41
Fla. L. Weekly S197bTop of Form

Workers’
compensation — Attorney’s fees — Mandatory fee schedule in section 440.34,
Florida Statutes (2009), which creates an irrebutable presumption that
precludes any consideration of whether the fee award is reasonable to
compensate the attorney, is unconstitutional under both the Florida and United
States Constitutions as a violation of due process — Holding that section
440.34 is unconstitutional operates to revive statute’s immediate predecessor
— Judge of compensation claims must allow a claimant to present evidence to
show that application of the statutory fees schedule will result in an
unreasonable fee

MARVIN CASTELLANOS, Petitioner, v. NEXT DOOR COMPANY, et
al., Respondents. Supreme Court of Florida. Case No. SC13-2082. April 28, 2016.
Application for Review of the Decision of the District Court of Appeal –
Certified Great Public Importance. First District – Case No. 1D12-3639.
Counsel: Richard Anthony Sicking, Mark Andrew Touby, and Richard Eric Chait of
Touby, Chait & Sicking, PL, Coral Gables; and Michael Jason Winer of the
Law Office of Michael J. Winer, P.A., Tampa, for Petitioner. Raoul G. Cantero,
III and David P. Draigh of White & Case LLP, Miami, for Respondents. Mark
Lawrence Zientz of the Law Offices of Mark L. Zientz, P.A., Miami, for Amicus
Curiae Workers’ Injury Law and Advocacy Group. Richard W. Ervin, III of Fox
& Loquasto, P.A., Tallahassee, and Susan Whaley Fox of Fox & Loquasto,
P.A., Orlando, for Amicus Curiae Florida Justice Association. Christopher John
Smith, Tampa, for Amicus Curiae Workers’ Compensation Section of The Florida
Bar. William J. McCabe, Longwood, for Amicus Curiae Voices, Inc. Geoffrey
Bichler of Bichler, Kelley, Oliver & Longo, PLLC, Maitland, for Amici
Curiae Florida Fraternal Order of Police, Florida Police Benevolent
Association, and International Union of Police Associations. Noah Scott Warman
of Sugarman & Susskind, P.A., Coral Gables, for Amicus Curiae Florida
Professional Firefighters, Inc. Kimberly Ann Hill of Kimberly A. Hill, P.L.,
Fort Lauderdale, and Kenneth Brian Schwartz of Kenneth Schwartz, P.A., West
Palm Beach, for Amicus Curiae Florida Workers’ Advocates. Mark Kenneth Delegal
and Matthew Harrison Mears of Holland & Knight LLP, Tallahassee; and
William Wells Large, Tallahassee, for Amici Curiae Florida Justice Reform
Institute and Florida Chamber of Commerce, Inc. Rayford Huxford Taylor of Casey
Gilson P.C., Atlanta, Georgia, for Amici Curiae Associated Industries of
Florida, Inc., Associated Builders & Contractors, Florida Electric
Cooperatives Association, Florida Retail Federation, Florida Roofing, Sheet
Metal and Air Conditioning Contractors Association, Florida United Businesses
Association, and Publix Supermarkets. Amy Lyn Koltnow and Maria Elena Abate of
Colodny, Fass, Talenfeld, Karlinsky, Abate & Webb, P.A., Fort Lauderdale,
for Amici Curiae Property Casualty Insurers Association of America, Florida
Insurance Council, American Insurance Association, and National Association of
Mutual Insurance Companies. Richard W. Ervin, III of Fox & Loquasto, P.A.,
Tallahassee, and Charles Holden Leo of the Law Offices of Charles H. Leo, P.A.,
Orlando, for Amicus Curiae Central Florida Trial Lawyers Association. Louis
Paul Pfeffer, Jupiter, for Amicus Curiae National Employment Lawyers
Association, Florida Chapter.

(PARIENTE, J.) This case asks us to evaluate the
constitutionality of the mandatory fee schedule in section 440.34, Florida
Statutes (2009), which eliminates the requirement of a reasonable attorney’s
fee to the successful claimant. Considering that the right of a claimant to
obtain a reasonable attorney’s fee has been a critical feature of the workers’
compensation law, we conclude that the mandatory fee schedule in section
440.34, which creates an irrebuttable presumption that precludes any
consideration of whether the fee award is reasonable to compensate the
attorney, is unconstitutional under both the Florida and United States
Constitutions as a violation of due process. See art. I, § 9, Fla.
Const.; U.S. Const. amend. XIV, § 1.1

This issue arises out of a question certified by the First
District Court of Appeal to be of great public importance,2 which we rephrase as follows:

The Petitioner, Marvin Castellanos, was injured during the
course of his employment with the Respondent, Next Door Company. Through the
assistance of an attorney, Castellanos prevailed in his workers’ compensation
claim, after the attorney successfully refuted numerous defenses raised by the
employer and its insurance carrier. However, because section 440.34 limits a
claimant’s ability to recover attorney’s fees to a sliding scale based on the
amount of workers’ compensation benefits obtained, the fee awarded to
Castellanos’ attorney amounted to only $1.53 per hour for 107.2 hours of work
determined by the Judge of Compensation Claims (JCC) to be “reasonable and
necessary” in litigating this complex case.

Castellanos had no ability to challenge the reasonableness
of the $1.53 hourly rate, and both the JCC and the First District were
precluded by section 440.34 from assessing whether the fee award — calculated
in strict compliance with the statutory fee schedule — was reasonable.
Instead, the statute presumes that the ultimate fee will always be reasonable
to compensate the attorney, without providing any mechanism for refutation.

The right of a claimant to obtain a reasonable attorney’s
fee when successful in securing benefits has been considered a critical feature
of the workers’ compensation law since 1941. See Murray v. Mariner Health, 994 So. 2d 1051,
1057-58 (Fla. 2008). From its outset, the workers’ compensation law was
designed to assure, as the current legislative statement of purpose provides,
“the quick and efficient delivery of disability and medical benefits to an
injured worker.” § 440.015, Fla. Stat. (2009).

Yet, while the Legislature has continued to enunciate this
purpose, in reality, the workers’ compensation system has become increasingly
complex to the detriment of the claimant, who depends on the assistance of a
competent attorney to navigate the thicket.3 Indeed, as this Court long ago
observed, allowing a claimant to “engage competent legal assistance” actually
“discourages the carrier from unnecessarily resisting claims” and encourages
attorneys to undertake representation in non-frivolous claims, “realizing that
a reasonable fee will be paid for [their] labor.” Ohio Cas. Grp. v. Parrish,
350 So. 2d 466, 470 (Fla. 1977).

We reject the assertion of Justice Polston’s dissenting
opinion that our holding “turns this Court’s well-established precedent
regarding facial challenges on its head.” Dissenting op. at 53 (Polston, J.).
It is immaterial to our holding whether, as Justice Polston points out, the
statutory fee schedule could, in some cases, result in a constitutionally
adequate fee. It certainly could.

But the facial constitutional due process issue, based on
our well-established precedent regarding conclusive irrebuttable presumptions,
is that the statute precludes every injured worker from challenging the
reasonableness of the fee award. See Recchi Am. Inc. v. Hall, 692 So. 2d
153, 154 (Fla. 1997) (clarifying that its holding “invalidates the irrebuttable
presumption altogether,” including as applied to certain situations). It is the
irrebuttable statutory presumption — not the ultimate statutory fee awarded in
a given case — that we hold unconstitutional.

The contrary approach embraced by Justice Polston’s
dissenting opinion, which leaves open the possibility of an as applied
challenge to the statute on a case-by-case basis, would be both unworkable and
without any standards for determining when the fee schedule produces a constitutionally
inadequate fee. Simply put, the statute is not susceptible to an as applied
challenge, but instead fits into our precedent governing the constitutionality
of irrebuttable presumptions, which is a distinct body of case law that differs
from the typical “facial” versus “as applied” cases cited by Justice Polston’s
dissent.

We also reject the assertion of Justice Canady’s dissenting
opinion that we “fail[ ] to directly address the actual policy of the statute.”
Dissenting op. at 41 (Canady, J.). Rather, it is Justice Canady’s dissent that
fails to acknowledge that a reasonable attorney’s fee has always been the
linchpin to the constitutionality of the workers’ compensation law.

It is undeniable that without the right to an attorney with
a reasonable fee, the workers’ compensation law can no longer “assure the quick
and efficient delivery of disability and medical benefits to an injured
worker,” as is the stated legislative intent in section 440.015, Florida
Statutes (2009), nor can it provide workers with “full medical care and
wage-loss payments for total or partial disability regardless of fault and
without the delay and uncertainty of tort litigation.” Martinez v. Scanlan,
582 So. 2d 1167, 1172 (Fla. 1991).

