Court Opinion

ID: 3205090
Source: CourtListenerOpinion
Date Created: 2016-05-19 16:20:22.604384+00
Date Added: 2024-06-11T14:28:30.833270
License: Public Domain

This opinion is subject to revision before final
                      publication in the Pacific Reporter

                                 2016 UT 21

                                    IN THE
       SUPREME COURT OF THE STATE OF UTAH

           INJURED WORKERS ASSOCIATION OF UTAH, et al.,
                           Appellants,
                                       v.
                              STATE OF UTAH,
                                 Appellee.

                               No. 20140372
                            Filed May 18, 2016

                      Fifth District, St. George
                    The Honorable John J. Walton
                           No. 090501137

                                 Attorneys:
            Virginius Dabney, St. George, for appellant
   Sean D. Reyes, Att’y Gen., Stanford E. Purser, Asst. Att’y Gen.,
                    Salt Lake City, for appellee

    JUSTICE DURHAM authored the opinion of the Court in which
        CHIEF JUSTICE DURRANT and JUSTICE HIMONAS joined.
  ASSOCIATE CHIEF JUSTICE LEE filed an opinion concurring in part.
     JUSTICE JOHN A. PEARCE became a member of the Court on
       December 17, 2015, after oral argument in this matter,
                and accordingly did not participate.

   JUSTICE DURHAM, opinion of the Court:
                           INTRODUCTION
   ¶1 In Utah, attorneys representing injured workers in workers’
compensation claims receive their fees out of the compensation
awarded to the worker. By statute, the legislature delegated the
authority to regulate these fees to the Utah Labor Commission. UTAH
CODE § 34A-1-309. The Labor Commission created a sliding-scale fee
schedule and an overall cap on the maximum amount of attorney
fees for attorneys representing injured workers. UTAH ADMIN. CODE
R602-2-4(C)(3).
                      INJURED WORKERS v. STATE
                         Opinion of the Court
   ¶2 The Injured Workers Association of Utah and several of its
member attorneys (collectively, IWA) challenge the statute and the
Labor Commission’s fee schedule as unconstitutional. IWA argues
that under the Utah constitution, the Utah Supreme Court is vested
with exclusive authority to regulate the practice of law, and that this
authority extends to the regulation of attorney fees.
   ¶3 We agree with IWA and hold that the regulation of attorney
fees is included within the power to govern the practice of law.
Because the Utah Supreme Court is vested with exclusive inherent
and constitutional authority to govern the practice of law—and the
court cannot under the separation-of-powers doctrine delegate the
regulation of attorney fees to the legislature or the Commission—we
hold both the Commission’s fee schedule and its authorizing statute
unconstitutional.
                           BACKGROUND
    ¶4 The Utah legislature enacted the Workers’ Compensation
Act in 1917. 1917 Utah Laws 306. The legislature designed this act as
a “security system” to compensate workers for their injuries without
requiring costly litigation. See Helf v. Chevron U.S.A., Inc., 2015 UT 81,
¶ 84, 361 P.3d 63 (citation omitted). Workers give up common law
tort remedies against their employers, and in exchange, employers
must compensate workers for workplace injuries regardless of fault.
See UTAH CODE § 34A-2-105(1); Shattuck-Owen v. Snowbird Corp., 2000
UT 94, ¶ 19, 16 P.3d 555.
    ¶5 Shortly after promulgating the Workers’ Compensation Act,
the legislature granted the Industrial Commission “full power to
regulate and fix the fee charge” of attorneys involved in workers’
compensation cases. 1921 Utah Laws 182. This power now resides
with the Labor Commission 1 and is codified in Utah Code
section 34A-1-309(1): “In a case before the commission in which an
attorney is employed, the commission has full power to regulate and
fix the fees of the attorney.”

