, they’d only be looking at whether did an accident occur and whether the person is disabled. So this seems to have made sense at the time even though it was controversial back in 1911.

Mark Zientz: It was controversial because more than anything, the challenges to the system that was set up came first from the employers who were upset at having to pay for damages that they were not negligent in causing and provide compensation to everybody hurt on the job rather than just those who were negligent and who were able to sue. So the system was one that was tested in the Supreme Court of the United States and the Supreme Court said, “Look. You make money off of these people, you’re profiting off of their services and when you hurt them, you’re going to be responsible.”

Alan Pierce: Exactly.

Mark Zientz: And that was the end of that question.

Alan Pierce: Okay, so what we’re going to do is we’re going to fast forward over the balance of the 20th century and get us into the 21st century and I’m going to make the general statement that more or less, this quid pro quo, this bargain where the injured worker gave up certain civil remedies in exchange for a certain workers comp remedy has pretty much worked fairly well. It has survived, it is universal, it has evolved, it has changed, there have been new causes of action, new types of injuries, occupational exposures; we can probably go through the decades and pick out certain landmarks that occurred. And workers comp has also been the subject to the political and economic realities of changes in the various states. When premiums get too high, we would start to see the legislatures rolling back benefits when injured workers were not getting what they were due and they had a strong, political influence on the legislatures. Benefits were increased so that we’ve kind of moved along in the last 104 years with ebbs and flows on a system that overall – I think we can all agree – has served the employers fairly well, has served the workers fairly well; that has asterisks over both of those fairly wells. But something has happened in Florida that is unique to Florida, but not necessarily unique to what’s been going around around the country in different pockets. So leading into the cases that you are involved in now, what happened in Florida that has changed the delicate balance of adequate, sure, remuneration for job injury in exchange for the right to sue?

Mark Zientz: When the grand bargain was acted into, the only way an employee could sue an employer in court for an injury was to prove not only negligence, but no contributory negligence, that the employee was not even 1% responsible for their own injury. They had to prove that the injury was not caused by a fellow servant, and they have to prove that the injury was not the result of them accepting the risks of hazardous employment. Those factors made it virtually impossible for an employee to sue successfully, and that’s why employers were initially upset at workers comp because they had to pay everybody and the people that were negligent in causing their injuries, they would usually win in the courts. What’s happened over the course of the years is I believe in every state now – I may be wrong about them, certainly in Florida – we’ve moved to a comparative negligence system and therefore what would have been a result of a suit in the early court of the 20th century as exempt from the employee now gives the employee a much greater opportunity to collect in a negligent suit. But when that happened in Florida, and this was in 1973 went by ruling of the Supreme Court, Florida changed from a contributory negligent state to a comparative negligence state. That change should have engendered additional benefits to working people because what they traded away has now become much more valuable than it was in 1911. But for the most part, increases in compensation did not come about when changes were made to the tort system.

Alan Pierce: So as you moved from the 70’s – and you’re right, even in Massachusetts where I practice, it was I think in 1972, we also moved from a contributory negligence as a Bar to recovery to a comparative negligence. But has the actual benefit levels – if they’ve not increased in Florida – have they decreased more recently so as to make this breach of the grand bargain more significant?

Mark Zientz: Florida is kind of unique. Florida had a constitutional convention around 1968 and a new constitution was ratified by the citizens. And the thinking was that any statutes that were in effect at the time of that constitution and any case law that was in effect at the time of that constitution could not be changed or repealed without a showing of a great public necessity. So in 1968, Florida, because its constitution before ‘68 and after ‘68 considered the right to a grand jury to address damages can be considered an inviolate right. And it’s the only right in the declaration of rights in Florida that has the term inviolate. So the people who passed the original compensation laws in Florida in 1935 left in a provision that allowed an employee or employer, merely by giving notice to the other and to the state, to opt out of coverage of the workers compensation law and have their right to a trial by jury. And that’s the way the system was in 1968. But in 1970, the legislature repealed the right to opt out and also didn’t provide any additional benefits or replacements for it. So when Florida became a comparative negligent state in 1973, the value of the trade changed considerably and you would expect more employees to opt out, but then of course, the right had been repealed, and then they were stuck with not only no opportunity for a jury trial, but then it’s at pretty much the whim of the legislature.

Alan Pierce: And has the legislature exercised its whim to the determine of any workers since then?

Mark Zientz: Well, that was a question that was posed in 1970 during the Nixon administration when OSHA was passed to provide workplace safety. Part of the original OSHA law was a provision requiring that a commision be appointed to study whether or not workers compensation benefits and procedures were adequate. The commission worked from 1970 to 1972 and reported to the president and it’s significant that they reported unanimously and the commission of course included members of all the stakeholders: unions management, insurance, judiciary, educators, everybody got together and somehow came up with the unanimous decision that in 1972, workers compensation laws in the United States were inadequate. And they listed in their report the things that needed to be in a workers compensation law to make it an adequate replacement remedy.

Alan Pierce: And these are what’s known as the so called essential recommendations. So let’s just fast forward ahead. As a result of their recommendations were some changes made in Florida?

