Florida Supreme Court Finds Attorneys’ Fee Limitation in Claims Bill Unconstitutional

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On January 31, 2017, in a 4-3 decision, the Florida Supreme Court determined it was impermissible for the Florida Legislature to limit the number of attorneys’ fees that could be paid pursuant to a claims bill.

Claims Bill Background

The claims bill at issue arose from a $28.3 million verdict against Lee Memorial Health System when a jury determined that the hospital’s employees were negligent, resulting in a catastrophic brain injury to a newborn. Lee Memorial Health System was an independent special district of the State of Florida entitled to sovereign immunity. The child’s parents had retained the law firm of Searcy Denney Scarola Barnhart & Shipley, P.A. (“Searcy Denney”) to represent them and signed a contract which provided for a contingency fee of 40% unless Federal and Florida Law

“limited the amount of attorney fees charged by [Searcy Denney], and in that event, I understand that the fees owed to [Searcy Denney] shall be the amount provided by law.”

After successful lobbying efforts, the Florida Legislature passed a claims bill, Chapter 2012—249, Laws of Florida, directing Lee Memorial to pay $10 million, with an additional $5 million to be paid in annual installments. Importantly, the claims bill stated that

“[t]he total amount paid for attorney’s fees, lobbying fees, costs, and other similar expenses relating to this claim may not exceed $100,000.”

After the initial $10 million was paid into the guardianship for the child, Searcy Denney petitioned the court to approve payment of $2.5 million to the firm for fees and costs – 25% of the $10 million payment. Searcy Denney argued that this amount was based upon the contract that existed with the parents, as limited by Florida Statute 768.28 – the limited waiver of sovereign immunity which provides that no attorney may charge fees in excess of 25% of any judgment against a sovereign. Searcy Denney further argued that the $100,000 fee limitation in the claims bill was invalid and unconstitutional. The guardianship court refused to find the fee limitation invalid and awarded Searcy Denney $100,000. Searcy Denney appealed, and in a split decision, the Fourth District Court of Appeals affirmed.

Florida Supreme Court Decision

The Florida Supreme Court accepted jurisdiction and held it was unconstitutional for the Florida Legislature to limit the number of attorneys’ fees in the claims bill because the limitation impaired the existing contingency fee contract between the parents and Searcy Denney.

The Court further determined that the fee limitation could be properly severed from the claims bill while still accomplishing the intent and purpose of the legislation. As identified by Justice Polston in his dissent, it is hard to imagine that the intent of the Legislature is still being accomplished when “the result of the majority’s ruling is to take $2,500,000 from the Guardianship of Aaron Edwards for attorneys’ fees. . . .” While this ruling is certainly a victory for the law firm, the victory comes at the expense of the minor child.

You can read the full opinion of the Florida Supreme Court in Searcy, Denney, Scarola, Barnhart & Shipley, et al. v. the State of Florida here: http://www.floridasupremecourt.org/decisions/2017/sc15-1747.pdf

If you should have any questions or concerns, please feel free to contact me at traci.mckee@henlaw.com or by phone at 239-344-1263.

About the Author

Traci McKee is a stockholder with Henderson Franklin Starnes & Holt, P.A. Although she concentrates her practice on defending professionals in malpractice lawsuits and grievance disputes, she also represents individuals, corporations, and governmental entities involved in personal injury, premises liability, products liability, and tort disputes. In addition to her trial practice, she also represents the firms’ clients in appeals, primarily related to torts and insurance litigation.

For eight seven consecutive years (2010—2017), Traci has been recognized by Florida Super Lawyers® magazine as a “Rising Star” in the field of civil litigation defense.

Traci is a member and also serves on the Board of Directors for the Florida Defense Lawyers Association.