FLORIDAJUSTICEASSOCIATION
®
ISSUESBOOK 2019
TABLE OF CONTENTS
Our
JUSTICE LIBERTY RESPONSIBILITY ACCOUNTABILITY
CONTENTS Priority Issues Before The Florida Legislature Mandatory Bodily Injury Auto Insurance Reform................................................... 4 Insurance Bad Faith................................................................................................. 6 Medical Payments.................................................................................................... 8 Homeowners’ Rights..............................................................................................10
“In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.” Amendment VII, The Bill of Rights The Constitution of the United States of America
Workers’ Compensation........................................................................................12 Sovereign Immunity...............................................................................................14 Nursing Home Safety.............................................................................................16 Tobacco Bond.........................................................................................................19 Prejudgment Interest.............................................................................................20 Human Trafficking..................................................................................................21 Rental Car Financial Responsibility......................................................................23
“The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.” Article I, Section 21 The Constitution of the State of Florida
Driverless Car Responsibility................................................................................. 24
Current as of 1.22.19
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AUTO INSURANCE REFORM FLORIDA CAN PROVIDE RATE RELIEF FOR DRIVERS BY SWITCHING TO RESPONSIBILITY-BASED AUTO INSURANCE. • A 2016 study by Pinnacle Acturarial Resources concluded a repeal of no-fault insurance in Florida would provide drivers carrying a complete set of automobile insurance coverages an average of $81 per car in auto insurance rate relief annually.
KEYTAKEAWAYS
RESPONSIBILITY-BASED AUTO INSURANCE REFORM IS BETTER FOR FLORIDA DRIVERS. • Forty-eight states require drivers to carry bodily injury liability coverage. Florida should, too. • Drivers in states that switched to responsibility-based liability insurance requirements saw drivers’ rates fall. PIP FAILS FLORIDA DRIVERS • Florida’s auto insurance rates are among the nation’s highest. Since 2015, Florida drivers have shouldered rate increases of up to 40 percent. • In 1978, the Legislature increased the PIP maximum benefit from $5,000 to $10,000 and has remained unchanged even as medical costs have skyrocketed. • According to the U.S. Bureau of Labor Statistics, with prices for medical care were 603.33% higher in 2017 versus 1979, medical care costing $10,000 in the year 1979 would be $70,333 in 2017 for an equivalent purchase. • Taxpayers often shoulder the payment burden when a crash involves drivers carrying minimal PIP coverage the state requires and PIP’s coverage limits fail to cover expensive medical treatment costs. • Florida unfairly mandates many drivers to buy health insurance they don’t need because they already have coverage from employment health plans, Tricare (for armed forces retirees), Medicare, or other sources.
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AUTO INSURANCE REFORM
RESPONSIBLE ROADWAYS TO PROTECT ALL DRIVERS Support Responsibility-Based Auto Insurance Reform Joining 48 Other States Requiring Drivers To Carry Bodily Injury Liability Coverage
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or the protection of all Floridians on our roadways, our state must require drivers to carry liability insurance adequate to cover injuries they may cause to others.
Florida law only requires car owners to carry $10,000 in “Personal Injury Protection” (PIP) coverage and $10,000 in property damage liability insurance. Surprisingly, there is no requirement that they carry the kind of bodily injury liability insurance that provides protection against high-dollar medical losses that occur in even moderate, let alone serious, car crashes. The Florida House of Representatives in the 2017 and 2018 sessions passed FJA-endorsed legislation by Rep. Erin Grall to repeal PIP and replace it with a requirement for Florida drivers to carry $25,000 per person/$50,000 per incident in bodily injury liability insurance.
With nearly one-in-four uninsured drivers, Florida is consistently ranked among the states with the highest rates of uninsured drivers in the country. The Sunshine State is one of only two states that does not require coverage for bodily injury liability, putting it far behind the rest of the country when it comes to protecting its citizens from staggering economic losses. As a result, Florida taxpayers end up paying higher taxes and increased insurance premiums to pick up the tab for the treatment and care of victims of negligent drivers who are either uninsured, or, more commonly, underinsured due to lax requirements. One of the reasons Florida has such a large number of uninsured motorists is the high cost of PIP coverage. The $10,000 personal injury coverage requirement, mandated in 1979 (and never increased since), does not cover the costs of most auto crashes with injuries. In many cases, this protection is redundant because it is one nearly all drivers already enjoy as part of their health insurance coverage. In 2012, major reforms were implemented that were supposed to make PIP coverage less expensive by limiting benefits and making claims filing more difficult and onerous, however, the savings realized as a result were extremely short-lived, and rates are back above pre-2012 levels in most cases, and benefits have not been restored. A study done for the Florida Office of Insurance Regulation found the average Florida driver could save $81 per car under a plan like the one Rep. Grall has sponsored to repeal PIP and replace it with a requirement that drivers carry bodily injury liability at $25,000 per person/$50,000 per incident levels. The
study shows in Broward County, drivers could save an average of $115.40 per vehicle – a 7.7 percent rate cut. We’ve also seen real-world evidence from Georgia, Connecticut and most recently Colorado how repealing the state no-fault auto insurance system and replacing it with mandatory bodily injury has led to rate relief for drivers. According to a 2010 report from RAND, when Colorado repealed its no-fault system in 2003 and replaced it with a responsibilitybased coverage requirement, the “average auto-insurance premiums dropped 35 percent from July 2003 to December 2007.” On top of the potential savings repealing no-fault could generate for drivers, repealing PIP would return personal responsibility to the roadways. The Florida PIP system treats irresponsible at-fault drivers the same as the people they hit in an accident. This lack of personal responsibility inherent in the system fails the basic fairness test and has left accident victims across the state asking why they’re punished with higher insurance costs because they’re in an accident with a driver carrying only barebones PIP coverage. Following other states’ successful leads, the FJA™ supports legislative initiatives that would reform Florida’s broken auto liability environment, including requiring mandatory bodily injury (MBI) coverage with policy limits of at least $25,000 per person/$50,000 per incident and looking to options such as requiring “med-pay” coverage for the cost of emergency medical care.
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INSURANCE BAD FAITH
KEYTAKEAWAYS
Insurance bad faith describes when insurance companies mistreat their policyholders. Bad faith often applies when an insurance company breaks terms of its contract with a policyholder and fails to act in the best interests of the policyholder by refusing to pay out a settlement. • Insurance policies are contracts in which policyholders pay premiums to insurance companies for coverage when needed. Through the agreement, the insurer enters into a covenant of good faith and fair dealing with policyholders. • Strong laws against insurer bad faith provide a powerful incentive for insurance companies to act in the best interests of their policyholders. • Examples of insurer bad faith include: • Denying the insured individual, family, or company the complete benefits guaranteed in their policy; • Offering less compensation than what is due under the policy; and • Unreasonably delaying payment to an insured. • Insurance bad faith reform would leave responsible consumers exposed for the mishandling of claims of their insurer.