   1 The legislature replaced the Industrial Commission with the
Utah Labor Commission in 1997, and “the Labor Commission
assumed responsibility from the Industrial Commission for the
enforcement of Title 34A, the Utah Labor Code.” Rowsell v. Labor
Comm’n, 2008 UT App 187, ¶ 8 n.1, 186 P.3d 968 (citation omitted).
Any “caselaw involving the administrative powers of the Industrial
Commission remains binding on cases involving the administrative
powers of the Labor Commission.” Id.
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    ¶6 Initially, the Commission created a scheme in which
attorneys received a minimum fee of ten dollars, plus 5 percent of
the injured worker’s award. See Ellis v. Indus. Comm’n, 64 P.2d 363,
370 (Utah 1937) (noting the Commission’s adoption of this policy on
July 21, 1921). Under this policy, the Commission retained discretion
to adjust the attorney fee upward or downward if the fee would
otherwise be considered unjust to the parties. Id. The Commission’s
scheme affected injured workers’ attorney fees only. The
Commission has never regulated fees of attorneys representing
employers or insurance companies.
    ¶7 The fee schedule has been adjusted several times since its
inception, typically for inflation. Today the regulation grants
successful 2 injured workers’ attorneys a fee of 25 percent for the first
$25,000 of the award, 20 percent for the next $25,000 of the award,
and 10 percent of amounts awarded in excess of $50,000. UTAH
ADMIN. CODE R602-2-4(C)(3)(a). Beginning in 1991, the Commission
also added a cap to the overall fees. 3 Currently, attorneys may not
receive fees in excess of $18,590 for “all legal services rendered
through final commission action.” Id. Some additional fees are
awarded if the case is appealed. Id. R602-2-4(C)(3)(b)–(c). The
regulation no longer allows the Commission discretion in awarding
fees; the amount of attorney fees awarded depends solely on the size
of the judgment.
    ¶8 IWA petitioned the district court for declaratory judgment,
challenging the constitutionality of the Commission’s fee schedule
and the statute authorizing the Commission to regulate attorney
fees. IWA attacked the fee schedule on four grounds, but only the
separation of powers argument is at issue on this appeal. 4 IWA

   2  An unsuccessful claimant’s attorney is entitled to no fees, even
if the attorney has contracted with the injured worker at an hourly
rate. See Stokes v. Flanders, 970 P.2d 1260, 1264 n.8, 1265 (Utah 1998)
(holding that the Commission’s rule implies that where the pursuit
of a claim is unsuccessful, “charging attorney fees on an hourly basis
[is] not lawful”).
   3 The Commission adjusted the dollar caps on April 5, 1999;
January 15, 2002; December 12, 2004; July 24, 2007; February 7, 2008;
and December 29, 2011.
   4  IWA did not appeal the district court’s rejection of its
substantive due process and open courts claims. Although IWA did
appeal the equal protection claim, we need not address it here as we
rule for IWA on its separation of powers claim.
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                      INJURED WORKERS v. STATE
                         Opinion of the Court
argues that under our state’s constitution, the Utah Supreme Court
has the exclusive power to govern the practice of law; the regulation
of attorney fees falls within this power; and therefore, any attempt
by the legislature to circumvent this power violates the separation of
powers doctrine.
    ¶9 In response, the State cited Thatcher v. Industrial Commission,
in which this court rejected the notion “that the regulation and fixing
of fees of attorneys is essentially and solely the power of the
judiciary.” 207 P.2d 178, 181 (Utah 1949). The Thatcher court
recognized this court’s inherent power to govern the practice of law,
but nonetheless stated it was unaware of any power belonging to
this court to regulate attorney fees, ultimately finding it unnecessary
“to determine whether the judiciary has the power to regulate or fix
fees” because it found that at the very least the legislature had the
right to do so. Id. at 181–82.
   ¶10 IWA acknowledged Thatcher but argued that the law
changed after the 1985 revision of article VIII of the constitution,
when the supreme court’s power to govern the practice of law
became explicit and exclusive. The district court was not persuaded
by IWA’s argument, determining that
       insofar as the power to regulate the practice of law is
       concerned, the 1985 amendment did not alter the
       previous allocation of such power in Utah, but merely
       “ratified” and stated “expressly” what was previously
       understood to be inherent. That being the case, there is
       no basis for concluding that the amendment somehow
       superseded Thatcher’s holding that the Legislature may
       “giv[e] to the Industrial Commission full power to
       regulate and fix reasonable fees of attorneys in cases
       before the commission in which attorneys have been
       employed.”
(citation omitted).
    ¶11 The district court additionally relied on a comment to rule
1.5 of the Utah Rules of Professional Conduct, which states that
“[a]pplicable law may impose limitations on contingent fees, such as
a ceiling on the percentage allowable,” and may apply in other fee
agreements beyond contingency fees. UTAH R. PROF. CONDUCT 1.5
cmt. 3. The court found this comment consistent with the Thatcher
opinion and its determination that the 1985 amendment did not alter
the scope of this court’s inherent power to govern the practice of law;
accordingly, the court denied IWA’s petition at the summary
judgment stage.

