Florida Court rules Legislative bills may cap attorney’s fees for tort actions against the state.

While this does not directly deal with Florida estate planning, I thought it may be of interest to many of my readers including attorneys.

Florida’s Fourth District recently ruled last week that Florida Legislature’s has the ability to cap attorney’s fees and costs for bills that awards a plaintiff damages over the usual $200,000 cap when the state is a defendant in a tort action. This is a significant ruling because the legislature ruled to give the original plaintiff family more than the capped damages, but would not give their attorneys the contracted for contingent fees the family wished to pay them for the work done.

The law firms in the case represented the Edwards family in a case of negligence on the part of the employees at Lee Memorial Health System for a severe brain injury for an injury the son Aaron Edwards sustained at his birth in 1997. Various law firms represented the family in a long legal process that led to a five-week jury trial in 2007. The jury found the hospital was negligent and awarded Aaron $28.3 million, the mother $1,340,000 and the father $1,000,000 in damages. However, the trial court found the hospital to be an independent special district of Florida, and pursuant to the sovereign immunity damage limitations in section 768.28 (5) entered a judgment against the hospital in the amount of $200,000.

So why did this happen? As the majority opinion states, these laws all stem back from Angelo-American common law, which held that no lawsuit could be brought against the king. This concept was known as sovereign immunity and carried over to American law as well. Under the old laws the federal government could not be sued, and this protection was later extended to the states under the 11th Amendment. However, the federal government abrogated its sovereign immunity in the Federal Torts Claims Act of 1946, which allowed plaintiffs to bring some tort claims against the government. The states followed the federal government’s example and by 1973 Florida officially enacted a law that waived its sovereign liability.

Florida Statute section 768.28 is the law regarding the state’s waiver of sovereign immunity in tort actions. A plaintiff’s recovery against the state and its agencies is limited to no more than $200,000 per incident. This same statute also states that no attorney can receive fees in excess of 25 percent of any judgment against the state.

The issue, then becomes what if the legislature awards a plaintiff more damages than the $200,000 allowed; can the attorney then receive 25 percent of this amount?

The recent holding of Searcy Denney Scarola Barnhart & Shipley, P.A. v. State has decided the issue and held the attorney can only receive the amount the legislature deems appropriate. The appellant law firms petitioned the court to authorize payment of $2.5 million in attorney’s fees for the years of work done in the Edward’s case, which included litigation in the medical malpractice lawsuit, the appeal, and the subsequent lobby effort to secure a higher payment from the legislature on behalf of Aaron Edwards. The lobbying was successful and the Legislature passed a claims bill that appropriated $10 million into a support trust for Aaron Edwards, with additional $5 million to be paid to the trust in annual installments.

The bill stipulated that the total amount of attorney’s fees for this matter could not exceed $100,000, which was a very small percentage of the total judgment versus the 25 percent the statute allows. With the support of the Edwards family, the attorneys asked the court to allocate $2.5 million for attorney’s fees. The petition asked for 25 percent as the statute allows and argued the limitation on the costs by the Legislature was unconstitutional.

The majority of the court justices did not agree, and the majority opinion stated that a claims bill, according to section 768.28, is a “voluntary recognition of its moral obligation by the legislature” and, as such, is firmly entrenched in the sphere of legislative discretion. Thus the Legislature was allowed to award any amount of attorney’s fees as it sees fit, even if under the 25 percent amount the statute provides for. The court stated that the dissatisfaction with the limitation on attorney’s fees and costs imposed on Aaron’s claims bill is understandable, but this restriction is how the court interprets the law and this ruling should present another factor to be considered by attorneys in deciding whether to take on representation in a case involving the state of Florida as a defendant.

How this ruling will affect cases involving tort claims against states won’t be known for many years. The dissent in this case believes the ruling will have a chilling effect against the poorer potential tort plaintiffs and will prevent them from being able to receive damages from the state due to the lack of profit attorneys would most likely receive. Further, the dissent feels the ruling infringes upon a person’s right to contract, as even though the Edwards family agreed to pay a higher contingent fee, they were unable to do so based upon the bill.

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