INSURANCE BAD FAITH
INSURANCE BAD FAITH LAW PROTECTS CONSUMERS ENSURES INSURANCE COMPANIES REMAIN ACCOUNTABLE TO POLICYHOLDERS WHEN THEY ACT IN BAD FAITH
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hen insurance companies act in bad faith to pad their bottom lines, they betray the trust placed in them by their policyholders. Florida’s insurance “bad faith” law provides policyholders with a powerful tool to make sure insurers act in the best interests of their customers. Florida’s insurance bad faith law is an incentive for insurers to follow through on their fiduciary responsibility to represent the best interests of their policyholders. Responsible insurers who keep the promises they make to policyholders should have nothing to fear from Florida’s insurance bad faith accountability law. Bad Faith Law Supports Honest Businesses An insurer’s action can expose the state’s innocent, job-creating, tax-paying employers to potential financial ruin. Consider this scenario: You are a responsible small business owner. You are properly licensed, regularly pay your bills, pay all your taxes, carry the recommended amounts of insurance, and pay your premiums on time. You have done everything right. You are living the American dream and are contributing to the economic well-being of your community. But then one day misfortune strikes: one of your employees was out on a delivery in a company van, it was raining hard, limiting visibility and making the roadways hazardous. By the time your employee realized the minivan in front of him had slammed on its brakes, it was too late. He had slammed into the back of it at 45 m.p.h., severely injuring the driver.
and, like they constantly insist in their expensive, flashy commercials, your insurance company has your back, just like a good friend or neighbor. Incentive for Insurers to Keep Promises to Policyholders Despite all the optimistic assurances of the lawyer your insurance company provided you, you are sitting in a courtroom watching a jury return a verdict against your company for the medical bills and pain and suffering of the victim of the car crash your employee caused. The verdict is five times the limits of your insurance policy. Your ability to keep the business you worked so hard to build is threatened. You then discover that your insurance company could have avoided the trial and settled the whole case a year ago by tendering the policy limits to the victim. Instead of acting in good faith and moving to settle the case and protect you and your business, the insurer rolled the dice and pushed the case forward. You now may lose your business as a result. Insurance Bad Faith Reform Would Allow Insurers to Escape Responsibility Under legislation to give insurers a license to practice bad faith, you and your business would be responsible. The previous scenario is not far-fetched. Insurance companies — particularly ones with financial problems — frequently act in bad faith. This happens when they fail to properly investigate legitimate claims, keep their policyholders in the dark about efforts to bring closure to
the case; or reject reasonable settlement offers without their policyholders knowing. When this happens, the insured is exposed to an “excess judgment” that can far exceed his or her policy limits. Under a normal insurance contract, an insured subject to an excess judgment must pay the full amount over the policy limits, out-of-pocket. Fortunately, people in these circumstances are not without hope. If an insurance customer can prove in a subsequent lawsuit that her own insurance company acted in bad faith by failing to settle a claim within policy limits, the insurance company – not the insured – must pay the judgment in excess of the policy limits. Bad Faith Accountability is Free-Market Consumer Protection Tool Not surprisingly, this is a critical consumer protection that insurance companies are working tirelessly to destroy. Every year they cause legislation to be introduced seeking to eliminate or curtail the Bad Faith cause of action, and every year the Florida Justice Association® opposes them. Florida law provides policyholders with a powerful tool to hold insurers accountable when their bad-faith malpractice tactics backfire on the best interests of policyholders. Laws that require insurers to act in good faith are good public policy, benefiting both policyholders and those injured through negligence. Florida’s Bad Faith law is the private, free-market alternative to additional and more onerous insurance regulation and is a consumer protection that must be protected and preserved.
As much as you hate that those involved had to experience something so terrible, you know you are protected because every month for the last few years you scraped together your premium payments
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MEDICAL PAYMENTS
KEYTAKEAWAYS
Legislation by the insurance industry would reduce payments back to medical providers after treating an injured victim, which breaks free market principles for people to see a doctor of their choosing after an accident. • The value of medical treatment is a key piece of an injured person’s total losses. In negligence actions, it’s critical information for juries to consider when evaluating those injuries. • We must respect an injured person’s ability to establish their damages. It makes no sense to force them to reduce the actual cost of the medical treatment through discounts, price reductions, or the preferred rate enjoyed by others. • Mandating the application of these reductions is a step too far that stacks the deck in favor of defendants by unreasonably understating the true impact of a defendant’s negligence. • The policy proposal would punish people who responsibly carry health insurance. They also are at risk of having the value of their medical treatment reduced by contract or other means and having unreasonable limits placed on a person’s recovery.
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MEDICAL PAYMENTS LIMITATIONS IN MEDICAL PAYMENTS PROPOSALS FAVOR GOVERNMENT MANDATES OVER FREE-MARKET PRINCIPLES DEFEND THE PATIENT/PROVIDER RELATIONSHIP
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or the last several years, lawmakers have filed Limitations in Medical Payments (LIMP) legislation that would prevent victims in personal injury cases from receiving just compensation for future medical expenses. The proposal would put them at risk of harassment from collection agents seeking medical payments or even drive them into bankruptcy. This would potentially impede their recovery from injuries, and jeopardize their future health and well-being; it also would increase their reliance on taxpayer-paid services and promote Medicaid-driven growth in Florida’s state budget. The most injurious provisions of past LIMP proposals would: • Limit awards of future damages for medical expenses to amounts “customarily accepted from Medicare” for such services; and • Classify as undiscoverable and inadmissible individual contracts between victims’ health insurers and providers— contracts that could shed light on what the victims’ real-world future medical expenses will truly be. Unlike Consumers, Feds Can Dictate What They Pay As a major player that buys hundreds of billions of dollars of medical services every year, the federal government’s Centers for Medicare & Medicaid Services wields immense market power. With its role as a market giant, it can set “take it or leave it” reimbursement rates that medical providers have for decades maligned as being inadequate to cover the costs of decent medical care.
Smaller insurers lacking that kind of market power – to say nothing of private individuals – obviously must pay more for these services than does the United States government. Recent LIMP bills would create a gap between the advantaged rates Medicare as a large payor spends for services and what injured people and their insurers must pay for the very same thing. This effectively would relegate those injured by others’ negligence to “second-class status,” and force them to make the difficult choice between filling the payment gap from their own already stressed personal resources or seeking out cheaper medical services, often from cut-rate providers.
When people are injured through no fault of their own, they should have the right to choose their doctors and receive the highest quality of treatment available in order to become whole again. LIMP Asks Jurors to Consider Fantasy-Based Arguments in Court Cases; Puts Quality Care Out of Reach Proposed LIMP legislation would undermine the integrity of the judicial system by prohibiting victims of negligence from fairly exercising their constitutional right to present their cases for accountability to a jury. With provisions to keep juries from hearing evidence of what doctors’ or hospitals’ actual charge for the treatment they have provided – or will need to provide – a person harmed by the negligent conduct of others, this legislation would make courts complicit in asking jurors to make a consequential decision based on fake numbers that paint an imaginary picture of the value of their medical providers’ expertise. LIMP legislation eliminates injured victims’ ability to receive the best treatment available by erecting roadblocks to accessing care. When people are injured through no fault of her own, they should have the right to choose their doctors and receive the highest quality of treatment available in order to become whole again. LIMP Legislation is Government-Mandated Market Manipulation When health care providers take on the care of persons injured in accidents caused by other parties’ negligence, they do so with the understanding they will see delays in payment and must make investments in time and money answering discovery requests and attending trials and depositions that they would not have to if they were treating other types of patients. The misguided approach offered in LIMP legislation would remove any incentive for physicians to provide care to such patients because the legislation would manipulate the market in a way where providers will not receive fair compensation for their valuable services. Additionally – instead of working to hold wrongdoers or their insurers accountable – the flawed approach embraced in LIMP legislation would promote a spike in doctors suing their patients to satisfy unpaid medical bills created by the gap between government Medicare rates and real-market rates. This would further harm innocent victims, increase the backlog in the court system, and force physicians to spend more time in the courtroom than in their practices providing care to their patients.