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   ¶12 On appeal, IWA asks us to strike down the Labor
Commission’s fee schedule and its enabling statute as a “direct,
unconstitutional, circumvention of the Utah Supreme Court’s
exclusive authority to regulate the practice of law.” 5 The
constitutionality of a statute presents a question of law. State v.
Candedo, 2010 UT 32, ¶ 7, 232 P.3d 1008. We review this question for
correctness, granting no deference to the lower court’s decision. Id.
We have jurisdiction to decide this appeal pursuant to Utah Code
section 78A-3-102(3)(j).
                             ANALYSIS
    ¶13 The separation-of-powers clause in our state constitution
describes the three branches of government and specifies that “no
person charged with the exercise of powers properly belonging to
one of these departments, shall exercise any functions appertaining
to either of the others, except in the cases herein expressly directed
or permitted.” UTAH CONST. art. V, § 1. “The latter phrase of this
clause establishes that there may be exceptions to the separation-of-
powers doctrine, but any exception must be found within the Utah
Constitution.” State v. Drej, 2010 UT 35, ¶ 25, 233 P.3d 476.
   ¶14 First, we reiterate that under our state constitution, the Utah
Supreme Court has plenary authority to govern the practice of law.
This authority is derived both from our inherent power and—since
1985—explicit and exclusive constitutional power.
    ¶15 Second, we determine that the regulation of attorney fees
falls squarely within the practice of law, thus invalidating Thatcher v.
Industrial Commission, 207 P.2d 178 (Utah 1949). Because we cannot
delegate the authority to regulate attorney fees in workers’
compensation cases to the legislature, both the statute and the Labor
Commission’s fee schedule are unconstitutional encroachments
upon the power of the judiciary to govern the practice of law.
   ¶16 Third, we set forth the reasons why we decline at this time
to adopt our own fee schedule for regulating the fees of injured
workers’ attorneys.

   5  The State raised a motion to strike IWA’s reply brief in its
entirety because, the State alleges, the reply brief raised new issues.
However, because we rule in favor of IWA’s separation of power
claim (which was raised in their opening brief) and do not reach any
other issues, the motion is moot.
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                      INJURED WORKERS v. STATE
                         Opinion of the Court
      I. THE UTAH SUPREME COURT HAS INHERENT AND
        CONSTITUTIONAL AUTHORITY TO EXCLUSIVELY
               GOVERN THE PRACTICE OF LAW
           A. Inherent Authority to Govern the Practice of Law
    ¶17 Our origin story begins with the inherent power to govern
the practice of law. See Bailey v. Utah State Bar, 846 P.2d 1278, 1280–81
(Utah 1993) (“From its beginning, this Court has had the inherent
power to regulate the practice of law . . . .”). The source of this power
flowed from article VIII, section 1 of our state constitution, which
vests the “judicial power of the state . . . in a Supreme Court.” UTAH
CONST. art. VIII, § 1; accord Gilbert v. Utah Down Syndrome Found., Inc.
(In re Discipline of Gilbert), 2012 UT 81, ¶¶ 19–20, 301 P.3d 979
(articulating that “the power to regulate the practice of law was
inherent in the judicial power conferred on this Court by article VIII
section 1 of the Utah Constitution” (citation omitted)); In re Utah
State Bar Petition for Approval of Changes in Disciplinary Rules on
Advert., 647 P.2d 991, 992–93 (Utah 1982).
    ¶18 As part of our inherent authority to govern the practice of
law, we have always had the ability to regulate the admission and
discipline of attorneys. See Barnard v. Utah State Bar, 804 P.2d 526, 528
(Utah 1991) (“[T]he authority of this Court to regulate the admission
and discipline of attorneys existed as an inherent power of the
judiciary from the beginning.”); In re Burton, 246 P. 188, 199 (Utah
1926) (“[This court’s] power to deal with its own officers, including
attorneys, is inherent, continuing, and plenary, and exists
independently of statute . . . .”). Even in Thatcher v. Industrial
Commission—the case we overrule today—we discussed this court’s
inherent power to regulate the practice of law, including: (1) our
“power to provide for the examination, licensing or regulation of
admission to the bar of persons seeking to practice law”; (2) the
“power to discipline attorneys as officers of the court for
unprofessional conduct”; and (3) “the power to determine what is a
reasonable [attorney] fee.” 207 P.2d 178, 181 (Utah 1949).
    ¶19 Although the “courts have traditionally regulated the
practice of law,” In re Knowlton, 800 P.2d 806, 808 (Utah 1990), our
inherent authority to govern the practice of law was not exclusive.
For example, prior to 1981, the Utah Supreme Court and the
legislature concurrently governed the Utah State Bar. The legislature
“provided for the admission to practice and the discipline and
disbarment of attorneys in Utah,” while the supreme court had
inherent and statutory authority “to establish rules for the admission
to practice and the discipline and disbarment of attorneys.” Barnard,
804 P.2d at 528 (citing Compiled Laws of Utah §§ 317–19, 331 (1917)).