Mark Zientz: Some changes were made in Florida to account for the fact that this report of the national commission suggested that there might be reason for a federal takeover in state workers comps, pretty much the same way as minimum wage is a federal law. They wanted to make statutory minimum standards for state workers comp laws. And our states, in order to avoid federal involvements, it will do better. And in 1974 in Florida, they did approve amendments which were the last ones in Florida intended to benefit injured workers. But surprisingly – well maybe not  surprisingly – most of those improvements have been wiped out by later amendments.

Alan Pierce: That’s what I am getting to. And when we come back from the break, I’m going to have you describe briefly what those changes were that were detrimental., And then what I want to do is pick up on three cases – one of which you are a counsel for – and have you describe these three cases that are currently pending at the appellate level in Florida and the ramifications of those cases. I think it was good to have this historical overview. So give us just an idea. What are the issues or what is the single issue in the three cases that are currently pending? I’ll use the names of the plaintiffs: Westfall, Castellanos and Stahl. I know they have varying facts on each other case. But essentially, what is the essential issue in those three cases?

Mark Zientz: The essential issue in all three cases is the adequacy of the benefits being provided. Is the compensation system an adequate replacement for the tort system which it supplanted. And that covers virtually all of the issues in the three cases.

Alan Pierce: So having said that, we are going to take a short break to hear from our sponsors and when we return with attorney Mark Zientz from Florida, we will examine the issues currently pending in the great state of Florida. We’ll be right back.

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Alan Pierce: Welcome back to Workers Comp Matters on the Legal Talk Network, this is Alan Pierce. I’m here with attorney Mark ZIentz from Miami, Florida. And we are now getting into a discussion of three cases, Westfall, Castellanos and Stahl that are in one way or another before the Florida Supreme Court. Can you give us an idea of how those cases got there? What was the initial cause of action in the lower trial courts that gave rise to an appeal that is now pending in the Supreme Court of Florida?

Mark Zientz: There are two ways to get an issue like this before the Supreme Court. One is by filing a declaratory relief action. The other is by appealing an adverse ruling from the offices of the judges of compensation claims which are adjudicators in Florida. They are not circuit court or accounting court judges or administrative law judges and they don’t have the authority to rule on constitutional issues. So if you try a case which has some complaint about the Florida constitution, usually you let the compensation judge know we’re going to be raising this when we appeal to the intermediate court of appeal – which, in Florida, is the first district court of appeal in Tallahassee. And each of these cases took the route of a hearing before a compensation judge and an appeal on constitutional rounds to the first district court of appeal.

Alan Pierce: So in terms of the hearing before the workers compensation judge in Florida, was it the position of the claimant that workers compensation as it existed in Florida was no longer constitutional and that it did not provide the type of adequate remedy that was envisioned by the framers of workers comp law in 1935 and established by the national commission that it was no longer sufficient to allow an employer to be immune from a lawsuit? Am I summarizing that properly?

Mark Zientz: Yes. One of the major attacks by the legislature and the chamber of commerce and the associated industries was on attorneys fees. Florida is not unique but in a small group of states that allow for an attorney’s fee to be paid by the employer or the insurance carrier if they haven’t provided the benefits within 30 days of the claims of them and they ultimately lose their trial and they’re responsible for attorney’s fees and costs. And the statute up until 2003 provided that you either got a percentage of the benefits obtained and it was a schedule in the statute. Or you got a reasonable relief fee depending on the circumstances of each case. So in 2003 which is the major amendments that were attacking in all three cases, the legislature said you can only get the percentage allowed by the statutory fee, you can no longer get an hourly fee. That meant that employees with low value cases would not be able to get representation. An appeal on that issue went to the Supreme Court and in 2008, the Supreme Court said no. The statute still uses the word reasonable, so we’re going to say that the attempt to limit it just to a statutory fee schedule is not appropriate. Immediately, in the next legislative session in 2009, the legislature repealed the word reasonable. So thereafter, all fees have been awarded only on a percentage of the benefits. And the percentage that legislature set up is around 10%. And again, low value cases or even higher value cases where the defendant puts up a really staunch defense and runs all over the place, you really can’t afford to do it for 10% of the benefits.

Alan Pierce: And that’s only if you win and I’m going to pause it that defense attorneys have no limitation on what they can charge and they get paid whether they win or lose.

Mark Zientz: Yeah, and that’s one of the problems, it’s not an even playing field.

Alan Pierce: That’s what I’m getting at. So that generated one case which I think is Castellanos is the case that deals primarily with the attorney.

Mark Zientz: There’s one where the trial judge said I have to award you a amount of dollars regardless because that’s the fee schedule. But if there was no fee schedule, you would get a reasonable fee substantially higher than that. And I think the fee amounted to somewhere around $6 an hour for what the judge felt were a reasonable number of hours to handle the prosecuting claim.

Alan Pierce: Less than the minimum wage. So walk us through the facts as much as you can on the Stahl case. You’re a counsel for the claimant plaintiff in Stahl – Hialeah Health I believe is the employer. Tell us a little bit about why that case has attracted the appellate docket and what’s currently the issue before the Florida Supreme Court in your case.