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HOMEOWNERS’ RIGHTS
HOMEOWNERS’ RIGHTS
KEYTAKEAWAYS
Insurers want lawmakers to approve their “heads I win, tails, you lose” legislation to have others pay their legal fees. • Insurers want lawmakers to stack the deck against homeowners and contractors. • The Big Insurance proposal contains a “losing insurers’ loophole” that would force winners to pay the insurer’s legal costs when a judgment that is greater than the insurer’s initial payment offer, if it falls below an arbitrary threshold. • Big insurance proposals are bad for small businesses. When insurance companies delay or deny payment for services, homeowners and small business contractors working on their behalf should be able to exercise their constitutional right to seek accountability in court. • This issue is about how many claims are being wrongfully delayed, slow-payed, or denied by insurers. This is a self-inflicted crisis caused by the insurance companies’ own bad business practices. Insurers want lawmakers to look at the number of suits filed and ignore the cause.
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DEFEND FLORIDIANS’ RIGHT TO ASSIGN INSURANCE BENEFITS
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hat if a pipe burst in your home. The water is ankle deep. Your drywall is soaked. Your furniture is ruined. Decades worth of precious keepsakes like photographs and memories are destroyed. But you think to yourself, “It could have been so much worse. That’s why we have insurance so we can get this fixed.” Knowing that time is of the essence, you call several water remediation companies, and they all tell you they are too busy dealing with other flooded customers to look at your house. But, finally, you find someone able to take a look. These experts came out the same day, surveyed the damage, and told you they need to begin pumping and drying immediately if there is to be any hope of preventing the kind of toxic mold growth that can jeopardize your family’s health and make your home nearly worthless and completely unlivable. You gratefully authorize them to get to work right away, confident that your insurance company, which spends tens of millions of dollars a year advertising to the public what a great “friend” and “neighbor” it is, will do what’s right in honoring its contractual commitment to make your home whole again. The contractors get right to work, assuring you that by assigning the protection you bought from your insurer to them, you will not have to pay thousands of dollars up front, because they will take care of everything through your insurance company. This scenario is similar to what happens in a serious car crash, where a grievously-injured person gratefully assigns her health insurance benefits to the ambulance service dispatched to the scene, and the emergency room doctors working to save her life at the nearest trauma center, knowing, as her first responders do, that what matters is her safety and her life, not whether her insurance company can shave a few dollars off its bill by using cutrate competitors.
An “assignment of benefits” occurs when policyholders who are owed benefits under their insurance policy (such as homeowners entitled to repair of flood damage), essentially sign over to those rights to the repair company. This allows the repair company and the insurance company to fight about the cost of repairs. Eliminating AOBs places the homeowner who just wants their home repaired, in the middle of the fight between the contractors and the insurer.” Assignment of benefits means peace of mind, a reprieve from the trauma of a disastrous situation, and a safe and healthy home. It is a respected and time-honored system that has worked for over a hundred years that, under this scenario, allows work to commence without out-of-pocket pay-ment. Big Insurance proposals in previous legislative sessions – and sure to be pushed again – are designed to strip property owners of this kind of security and peace of mind, by imposing onerous and burdensome limitations on a common practice. This would turn a system that has protected consumers and homeowners for decades into one where hardworking families will be at the mercy of poorly trained insurance adjusters and insurance companies who care more about padding the bottom lines for their high-paid executives and shareholders than protecting Florida’s hardworking families. So-called “AOB reform” will have the effect of forcing homeowners to pay upfront, out of pocket (in the unlikely event they can), for time-sensitive repairs because contractors will be unwilling to provide the desperately needed work without some confidence of being paid in full after the job is done. It is a misguided attempt to destroy an effective, consumer-friendly system that has worked for Floridians for over 100 years and must be opposed.
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Civil litigation frequently results when we do not pay insurance claims in the amounts or at the times demanded by policyholders or their representatives.... Management believes that any liabilities that may arise as a result of these legal matters will not have a material adverse effect on our financial condition or results of operations
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Big Insurance supports an approach that hurts homeowners and is well-established law. The insurance industry is attacking homeowners’ freedom to select the best contractor to do a job and then work with the insurer to get paid for the work. It’s been a homeowners’ right for nearly a century.
HOMEOWNERS’ RIGHTS UNDER FIRE
Universal Insurance Holdings
U.S. Securities and Exchange Commission Form 10-K, 2017 Annual Report, Page 31
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WORKERS’ COMPENSATION
WORKERS’ COMPENSATION
KEYTAKEAWAYS
RATEMAKING REFORM • Transparency in the ratemaking process: Currently it is conducted under the cover of night by the National Council on Compensation Insurance (NCCI), a trade group of industry insiders. Sunshine laws are virtually ignored in this seriously flawed system, and Florida employers business suffer as a result. • Competition in ratemaking. Businesses win when insurance companies compete for their business. In the overwhelming majority of states, workers’ comp premiums are determined through a competitive ratemaking process, where employers are able to shop around for the best rates. Florida is one of just four states using an antiquated system that allows NCCI to have a formal role in setting workers’ comp rates. NCCI files just one set of rates to be used by all insurance carriers, virtually eliminating market competition.
CREATING A WORKERS’ COMPENSATION SYSTEM TO SERVE INJURED WORKERS
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he Industrial Revolution was a dangerous era for working people. Employees injured on the job had a hard time receiving compensation and were forced to sue employers to recover medical expenses, lost pay, and other damages. The laws were skewed in favor of employers and workers’ rarely won court challenges. Upton Sinclair’s 1906 novel The Jungle opened America’s eyes to horrors workers experienced in the Chicago’s slaughterhouses. Subsequent public outrage led to new laws to protect workers.
MEDICAL CHOICE FOR INJURED WORKERS • Businesses need a healthy workforce. When employees are injured in a work-related accidents, they should be able to choose their doctors rather than go to providers with the lowest negotiated contracts with an insurer.
Between 1911 and 1948 states began requiring employers to provide injured workers medical and wage replacement benefits. In exchange, regardless of fault, employees agreed to give up their right to sue their employer. The historic agreement is known today as the “Grand Bargain.”
COMMON-SENSE ATTORNEYS’ FEES • Attorneys play a key role in protecting full access to health care for injured workers. Under the “grand bargain,” injured workers gained access to medical treatment after agreeing not to sue employers for negligence. This is all they can receive. • It is important to remember, insurance carriers only pay attorneys’ fees when it is proven an injured worker’s benefits have been wrongfully denied. This is the only “hammer” that the injured worker maintains to receive the benefits for which they are entitled. • Florida lawmakers must protect the constitutionality of the workers’ compensation system and avoid “crippling our workforce.” This would just equate to perpetual, inefficient, and costly retraining of employees while injecting unpredictability into the workers’ compensation system.