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    ¶20 In 1981, this court “adopted rules for integration of the Bar
under the Court’s own independent, inherent power derived from
the historic and fundamental relationship between attorneys at law
and the courts and the doctrine of separation of powers.” Id. (citing
In re Integration & Governance of the Utah State Bar, 632 P.2d 845 (Utah
1981)). Those rules “incorporated much of the text of Title 78, chapter
51, the statutes [then] governing the Bar.” Id. We noted at the time of
integration that questions “on the respective functions of the judicial
and legislative branches of government in the regulation of attorneys
and counselors and the practice of law are left to be resolved in the
context of specific cases and controversies.” In re Integration &
Governance of the Utah State Bar, 632 P.2d at 846.
   ¶21 This sharing of our power to regulate the practice of law
ended in 1985 when the constitution was amended to explicitly grant
the Utah Supreme Court exclusive power to govern the practice of
law.
      B. In 1985, the Supreme Court Was Vested with the Exclusive
          Constitutional Authority to Govern the Practice of Law
    ¶22 In 1977, the legislature created a Constitutional Revision
Commission (Revision Commission) in order “to make a
comprehensive examination of the Constitution of the State of
Utah, . . . and thereafter to make recommendations to the governor
and the legislature as to specific proposed constitutional
amendments designed to carry out the commission’s
recommendations for changes therein.” CONSTITUTIONAL REVISION
COMM’N, REPORT TO THE GOVERNOR AND THE 44TH LEGISLATURE 1
(1982) (citation omitted). The Revision Commission found it
necessary to completely overhaul article VIII—the judicial article. See
id. at 14–15.
    ¶23 Before 1985, the constitution did not expressly provide for
this court’s rulemaking authority or the power to govern the practice
of law. CONSTITUTIONAL REVISION COMM’N, REPORT TO THE GOVERNOR
AND THE 45TH LEGISLATURE 19 (1984). This power was inherent and
derived from article VIII, section 1. The Revision Commission
drafted language that expressly recognized the supreme court’s
authority to “adopt rules of procedure and evidence” and to “govern
the practice of law.” Id. at 27. The rationale was that
       [m]embers of the commission felt that the rulemaking
       authority of the supreme court should be specifically
       included in the constitution. This power is considered
       essential to the [sic] maintaining an independent
       judiciary. The revision also provides the supreme court