The statute prevents every injured worker from challenging
the reasonableness of the fee award in his or her individual case — an issue
of serious constitutional concern given the critical importance, as a key
feature of the workers’ compensation statutory scheme, of a reasonable
attorney’s fee for the successful claimant. Accordingly, we answer the
rephrased certified question in the affirmative, quash the First District’s
decision upholding the patently unreasonable $1.53 hourly fee award, and direct
that this case be remanded to the JCC for entry of a reasonable attorney’s fee.

I.
FACTS AND PROCEDURAL HISTORY

In 2009, Marvin Castellanos, then forty-six years old,
suffered an injury during the course of his employment as a press break
operator for Next Door Company, a manufacturer of metal doors and door frames
located in Miami, Florida. Castellanos requested medical treatment, and Next
Door authorized him to seek treatment at the Physician’s Health Center in
Hialeah, Florida, the health insurance clinic designated for medical diagnoses
by Next Door’s workers’ compensation insurance carrier, Amerisure Insurance
Company. At the clinic, Castellanos was diagnosed with multiple contusions to
his head, neck, and right shoulder. A doctor requested authorization of
medically necessary treatment, including x-rays, medications, and physical
therapy.

Next Door, as the employer, and Amerisure, as Next Door’s
insurance carrier (collectively, the “E/C”), failed to authorize its own
doctor’s recommendations, and Castellanos subsequently filed a petition for
benefits, seeking a compensability determination for temporary total or partial
disability benefits, along with costs and attorney’s fees. The E/C filed a
response to the petition, denying the claim based on sections 440.09(4)
(intentional acts) and 440.105(4)(b)9. (fraud), Florida Statutes (2009),
ultimately asserting that Castellanos was responsible for his own injuries.

The parties subsequently filed a stipulation, in which the
E/C raised twelve defenses. A final hearing was then held before the JCC, in
which numerous depositions, exhibits, and live testimony were submitted for
consideration.

In its Final Compensation Order, the JCC determined that
Castellanos was entitled to be compensated by the E/C for his injuries and was
therefore entitled to recover attorney’s fees and costs from the E/C. The JCC
explicitly found that Castellanos’ attorney was successful in securing
compensability and defeating all of the E/C’s defenses, and retained
jurisdiction to determine the amount of the attorney’s fee award.

Based on the JCC’s finding of compensability, Castellanos
filed a motion for attorney’s fees, seeking an hourly fee of $350 for the
services of his attorney. Section 440.34, however, strictly constrains an award
of attorney’s fees to the claimant’s attorney, requiring the fee to be
calculated in conformance with the amount of benefits obtained.

Specifically, subsection (3) of section 440.34 was amended
in 2009 to remove the longstanding requirement that the fee be “reasonable” and
instead to provide, except for disputed medical-only claims, that the fee equal
the amount provided for in subsection (1), which sets forth the following
sliding scale fee schedule:

A fee, gratuity, or other
consideration may not be paid for a claimant in connection with any proceedings
arising under this chapter, unless approved by the judge of compensation claims
or court having jurisdiction over such proceedings. Any attorney’s fee
approved by a judge of compensation claims for benefits secured on behalf of a
claimant must equal to 20 percent of the first $5,000 of the amount of the
benefits secured, 15 percent of the next $5,000 of the amount of the benefits
secured, 10 percent of the remaining amount of the benefits secured to be
provided during the first 10 years after the date the claim is filed, and 5
percent of the benefits secured after 10 years. The judge of compensation
claims shall not approve a compensation order, a joint stipulation for lump-sum
settlement, a stipulation or agreement between a claimant and his or her
attorney, or any other agreement related to benefits under this chapter which
provides for an attorney’s fee in excess of the amount permitted by this
section. The judge of compensation claims is not required to approve any
retainer agreement between the claimant and his or her attorney. The retainer
agreement as to fees and costs may not be for compensation in excess of the
amount allowed under this subsection or subsection (7).

§ 440.34(1), Fla. Stat. (emphasis added). Application of the
fee schedule in this case resulted in a statutory fee of $1.53 per hour.

In support of his motion for attorney’s fees, which argued
that an award limited to the statutory fee would be unreasonable and manifestly
unjust, Castellanos presented expert testimony from attorneys James Fee and
Brian Sutter. Fee testified that there is “no way on this planet” that
Castellanos could have prevailed in obtaining benefits “without the skilled and
tenacious representation” of an attorney, based on “the onslaught of defenses
that were asserted.” He agreed that the 107.2 hours claimed by Castellanos’
attorney were reasonable and necessary and an “exceedingly efficient use of
time” given that “this was a very difficult case.”

Sutter testified that it is “absolutely illusory to think”
that a claimant could present his case without counsel “because of all the
dangers and pitfalls” of the workers’ compensation law. He further stated that
fees under $2.00 an hour, such as the statutory fee in this case, are “absurd”
and “manifestly unjust,” and “would provide an extreme chilling effect” that
would “prevent any attorney from handling a similar case in the future.”

Attorney Jeff Appell testified as an expert witness on
behalf of the E/C. When asked what percentage of workers’ compensation cases
showed claimants to be successful in prosecuting their claims without an
attorney, Appell responded that, although he regularly reviewed JCC orders, “I
can’t say that I’ve seen one that’s been entirely successful,” and, “as far as
litigating a complicated case throughout, I honestly haven’t seen it.” He
agreed that a statutory fee as low as the one in this case was “an unreasonably
low hourly rate” and “an absurd result.”

After hearing the testimony and considering the evidence and
the law, the JCC issued an order awarding fees, finding that Castellanos
“ultimately prevailed in obtaining a finding of compensability, a necessary
precursor to obtaining benefits.” According to the JCC, in order to obtain this
result, Castellanos “had to overcome between 13 and 16 different defenses
raised by the E/C throughout the course of litigation.” The JCC further found
that it was “highly unlikely that [Castellanos] could have succeeded and
obtained the favorable result he did without the assistance of capable
counsel.”

Constrained to the statutory fee schedule, however, the JCC
found that Castellanos was limited to an attorney’s fee of $164.54, based on
the application of the conclusive fee schedule to the actual value of benefits
secured of $822.70. Nevertheless, in its order, the JCC “fully accept[ed] the
notion that ‘Lawyers can’t work for $1.30 an hour,’ ” and stated that
Castellanos’ attorney “is an exceptionally skilled, highly respected
practitioner who has been awarded as much as $350 to $400 an hour for his
success in workers’ compensation cases.” The JCC, in addition, found that
“[t]here is no question . . . that the 107.2 hours expended by his firm . . .
were reasonable and necessary,” and that these hours constituted an
“exceedingly efficient use of time,” which was “wholly consistent with the
115.20 defense hours documented” by counsel for the E/C.

But as an executive branch official, the JCC had no
authority to address Castellanos’ claim that section 440.34, and the resulting
$1.53 hourly fee, was unconstitutional. See Ariston v. Allied Bldg. Crafts,
825 So. 2d 435, 438 (Fla. 1st DCA 2002) (“A JCC clearly does not have
jurisdiction to declare a state statute unconstitutional or violative of
federal law.”). Castellanos thus appealed the JCC’s order to the First
District, raising the constitutional claim.

The First District affirmed the JCC’s decision to award
“only $164.54 for 107.2 hours of legal work reasonably necessary to secure the
claimant’s workers’ compensation benefits,” holding that “the statute required
this result” and that the court was “bound by precedent to uphold the award,
however inadequate it may be as a practical matter.” Castellanos, 124
So. 3d at 393. In so doing, the First District recognized that there were
important constitutional issues presented by this case that warranted this
Court to determine the constitutionality of the current attorney’s fee statute.
Id. at 394. We granted review and now hold that the statute is
unconstitutional under both the state and federal constitutions as a violation
of due process.

II.
ANALYSIS

Our review of the constitutionality of section 440.34 is de
novo. See Graham v. Haridopolos, 108 So. 3d 597, 603 (Fla. 2013). We
begin our analysis by tracing the history of awarding attorney’s fees to the
claimant under our state’s workers’ compensation law, culminating in the
Legislature’s 2009 elimination of the requirement that the fee be “reasonable.”
Then, we consider whether the statute, as amended in 2009, creates an
unconstitutional, irrebuttable presumption in violation of due process of law.
Finally, concluding that the statute is unconstitutional, we address the
remedy.

A.
History of Awarding Attorney’s Fees to the

Claimant
Under Florida’s Workers’ Compensation Law

In 1935, the Legislature adopted the workers’ compensation
law to provide “simple, expeditious” relief to the injured worker. Lee Eng’g
& Constr. Co. v. Fellows, 209 So. 2d 454, 456 (Fla. 1968). As an
integral part of that goal from 1941 until 2009, the Legislature provided for
an award of a reasonable attorney’s fee to an injured worker who was successful
in obtaining workers’ compensation benefits.