In Florida, all employers (with few exceptions) are required to carry workers’ compensation insurance. This mandate compels workplace safety and makes employers immune from some injury lawsuits by employees.
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For years, Florida’s workers’ compensation debate has centered on holding down the rates employers pay to cover care for injured workers. In 2003, the Florida Legislature passed a reform package that stripped injured workers of medical and lost wage benefits and deleted reference in the attorney’s fee provision to consideration of the reasonable fee factors. The Legislature amended the law in 2009 and included a cap on attorney’s fees to provide a disincentive for attorneys to take on injured workers’ cases. In one case, (Castellanos v. Next Door Company) the attorneys’ fee calculated under the state’s cap was
$1.53 an hour for 107.2 hours of work. The Florida Supreme Court took up the case after a Judge of Compensation Claims upheld the low fee. In a 5-2 decision, the Florida Supreme Court ruled the state’s mandatory attorneys’ fee schedule unconstitutionally violated due process under the Florida and U.S. Constitutions.
Comprehensive ratemaking reform is a cornerstone step to bring stability, predictability, and constitutionality to the market.
“The right of an injured worker to recover a reasonable prevailing party attorney’s fee has been a key feature of the state’s workers’ compensation law since 1941,” wrote Justice Barbara Pariente for the majority. “Through the 2009 enactment of a mandatory fee schedule, however, the Legislature has created an irrebuttable presumption that every fee calculated in accordance with the fee schedule will be reasonable to compensate the attorney for his or her services. The $1.53 hourly rate in this case clearly demonstrates that not to be true.”
Florida law requires businesses in the state with four or more employees to carry workers’ compensation insurance – the only type of insurance in Florida that has no competition in the way rates are set. Lawmakers can change this by establishing a loss-cost system to add flexibility and allow insurers to adjust workers’ compensation rates to reflect their unique business models.
Justice Pariente added that the fee schedule was “clearly unreasonable” and insufficient to afford workers the ability to secure competent counsel. Yet, following the ruling, National Council on Compensation Insurance (NCCI) and the insurers that control it immediately moved to exploit the court’s action and claimed there was an “insurance crisis” justifying massive rate increases. However, there is no legitimate basis for carriers to seek any rate increase, much less the 20 percent increase NCCI said was needed. After a 14.5 percent hike, (based on market projections) what followed was a series of rate reductions. In 2018, workers’ compensation rates in Florida fell by nearly 10 percent. With rates dropping for employers, Florida lawmakers in 2019 have an opportunity to thoughtfully and responsibly achieve meaningful, comprehensive, and constitutional workers’ compensation reform. Free from the emotions of rate hikes, lawmakers can build a new and improved ratemaking system that: • Promotes greater transparency; • Fosters increased competition; • Provides medical choice for injured workers; • Protects a constitutional approach to qualifying for benefits; and • Allows free-market principles to work to benefit Florida employers and injured workers.
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With meaningful ratemaking reform, Florida lawmakers can dismantle a virtual insurance cartel protected by the current system.
Currently, subject to Office of Insurance Regulation approval, the NCCI files one set of rates to be used by all insurance carriers. Employers would benefit greatly from increased transparency in how rates are determined. NCCI is effectively controlled by big insurance companies. Allowing a group dominated by insurance interests to set rates creates a conflict of interest between employers, who are seeking the lowest insurance rates, and NCCI, whose members benefit from the highest premiums possible. Ratemaking reform would end this conflict. Industry controlled rate setting isn’t the only concern for employers and employees. In workers’ compensation, insurers choose the health care providers for injured workers. When insurance companies delay or deny benefits recommended by the very physicians they select, they act contrary to the intent of the Florida Workers’ Compensation Act, which is to get injured workers the care they need to return to work. Attorneys are seldom involved in workers’ compensation claims when the insurer or employer is furnishing necessary care. The Workers’ Compensation Act affords insurance companies and employers the opportunity to avoid the payment of attorney fees by simply furnishing benefits when they are due. Requiring insurers and employers who delay or deny benefits to injured workers to pay attorney’s fees is a safeguard to ensure that the intent of the Workers’ Compensation Act is being fulfilled. It is apparent there is a tremendous opportunity for Florida legislators to enact fair and competitive ratemaking in place of the unfair and protected workers’ compensation market system currently in place.
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FJA supports comprehensive reform to the worker’s compensation system rather than that the industry approach to eliminate access to benefits by virtue of an unconstitutional cut to attorney’s fees. Such a comprehensive system would:
PROTECT INJURED WORKERS FIRST
Real workers’ compensation reform would allow workers some choice in their doctors, a ‘midlevel’ tier for benefits, competition between insurers on rates, and ‘reasonable’ attorney fees.
Richard Chait
Chairman of FJA’s workers’ compensation section
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SOVEREIGN IMMUNITY
KEYTAKEAWAYS
• The 2018 massacre at Marjory Stoneman Douglass High School has exposed shortcomings regarding the state’s sovereign immunity law and claims bill process. • Florida’s sovereign immunity law caps damages on public bodies like the Broward Co. School District at $200,000 in a claim by a single person or $300,000 for claims stemming from an incident involving multiple people. • The Broward Co. School District’s Insurance Company claims damages resulting from the 2018 massacre in Parkland should be capped at $300,000 and the court should classify the attack as a single event with multiple victims. • With 17 students and teachers dead and another 17 injured, the state’s$300,000 cap on sovereign immunity liability damages limits potential judgments to $8,823.53 per victim. • Victims seeking more have to get legislative approval through a claims bill process that can take years to complete. • The Florida Supreme Court has ruled that damage caps violate Floridian’s right to equal protection under the law.
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OBSOLETE SOVEREIGN IMMUNITY LAW DELAYS JUSTICE FOR VICTIMS
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or many, a dark cloud will forever hang over February 14, 2018 — the date of the massacre at Marjory Stoneman Douglas High School in Parkland, Florida. On that tragic Valentine’s Day, 17 students and teachers were senselessly murdered and 17 others were injured, leaving their families, friends, classmates, and generation shaken, angry, and committed to change. Subsequent investigations and inquiries into the mass shooting have exposed significant failures on the part of the school board and others. We can never bring back the murdered students and teachers. But, we can honor them and the survivors by reforming the state’s obsolete sovereign immunity statute and provide comfort for the incalculable loss. Origins of Sovereign Immunity Concept State law limits its own total liability to $300,000. This is not because of a verdict rendered by a jury of peers. This is not because of a conservative ruling by a Judge. This is, instead, due to Florida’s Sovereign Immunity laws. The concept of sovereign immunity has roots in the monarchies of England during the time where “the king could do no wrong.” The United States adopted most of the common law from England, including sovereign immunity to protect federal and state governments and their employees from being sued. As time went on this concept slightly fell out of favor and in 1946 Congress passed the Federal Tort Claims Act (FTCA), waiving sovereign immunity for certain actions. States began enacting similar laws shortly thereafter. Sovereign Immunity in Florida In 1969, the Florida Legislature suspended its sovereign immunity
for a year. The waiver was ultimately replaced by the present law, last updated in 2010, which allows for the state and its political subdivisions to be sued for torts but limits awards to $200,000 per person or $300,000 per occurrence. Considering a tragedy like the murder of 17 high school students in Parkland, this arbitrary amount exposes the injustice of Florida’s current caps on sovereign immunity. Burdensome, Bureaucratic Claims Bill Process Floridians should be able to recover all the damages awarded to them by a jury or even stipulated in a settlement. However, to receive what’s justly due to them, the state sentences murder victims’ families and survivors to navigate the state’s politically driven, burdensome, and bureaucratic legislative claims bill process.