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                      INJURED WORKERS v. STATE
                         Opinion of the Court
       with clear constitutional authority for the governance
       of the practice of law. The commission felt that the
       practice of law is an inherent function of the judiciary.
Id.
    ¶24 Just as our inherent authority to govern the practice of law
was not exclusive before 1985, our authority to make rules of
procedure and evidence was likewise not exclusive. Before 1943, the
supreme court could make procedural rules but the legislature could
supersede those rules by statute. See Kent R. Hart, Note, Court
Rulemaking in Utah Following the 1985 Revision of the Utah Constitution,
1992 UTAH L. REV. 153, 154 (1992). In 1943, the “legislature changed
course and declared that court rules would override inconsistent
legislative enactments.” Id. By 1951, the legislature “expanded the
supreme court’s rule-making responsibilities to encompass
evidentiary as well as procedural rules.” Id.
  ¶25 Section 4 of article VIII—as drafted by the Revision
Commission and approved by the voters in 1984—provides that:
       The Supreme Court shall adopt rules of procedure and
       evidence to be used in the courts of the state and shall
       by rule manage the appellate process. The Legislature
       may amend the Rules of Procedure and Evidence
       adopted by the Supreme Court upon a vote of two-
       thirds of all members of both houses of the
       Legislature. . . . The Supreme Court by rule shall
       govern the practice of law, including admission to
       practice law and the conduct and discipline of persons
       admitted to practice law.
UTAH CONST. art. VIII, § 4; see also In re Discipline of Davis, 754 P.2d
63, 65 n.6 (Utah 1988).
   ¶26 Although the constitution permits legislative oversight of
the supreme court’s rules of procedure and evidence, there is no
such limitation on the supreme court’s authority to govern the
practice of law. And, as specifically articulated in our separation-of-
powers clause and jurisprudence, “there may be exceptions to the
separation-of-powers doctrine, but any exception must be found
within the Utah Constitution.” State v. Drej, 2010 UT 35, ¶ 25, 233
P.3d 476. Because there is no limitation found within the constitution
on our ability to govern the practice of law, we maintain the
exclusive authority to do so.
   ¶27 Our caselaw recognizing this exclusive authority is
extensive. See In re Schwenke, 2004 UT 17, ¶ 35, 89 P.3d 117 (“[W]e
take this opportunity to emphasize that the Utah Constitution is
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                         Opinion of the Court

clear in its pronouncement that this court controls the practice of
law. Under article VIII, section 4 of the Utah Constitution, we have
the exclusive constitutional mandate to do so.”); Utah State Bar v.
Summerhayes & Hayden, Pub. Adjusters, 905 P.2d 867, 869–70 (Utah
1995) (“This Court has the exclusive authority to regulate the
practice of law in Utah.”); Barnard v. Sutliff, 846 P.2d 1229, 1237 (Utah
1992) (“[O]nly this court has the rule-making power over the practice
of law and the procedures of the Bar.”); Schwenke v. Smith, 942 P.2d
335, 336–37 (Utah 1997) (“The Utah Constitution vests sole authority
for regulating the practice of law in this court.”); Pendleton v. Utah
State Bar, 2000 UT 96, ¶ 9, 16 P.3d 1230 (“The Utah Constitution
grants exclusive power to this court to ‘govern the practice of
law . . . .’”); In re Discipline of Harding, 2004 UT 100, ¶ 18, 104 P.3d
1220 (“[A]ttorney discipline proceedings, being the exclusive
province of this court, are conducted under the rules and directions
we give.”).
    ¶28 Thus, any pre-1985 case law discussing our shared power to
regulate the practice of law with the legislature is no longer valid.
See, e.g., Ruckenbrod v. Mullins, 133 P.2d 325, 330 (Utah 1943) (noting
that the “legislature might make reasonable regulations governing
the admission and disbarment of attorneys in the exercise of their
police powers and in aid of the court’s powers”). The district court
relied on this case law to proclaim that “even certain fundamentally
judicial power may be exercised to an extent by the Legislature.”6
While this may have been true of our inherent power to govern the
practice of law, it has not been the case since the 1985 constitutional

