Monday, November 28, 2016

U.S. Supreme Court Politics and Why Florida May Not Produce the Test Case on Workers' Compensation Benefit Adequacy

When the U.S. Supreme Court denied cert in Stahl v. Hialeah Hospital earlier this fall, certain commentary around the blogosphere seemed to suggest that the reason for the declination was a lack of interest on the Court’s part in the application of federal due process floors to state workers’ compensation.  As everyone will recall, there is an argument that White hinted at some required baseline of adequacy for workers’ compensation benefits (see my article on these issues here). The problem is determining upon what the baseline could have thought to be grounded by the Court writing in 1917. The Court has assiduously avoided writing more on the adequacy of workers’ compensation benefits, specifically, or more generally on the question of some measure of adequacy in connection with personal injury damages. However, Justice White, writing in dissent on the occasion of the Court’s dismissal of a Petition for Cert of the California Supreme Court’s upholding of California’s medical malpractice damages limits in Fein v. Permanente Medical Group, 695 P.2d 665 (Ca. 1985), stated as follows:

Whether due process requires a legislatively enacted compensation scheme to be a quid pro quo for the common-law or state-law remedy it replaces, and if so, how adequate it must be, thus appears to be an issue unresolved by this Court, and one which is dividing the appellate and highest courts of several States. The issue is important, and is deserving of this Court's review. Moreover, given the continued national concern over the “malpractice crisis,” it is likely that more States will enact similar types of limitations, and that the issue will recur. I find, therefore, that the federal question presented by this appeal is substantial, and dissent from the Court's conclusion to the contrary. 472 U.S. 892 (1985) (White, J., dissenting).

I don’t think the legal situation regarding damages capping has changed much and suspect there is some sympathy at the Court for the notion of a damages floor protected by federal due process (just as the Court has been willing to establish a due process based damages ceiling in B.M.W. of North America, Inc. v. Gore, 517 U.S. 559 (1996).  

Consider the judicial politics of the situation, however. If you were a Justice sympathetic to the notion of damages floors, why would you choose a case from Florida to fight the battle? What Florida is showing us over and over again is that its state constitution (and able plaintiffs’ bar) is capable of fighting “floor battles” on state constitutional and statutory grounds. All that is required for establishment of a floor in Florida is working out state law theoretical questions of how to bring facial challenges to statutes. One suspects that the recent Florida trial level case insisting that NCCI rate setting proceedings comply with the state’s open meeting, Fee v. NCCI and the Florida Office of Insurance Regulation (Nov. 23, 2016), is but another step on the road to a constitutionally based theory of benefit adequacy. In any event, if I were a clerk to a Supreme Court Justice I would not be focusing on Florida for a test case on the workers’ compensation race to the bottom. There are better candidates out there and they are likely to make themselves known sooner rather than later.   

Michael C. Duff

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