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In order to pass a claims bill, an injured victim must first get state legislators to file the claims bill in each chamber. Once the claims bill is filed, the presiding officer of each chamber will likely refer the claims bill to a Special Master and several committees. The Special Master essentially holds a trial and sits as judge and jury. After the trial, each Special Master writes a report which includes a recommendation as to whether the Legislature should pass or reject the claims bill. Unfortunately, even a recommendation to pass a claims bill does not guarantee its approval. The claims bill then must go through the normal process of public committee hearings, passing the floor of each chamber, and then avoiding being vetoed by the governor. These hearings force the victims families and their survivors of the mass shooting to relive the horrendous experience multiple times in order to be made whole.
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To ensure justice is delivered for people hurt as the result of an action by a public body, Florida needs to reform its obsolete approach to soverign immunity and the legislative claims bill process.
SOVEREIGN IMMUNITY
I’m livid mad. If this gets treated as one incident and you divide it by 17” — and then add the injured students — that “puts the value of my daughter around $10,000. I have a real problem with that. Fred Guttenberg, whose daughter Jamie died in the Parkland massacre South Florida Sun-Sentinel, April 27, 2018
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NURSING HOME SAFETY In Florida, drivers are required to carry more liability insurance than a nursing home. Though reforms in 2001 required homes to carry liability insurance, they failed to set minimum levels of financial responsibility.
KEYTAKEAWAYS
• For-profit nursing homes in Florida have been able to operate without the transparency and accountability that our state’s frail nursing home residents and their families deserve. • Florida’s for-profit nursing homes have been able to operate behind a corporate veil of secrecy, concealing many aspects of their business from regulators, their competitors, and the general public. With thousands of frail Floridians living in nursing homes and Assisted Living Facilities, this lack of transparency and public accountability should be a serious concern to all who want to keep the golden years shining ones for Florida seniors. • Florida is rapidly aging as a state. Our graying population is getting older at a rate faster than the national average. As Floridians reach retirement age and other seniors relocate to the Sunshine State, our must take a leading role in addressing issues critical to seniors. • Everyone deserves the best possible care as well as full accountability so that large corporate nursing home owners, operators and management companies do not put profits above the needs of the residents.
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NURSING HOME SAFETY
MAKE THE GOLDEN YEARS SHINE FOR FLORIDIANS PROTECTING FLORIDA’S FRAIL ELDERLY FROM ABUSE AND NEGLECT Florida has an opportunity to demonstrate to the nation that the state welcomes retirees with open arms.
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lorida should guarantee basic, fundamental rights for our most-vulnerable residents in nursing homes and assisted living facilities.
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The right to be treated courteously, fairly, and with the fullest measure of dignity. The right to adequate and appropriate health care and treatment that prioritizes the residents’ needs and best interests. The right to a safe, clean, comfortable, and homelike environment that protects residents from harm even during extreme conditions and natural disasters. The right to access courts and a jury system and to hold accountable all persons or entities who either directly or indirectly own or operate the facilities.
Nursing Homes: Must be Safe, Secure, and Accountable The Florida Department of Elder Affairs says there are 742 nursing homes, 3,096 assisted living facilities, and 329 adult family care homes to serve today’s senior population. As the population grows, an increasing percentage of seniors will need nursing home care.
In May 2018, the USA Today Network – Florida noted how Orlando-based Consulate Health Care – the state’s largest nursing home provider – reported $1.7 billion in revenues in 2016. According to the report, in 2015 “taxpayers paid Consulate’s 77 Florida nursing homes more than $224.5 million through Medicare, or an average of $2.9 million per home.” According to state records, Medicaid also paid Consulate’s homes $206.62 a day per eligible patient.
In 2017, a study by RAND Corporation found among persons aged 57 to 61, 56 percent will stay in a nursing home at least one night during their lifetime. The findings published online by the journal Proceedings of the National Academy of Sciences, reportedly surprised researchers as previous studies corroborated an estimate from the U.S. Department of Health and Human Services that 35 percent of older Americans are likely to utilize nursing home care.
A whistleblower case resulted in a $347.8 billion judgment in 2017 against Consulate. As reported by the long-term care trade publication McKnight’s, the verdict led to $115 million in Medicare and Medicaid damages, tripled under provisions of the False Claims Act, and a minimum penalty of $5,500 for each of the 446 cited false claims.
While home and community-based services cost less than nursing home care, many seniors with chronic illnesses, disabilities, or isolation will need the services provided by a nursing home. Data from FY 2016/2017 shows on average it cost $65,402 to provide a senior with a year of care in a Florida fee-for-service nursing home.
A judge overturned the verdict in 2018 saying there wasn’t evidence the government would have withheld payment if aware of the billing
Since the passage of Florida’s “Nursing Home Residents’ Rights Act” in the 1980s, so-called “tort reform” legislation has caused a steady erosion of those Residents’ Rights. For example, the State has: • Lowered nursing home staffing levels; • Weakened punitive damage statutes and safety regulations; and • Enacted changes that make it much harder to hold nursing home owners accountable when seniors are injured while under their care. To demonstrate the kind of leadership that’s required by Florida’s demographic changes, the state must address the erosion of the rights of nursing home residents.
An Aging Florida Must Be a Leader on Senior Issues Florida’s population growth is the state’s primary economic engine. In the state’s 2018 Long-Range Financial Outlook, the Florida Legislature’s Office of Economic and Demographic Research (EDR) says “Florida’s unique demographics will present challenging issues for the state’s policy makers over the next three decades.”
Florida Needs Nursing Home Transparency The nursing home industry makes billions of dollars in profit. According to data from IMS Health, in 2015, the average Florida nursing home’s revenue stood at $15,264,000. In comparison, Arizona’s average nursing home revenue in 2015 came in at $12,034,000. The national average was $11,566,000.
EDR forecasts Florida’s senior population (aged 65+) will represent 24.3 percent of the state’s population in 2030, compared to 19.8 percent in 2018. Forecasters also estimate between 2010 and 2030, Florida will grow by 5.4 million with 54 percent of those gains coming from people age 60 and older.
Much of that money comes for taxpayers in the form of Medicaid and Medicare reimbursements, making elder care issues taxpayer issues as well. As watchdogs over peoples’ money, lawmakers must ensure nursing homes are safe and subject to sunshine in their insurance coverage and their ownership.
With a boom of retirement-age residents fueling Florida’s growthdependent economy, policymakers will have to address the new challenges posed by the state’s older demographic.