In the eighty years since the enactment of the workers’
compensation law, however, the statutory scheme has become increasingly
complex. And although the Legislature has now eliminated any requirement that
attorney’s fees awarded to an injured worker prevailing in his or her claim for
benefits must be “reasonable,” the Legislature’s expressed intent for the
workers’ compensation law has remained unchanged:

It
is the intent of the Legislature that the Workers’ Compensation Law be
interpreted so as to assure the quick and efficient delivery of disability
and medical benefits to an injured worker and to facilitate the worker’s
return to gainful reemployment at a reasonable cost to the employer. . . . The
workers’ compensation system in Florida is based on a mutual renunciation of
common-law rights and defenses by employers and employees alike. . . . It
is the intent of the Legislature to ensure the prompt delivery of benefits
to the injured worker.

§
440.015, Fla. Stat. (emphasis added).

In Murray, 994 So. 2d at 1057, which was the last
time this Court addressed the attorney’s fee provision, we summarized the
statutory history of awarding attorney’s fees to the claimant, explaining that
the Legislature initially adopted this provision to ensure that the injured
worker, rather than his or her attorney, would actually receive the bulk of the
compensation award. We stated:

The
theory underlying the Act was that a claimant did not need an attorney and
could alone navigate the procedures to obtain the benefits to which he or she
was entitled under the law. Thus, originally, when a claimant hired an
attorney, the claimant’s attorney fee was the obligation of the claimant. The
Legislature, however, was concerned that the bulk of the compensation benefit
go to the claimant, not his attorney. Accordingly, to protect a claimant’s
compensation award, the Legislature, from the original adoption of the Act,
gave the JCC or relevant administrative body, however denominated at the time,
approval oversight of the amount a claimant paid to his attorney. See
ch. 17481, § 34, Laws of Fla. (1935).

Id.
(citation omitted).

In 1941, as it became clear that an injured worker needed
the assistance of an attorney to navigate the workers’ compensation system, the
Legislature significantly revised the workers’ compensation law to “mandate[ ]
that in some instances, the employer/carrier should pay for the claimant to
have an attorney.” Id. At that time, the Legislature provided as
follows:

If
the employer or carrier shall file a notice of controversy as provided in
Section 20 of this Act, or shall decline to pay a claim on or before the 21st
day after they have notice of same, or shall otherwise resist unsuccessfully
the payment of compensation, and the injured person shall have employed an
attorney at law in the successful prosecution of his claim, there shall, in
addition to the award for compensation, be awarded [a] reasonable attorney’s
fee, to be approved by the Commission which may be paid direct to the
attorney for the claimant in a lump sum. If any proceedings are had for review
of any claim, award or compensation order before any Court, the Court may allow
or increase the attorney’s fees, in its discretion, which fees shall be in
addition to the compensation paid the claimant, and shall be paid as the Court
may direct.

Ch.
20672, § 11(a), Laws of Fla. (1941) (emphasis added).

“As the First District noted regarding a subsequent version
of this provision, ‘The legislative determination that a fee is payable by the
employer/carrier in the circumstances enumerated in [this subsection] reflects
a public policy decision that claimants are entitled to and are in need of
counsel under those conditions.’ ” Murray, 994 So. 2d at 1058 (quoting Pilon
v. Okeelanta Corp., 574 So. 2d 1200, 1201 (Fla. 1st DCA 1991)). Indeed, the
First District has stated that, especially in a “lengthy and expensive contest”
with an E/C, a claimant proceeding “without the aid of competent counsel” would
be as “helpless as a turtle on its back.” Davis v. Keeto, Inc., 463 So.
2d 368, 371 (Fla. 1st DCA 1985) (quoting Neylon v. Ford Motor Co., 99
A.2d 664, 665 (N.J. Super. Ct. App. Div. 1953)).

This Court, in Ohio Casualty Group, noted that the award
of a “reasonable attorney’s fee” was

enacted
to enable an injured employee who has not received an equitable compensation
award to engage competent legal assistance and, in addition, to penalize
a recalcitrant employer. If the services of an attorney become necessary,
and the carrier is ordered to pay compensation, attorney’s fees must be
assessed against the carrier so that the benefits awarded the employee will
constitute a net recovery. Thus, in adding attorney’s fees to the injured
worker’s compensation award, [the provision] discourages the carrier from
unnecessarily resisting claims in an attempt to force a settlement upon an
injured worker. In addition, if the worker has a meritorious case, an
attorney will be inclined to represent him, realizing that a reasonable fee
will be paid for his labor and not deducted from perhaps a modest benefit
due the claimant. Conversely, if the attorney believes the claim is frivolous,
he would be inclined to decline representation.

350 So. 2d at 470 (emphasis added) (citations omitted).

This Court has long recognized the factors to be considered
in determining the reasonableness of an attorney’s fee award under the statute.
In Florida Silica Sand Co. v. Parker, 118 So. 2d 2, 4 (Fla. 1960), this
Court concluded that Canon 12 of the Canons of Professional Ethics, the
predecessor to rule 4-1.5 of the Rules Regulating The Florida Bar — the
ethical rule governing attorneys’ fees — was a “safe guide in fixing the
amount of [E/C-paid] fees” awarded to the claimant. This Court noted that the
Florida Industrial Commission had promulgated a minimum schedule of fees to be
used as a guide by the JCC and found that “[s]uch a schedule is helpful but is
not conclusive.” Id. at 5. “Innumerable economic factors,” this Court
stated, “enter into the fixing of reasonable fees in one section of the State
and in one community which might not be present in others.” Id.

In addition to the minimum schedule, this Court explained
that “it appears to us that supplemental evidence should be presented.” Id.
This Court specifically noted the principle that, “especially in this type of
matter[,] fees should be carefully considered so that on the one hand they will
not be so low as to lack attraction for capable and experienced lawyers to
represent workmen’s compensation claimants” while, “[o]n the other hand, they
should not be so high as to reflect adversely on the profession or in actuality
to enter disproportionately into the cost of maintaining the workmen’s
compensation program.” Id. at 4.

Then, in Lee Engineering, this Court rejected the
strict application of a contingent percentage of the benefit award based on a
schedule of minimum fees, holding that a “schedule of fees . . . was helpful
but unreliable” and remanding for the determination of a reasonable attorney’s
fee. 209 So. 2d at 458-59. According to this Court, a statutory fee schedule is
“less sensitive to the changing needs of the program,” and, “in the absence of
a stipulation or other evidence, is not an appropriate method for fixing a fee
in Workmen’s Compensation cases.” Id. at 458. Reaffirming Florida
Silica Sand, this Court concluded that the factors set forth in Canon 12 of
the Canons of Professional Ethics, the predecessor to rule 4-1.5, must be
considered to determine whether an attorney’s fee is reasonable and stated that
findings by the JCC to support the award are required. Id. at 458-59.

 

Ironically, the Lee Engineering decision was a
response to what this Court perceived as “excessive” attorney’s fees. Id.
at 457. In 1977, responding to this Court’s decision in Lee Engineering,
the Legislature significantly revised section 440.34 to add discretionary
factors the JCC must consider when increasing or decreasing the fee, but also
added a statutory formula to be used as the starting point for determining a
reasonable attorney’s fee award for a successful claimant:

(1)
If the employer or carrier shall file notice of controversy as provided in s.
440.20, or shall decline to pay a claim on or before the 21st day after they
have notice of same, or shall otherwise resist unsuccessfully the payment of
compensation, and the claimant injured person shall have employed
an attorney at law in the successful prosecution of the claim, there shall, in
addition to the award for compensation, be awarded a reasonable attorney’s fee of
25 percent of the first $5,000 of the amount of the benefits secured, 20
percent of the next $5,000 of the amount of the benefits secured, and 15
percent of the remaining amount of the benefits secured, to be approved by the
judge of industrial claims, which fee may be paid direct to the attorney
for the claimant in a lump sum. However, the judge of industrial claims
shall consider the following factors in each case and may increase or decrease
the attorney’s fee if in his judgment the circumstances of the particular case
warrant such action:

(a)
The time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly.

(b)
The likelihood, if apparent to the claimant, that the acceptance of the
particular employment will preclude employment of the lawyer by others or cause
antagonisms with other clients.

(c)
The fee customarily charged in the locality for similar legal services.

(d)
The amount involved in the controversy and the benefits resulting to the
claimant.

(e)
The time limitation imposed by the claimant or the circumstances.

(f)
The nature and length of the professional relationship with the claimant.

(g)
The experience, reputation, and ability of the lawyer or lawyers performing the
services.

(h)
The contingency or certainty of a fee.

Ch. 77-290, § 9, at 1293-94, Laws of Fla. (statutory
additions underlined; statutory deletions struck-through).

“Thus, to determine a reasonable fee, the JCC applied the
formula and then increased or decreased the amount after consideration of the
factors in order to determine a reasonable fee.” Murray, 994 So. 2d at
1059. As the First District noted, the sliding fee schedule “embodies a
legislative intent to standardize fees.” Fiesta Fashions, Inc. v. Capin,
450 So. 2d 1128, 1129 (Fla. 1st DCA 1984).