   6  The district court cites one case published after the 1985
amendments in support of this proposition—In re Discipline of
McCune, 717 P.2d 701, 705 (Utah 1986), abrogated on other grounds by
Monson v. Carver, 928 P.2d 1017 (Utah 1996). In In re McCune, this
court cites Ruckenbrod for the proposition that “[a]lthough the
legislature has some power to regulate and control attorneys, at least
in certain respects, that power is subject to this Court’s inherent power
to discipline its officers.” Id. (emphasis added). The court then
speaks of the legislature “exercising its pre-1985 authority” to create
statutes governing the Bar. Id.; see also supra ¶¶ 19–20. The quote
from In re McCune about our shared power clearly refers to our
inherent power and not our exclusive constitutional authority to
govern the practice of law. Therefore, the quote cannot be read as
supporting the district court’s statement that even today we still
share this power with the legislature.
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                      INJURED WORKERS v. STATE
                         Opinion of the Court
amendments explicitly granted the supreme court the exclusive
power to govern the practice of law.
 II. THE REGULATION OF ATTORNEY FEES FALLS SQUARELY
      WITHIN OUR EXCLUSIVE JURISDICTION TO GOVERN
                  THE PRACTICE OF LAW
    ¶29 The “practice of law” is a somewhat elusive term that can be
difficult to define, but “is generally acknowledged to involve the
rendering of services that require the knowledge and application of
legal principles to serve the interests of another with his consent.”
Utah State Bar v. Summerhayes & Hayden, Pub. Adjusters, 905 P.2d 867,
869 (Utah 1995). The practice of law is not limited to services
performed before the courts, “but in a larger sense involves
counseling, advising, and assisting others in connection with their
legal rights, duties, and liabilities.” Id. at 870.
    ¶30 Our exclusive authority to regulate the practice of law
“includes the power to determine what constitutes the practice of
law and to promulgate rules to control and regulate that practice.”
Id. We make these determinations on a case-by-case basis. See, e.g., id.
(holding that the “practice of third-party adjusting by public
adjusters falls clearly within the definition of the practice of law”).
    ¶31 The State contends that the regulation of attorney fees does
not fall within the practice of law, relying on Thatcher v. Industrial
Commission, 207 P.2d 178 (Utah 1949). In Thatcher, the plaintiffs
argued “that the regulation and fixing of fees of attorneys is
essentially and solely the power of the judiciary.” Id. at 181. But the
court did not agree. The court found it “unnecessary at this time to
determine whether the judiciary has the power to regulate or fix
fees” because it had “no doubt that [the] legislature, under its police
powers, has such right in [workers’] compensation cases.” Id. at 181–
82. The court did not address whether the power to regulate attorney
fees could be inferred from its inherent power to regulate admission
to the Bar or its power to discipline attorneys. Id. at 181. Instead, the
court opined that “[i]f there is power in the courts to fix a fee scale or
regulate fees, it has not been exercised.” Id. Thus, Thatcher did not
decide whether this court had the authority to regulate attorney fees.
The Thatcher court only held that under the version of the Utah
Constitution then in effect, the Utah Supreme Court did not have the
exclusive power to regulate fees.
    ¶32 But the supreme court was already regulating attorney fees
at the time, because the court had the power to determine what a
“reasonable” attorney fee is. In fact, Thatcher recognized this power
and imposed a “duty [upon] the commission by evidence to fix a fee
within the zone of reasonableness.” Id. at 184. The court also outlined
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rule 12 of the Revised Rules of the Utah State Bar, which the
supreme court approved in 1937. Id. at 183–84. This rule is
remarkably similar to today’s rule 1.5 of the Utah Rules of
Professional Conduct. Rule 12 required that in “fixing fees, lawyers
should avoid charges which overestimate their advice and services,
as well as those which undervalue them. A client’s ability to pay
cannot justify a charge in excess of the value of the service . . . .” Id. at
183 (quoting rule 12 of the Revised Rules of the Utah State Bar). Both
rule 12 and today’s rule 1.5 lay out several factors that should be
taken into consideration when calculating a “reasonable” attorney
fee: the time and labor required, the amount involved in the
controversy, the contingency or certainty of the compensation, etc.
Id. at 183–84; UTAH R. PROF. CONDUCT 1.5(a). The Thatcher court then
required the Commission to determine the zone of reasonableness
and that there is enough to show “from evidence adduced as to the
reasonable worth of the services rendered that the fee it fixes is
within the zone.” 207 P.2d at 184. Although the court did not fix the
fee in Thatcher, it opined that the fee agreed upon between the client
and the attorney was “within the range between the highest and
lowest reasonableness.” Id.
    ¶33 We hold that the regulation of attorney fees falls squarely
within the practice of law. It is something we have regulated since
before Thatcher and continue to regulate today. In rule 1.5, we
mandate that a “lawyer shall not make an agreement for, charge or
collect an unreasonable fee.” UTAH R. PROF. CONDUCT 1.5(a). We
have used this rule as a guideline in determining the reasonableness
of attorney fees in several cases. See Dahl v. Dahl, 2015 UT 79, ¶ 198,
___P.3d___ (holding attorney fees charged were excessive); Utah
State Bar v. Jardine, 2012 UT 67, ¶ 46, 289 P.3d 516 (determining
attorney fees were not excessive); Cabrera v. Cottrell, 694 P.2d 622, 625
(Utah 1985) (finding attorney fees to be reasonable even though fees
exceeded amount recovered in the contract dispute). Even in
Thatcher, we recognized that the supreme court is in a better position
than an administrative agency to determine the reasonableness of
attorney fees. See 207 P.2d at 183. Regulating attorney fees goes to the
very heart of the practice of law, inasmuch as it involves assessment
of the quality, amount, and value of legal services related to a legal
problem.
   ¶34 Therefore, today we decide what Thatcher left undecided—
that we have the power to regulate and fix attorney fees. Moreover,
by vesting the exclusive power to govern the practice of law with the
supreme court, the 1985 amendment to article VIII, section 4
invalidated Thatcher’s holding that the legislature has the authority