Many nursing home companies in Florida are owned by a maze of corporate LLC’s. With layer upon layer of shell LLCs shielding nursing home ownership, it is nearly impossible to follow the money, determine who operates a Florida facility, and who is legally responsible when residents get mistreated or killed. 2019 FJA™ ISSUES BOOK
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TOBACCO BOND
NURSING HOME SAFETY
the home carries. Many nursing home facility owners have decided to operate with the least amount of general and professional liability insurance necessary to comply with Florida’s law compelling facilities to maintain coverage.
The USA Today Network story shows, “despite the big money generated from Medicare and Medicaid programs serving the poor and elderly, Consulate’s nursing homes are designed to appear cashstrapped. While individual nursing home LLCs are essentially empty shells, they pay rent, management and rehabilitation service fees to Consulate or Formation Capital-affiliated companies.”
According to a Florida House of Representatives staff analysis of House Bill 1369 filed in 2018 by Rep. Amber Mariano, to require every licensed nursing home facility to maintain professional liability insurance in an amount not less than $2 million per occurrence and with a minimum annual aggregate of not less than $4 million, out of the state’s 684 licensed nursing homes, “64 nursing homes have professional liability insurance of $2 million or more per occurrence or claim. Out of those 64 nursing homes, 47 also have aggregate professional liability insurance coverage over $4 million.”
Nursing home patients would benefit from transparency when it comes to nursing home ownership. The state can take a giant step forward and prohibit out-of-state shadow Limited Liability Companies (LLC’s) to be the owners of Florida nursing homes. The USA Today Network used Consulate’s Governors Creek Health and Rehabilitation nursing home in Green Cove Springs, to illustrate how nursing homes companies use their corporate structure to shield facility ownership, disguise profitability, and make it difficult for lawyers to recover damages owed to victims of nursing home abuse and neglect. According to the published report: • Consulate companies Epsilon Health Care and CMC II, respectively own and manage Governor’s Creek Health and Rehabilitation. • Medicaid cost reports show it paid CMC II, its management company, $467,022 in 2015. • Governors Creek’s landlord and rehabilitation services provider are both related to Atlanta-based private equity firm Formation Capital, the chain’s owner. • The facility paid $298,554 in rent in 2015, according to cost reports. • In each case, the money flows back to Formation Capital and its wealthy investors. Consumers should not have to hire a forensic accountant to know who owns the facility providing care for our most-frail seniors. Liability Insurance Transparency In Florida, drivers are required to carry more liability insurance than nursing homes. Seniors and their families should know the home’s level of accountability before they sign an agreement to spend thousands of dollars a month for their loved-one’s care. Unfortunately, nursing homes are not required to provide seniors or their families with information about how much liability coverage
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Florida is one of the only states in America where you can operate a nursing home with no meaningful liability insurance at all. Pennsylvania requires nursing home owners to carry at least $1 million in liability insurance coverage. New Jersey requires $500,000. Florida’s vulnerable seniors and their families need nursing home liability insurance transparency and the security offered by requiring licensed facilities maintain a responsible level of coverage.
PROMOTE EQUITY FOR FLORIDA BUSINESSES, NOT FAVORITISM FOR BIG TOBACCO
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lorida’s tobacco appellate bond statute is a sweetheart gift to Big Tobacco that promotes inefficiency in our courts and increases the burden on the state’s taxpayers.
This dubious special-interest statute stands as an embodiment of the kind of special interest-driven laws common in the DC “swamp” that have eroded the public’s trust in government. Florida lawmakers can reject laws that pick winners and losers by repealing this antiquated law. The jury in a 1994 tobacco class action case against cigarette companies (Engle v. Liggett Group, Inc.) found that those companies were negligent, committed fraud by concealment, and conspired to commit fraud by concealment, the jury awarded $145 billion in punitive damages to the class. The cigarette manufacturers appealed, and the Florida Supreme Court overturned the punitive damages award and instructed the class members to file their own individual lawsuits within one year. Of the original 700,000 class members, 8,000 filed individual lawsuits, and these are considered “Engle progeny” cases. After years of litigation, and after numerous Engle progeny cases were tried to verdict, the Legislature in 2009 enacted §569.23, changing the rules in the middle of litigation to favor the cigarette companies.
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This legislative change not only allowed the cigarette companies to post a much lower bond to avoid paying the judgment during the initial appeal, but they also can avoid paying the judgment for years after it is affirmed and do not have to pay until both the Florida Supreme Court and the United States Supreme Court have denied review or the time for seeking such review has expired! This is a huge benefit no other business or individual access, not even the State of Florida. By changing the rules mid-stream, current law favors foreign cigarette manufacturers over Floridians. With much less money out of their pockets, cigarette manufacturers make endless frivolous appeals with impunity, and deny and delay payment to Floridians that have proven their cases, sometimes until the Floridian dies. Hundreds of Engle progeny cases remain pending today and may remain pending for decades unless something forces these companies to change their litigation strategy, especially at the appellate level. Allowing these companies to have their own special appellate bond statute that permits them to delay and deny payment for years after losing only encourages continuation of their strategy against Floridians. FJA™ supports the repeal of this statute that only benefits the immensely profitable multinational cigarette manufacturers while delaying justice to ill Floridians who have already won at trial.
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violations brought to light by the whistleblower. In court documents, company officials said the chain was in a “precarious” financial situation and claimed a financial penalty could lead to the “immediate economic extinction” of all Consulate homes.
FLORIDA’S TOBACCO APPELLATE BOND LAW PICKS WINNERS AND LOSERS
As a result of the bond cap statute, these cases stay in litigation long after the cigarette companies have lost at trial; long after the cigarette companies have lost on the appeal. This statute gives those companies an incentive to just keep on appealing until the last dog dies. These people who are owed money by these companies – and have proven it to Florida juries and have had their judgment upheld by a Florida appellate court – they die waiting to be paid what they are owed. Former FJA™ President Jimmy Gustafson
Legislative Testimony Supporting Repeal of Tobacco Bond Statute
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PREJUDGMENT INTEREST
HUMAN TRAFFICKING
PREJUDGMENT INTEREST SUPPORT STANDARDIZED PREJUDGMENT INTEREST IN OUR JUSTICE SYSTEM
SUPPORT FLORIDA’S FIGHT AGAINST HUMAN TRAFFICKING
End Frivolous, Abusive, and Expensive Delay Tactics
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lorida currently allows for prejudgment interest in cases involving business and contractual disputes, but does not do so in cases involving personal injury and wrongful death.
Too often, negligent defendants and insurance companies play games with the lives and recovery of Floridians during personal injury and wrongful death cases. Because of the latitude our judicial process affords defendants, many cause frivolous delays to exacerbate the desperation of victims, which they hope will cause the victims to obtain settlements far below the true amount they need. This practice is often known as attempting to “out-live” a meritorious claimant or their family by means of multiple delays and stall tactics. While the legal process is core to our democracy, there must be accountability for wrongdoers that take advantage of the process.