Two years after codifying the Lee Engineering
factors, the Legislature again significantly amended the statute, in 1979, to
limit entitlement to “a reasonable attorney’s fee from a carrier or employer”
to three conditions:

(a)
Against whom he successfully asserts a claim for medical benefits only, if
the claimant has not filed or is not entitled to file at such time which
does not include a claim for disability, permanent impairment, or
wage-loss, or death benefits, arising out of the same accident;
or

(b)
In cases where the deputy commissioner issues concludes by the
issuance of an order finding that a carrier has acted in bad faith
with regard to handling an injured worker’s claim and the injured worker has
suffered economic loss. For the purposes of this paragraph, “bad faith” means
conduct by the carrier in the handling of a claim which amounts to fraud,
malice, oppression, or willful, wanton or reckless disregard of for
the rights of the claimant. Any determination of bad faith shall be made by the
deputy commissioner through a separate fact-finding proceeding; or

(c)
In a proceeding where a carrier or employer denies that an injury occurred for
which compensation benefits are payable, and the claimant prevails on the issue
of compensability coverage.

Ch. 79-312, § 15, at 1657, Laws of Fla. (statutory additions
underlined; statutory deletions struck-through).

Any
person: (a) [w]ho receives any fees or other consideration or any gratuity on
account of services so rendered, unless such consideration or gratuity is
approved by the deputy commissioner, the commission, or court; or (b) [w]ho
makes it a business to solicit employment for a lawyer or for himself or
herself in respect of any claim or award for compensation, is guilty of a
misdemeanor of the second degree, punishable as provided in s. 775.082, s.
775.083, or s. 775.084.

Ch. 79-312, § 15, at 1658, Laws of Fla. (statutory additions
underlined). Then, in 1980, the Legislature revised section 440.34(2) to
include language intended to limit the amount of the attorney’s fee award: “In
awarding a reasonable attorney’s fee, the deputy commissioner shall consider
only those benefits to the claimant the attorney is responsible for securing.”
Ch. 80-236, § 14, Laws of Fla.

In 1993, the Legislature again revised the statute, this
time to reduce the percentage amounts for attorney’s fees in the sliding
schedule:

[A]ny
attorney’s fee approved by a judge of compensation claims for services
rendered to a claimant must shall be equal to 20 25
percent of the first $5,000 of the amount of the benefits secured, 15 20
percent of the next $5,000 of the amount of the benefits secured, 10 and
15 percent of the remaining amount of the benefits secured to be
provided during the first 10 years after the date the claim is filed, and 5
percent of the benefits secured after 10 years.

In Murray, 994 So. 2d 1051, this Court was asked to
consider the constitutionality of the 2003 amendments to the attorney’s fee
statute, which deleted the Lee Engineering factors to be used in
determining whether the fee award was reasonable. Murray involved a
claimant who hired an attorney and prevailed after the employer and its
insurance carrier denied workers’ compensation benefits. Id. at 1053-54.
The JCC then calculated the claimant’s award of attorney’s fees in accordance
with the statutory formula, finding that although the claimant’s counsel
expended eighty hours of reasonable and necessary time on the case, the
ultimate fee award was governed by the statutory formula set forth in section
440.34(1). Id. at 1054. Thus, the JCC awarded attorney’s fees in the
amount of $684.84. Id. at 1055.

Noting that this equated to an hourly rate of only $8.11
because of the low monetary value of the benefits obtained, the JCC commented:

Given
that this was a very complex case, with difficult issues, very contingent,
required a highly skilled practitioner and that [the claimant’s] attorney
enjoys an outstanding reputation as a highly skilled and experienced workers’
compensation practitioner, an attorney fee of $8.11 per hour would on its face
. . . hardly appear to be “reasonable.” It would appear to be “manifestly
unfair.”

Id. at 1055-56 (quoting Murray v.
Mariner Health, OJCC Case No. 04-000323DFT (Fla. Div. of Admin. Hearings
Compensation Order filed Jan. 17, 2006) at 5). Evidence in Murray also
showed that the E/C paid its attorney $16,050 — 135 hours at $125 an hour —
in the unsuccessful effort to resist paying benefits. Id. at 1055.

After the First District affirmed the $8.11 hourly fee award
for the claimant’s attorney, this Court held that the statute was ambiguous —
section 440.34(3) stated that the claimant was entitled to a “reasonable
attorney fee,” while section 440.34(1) stated that any attorney’s fee approved
by the JCC “must equal” the statutory formula. Id. at 1057. “It is
obvious,” this Court stated, “that applying the formula in all cases will not
result in the determination of reasonable attorney fees in all cases.” Id.
To the contrary, applying the formula will in some circumstances “result in
inadequate fees,” while in other circumstances, “applying the formula will
result in excessive fees.” Id.

Recognizing the principle of statutory construction that it
will construe statutes in a manner that avoids a holding of
unconstitutionality, this Court declined to consider the constitutional
challenge. Id. at 1053. Instead, this Court resolved the statutory
ambiguity in favor of section 440.34(3), holding that the claimant was entitled
to recover a reasonable attorney’s fee; that a reasonable attorney’s fee for a
claimant was to be determined using the factors set forth in rule 4-1.5 of the
Rules Regulating The Florida Bar, rather than using the statutory formula; and
that reasonable attorney’s fees for claimants, when not otherwise defined in
the workers’ compensation statute, are to be determined using the factors set
forth in rule 4-1.5. Id. at 1061-62.

Following Murray, the Legislature in 2009 removed any
ambiguity as to its intent. Deleting the word “reasonable” in relation to
attorney’s fees, the Legislature provided that a claimant is entitled to
recover only “an a reasonable attorney’s fee in an amount
equal to the amount provided for in subsection (1) or subsection (7) from a
carrier or employer.” Ch. 2009-94, § 1, Laws of Fla. (statutory additions
underlined; statutory deletions struck-through). Subsection (1) requires the
fee to be calculated in strict conformance with the fee schedule, and
subsection (7) applies solely to the $1500 flat fee for “disputed medical-only
claims.”

B.
Violation of Due Process

Section 440.34 provides a fee schedule that must be followed
in every case by the JCC in calculating and awarding attorney’s fees, based on
the amount of benefits recovered by the claimant. The statute does not allow
for any consideration of whether the fee is reasonable or any way for the JCC
or the judiciary on review to alter the fee, even if the resulting fee is
grossly inadequate — or grossly excessive — in comparison to the amount of
time reasonably and necessarily expended to obtain the benefits.

Stated another way, the statute establishes a conclusive
irrebuttable presumption that the formula will produce an adequate fee in every
case. This is clearly not true, and the inability of any injured worker to
challenge the reasonableness of the fee award in his or her individual case is
a facial constitutional due process issue.

In considering the constitutionality of the statute, we do
not view the absolute limitation from the point of view of the attorney’s
rights, because the attorney always has the option to refuse representation,
especially in complex low-value claims. Rather, we view the conclusive
irrebuttable presumption in the context of the complete frustration of the
entire workers’ compensation scheme designed to provide workers with “full
medical care and wage-loss payments for total or partial disability regardless
of fault and without the delay and uncertainty of tort litigation.” Martinez
v. Scanlan, 582 So. 2d 1167, 1172 (Fla. 1991). We accordingly reject the
argument that Castellanos, as the claimant rather than the attorney, lacks
standing to raise the constitutional violation.

As the First District has explained, the injured worker,
rather than the attorney, is the “true party in interest.” Pilon, 574
So. 2d at 1201. A “barrier to review a decision to award a fee,” the First
District stated in Pilon, “could ultimately result in a net loss of
attorneys willing to represent workers’ compensation claimants.” Id.
This in turn would result “in a chilling effect on claimants’ ability to
challenge employer/carrier decisions to deny claims for benefits and disrupt
the equilibrium of the parties’ rights intended by the legislature in enacting
section 440.34.” Id.

Because Castellanos has standing to challenge the
constitutionality of the statute, we turn to the merits of his argument. This
Court has set forth the following three-part test for determining the
constitutionality of a conclusive statutory presumption, such as the fee
schedule provided in section 440.34: (1) whether the concern of the Legislature
was “reasonably aroused by the possibility of an abuse which it legitimately
desired to avoid”; (2) whether there was a “reasonable basis for a conclusion
that the statute would protect against its occurrence”; and (3) whether “the
expense and other difficulties of individual determinations justify the
inherent imprecision of a conclusive presumption.” Recchi, 692 So. 2d at
154 (citing Markham v. Fogg, 458 So. 2d 1122, 1125 (Fla. 1984)).

