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Alabama Workers’ Compensation Act Ruled As Unconstitutional By Jefferson County Circuit Court Judge Pat Ballard

Alabama Workers’ Compensation Act Ruled as Unconstitutional by Jefferson County Circuit Court Judge Pat Ballard

As most people are now aware, Jefferson County Circuit Court Judge Pat Ballard has issued an Order ruling that the Alabama Workers’ Compensation Act is unconstitutional.  All Alabamians should take a moment to consider the impact this may (or may not) have on the Alabama worker, the backbone of this State.

Attorney Will Hassinger shares an update on behalf of this new ruling.

The most common question I receive since the ruling from friends and family: “Can he do that?”  The answer is unequivocally, “yes.”  Not only can he, but Circuit Court Judges have an absolute duty to review the constitutionality of statutes should the issue be presented.  However, while his ruling is valid, it is not necessarily final. The parties have the right to appeal to the Alabama Court of Civil Appeals, who have original jurisdiction over matters pertaining to the Alabama Workers’ Compensation Act.  Further, the parties can appeal to the Alabama Supreme Court.   

The next most common question I am asked is: “Why is it unconstitutional?”  Actually, the Judge did not rule the entirety of the Act unconstitutional, only two statutes within the Act.  First, the statute that places a $220/week cap on permanent partial disability, and second, the statute that places a 15% contingency fee maximum on legal fees.  The Alabama Workers’ Compensation Act has a non-severable statute, which means if any statute within the Act is unconstitutional, then the entirety of the Act is invalid.  This prevents “line-item” judicial activism.

I have found that many people that have never suffered an on-the-job injury do not appreciate the significance of the $220/week statutory cap on permanent partial disability benefits.  Please take the example of a factory worker I recently represented to illustrate the archaic and disparate treatment this cap imposes on the Alabama worker:

Mr. Smith was a roofer who fell two stories onto his back.  He had multiple back surgeries and was unable to return to roofing work.  He was able to return to light-duty work, but suffered a severe physical and vocational loss (making much less money).  The remedy?  The maximum allowable: $220/week for 300 weeks.  My client’s life was irreparably changed, and the compensation is woefully inadequate. 

Moreover, if a worker is 99% disabled as a result of an on the job injury, his recovery is “capped” at $220/week.  Judge Ballard has identified the inequity in this, and thus, his ruling.

But what about the 15% cap on attorney’s fees?  There is so little indemnity or monetary recovery in workers’ compensation cases that the vast majority of attorneys will not accept these cases if they present any substantial difficulty.  Wettermark Keith, LLC has a mandate to help the injured worker if at all possible, but most firms do not have such a policy.  This has the effect of restricting the access of injured workers to competent counsel.  Think about it this way: What if the legislature told the real estate industry to forget about their 6% commission, and that they were imposing a 1% cap?  Do you need to sell your house?  Good luck finding an agent willing to put in potentially months of effort for little or possibly no return!

So, what happens now?  EVERYBODY PANIC.  Actually, not so fast.  Judge Ballard gave the legislature 120 days to fix the problem.  With about 5 days left this session, that’s never going to happen.  The last major revisions (twenty-five years ago) took about two years of meetings and reconciliations between employee and employer interests, so getting it done in this time frame is practically impossible.  However, there is a framework for compromise already in place involving concessions by both sides, and I am optimistic that this is a step in the right direction.  IT HAS BEEN 120 DAYS, CAN I PANIC NOW? Calm down, I’ll tell you when to panic.

The most important factor in the ultimate implications of the Circuit Court’s decision lies in Alabama Code § 6-6-227. That section, which is part of the Alabama Declaratory Judgment Act, provides in its pertinent part:

All persons shall be made parties who have, or claim, any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding…”

In other words, when a party is seeking a declaration of law, such as a declaration by the court that a particular statute is unconstitutional, everyone whose interests would be affected by the declaration must be made a party. In the event that doesn’t happen, the declaration shall not prejudice the rights of anyone who is not a party to the action. In Guy v. Southwest Alabama Council on Alcoholism, 475 So.2d 1190 (Ala.Civ.App. 1985), the Alabama Court of Appeals held that when a party challenges the constitutionality of any provision of The Alabama Workers’ Compensation Act, the provisions of The Alabama Declaratory Judgment Act are triggered. That means that Clower’s motion triggered § 6-6-227. Yet, the only parties to the action are Clower and CVS Caremark. Yes, Steve Marshall was served with the motion, and yes Marshall declined to defend the Act (whether that was due to the curious timing of the motion, or some other reason). However, that does not change the fact that the only parties that would be affected by the Circuit Court’s recent ruling are Clower and CVS Caremark. In any other court, in any other county, involving any other parties, The Alabama Workers’ Compensation Act is still constitutional. The only way that would ever change is if CVS appeals the Circuit Court’s ruling, and the appellate court(s) affirm the Circuit Court.

WHAT IF THE APPELATE COURT AGREES WITH JUDGE BALLARD, CAN WE PANIC THEN?  I don’t see this happening, but yes, panic would now be appropriate.  The self –insured workers’ compensation insurance funds will collapse.  Employers will have no protection from tort lawsuits brought by employees.  The employee would need to prove negligence in relation to his on-the-job injury to make any recovery.  A blizzard of motions to dismiss active workers’ compensation lawsuits will occur.

This ruling illuminates the chasm that has developed between “legal” and “just.”  I believe in our system of government, and I believe that our legislature will do the right thing (eventually). But if they refuse, and the ONLY remedy the Alabama worker has is to find someone who will pursue direct actions in tort against large corporate interests….you know where to find us.

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