The Florida Supreme Court has accepted review of Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, No. 4D13-3497, 2015 WL 4269031 (Fla. 4th DCA July 15, 2015), which will require it to decide whether a claims bill* that awarded $15 million to a minor plaintiff, but limited attorneys’ fees to $100,000, when the law firm spent $500,000 in costs alone, is constitutional. See No. SC15-1747.

This case arises from a catastrophic brain injury sustained by Aaron Edwards during his birth as a result of the medical negligence of employees at Lee Memorial Health System. Aaron and his parents retained the law firm of Searcy Denney Scarola Barnhart & Shipley, P.A. (“Searcy Denney”) to represent them. The Edwards family agreed to pay Searcy Denney a 40% contingency fee and acknowledged that to the extent that a governmental agency was responsible for their damages, federal and Florida law may limit the amount of attorneys’ fees charged by Searcy Denney.

A jury awarded Aaron over $28 million, his mother $1.34 million, and his father $1 million. Because Lee Memorial was a governmental agency, the judgment against the hospital was limited to $200,000 pursuant to Florida’s sovereign immunity statute. The Florida Legislature ultimately passed a claim bill directing Lee Memorial to appropriate $10 million, with an additional $5 million payable in annual installments to Aaron’s guardianship. See Ch. 2012-249, Laws of Fla. The claim bill also limited the total amount paid for attorneys’ fees, lobbying fees, and costs to $100,000.

After the first $10 million installment had been paid, various law firms that had worked on the case, petitioned the guardianship court to approve a closing account statement transferring $2.5 million to them—an amount that was consistent with the sovereign immunity statute, but which contravened the limitation in the claim bill. The law firms argued that the claim bill was an unconstitutional impairment of their contract with the Edwards family. The guardianship court refused to transfer the money.

On appeal, the Fourth District agreed with the guardianship court’s ruling based on two Florida Supreme Court decisions, Gamble v. Wells and Noel v. Sheldon J. Schlesinger, P.A., which upheld the constitutionality of attorneys’ fees limitations in claim bills significantly less than the amount contracted for by the claimants. The district court grounded its decision on two principles: (1) a claim bill is a “voluntary recognition of its moral obligation by the legislature” and is a “matter of legislative grace”; and (2) parties cannot enter into a contract to bind the state in the exercise of its sovereign power. Judge Ciklin wrote a lengthy dissenting opinion.

The parties are currently briefing the issues for the Court. This article will be updated once the supreme court decides the case.

*A claim bill, sometimes called a relief act, is a bill that compensates a particular individual or entity for injuries or losses occasioned by the negligence or error of a public officer or agency. It is a means by which an injured party may recover damages even though the public officer or agency involved may be immune from suit. For further information on claim bills, see Legislative Claim Bill Manual.

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