In Recchi, this Court fully adopted the reasoning of
the First District, which concluded that a statute violated the constitutional
right to due process where it provided no opportunity for an employee working
in a drug-free workplace program to rebut the presumption that the intoxication
or influence of drugs contributed to his or her injury. Id. “According
to the district court of appeal, the irrebuttable presumption failed the
three-pronged test because the expense and other difficulties of individual
determinations did not justify the inherent imprecision of the conclusive
presumption.” Id. (citing Hall v. Recchi Am. Inc., 671 So. 2d
197, 201 (Fla. 1st DCA 1996)).

The same, and more, can be said of the conclusive
presumption in section 440.34. We address each prong of the due process test to
explain why.

1.
Whether the Concern of the Legislature was

Reasonably
Aroused by the Possibility of an Abuse

Which
it Legitimately Desired to Avoid

As to the first prong, one of the Legislature’s asserted
justifications for the fee schedule is to standardize fees. See Alderman v.
Fla. Plastering, 805 So. 2d 1097, 1100 (Fla. 1st DCA 2002) (“Section
440.34(1), Florida Statutes[,] reflects a legislative intent to standardize
attorney’s fee awards in workers’ compensation cases.”). The conclusive
presumption certainly does that, although it does so in a manner that lacks any
relationship to the amount of time and effort actually expended by the
attorney. As the First District has recognized, a fee schedule has typically
been considered merely a starting point in determining an appropriate fee
award. See, e.g., Fumigation Dep’t v. Pearson, 559 So. 2d 587, 590 (Fla.
1st DCA 1989) (“For purposes of determining an attorney’s fee award under
section 440.34(1), Florida Statutes, a starting point in the analysis is the
amount of benefits obtained for the claimant by his attorney.”); Martin
Marietta Corp. v. Glumb, 523 So. 2d 1190, 1195 (Fla. 1st DCA 1988)
(“Although the amount of benefits obtained is a significant factor, it is not
determinative of the maximum amount that can be awarded as a fee.”).

To the extent the Legislature was also concerned about the
excessiveness of attorney’s fee awards, however, this is not a reasonable basis
for the unyielding formulaic fee schedule. Other factors, such as Rule
Regulating The Florida Bar 4-1.5, already prevent against excessive fees. That
Rule provides a number of factors to be considered as a guide to determining a
reasonable fee, including, among many others, “the time and labor required, the
novelty, complexity, and difficulty of the questions involved, and the skill
requisite to perform the legal service properly.” R. Reg. Fla. Bar 4-1.5(b)(1)(A).
In fact, since Lee Engineering, this Court has made clear that it does
not condone excessive fee awards.

The effect of the limitation on the fee amounts paid to
claimants’ attorneys is revealed in the mandatory annual reporting of all
attorney’s fees to the Office of the Judges of Compensation Claims, as required
by section 440.345, Florida Statutes. The report demonstrates the one-sided
nature of the fees paid, with claimants’ attorneys consistently receiving a
lower percentage of the total fees than defense attorneys and the gap only
increasing over the past decade:

State of Fla. Div. of Admin. Hearings, 2012-2013 Annual Report of the Office
of the Judges of Compensation Claims at 31. Further, claimants’ attorneys
are prohibited by statute from negotiating a different fee with the claimant,
and the JCC is precluded from approving a different fee — even if the
negotiated rate would actually produce a more reasonable fee than the statutory
fee schedule. See § 440.34(1), Fla. Stat. (“The judge of compensation
claims shall not approve a compensation order, a joint stipulation for lump-sum
settlement, a stipulation or agreement between a claimant and his or her
attorney, or any other agreement related to benefits under this chapter which
provides for an attorney’s fee in excess of the amount permitted by this
section.”). In fact, it is a crime for an attorney to accept any fee not
approved by the JCC, which is of course constrained to award a fee only
pursuant to the statutory fee schedule. See § 440.105(3)(c), Fla. Stat.
(“It is unlawful for any attorney or other person, in his or her individual
capacity or in his or her capacity as a public or private employee, or for any
firm, corporation, partnership, or association to receive any fee or other
consideration or any gratuity from a person on account of services rendered for
a person in connection with any proceedings arising under this chapter, unless
such fee, consideration, or gratuity is approved by a judge of compensation
claims or by the Deputy Chief Judge of Compensation Claims.”).4

2.
Whether There was a Reasonable Basis for a Conclusion

That
the Statute Would Protect Against its Occurrence

Even assuming, however, that the first prong of the due
process test is satisfied because the Legislature desired to avoid excessive
fees, there is no reasonable basis to assume that the conclusive fee schedule
actually serves this function — as required by the second prong of the test.
Excessive fees can still result under the fee schedule, just as inadequate ones
can — for instance, in a simple and straightforward case where the claimant
obtains a substantial amount of benefits. See Murray, 994 So. 2d at
1057. The fee schedule does nothing to adjust fees downward when the recovery
is high, even if the time required to obtain significant benefits was
relatively minor and the resulting fee is actually excessive.

As
this Court stated in Murray:

In
some cases such as the present case, the amount of benefits is small, but the
legal issues are complex and time consuming, and require skill, knowledge, and
experience to recover the small but payable benefits. In other cases, the
amount of benefits is substantial, but the legal issues are simple and direct,
and do not require exceptional skill, knowledge, and experience. In the former
case, a mandatory, rigid application of the formula results in an inadequate
fee; in the latter, such application of the formula results in an excessive
fee.

Id. at
1057 n.4.

The First District has also observed that a customary fee
based on an hourly rate is likely to be more significant in a case in which the
value of the attorney’s services greatly exceeds the financial benefit obtained
on behalf of the client. See Alderman, 805 So. 2d at 1100. For example,
the work necessary to establish a connection between chemical exposure and
respiratory illness might not bear a reasonable relationship to the benefit
obtained, and to apply the statutory formula in such a case might result in a
fee that is inadequate and unfair. See Glumb, 523 So. 2d at 1195. In
other words, the elimination of any authority for the JCC or the judiciary on
review to alter the fee award completely frustrates the purpose of the workers’
compensation scheme.

3.
Whether the Expense and Other Difficulties of Individual

Determinations
Justify the Inherent Imprecision

of
a Conclusive Presumption

But even if none of that were true, the third prong of the
test for evaluating a conclusive presumption — that the feasibility of
individual assessments of what constitutes a reasonable fee in a given case
must justify the inherent imprecision of the conclusive presumption —
certainly weighs heavily against the constitutionality of the fee schedule.
Indeed, the JCC in this case actually made these individual determinations, but
the inherent imprecision of the conclusive presumption prevented both the JCC
and the First District from doing anything about the unreasonableness of the
resulting fee.

Courts have, in fact, long operated under the view that the
fee schedule was merely a starting point, and judges of compensation claims
have determined, awarded, and approved attorney’s fees without undue expense or
difficulty to avoid unfairness and arbitrariness since the reasonable
attorney’s fee provision was adopted in 1941. Under prior versions of the
statutory scheme, the JCC considered legislatively enumerated factors, and,
after the deletion of these factors, continued to consider whether the fee was
reasonable and not excessive. See, e.g., S. Bell Tel. & Tel. Co. v.
Rollins, 390 So. 2d 93, 95 (Fla. 1st DCA 1980); E. Coast Tire Co. v.
Denmark, 381 So. 2d 336, 339-40 (Fla. 1st DCA 1980). This type of review to
control abuse, limit excessive fees, and award reasonable fees provides no
basis for concern about abuse.

The cases cited in opposition are readily distinguishable.
Although the United States Supreme Court held that the unreasonably low fee
provisions at issue in those cases passed constitutional muster despite the
existence of a fee schedule, the judiciary still had discretionary authority to
raise or lower the final fee according to articulated standards — unlike the
conclusive presumption established by section 440.34.

For example, the Longshore and Harbor Workers’ Compensation
Act (LHWCA), the federal statutory workers’ compensation scheme, which provides
benefits to maritime workers, prohibits an attorney from receiving a fee unless
approved by the appropriate agency or court. This provision has been upheld by
the United States Supreme Court. See U.S. Dep’t of Labor v. Triplett,
494 U.S. 715, 721-26 (1990) (upholding the LHWCA provision, as incorporated
into the Black Lung Benefits Act of 1972, against Fifth Amendment Due Process
challenge).

Unlike the conclusive fee schedule in section 440.34, however,
the Code of Federal Regulations creates factors to guide the adjudicator in
awarding a fee “reasonably commensurate with the necessary work done.” Triplett,
494 U.S. at 718. In other words, the fee provision in the LHWCA does not
establish a conclusive irrebuttable presumption without consideration of
whether the fee is “reasonable,” but actually allows for the award of a
“reasonable attorney’s fee” — the precise constitutional problem with section
440.34.

In addition, in the federal cases cited in Triplett,
the fees were intentionally set low due to the simple and non-adversarial
nature of the services required — a far cry from the complex nature of
Florida’s current workers’ compensation system. Indeed, Florida’s workers’
compensation law has become increasingly complex over the years. As a result of
the complexity of the statutory scheme, the JCC specifically concluded in this
case that it was “highly unlikely that [Castellanos] could have succeeded and
obtained the favorable results he did without the assistance of capable
counsel.”