QUICK TAKE: Prejudgment interest promotes increased efficiency in the judicial system by eliminating an incentive for litigants to drag their feet in settling meritorious claims. Current Florida law allows prejudgment interest in many other cases, such as business torts and contractual disputes, but generally does not in cases involving personal injury and wrongful death.
Thirty-three states, including Texas, Ohio, California, Colorado, and Georgia, have responded to this behavior by allowing prejudgment interest (PJI) in cases involving personal injury and wrongful death. The result is a “hammer of accountability” over the negligent party to be responsive after a meritorious case has been filed against them. Of course, if a court finds the defendant is not responsible, then they are not liable for any interest or damages. FJA™ supports legislation to standardize prejudgment interest. PJI would allow injured people throughout the state to recover interest on damages that have been awarded by a jury. By discouraging delay tactics, it would encourage fair settlements for victims, and if the prejudgment interest is compounded with post-judgment interest, it would also curb the abuse of the appellate process.
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KEYTAKEAWAYS
Prejudgment interest promotes increased efficiency in the court system. Florida can reduce the backlog of cases and the justice system can become a smoother, quicker, and better process to benefit Florida taxpayers with a standardized prejudgment interest law.
Human trafficking is modern-day slavery where victims’ lives and freedom are stolen for profit. Human traffickers recruit and exploit victims in their own home towns and sometimes in their own homes. There are two primary forms of exploitation people are trafficked for: forced labor and commercial sexual exploitation. • In its 2016 global report on human trafficking, the United Nations Office on Drugs and Crime found about 54 percent of human trafficking victims were sexually exploited. Of girls/women being trafficked, 72 percent are trafficked for sexual exploitation. • This is a multi-billion dollar worldwide criminal operation with activity happening in the Sunshine State. Florida is No. 3 in the United States as a haven for human traffickers and their victims. Florida should provide no sanctuary for human traffickers. • Florida is known globally as a family-friendly destination. The state is also a prime location for national association conventions, which can serve as a hot bed for trafficking activities. • Increasing awareness of human trafficking and promoting training of hospitality employees so they can identify the warning signs will help law enforcement save victims of to human traffickers in Florida.
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uman trafficking is a crime that involves the abuse and exploitation of innocent and vulnerable people.
Florida ranks 3rd is behind California and Texas, as a haven for human traffickers and their victims. Florida’s tourist economy makes it an ideal destination for sex traffickers. The state’s large immigrant population makes it an attractive destination for labor exploitation. The International Labor Organization estimates that forced labor and human trafficking is a $150 billion industry worldwide. The group also estimates that there are 20.9 million victims of human trafficking globally. By some estimates, approximately 25 percent of the victims of human trafficking are children. In 2016, an estimated 1 out of 6 endangered runaways reported to the National Center for Missing and Exploited Children that they were child sex trafficking victims. Of those, 86 percent were in the care of social services or foster care when they ran. According to the Polaris Project reports of human trafficking in the U.S. increase
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HUMAN TRAFFICKING
RENTAL CAR FINANCIAL RESPONSIBILITY
every year. In 2016, we learned of 8,042 cases of human trafficking, a 35 percent jump over
trafficking organization ECPAT-USA developed a training program specifically for hotel employees.
RENTAL CAR DRIVER ACCOUNTABILITY
Since 2007, more than 17,000 incidents of sex trafficking have been reported to the National Human Trafficking Resources Center. Women, with a disproportionate number being minors, made up a vast majority of the more than 1,200 cases of sex trafficking reported in the first six months of 2016.
Increasing awareness and providing high-quality training would help hotel employees make correct decisions when they suspect human trafficking on property – and enhance Florida’s global position as a family-friendly destination.
ENSURING RENTAL CAR DRIVERS CARRY APPROPRIATE INSURANCE COVERAGE
According to the U.S. Department of Homeland Security, and the polaris project, hotels and motels are attractive locations for all forms of human trafficking. They provide human traffickers with privacy and anonymity. Hospitality industry staff are not necessarily trained to recognize and report signs of trafficking. Providing education to hospitality employees from housekeeping to front desk personnel to serve as a force multiplier should better assist law enforcement’s efforts to eradicate human trafficking. Efforts have taken root across America to increase awareness of human trafficking among people who work in the hospitality industry. Connecticut, has created a public/private partnership to train employees in the hospitality industry to better identify warning signs of human trafficking in their establishments and how to respond if they are concerned a person is a trafficking victim. Marriott International and Brooklyn New York-based anti child
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lorida is known worldwide as a vacation destination. In 2017, Visit Florida data showed out of approximately 118.5 million visitors to Florida, an estimated 14.1 million came from foreign countries. Many of those visitors rented cars. Some had accidents. Taxpaying Floridians often have no recourse against those without liability insurance who rent cars and end up hurting people. This is especially true of foreign tourists who return to their home countries before justice can be achieved. In 2005, powerful rental car companies and their lobbyists convinced the United States Congress to pass the so-called “Graves Amendment” to the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users. That law (49 U.S.C. § 30106) which eliminated rental companies’ vicarious liability for the actions of the persons they allow to drive their profit-generating vehicles. The Florida Legislature has an opportunity to protect Florida residents by requiring all rental car drivers — especially foreign tourists — to either carry or purchase bodily injury liability insurance in at least $100,000 per person and $300,000 per incident, with at least $50,000 in property damage liability coverage. This is good policy for Florida drivers and good for the bottom line of the rental car companies who can sell the insurance. Florida should also require that rental car companies be fully financially responsible if they rent cars to uninsured drivers who then injure others on Florida’s roads. In July 2018, South Florida’s WPLG reported the story of a crash Richmond Heights resident Dennis Baxter had with a woman driving a rental car. According to the report, in May 2018, a woman in a Chevy Impala merged from the far right lane into the center lane. She then merged again, from the center lane, into the far
left lane and crashed into the side of Baxter’s truck. Baxter caught the incident on video and successfully countered claims from the other driver that he caused the crash. After the accident, the rental car company sent the man a letter that said, “The driver of the rental during the accident was not the person who rented the vehicle, nor were they listed as an additional driver.” Like most Floridians, you would assume Florida law requires people driving rental cars to purchase some sort of liability insurance or that the rental car company has insurance to cover any losses the tourist’s coverage does not. Unfortunately, you would be incorrect on both points. In the Baxter accident even though the woman driving the rental car received a ticket for improper lane change and driving with a suspended license, the man she hit was stuck with the bill. Under Florida law, drivers — including rental car drivers — are not required to carry the kind of bodily injury liability insurance that could pay the medical bills generated by a car crash with injuries. Although most of us are financially responsible for ourselves and the people we allow to drive our cars, rental car companies are not. Florida, despite its enormous tourism economy — has the weakest financial responsibility laws of any state in the country. This leaves anyone unfortunate enough to be injured by a reckless rental car driver in serious financial jeopardy. WPLG Story: https://www.local10.com/consumer/leave-it-tolayron/he-wasnt-at-fault-when-a-rental-car-hit-him-but-hes-stuckstill-with-the-bill
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DRIVERLESS CAR RESPONSIBILITY
KEYTAKEAWAYS
Florida needs a strong driverless car accountability law that focuses on protecting public safety. Without smart public safety accountability provisions, a Chinese automaker testing driverless cars on Florida’s roads could seriously injure or kill a person in Florida, close their Florida operation, and leave their victims without recourse to seek justice. Driverless technology poses urgent concerns because: • The public has significant concerns about driverless car safety. A May 2018 survey from the American Automobile Association (AAA) found 73 percent of American drivers are too afraid to ride in a driverless car – up from 63 percent in late 2017. • Florida’s citizens, and the millions of tourists who visit our state each year, should not be turned into unwitting test subjects for foreign manufacturers or tech startups with no demonstrated financial accountability. • Florida taxpayers should not be forced to pay for the medical care and treatment necessitated by beta tests gone wrong.
