A recent Daily Business Review story, by Celia Ampel, “Legislation Attorney Fee Cap in Claims Bill Struck Down,” reports that the Florida Legislature cannot limit attorney fees in a claims bill if it contradicts the client's contract, the Florida Supreme Court ruled in a 4-3 decision.
The opinion favors the West Palm Beach law firm Searcy Denney Scarola Barnhart & Shipley, which challenged the state after the Fourth District Court of Appeal ruled in 2015 that the firm and co-counsel could recover only $100,000 of a multimillion-dollar contingency fee award in a medical malpractice case.
Searcy Denney and other firms were set to receive $2.5 million in fees under a contract with the family of Aaron Edwards, who was seriously injured at birth because of negligence by employees of Lee Memorial Health System in Fort Myers. The firms won a $28.3 million judgment for the Edwards family in 2007, which was capped at $200,000 because the public hospital was protected by sovereign immunity. The attorneys pushed for a claims bill to allow a larger payout to the family, and the Legislature passed a $15 million claims bill in 2012 to benefit Edwards — but with a $100,000 cap on legal fees and costs.
A guardianship court backed the small fee for 7,000 hours of work and $500,000 in expenditures, and the Fourth District affirmed the decision on appeal. But the Florida Supreme Court found the fee limitation unconstitutional as the Florida Constitution prohibits laws that impair preexisting contracts. The decision was in line with a dissent in the Fourth DCA case from Chief Judge Cory Ciklin.
"The right to contract for legal services in order to petition for redress is a right that is related to the First Amendment, and any impairment of that right not only adversely affects the right of the lawyer to receive his fee but the right of the party to obtain, by contract, competent legal representation to ensure meaningful access to courts to petition for redress," the Supreme Court ruled in a per curiam decision.
The majority also accepted Searcy Denney's argument that the fee limitation wasn't in line with a statute that blocks attorney fees "in excess of 25 percent of any judgment of settlement." The 25 percent limit should apply to the $28.3 million excess judgment, the court found, and instead the claims bill capped the fees at less than 1 percent of that judgment.
The court ruled that rather than striking the entire claims bill, it would sever the valid parts of the bill compensating the Edwards family from the fee limitation portion. Justices Barbara Pariente, R. Fred Lewis and Peggy Quince formed the majority with Senior Justice James E.C. Perry, who retired at the end of last year. He has since been replaced by Justice C. Alan Lawson, who joined the court too late to hear arguments in this case.
In a separate dissent, Justice Ricky Polston wrote the fee limitation did not impair Searcy Denney's contract, which said, "Florida law may limit the amount of attorney fees charged by" the firm. He also disagreed with the majority's reasoning on severability. "The result of the majority's ruling is to take $2,500,000 from the guardianship of Aaron Edwards for attorneys' fees, a result that was explicitly rejected by the Legislature with its enactment of the claims bill," Polston wrote.