The stated goal of the workers’ compensation system remains
to this date the “quick and efficient delivery of disability and medical
benefits to an injured worker” so as “to facilitate the worker’s return to
gainful reemployment at a reasonable cost to the employer.” § 440.015, Fla.
Stat. This case, and many others like it, demonstrate that despite the stated
goal, oftentimes the worker experiences delay and resistance either by the
employer or the carrier.5 Without the likelihood of an adequate
attorney’s fee award, there is little disincentive for a carrier to deny
benefits or to raise multiple defenses, as was done here. This is the exact
opposite of the original goal of the attorney’s fee provision, as this Court
recognized long ago. See Ohio Cas. Grp., 350 So. 2d at 470 (“[I]n adding
attorney’s fees to the injured worker’s compensation award, Section 440.34,
Florida Statutes (1975), discourages the carrier from unnecessarily resisting
claims in an attempt to force a settlement upon an injured worker.”).

And although there is a “mutual renunciation of common-law
rights and defenses by employers and employees alike,” § 440.015, Fla. Stat.,
the employer under the workers’ compensation law has the prerogative to raise a
whole host of defenses to denying benefits, while the employee is at the mercy
of the E/C in being required to see the doctors that are chosen by the E/C. As
this case shows, to navigate the current workers’ compensation system, after a
denial by the E/C of benefits, would be an impossibility without the assistance
of an attorney. The JCC explicitly found as much in this case.

Virtually since its inception, the right of a claimant to
obtain a reasonable prevailing party attorney’s fee has been central to the
workers’ compensation law. While the incentive for an attorney to represent a
claimant in a relatively high-value case is readily apparent, the exact
opposite is true in a low-value complex case, such as this one.

But the conclusive fee schedule prevents all injured workers
— whether they have small-value or high-value claims — from presenting
evidence to prove that the fee is inadequate in any given case. Without the
ability of the attorney to present, and the JCC to determine, the
reasonableness of the fee award and to deviate where necessary, the risk is too
great that the fee award will be entirely arbitrary, unjust, and grossly
inadequate. We therefore conclude that the statute violates the state and
federal constitutional guarantees of due process.6

C.
Statutory Revival

Having concluded that the statute is unconstitutional, we
must consider the remedy until the Legislature acts to cure the constitutional
infirmity. “Florida law has long held that, when the legislature approves
unconstitutional statutory language and simultaneously repeals its predecessor,
then the judicial act of striking the new statutory language automatically
revives the predecessor unless it, too, would be unconstitutional.” B.H. v.
State, 645 So. 2d 987, 995 (Fla. 1994).

Accordingly, our holding that the conclusive fee schedule in
section 440.34 is unconstitutional operates to revive the statute’s immediate
predecessor. This is the statute addressed by this Court in Murray,
where we construed the statute to provide for a “reasonable” award of
attorney’s fees.

With Murray as a guide, a JCC must allow for a
claimant to present evidence to show that application of the statutory fee
schedule will result in an unreasonable fee. We emphasize, however, that the
fee schedule remains the starting point, and that the revival of the
predecessor statute does not mean that claimants’ attorneys will receive a
windfall. Only where the claimant can demonstrate, based on the standard this
Court articulated long ago in Lee Engineering, that the fee schedule
results in an unreasonable fee — such as in a case like this — will the
claimant’s attorney be entitled to a fee that deviates from the fee schedule.

III.
CONCLUSION

We conclude that the mandatory fee schedule is
unconstitutional as a violation of due process under both the Florida and
United States Constitutions. Accordingly, we answer the rephrased certified
question in the affirmative, quash the First District’s decision upholding the
patently unreasonable fee award, and direct that this case be remanded to the
JCC for entry of a reasonable attorney’s fee.

It is so ordered. (LABARGA, C.J., and QUINCE, and PERRY,
JJ., concur. LEWIS, J., concurs with an opinion. CANADY, J., dissents with an
opinion, in which POLSTON, J., concurs. POLSTON, J., dissents with an opinion.)

__________________

1Castellanos challenges the
constitutionality of the statute on numerous grounds, arguing that it violates
the right of access to courts under article I, section 21, of the Florida
Constitution; the separation of powers doctrine; due process; equal protection;
the right to contract and speak freely; the right to be rewarded for industry;
and constitutes an unconstitutional taking of property. We decide the constitutional
issue in this case on the basis of the constitutional rights of the claimant
under due process and do not address the other grounds raised.

2The following question was certified
by the First District:

WHETHER THE AWARD OF
ATTORNEY’S FEES IN THIS CASE IS ADEQUATE, AND CONSISTENT WITH THE ACCESS TO
COURTS, DUE PROCESS, EQUAL PROTECTION, AND OTHER REQUIREMENTS OF THE FLORIDA
AND FEDERAL CONSTITUTIONS.

Castellanos v. Next Door Co./Amerisure Ins. Co.,
124 So. 3d 392, 394 (Fla. 1st DCA 2013). We have jurisdiction. See art.
V, § 3(b)(4), Fla. Const.

Clearly this issue is affecting numerous claimants. Since Castellanos,
the First District has certified that its disposition in eighteen additional
cases passes upon the same question: Joe Taylor v. Rodney Gunder Plastering
& Stucco, LLC, No. 1D15-5895, 2016 WL 1579228 (Fla.1st DCA Apr. 20,
2016); Stephens v. Dominos Pizza, No. 1D12-3239, 2016 WL 1169975 (Fla.
1st DCA Mar. 24, 2016); De Mesa v. Dollar Tree Stores, Inc./Sedgwick CMS,
No. 1D15-5635, 2016 WL 1169978 (Fla. 1st DCA Mar. 24, 2016); Shannon v.
Hillsborough Area Reg’l Transit Auth. et al., 184 So. 3d 665 (Fla. 1st DCA
2016); Perez v. Univision Network LP/Sentry Claims Service, 184 So. 3d
653 (Fla. 1st DCA 2016); Weimar v. L’Oreal USA S/D, Inc., 176 So. 3d
1288 (Fla. 1st DCA 2015); Rankine v. AMR Corp., 176 So. 3d 392 (Fla. 1st
DCA 2015); Zaldivar v. Prieto, 174 So. 3d 1126 (Fla. 1st DCA 2015); Gallagher
Law Grp., P.A. v. Vic Renovations, 174 So. 3d 1124 (Fla. 1st DCA 2015); Zaldivar
v. Dyke Indus., Inc., 168 So. 3d 336 (Fla. 1st DCA 2015); Ferrer v.
Truly Nolen of Am., Inc., 164 So. 3d 700 (Fla. 1st DCA 2015); Flores v.
Vanlex Clothing Corp., 160 So. 3d 961 (Fla. 1st DCA 2015); Mayorga v.
Sun Elecs. Int’l, Inc., 159 So. 3d 1032 (Fla. 1st DCA 2015); Leon v.
Miami Dade Pub. Schs., 159 So. 3d 422 (Fla. 1st DCA 2015); Gonzalez v.
McDonald’s, 156 So. 3d 1127 (Fla. 1st DCA 2015); Diaz v. Palmetto Gen.
Hosp./Sedgwick CMS, 146 So. 3d 1288 (Fla. 1st DCA 2014); Pfeffer v.
Labor Ready Se., Inc., 155 So. 3d 1155 (Fla. 1st DCA 2014); Richardson
v. Aramark/Sedgewick CMS, 134 So. 3d 1133 (Fla. 1st DCA 2014).

3To name just a few of the ways in
which the workers’ compensation system has become increasingly complex and
difficult, if not impossible, for an injured worker to successfully navigate
without the assistance of an attorney: (1) the elimination of the provision
that the workers’ compensation law be liberally construed in favor of the
injured worker, § 440.015, Fla. Stat.; (2) reductions in the duration of
temporary benefits, § 440.15(2)(a), Fla. Stat.; (3) an extensive fraud and
penalty provision, § 440.105, Fla. Stat.; (4) a heightened standard of “major
contributing cause” that applies in a majority of cases rather than the less
stringent “proximate cause” standard in civil cases, § 440.09(1), Fla. Stat.;
(5) a heightened burden of proof of “clear and convincing evidence” in some
types of cases, §§ 440.02(1), 440.09(1), Fla. Stat.; (6) the elimination of the
“opt out” provision, §§ 440.015, 440.03, Fla. Stat.; and (7) the addition of an
offer of settlement provision that allows only the employer, and not the
claimant, to make an offer to settle, § 440.34(2), Fla. Stat.