DRIVERLESS CAR RESPONSIBILITY
WHO’S ACCOUNTABLE WHEN A DRIVERLESS CAR HURTS OR KILLS SOMEONE? DRIVERLESS CAR LAWS MUST INCLUDE ACCOUNTABILITY WHEN SOMETHING GOES WRONG
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n a December 2016 statement, Arizona Gov. Doug Ducey said, “Arizona welcomes Uber self-driving cars with open arms and wide-open roads.” Unfortunately, in March 2018, an Uber-operated automobile with “self-driving” mode engaged struck and killed 49-year-old pedestrian Elaine Herzberg in Tempe, Arizona. The fatal crash was the first in the United States involving a driverless vehicle and a pedestrian. A preliminary report from the National Transportation Safety Board on the fatal crash said: “According to data obtained from the self-driving system, the system first registered radar and LIDAR observations of the pedestrian about 6 seconds before impact, when the vehicle was traveling at 43 mph. As the vehicle and pedestrian paths converged, the self-driving system software classified the pedestrian as an unknown object, as a vehicle, and then as a bicycle with varying expectations of future travel path. At 1.3 seconds before impact, the self-driving system determined that an emergency braking maneuver was needed to mitigate a collision. According to Uber, emergency braking maneuvers are not enabled while the vehicle is under computer control, to reduce the potential for erratic vehicle behavior. The vehicle operator is relied on to intervene and take action. The system is not designed to alert the operator.” National Transportation Safety Board Preliminary Report HWY18MH010
DRIVERLESS CARS NOT READY FOR PRIME TIME? • It is too soon to gauge the safety of driverless car technology. • In 2018, a test car operating in driverless mode hit and killed a pedestrian in Arizona. The crash exposed safety issues related to the technology. • In California, during the 2017 reporting year, Mercedes Benz’s three test vehicles drove 1,087 miles with 842 disengagements – that’s a rate of one disengagement every 1.3 miles. • Bosch’s three test cars performed slightly better and logged 1,454 miles with 598 disengagements – a rate
of one disengagement every 2.4 miles. • General Motors/Cruise driverless cars showed 125,000 test miles during the period. While reporting zero disengagements, those vehicles were involved in 22 crashes – one crash for every 5,682 miles of testing. • Comparatively, human drivers have a fatal accident rate of 56 crashes per 100 Million miles driven (with only 1 fatality in that same 100 million miles). (https://crashstats.nhtsa.dot.gov/Api/Public/ ViewPublication/812318)
The tragedy in Tempe, along with several high-profile crashes involving other vehicles with varying levels of automation, -demonstrate that driverless car technology remains very much in the developmental stage.
As a remedy, Florida should look to Michigan, the home of the Big Three automakers, for an example of legislation to provide more stringent requirements to protect the interests of the citizens. Current Michigan law requires an automaker to post a $10 million bond, or provide proof of equivalent insurance coverage, before operating autonomous vehicles in certain contexts.
Like Arizona, Florida has also laid the groundwork to create a permissive climate for the implementation and deployment of autonomous and connected vehicle technologies. However, current Florida law requires that self-driving cars have a human “operator,” who in turn must have a valid driver’s license. Significantly, the licensed “operator” required under current law may be held legally accountable for a crash. Recent legislative proposals would instead deem the autonomous technology to be the operator. If this approach were taken, then a first grader could get into a car, engage the vehicle’s autonomous mode — a term that is not defined in the legislation or anywhere else in Florida law — and then legally cruise down Florida’s roadways. The technology simply is not there. In effect, the recent proposals would have turned Florida’s roadways into an open testing ground for anyone or any entity to test whatever “autonomous technology” they desired—without having to demonstrate or establish any type of financial accountability to Florida’s citizens. This means that a Chinese tech company could deploy self-driving cars on I-4 or I-10, maim, paralyze, or kill a Florida family, and then simply fold up its U.S. operations and leave that family—and Florida’s taxpayers—paying the bills for the necessary medical care and treatment. To make driverless cars a winning idea for Florida’s citizens, we must reign in unintended consequences and provide recourse for anyone injured or killed as a result of driverless car technology.
Financial responsibility is very much a state concern that must be handled by the Legislature. This is a matter of bi-partisan agreement: the initial self-driving car guidance developed and published in 2016 by the U.S. Department of Transportation (“DOT”) and the National Highway Traffic Safety Administration (“NHTSA”) said exactly this; and this same sentiment was again clearly expressed by the DOT/NHTSA administration in the revised guidance published in September 2017, and once again in the revised guidance published in September 2018. The revised guidelines specifically recommended that states require, among other things, “proof of financial responsibility requirements in the form of surety bonds or self-insurance.” If the full promise of this technology is realized, it should result in safer roads and thousands of lives saved every year. While the technology matures and grows, however, protective steps are necessary for the inevitable tragedies that will occur as the field develops. Before turning Florida roads into a test track for driverless car technology and Florida citizens into test subjects, the Legislature has an opportunity to proactively ensure that there are basic safeguards in place to protect Floridians and our state’s visitors who travel on our roadways.
Source: AAA Survey, May 22, 2018, https:// newsroom.aaa.com/2018/05/aaa-american-trustautonomous-vehicles-slips/
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2019 FJA™ ISSUES BOOK
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NOTES
Mission Our
The Florida Justice Association’s (FJA™) mission is to strengthen and uphold Florida’s civil justice system and protect the rights of Florida’s citizens and consumers. FJA™ members passionately believe that all Floridians benefit when deserving individuals have a fair chance to seek justice in our state’s courts, and Florida’s consumers are made safer when large corporations and industries are held to a high ethical standard and accept fair responsibility for their actions.
FJA™ works in the legislative, political, and public arenas to ensure that Floridians know and understand the importance of their rights to justice and to make certain that these rights, which are at the very core of what it means to be American, are safeguarded and protected.
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STAFF CONTACTS Paul D. Jess Executive Director pjess@floridajusticeassociation.org Jeff Porter Legislative and Political Director and Deputy Executive Director jporter@floridajusticeassociation.org Lynn McCartney Deputy Legislative Director lmccartney@floridajusticeassociation.org Kevin Sweeny Operations Director, FJ PAC ksweeny@floridajusticeassociation.org G.C. Murray II, Esq., DPL Special Counsel and Director of Membership gcmurray@floridajusticeassociation.org Sarah Thompson Legislative Counsel and Special Counsel sshuler@floridajusticeassociation.org Ryan Banfill Communications Director rbanfill@floridajusticeassociation.org
FLORIDA JUSTICE ASSOCIATION ®
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