Mark Zientz: Even though the statutory amendment took place effective October 1, 2003, which eliminated all compensation to what we call permanent partial disability in the tort scheme that would be called future laws of wage and capacity, it’s a big sector of the benefits that employees are supposed to get when they can no longer return to a job that pays the same thing as they were at when they were hurt. So was a nurse at Hialeah Hospital happened to be injured because his employer was cutting back on help and there weren’t enough people to transfer patients in the operating room safely. So he hit a disc in his back and became inoperable and therefore after, Stahl could no longer perform the duties of a nurse; he couldn’t do any of the lifting. He was paid impairment benefits for what’s called a 6% impairment which amounted to slightly over $5,000 at his compensation rate and then nothing. He said it’s inadequate for a statute not to have some compensation to primitive partial disability. That’s one of the most important parts of the workers compensation law. But it took, as you can see, about 12 to 13 years to get the matter in the position where it got before the Supreme Court.

Alan Pierce: And what is it that the Supreme Court is going to decide? First of all, they can’t legislate so they can’t award something that isn’t in the statute. So is it the theory that if the statute doesn’t provide an adequate remedy for this particular harm that the statute should be unconstitutional and that the employer could be then sued in tort for those damages?

Mark Zientz: That’s it. The last of the four terms that you mentioned when we opened this podcast were the exclusive remedy and our position that the statute’s not an adequate replacement then it should not be the exclusive remedy. And that of course would give employees after an injury the right to make a decision on whether to collect workers comp benefits – as meager as they are – or to go into the tort system and sue their employer.

Alan Pierce: Or it could result in the legislature having to take another a look at the benefit levels and bring them up to an acceptable level. I don’t know if that’s one of the endgames that the parties are seeking whether the Supreme Court if they view this as a breach of the grand bargain of the great trade off. Do you foresee they might suggest that the legislature may grant the relief suggesting that this is likely to be the state of the law until and unless the legislature properly addresses the deficiencies in the workers comp statute?

Mark Zientz: I can tell you that there have been any number of cases out of the first district court of appeals which have suggested to the legislature that they do something about the inequalities and the inequities in the current comp statute and the legislature has soundly ignored them. Even the Supreme Court pre 1968, before the constitution, had a case where the employee had exhausted his 350 weeks of temporary benefits and still haven’t gotten as well as he was supposed to get at what they call maximum medical improvement. And the compensation carrier cut off his benefits even though he was still totally disabled and receiving treatment. And the Supreme Court said, well, this 350 weeks is inadequate and the legislature should do something about it. But they never did at that point. And then ultimately, that 350 weeks is now reduced to a maximum of 104 weeks.

Alan Pierce: Alright, so it’s even gone down by over two thirds.

Mark Zientz: More than that because when the 350 weeks was in effect, after 350 weeks you could get another 5 years of temporary partial disability benefits and you could also get up to a year of vocational rehabilitation benefits. And all three of those categories are lumped into 104 weeks.

Alan Pierce: I know I haven’t monitored these cases from afar that not only are you facing challenges from a much more well funded opposition, but I know there have been amicus curiae briefs filed with the Supreme Court. I know the organization to which we both belong, WILAG, the Workers Injury Law & Advocacy Group has filed an amicus brief on the Stahl matter and I’m imagining that on the industry of employer and management side, a lot of people are looking at this and there are amicus briefs on that issue as well. So these cases have attracted a lot of attention, have they not?

Mark Zientz: Yes, they have. Even the attorney general for the state of Florida has finally jumped into this and filed an amicus brief on behalf of Hialeah Hospital. The insurance counsel, American Insurance Association, National Association, mutual insurance companies and property and casualty insurers along with associated industries, the Chamber of Commerce, I could go on and on; these are the groups that have filed amicus briefs on behalf of Hialeah Hospital.

Alan Pierce: So this is a work in progress. Mark, I want to thank you for being a guest on Workers Comp Matters. I want to thank you for champing the rights of Mr. Stahl and all the clients you represent and hope that Florida somehow resolves this mess and it can only be viewed as a mess by addressing all of these issues. Because what’s happening in Florida, I think we’re all aware that there are other states in which benefits have been steadily reduced over the last 5, 10, 20 or more years which is almost 40 years ago. And those of us who represent injured workers – and Workers Comp Matters, we try to present a balance on this show, but it is the field of law that we are involved in. It’s called workers compensation. And it’s no secret that the name, “Workers,” comes first and the name compensation goes with it. And when the compensation no longer adequately favors the workers that something has to be done. So I want to thank you for your advocacy. We will be watching these issues closely, and thank you very much. If somebody wants to contact you, Mark, very quickly, tell us how somebody could reach you, maybe your website.

Mark Zientz: The website is www.MZLaw.com, and in Florida I can be reached at my office number, (305) 670-6275.

Alan Pierce: Alright. Well once again on behalf of Legal Talk network, on behalf of Workers Comp Matters, this is Alan Pierce saying thank you. Go out and make it a day that matters.
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