4We note that the First District
Court of Appeal recently concluded in an as-applied constitutional challenge to
sections 440.105 and 440.34 that the restrictions in those sections are
unconstitutional violations of a claimant’s right to free speech, free
association, petition, and right to form contracts, and held “that the criminal
penalties of section 440.105(3)(c), Florida Statutes, are unenforceable against
an attorney representing a workers’ compensation client seeking to obtain
benefits under chapter 440, as limited by other provisions.” Miles v. City
of Edgewater Police Dep’t, No. 1D15-0165, at 25 (Fla. 1st DCA Apr. 20,
2016). The issue of the constitutionality of that provision is not before us.

5Several related cases arising out of
the First District, which are currently pending in this Court, illustrate that
this is not an isolated case. In each of these cases, there was either an
outright denial of benefits or multiple defenses raised by the E/C, and in each
case, the attorney for the E/C expended a number of hours equal to or exceeding
the hours expended by the claimant’s attorney.

For example, in Diaz v. Palmetto General Hospital,
No. SC14-1916 (Fla. Apr. 28, 2016), the statutory fee award was $13.28 per hour
for 120 hours of work deemed to be necessarily and reasonably expended by the
attorney for the claimant. The E/C’s attorney spent 175 hours litigating the
case, which was found to be a reasonable amount of time given its complex
nature. Just as in this case, the JCC in Diaz found that the injured
worker would not have recovered benefits without the aid and assistance of an
attorney.

6Although Castellanos has also raised
a strong argument based on the state constitutional right of access to courts
in article I, section 21, of the Florida Constitution, because we conclude that
the due process challenge is dispositive, we do not address the many other
constitutional challenges to the statute.

__________________

Now the workers’ compensation program has emasculated the
attorney fee provision to the extent that a mandatory fee schedule creates an
irrebuttable presumption with regard to attorney fees that eliminates any
consideration of whether the attorney fee is adequate for workers to actually
obtain competent counsel in these cases. Thus, circumstances such as this case
result in providing counsel attorney fees in an amount of $1.53 per hour, which
is clearly unreasonable and insufficient to afford workers the ability to
secure competent counsel, and the irrebuttable or conclusive presumption with
regard to attorney fees violates the three-pronged analysis applicable to
determine constitutionality here. This irrebuttable or conclusive presumption
violates the constitutional right to due process. See Recchi America Inc. v.
Hall, 692 So. 2d 153 (Fla. 1997); Markham v. Fogg, 458 So. 2d 1122
(Fla. 1984).

Additionally, where workers face the exclusive remedy under
Florida’s workers’ compensation statutes, but are then denied the ability to
secure competent counsel due to the totally unreasonable attorney fees
provision, the legislation operates to unconstitutionally deny Florida workers
access to our courts. As stated in Kluger v. White, 281 So. 2d 1, 4
(Fla. 1973):

__________________

(CANADY, J., dissenting.) The fee schedule in section
440.34, Florida Statutes, embodies a policy determination by the Legislature
that there should be a reasonable relationship between the value of the
benefits obtained in litigating a workers’ compensation claim and the amount of
attorney’s fees the employer or carrier is required to pay to the claimant.
This policy violates none of the constitutional provisions on which the
petitioner relies. Accordingly, I dissent from the majority’s invalidation of
this statutory provision.

In reaching the conclusion that the statute violates due
process, the majority fails to directly address the actual policy of the
statute. Instead, the majority assumes — without any reasoned explanation —
that due process requires a particular definition of “reasonableness” in the
award of statutory attorney’s fees. The definition assumed by the majority
categorically precludes the legislative policy requiring a reasonable
relationship between the amount of a fee award and the amount of the recovery
obtained by the efforts of the attorney. Certainly, this legislative policy may
be subject to criticism. But there is no basis in our precedents or federal law
for declaring it unconstitutional.

Although the Legislature long ago made provision for the
award of attorney’s fees to workers’ compensation claimants, we have never held
that — as the majority asserts — “a reasonable attorney’s fee [is] the
linchpin to the constitutionality of the workers’ compensation law.” Majority
op. at 6. And we have never held that it is unreasonable to require that an
award of attorney’s fees be commensurate with the benefits obtained. The policy
adopted by the Legislature in section 440.34 may be subject to criticism, but it
unquestionably has a rational basis.

This case illustrates the rationale for the legislative
policy requiring that a fee award be commensurate with the recovery obtained.
Here, the value of the claim was $822.70, and the claimant sought attorney’s
fees in the amount of $36,817.50 — a fee nearly 45 times the amount of the
recovery. Of course, an argument can be made that an award of fees in an amount
so disproportionate to the recovery is necessary and appropriate to allow the
effective litigation of a complex low-value claim. And a counter argument can
be made that such disproportionate fee awards impose an unwarranted social
cost. But the question for this Court is not which side of this policy debate
has the best argument, but whether the policy adopted by the Legislature
violates some constitutional requirement.

Our precedents and federal law provide no authority to
support the proposition that due process — or any other constitutional
requirement relied on by the petitioner — requires that statutory fee awards
fully compensate for the effective litigation of all claims. Under the American
Rule, parties must ordinarily bear the expense of obtaining their own legal
representation. Inevitably, under the American Rule, obtaining the assistance
of an attorney for the litigation of low-value claims — whether simple or
complex — often is not feasible. Given the undisputed constitutionality of the
American Rule, there is no impediment to a legislative policy requiring that
the amount of statutory fee awards be reasonably related to the amount of the
recovery obtained. See Florida Patient’s Comp. Fund v. Rowe, 472 So. 2d
1145, 1149 (Fla. 1985) (“We find that an award of attorney fees to the
prevailing party is ‘a matter of substantive law properly under the aegis of
the legislature,’ in accordance with the long-standing American Rule adopted by
this Court.”)

The majority’s reliance on the “three-part test for
determining the constitutionality of a conclusive statutory presumption,”
majority op. at 26, to invalidate the statute is unjustified because the
majority misunderstands the test and misapplies it in the context presented by
this case. The majority’s decision ignores the background of the three-part
test. When that background is considered, it becomes abundantly clear that the
majority has misapplied the test in this case.

The three-part test was first referred to by this Court in Gallie
v. Wainwright, 362 So. 2d 936, 943-45 (Fla. 1978), where we rejected a
claim that statutory and rule provisions limiting the availability of bond
pending appeal by criminal defendants established an irrebuttable presumption
that transgressed the requirements of due process. The three-part test referred
to in Gallie was derived from Weinberger v. Salfi, 422 U.S. 749,
752-53 (1975), which reversed a lower court’s decision “invalidating [9-month]
duration-of-relationship Social Security eligibility requirements for surviving
wives and stepchildren of deceased wage earners.” The lower court had held the
statutory requirements invalid on the ground that they constituted an
irrebuttable presumption that violated due process.

In Salfi, the three parts of the test utilized by the
majority here were simply elements considered by the Court in determining
whether the challenged statutory provisions comported with “standards of
legislative reasonableness.” 422 U.S. at 776-77. Salfi relied on “[t]he
standard for testing the validity of Congress’ Social Security classification”
set forth in Flemming v. Nestor, 363 U.S. 603, 611 (1960): “ ‘Particularly
when we deal with a withholding of a noncontractual benefit under a social
welfare program such as (Social Security), we must recognize that the Due
Process Clause can be thought to interpose a bar only if the statute manifests
a patently arbitrary classification, utterly lacking in rational
justification.’ ” Salfi 422 U.S. at 768. Salfi also cited Richardson
v. Belcher, 404 U.S. 78, 84 (1971), which, in rejecting a due process
challenge to a provision of the Social Security Act, said: “ ‘If the goals
sought are legitimate, and the classification adopted is rationally related to
the achievement of those goals, then the action of Congress is not so arbitrary
as to violate the Due Process Clause of the Fifth Amendment.’ ” Salfi,
422 U.S. at 768-69.

Accordingly, the Salfi Court’s reasoning was —
unlike the majority’s reasoning here — highly deferential to the legislative
judgment underlying the challenged statutory provision:

Salfi,
422 U.S. at 777.

The particular elements of the rational basis analysis in Salfi
were based on the particular justification advanced by the Social Security
Administration for the duration-of-relationship requirement — that is, as a
“general precaution against the payment of benefits where the marriage was
undertaken to secure benefit rights.” 422 U.S. at 780. The Court concluded that
this concern was undoubtedly “legitimate,” that it was “undoubtedly true that
the duration-of-relationship requirement operates to lessen the likelihood of
abuse through sham relationships entered in contemplation of imminent death”
and that “Congress could rationally have concluded that any imprecision from
which [the requirement] might suffer was justified by its ease and certainty of
operation.” Id.