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                      INJURED WORKERS v. STATE
                         Opinion of the Court
to regulate attorney fees. 7 Even if Thatcher correctly allowed the
legislature to regulate fees at the time it was decided, this decision
has been preempted by this court’s now exclusive constitutional
authority to regulate attorney fees. The fee schedule the legislature
has authorized is therefore invalid.
    III. WE DECLINE TO ADOPT A FEE SCHEDULE REGULATING
           THE FEES OF INJURED WORKERS’ ATTORNEYS
   ¶35 We have determined that the constitutional separation of
powers doctrine forbids the legislature from regulating attorney fees.
That leaves this court with the responsibility to regulate fees.
Although we have the power to adopt a similar scheme, we decline
to do so at this time because (1) the policy considerations advanced
by the Labor Commission do not seem to outweigh countervailing
policy considerations, and (2) attorneys remain bound by rule 1.5
and the other Utah Rules of Professional Conduct—just as in any
other case—and therefore may charge only reasonable fees.
        A. The State Has Not Produced Evidence Showing that the Fee
                  Schedule Actually Protects Injured Workers
    ¶36 The Labor Commission created the fee schedule in an
attempt to protect “‘unsophisticated litigants’ with limited
bargaining power.” Despite good intentions in its adoption, the fee
schedule has not been shown to protect workers. Because of the fee
limitations and the cap, many attorneys are economically unable or
unwilling to take on injured workers’ cases. The district court noted
that “the collective totals of declined representation among only two
[attorney] Plaintiffs to this proceeding equal between 364 and 416
denials to injured workers each year.” There is also some evidence
that there are now very few attorneys willing to represent injured
workers in Utah and injured workers suffer as a result of being
unable to obtain representation.
    ¶37 Not only are injured workers limited in the quantity of
attorneys willing to take on their cases, they are also limited in the
quality of the attorneys’ work. IWA alleges that the fee schedule
results in smaller awards, because attorneys are disincentivized to
pursue awards above the capped amount. Attorneys have an
incentive to settle once they have reached the capped amount,

7 We stress that this opinion is limited to legislative attempts to
regulate the attorney-client relationship. We are not foreclosing the
legislature’s ability to designate statutory attorney fee awards. See,
e.g., Bilanzich v. Lonetti, 2007 UT 26, ¶ 11, 160 P.3d 1041 (“Generally,
attorney fees are awarded only when authorized by contract or by
statute.”).
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because any work to obtain a larger award for the client will be
performed without compensation.
    ¶38 The fee schedule heretofore in place additionally affects the
quality of representation because it exacerbates the differences
between worker and employer/insurer in an adversarial setting.
While workers’ attorneys are strictly limited in fees, and in complex
cases may not be able to afford adequate discovery, witnesses, etc.,
employers and their insurers suffer no such limitations. The
legislature originally assumed that this would not be a problem as
workers’ compensation cases tend to be more straightforward than
traditional common-law claims and do not involve questions of
fault. But even that lowered burden has not stopped employers and
insurers from investing heavily in defense against awards. See
Aldrich, Nelson, Weight & Esplin v. Dep’t of Emp’t Sec., 878 P.2d 1191,
1196 (Utah Ct. App. 1994) (noting that the legislative fee limits on
attorneys representing unemployment compensation claimants can
be unfair and inflexible “even in the face of extenuating
circumstances”).
    ¶39 We are persuaded at this time that the absence of a fee
schedule will allow injured workers the flexibility to negotiate
appropriate fees with their attorneys. For very simple cases, the
attorney and injured worker can negotiate a small fee, perhaps even
less than that mandated by the current fee schedule. For more
complex cases, the attorney and injured worker can come up with an
appropriate fee that will not cause the lawyer to lose money by
taking on the case and will still give the injured worker the
representation needed to receive an adequate award. Fears about
unscrupulous attorneys preying upon unsophisticated injured
workers are exaggerated, as attorneys are still constrained by rules of
professional conduct.
      B. Attorneys Remain Bound by the Rules of Professional Conduct
             and May Be Disciplined for Violations of These Rules
   ¶40 The preamble to the Utah Rules of Professional Conduct
explains that
      A lawyer is a representative of clients, an officer of the
      legal system and a public citizen having special
      responsibility for the quality of justice. Every lawyer is
      responsible to observe the law and the Rules of
      Professional Conduct, shall take the Attorney’s Oath
      upon admission to the practice of law, and shall be
      subject to the Rules of Lawyer Discipline and
      Disability.

