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January 13, 2015

A recent and unusual opinion out of the Circuit Court for Miami-Dade County may, at the minimum, be a harbinger for changes to come to Florida’s Workers’ Compensation Act. At the maximum, it could also provide the basis for thousands of potential liability lawsuits.

In the case of Elsa Padgett v. State of Florida, the judge ruled Section 440.11 of the Florida Statutes unconstitutional because it no longer provided an adequate replacement remedy in place of common law tort. Prior to the 2003 amendments to the Workers’ Compensation Act, an injured employee could receive some indemnity benefit if they suffered a partial loss of wage-earning capacity or permanent impairment to the body as a whole, whichever was greater. Judge Cuerto reasoned that because an employee could not “opt-out” of the coverage of the workers’ compensation scheme, and because the Act no longer provided for partial loss of wage-earning capacity with no reasonable alternative, this particular provision violated the employee’s due process rights.

This ruling is unusual for several reasons. First, this opinion was issued from the Circuit Court judge rather than a Judge of Compensation Claims in an administrative proceeding. As such, the Padgett appeal will be with the Third District Court of Appeal (again, in Miami-Dade) rather than the First District, which generally addresses workers’ compensation appeals.

Second, the lawsuit involving the original plaintiff and defendant had been resolved and the question posed was moot. In the initial suit, Mr. and Mrs. Cortes sued Velda Farms for negligence. Velda Farms asserted the defense of immunity under Florida’s workers’ compensation law. The Cortes then amended their action to assert a declaratory relief count claiming this defense was unconstitutional. Notice was provided to Florida’s Attorney General, but she was not added as a party. Two advocacy organizations seeking to intervene on behalf of the plaintiff on this discrete issue. Velda Farms subsequently moved to withdraw its immunity defense, and the advocacy groups sought to sever the declaratory judgment claim. The declaratory judgment action was then dismissed against Velda Farms, and the Court allowed the action to proceed without the involvement of the Cortes’ but against the State of Florida, Office of the Attorney General.

The Court then denied the advocacy groups’ motion for summary judgment as there was no specific claimant seeking redress. The Court later allowed Ms. Padgett to intervene to challenge whether the issue was capable of repetition in the future and might evade review. The intervenors again moved for summary judgment, and the opinion was issued unopposed (the Attorney General never appeared in the case).

So, where does this leave the issue? Padgett’s opinion is precedent in Miami-Dade County. In theory, an employee who suffered a permanent partial disability (partial loss of wage-earning capacity) could sue his or her employer for those benefits. For employers and insurers, this means potential liability claims for which they have not planned or budgeted. In practical terms, this opinion will almost certainly be appealed to the Third District and likely to the Florida Supreme Court. It may also be reviewed by the Legislature to correct the alleged defect. It is also noteworthy that the Florida Supreme Court is currently reviewing another case from the First District Court of Appeal, Westpahl v. City of St. Petersburg, which addressed whether Section 440.15 of the Florida Statutes was constitutionally valid regarding “temporary permanent total disability.” We are watching the development of these cases with much interest.

For any further questions, please contact David Mercer.