Alabama State Circuit Court Judge Strikes Down Alabama Workers' Compensation Act as Unconstitutional

An Alabama state circuit court judge today, in the case Nora Clower vs. CVS Caremark, struck down the Alabama Workers' Compensation Act as unconstitutional on two grounds. First, Judge Pat Ballard found that the $220 per week benefit cap on benefits was unconstitutional. Second, Judge Ballard struck Alabama's 15% cap [of accrued benefits] on attorneys' fees. Because the statute was struck on multiple grounds it appears the Act has been completely nullified. I would not expect that result to stand for long -- the appellate courts will soon intervene notwithstanding Judge Ballard's additional decision to stay implementation of the decision for 120 days.

I have not yet had a chance to analyze the decision, but it appears the judge questioned the $220 per week figure both because it was deemed too low and because, as applied, he thought it irrational. Quoting from the story to which I linked above, the judge said:

"There is little credibility in telling two injured workers, both of whom are 99 percent disabled due to work injuries, that they both get $220 per week... when one earns $8.50 per hour for a 40-hour work week, and the other earns an annual salary of $125,000."

The issue of attorneys' fees has been a hot one of late in workers' compensation circles, appearing to have single-handedly grounded Florida workers' compensation reform initiatives. 

The judge's finding on the benefit cap is somewhat curious. It is one thing to argue that the benefit amount is too low -- the plaintiff argued that the $220 per week figure dated from 1987, when she claims the figure was "above the minimum wage level and the poverty level." Writers on this blog have discussed on several occasions the issue of whether there is, or should be, some constitutional floor to workers' compensation indemnity benefits. I have argued at length that inadequate benefits should trigger heightened Constitutional scrutiny. Whether such an argument could make headway in Alabama depends entirely on that state's constitutional law.

On the other hand, all states tie benefit maximums to some percentage of the state average weekly wage and this universally has the effect of capping benefits to the detriment of high earners.

I hope to read the decision soon and will likely have more to say about it. 

Michael C. Duff