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                     INJURED WORKERS v. STATE
                        Opinion of the Court
This court “has delegated to the Office of Professional Conduct
(‘OPC’) the responsibility of investigating allegations that an
attorney has violated the Rules of Professional Conduct.” UTAH
STATE BAR, UTAH STATE BAR OFFICE OF PROFESSIONAL CONDUCT,
http://utahbar.org/opc [https://perma.cc/H7ME-GNHQ] (last
visited May 6, 2016). If the OPC has determined a violation has
occurred, then the OPC will prosecute “in accordance with the Rules
of Lawyer Discipline and Disability.” Id. As outlined supra in Part II,
rule 1.5 of the Rules of Professional Conduct requires attorneys to
charge a reasonable attorney fee in all cases. Attorneys that violate
this rule may be subject to sanctions.
   ¶41 In Dahl v. Dahl, for example, we held that the attorney
violated rule 1.5 by charging an unreasonable fee. 2015 UT 79, ¶ 206,
___P.3d___. We recognized that when “an attorney proceeds
competently, but nonetheless is unsuccessful for his client, we
ascribe no error. But when an attorney consistently fails to perform
basic skills in a competent manner, and the client is harmed as a
result, we will not allow that attorney to collect patently
unreasonable fees.” Id. We thus invalidated the attorney’s fee
agreement with his client and referred the attorney to the OPC for
disciplinary proceedings. Id. ¶ 213.
   ¶42 We are therefore persuaded that injured workers are
adequately safeguarded by current rules against attorneys preying
on their awards and charging unreasonable fees. We therefore
decline to enact a fee schedule at this time.
                           CONCLUSION
    ¶43 Our state constitution explicitly grants the supreme court
the exclusive authority to govern the practice of law. The regulation
of attorney fees undoubtedly falls within the practice of law.
Although we have power to delegate this authority to the Bar and
maintain supervisory oversight, we cannot delegate the power to
govern the practice of law to the legislature or the Labor
Commission. This would violate the separation-of-powers clause
because the ability to delegate this authority to another branch of our
state government is not “expressly directed or permitted” in the text
of the Utah constitution. UTAH CONST. art. V, § 1; State v. Drej, 2010
UT 35, ¶ 25, 233 P.3d 476.
   ¶44 Utah Code section 34A-1-309 and Utah Administrative Code
R602-2-4(C)(3) violate both article VIII, section 4 and article V,
section 1 of our state constitution, and are therefore invalid
encroachments upon the powers of the judiciary.

                                  14
                       Cite as: 2016 UT 21
           ASSOCIATE CHIEF JUSTICE LEE, concurring in part

ASSOCIATE CHIEF JUSTICE LEE, concurring in part:

   ¶45 I agree with the court that the constitution grants the power
to regulate attorney fees only to this court and not to the labor
commission. And I concur in the majority opinion in full to the
extent of its analysis on that issue.
   ¶46 I cannot agree with the court’s analysis in Part III(A),
however. There the court “decline[s]” to “adopt” a fee schedule
similar to that endorsed by the labor commission. Supra ¶ 35. And it
does so on the basis of its conclusions that the record shows that
“there are now very few attorneys willing to represent injured
workers in Utah” under the schedule adopted by the labor
commission and that that schedule has also affected “the quality of
representation” afforded by counsel. Supra ¶¶ 36, 38.
    ¶47 The question of whether to adopt such a fee schedule is not
properly presented for our consideration. We have not been formally
asked to adopt our own fee schedule for regulating the fees of
injured workers’ attorneys through our rulemaking power. And
there is little or no evidence in the record to support the court’s
conclusions regarding the policy pros and cons of such a schedule.
For these reasons I would analyze only the question of the labor
commission’s authority to promulgate a fee schedule; I would not
offer an advisory basis for rejecting a hypothetical request that is not
before us.

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