It is readily apparent that the framework of the three-part
analysis does not fit the context presented by the case on review here. Section
440.34 does not embody a prophylactic requirement akin to the eligibility
requirement in Salfi. Section 440.34 thus does not present any question
of “inherent imprecision.” Id. at 777. By definition, the rule of
proportionality embodied in the statute precisely and comprehensively protects
against fee awards disproportionate to the recovery obtained. The award of such
disproportionate fees is the very evil that the Legislature sought to
eliminate. In its application of the inapposite three-part test, the majority
simply ignores this fundamental point. Beyond that, the majority applies the
elements of the test in a manner totally contrary to the manner in which Salfi
applied them and totally at odds with the general rule “that the Due Process
Clause can be thought to interpose a bar only if the statute manifests a
patently arbitrary classification, utterly lacking in rational justification.” Id.
at 768 (citing Nestor, 363 U.S. at 611).

It should not be ignored that Salfi reversed the
lower court’s application of the irrebuttable presumption doctrine and took
pains to distinguish and limit earlier cases that had relied on that doctrine
to invalidate legislation. 422 U.S. at 771-72. In doing so, the Court expressed
its strong concern that an expansive application of the irrebuttable
presumption doctrine — like the application by the lower court — would turn
that doctrine “into a virtual engine of destruction for countless legislative judgments
which have heretofore been thought wholly consistent with the Fifth and
Fourteenth Amendments to the Constitution.” Id. at 772. Underlying this
concern is the reality that any legislative classification can be characterized
as an irrebuttable presumption. The majority here has applied a test extracted
from Salfi in a manner that flies in the face of the central concern
expressed by the Court in Salfi justifying its reversal of the lower
court. The line of reasoning adopted by the majority unquestionably has the
potential to become a “virtual engine of destruction for countless legislative
judgments” previously understood to be constitutional.

Although some of our prior cases have relied on the
three-part test derived from Salfi, we have never applied that test to
find a statutory provision unconstitutional in circumstances that have any
similarity to the circumstances presented here. In Recchi America Inc. v.
Hall, which is briefly discussed by the majority, the underlying
legislative policy — as expressly stated in the statute — was that no
workers’ compensation would be payable for an injury occasioned primarily by
the employee’s intoxication. With that legislative policy in view, we upheld
the invalidation of a statutory irrebuttable presumption that an employee’s
injury was caused primarily by intoxication if the employee was working in a
workplace with a drug-free workplace program and tested positive for alcohol or
drugs at the time of injury. We concluded that “the conclusive presumption created
a high potential for inaccuracy” and emphasized that the injured worker in the
case “was injured when a coworker tripped and jabbed a long steel apparatus
into the back of his head.” Recchi, 692 So. 2d at 154-55.

Leaving aside the question of whether our analysis in Recchi
is consistent with Salfi — which we did not mention — Recchi is
readily distinguishable from the case now on review. Here, there is no
expressly stated legislative policy regarding attorney’s fees that might be
implemented through a process of individualized determinations analogous to the
expressly stated legislative policy regarding causation that was addressed in Recchi.
No process of individualized factual determinations could better serve the
legislative purpose of establishing proportionality between fee awards and
recoveries obtained than does the statutory fee schedule.

Finally, I agree with Justice Polston that the majority
“turns this Court’s well-established precedent regarding facial challenges on
its head[.]” Dissenting op. at 53 (Polston, J.)

I would answer the rephrased certified question in the
negative and approve the decision of the First District. (POLSTON, J.,
concurs.)

__________________

In 2008, this Court issued an opinion interpreting the
attorney’s fees provision of Florida’s workers’ compensation law as amended in
2003 to include a reasonableness requirement. See Murray v. Mariner Health,
994 So. 2d 1051 (Fla. 2008) (interpreting section 440.34, Florida Statutes
(2003)). This Court in Murray determined that the plain language of the
statute was ambiguous regarding reasonableness because subsection (1) did not
include the term reasonable when providing for a mandatory fee schedule but
subsection (3) did employ the term. Id. at 1061. Such ambiguity
necessitated a judicial interpretation utilizing the rules of statutory
construction. Id. In response to this Court’s decision in Murray,
the Legislature amended the statute to eliminate any ambiguity, which the
Legislature is constitutionally authorized to do. Specifically, in 2009, the
Legislature eliminated all references to reasonableness, rendering moot this
Court’s 2008 interpretation of the provision as including a reasonableness
requirement. See ch. 2009-94, § 1, Laws of Fla. However, with today’s
decision, the majority reinstates its prior 2008 holding by turning facial
constitutional review completely on its head and rewriting the 2009 statute.

In a facial challenge, this Court has emphasized that “our review
is limited.” Abdool v. Bondi, 141 So. 3d 529, 538 (Fla. 2014).
Specifically, “we consider only the text of the statute.” Id. “For a
statute to be held facially unconstitutional, the challenger must demonstrate
that no set of circumstances exists in which the statute can be
constitutionally applied.” Id.; see also Cashatt v. State, 873
So. 2d 430, 434 (Fla. 1st DCA 2004) (“A facial challenge to a statute is more
difficult than an ‘as applied’ challenge, because the challenger must establish
that no set of circumstances exists under which the statute would be valid.”); cf.
Accelerated Benefits Corp. v. Dep’t of Ins., 813 So. 2d 117, 120 (Fla. 1st
DCA 2002) (“In considering an ‘as applied’ challenge, the court is to consider
the facts of the case at hand.”). Moreover, “when we review the
constitutionality of a statute, we accord legislative acts a presumption of
constitutionality and construe the challenged legislation to effect a
constitutional outcome when possible.” Abdool, 141 So. 3d at 538 (citing
Fla. Dep’t of Revenue v. Howard, 916 So. 2d 640, 642 (Fla. 2005)). “As a
result, [an] Act will not be invalidated as facially unconstitutional simply
because it could operate unconstitutionally under some [ ] circumstances.” Id.

Applying this well-established precedent, the facial
challenge at issue here fails, even assuming that adequate and reasonable
attorney’s fees are constitutionally required. There are some workers’
compensation cases where “the amount of benefits is substantial, but the legal
issues are simple and direct, and do not require exceptional skill, knowledge,
and experience.” Murray, 994 So. 2d at 1057 n.4. In these high pay-off,
low-effort cases, the statutory fee schedule could provide reasonable
compensation for a prevailing claimant’s attorney. After all, section
440.34(1), Florida Statutes (2009), provides that the attorney’s fee must equal
20 percent of the first $5,000 in benefits, 15 percent of the next $5,000, 10
percent of the remaining during the first 10 years of the claim, and 5 percent
after 10 years. Therefore, because there are a set of circumstances under which
the attorney’s fees provision could be constitutionally applied, the provision
is facially constitutional under our precedent. See Fla. Dep’t of Revenue v.
City of Gainesville, 918 So. 2d 250, 265 (Fla. 2005) (“[I]n a facial
constitutional challenge, we determine only whether there is any set of
circumstances under which the challenged enactment might be upheld.”).

The majority reaches a contrary holding, not by applying our
precedent regarding facial challenges, but by ignoring it altogether and never
even citing the well-established standard. The majority just declares that the
attorney’s fees provision in Florida’s workers’ compensation law includes an
irrebuttable presumption of reasonableness, and then it holds that this
presumption is a violation of procedural due process under both the United
States and Florida constitutions. But the 2009 provision does not mention
reasonableness at all and, therefore, does not include any such presumption,
irrebuttable or otherwise. Cf. Recchi America Inc. v. Hall, 692 So. 2d
153 (Fla. 1997) (declaring an irrebuttable presumption invalid as a violation
of due process where the statute plainly and expressly included a
presumption that an accident was primarily caused by the worker’s intoxication
if that worker’s urine test revealed the presence of alcohol or drugs). Section
440.34 as plainly written prescribes a mandatory schedule for prevailing party
attorney’s fees. It never states that those attorney’s fees have to be or
should be considered reasonable. In fact, it was specifically amended post-Murray
to eliminate the term reasonable, which eliminates the ability of this Court to
say that the statute includes anything about reasonableness. And because the
statute does not include any presumption of reasonableness (let alone a
conclusive presumption), the majority’s analysis of the constitutionality of
that non-existent presumption is erroneous.

The majority’s decision turns this Court’s well-established
precedent regarding facial challenges on its head and accomplishes by the
backdoor what it could not do by the front door. The majority is really
deciding that reasonable attorney’s fees are constitutionally required. But by
rewriting the 2009 statute to include a conclusive presumption, the majority
avoids the fact that the state and federal due process clauses do not require
Florida’s workers’ compensation scheme to include reasonable prevailing party
attorney’s fees. The majority also invalidates a statute that might sometimes,
but not all the time, be applied in a manner that denies reasonable attorney’s
fees. However, this Court’s precedent regarding facial challenges requires that
such a statute be upheld. See State v. Ecker, 311 So. 2d 104, 110 (Fla.
1975) (“While the statute might be unconstitutionally applied in certain
situations, this is no ground for finding the statute itself [facially]
unconstitutional.”).

Accordingly,
I respectfully dissent.

* *
*ottom of Form