Court Opinion

ID: 9719474
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:53:57.16241+00
Date Added: 2024-06-11T18:24:07.589276
License: Public Domain

RUSSELL A. ANDERSON,
Justice (dissenting).
I respectfully dissent. The narrow issue before us is the validity of section 176.081, *145subd. 1(a)(1) (1998) as it relates to the calculation of an injured employee’s attorney fees when such fees are shifted to the employer and its workers’ compensation carrier. Given that the subject matter is a statutory right imposed on the employment relationship pursuant to the police power of the state, and in view of the American Rule pursuant to which courts may not award fees against the unsuccessful party in the absence of a statute or contract, I can only conclude that statutory limitations on fee shifting do not violate the Separation of Powers Clause of our constitution. While the limitations contained in the current legislation might implicate serious due process concerns to the extent they might deprive a claimant of adequate legal representation, they do not amount to an assumption of judicial power.
The majority relies in large measure on dictum found in Mack v. City of Minneapolis, 333 N.W.2d 744, (Minn.1983), to conclude that statutory limitations on fees effectively deny judicial review, in the sense that fees may not be awarded beyond the statutory maximum, and therefore violate the Separation of Powers Clause. See id. at 752-53. The relators in Mack asserted a separation of powers challenge to the legislative imposition of limits on fees and the assignment of responsibility to set those fees to the workers’ compensation commission. See id. Although the Mack court surmised constitutional boundaries to the regulation of fees, it was the legislative assignment of quasi-judicial functions to the workers’ compensation commission, the executive branch, which caused separation of powers concern and not the establishment of statutory limitations on fees in the first instance by the legislature. See id. Given this court’s review of fees set by the commission, and in view of the nearly uniform practice throughout the country of assigning responsibility for the supervision of fees to the commission or court handling compensation administration, we declined to invalidate the statute allowing the commission to set those fees as a violation of the Separation of Powers Clause. See id. at 753. In the present case, however, the majority has essentially declared that legislative limitations on fees encroach on the judiciary’s inherent power to regulate attorneys and their fees.
Under the “American Rule,” unless authorized by statute or contractual agreement between the parties, “the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser,” Alyeska Pipeline Co. v. Wilderness Soc’y, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). The rule dates back to the beginning of the United States federal system. See, e.g., Arcambel v. Wiseman, 3 U.S. (3 Dall.) 306, 306, 1 L.Ed. 613 (1796). That fees may not be shifted in the absence of a statute or contract was settled more than 100 years ago in this state by Kelly v. Rogers, 21 Minn. 146, 152-53 (1874). With limited exception, this court has consistently adhered to the American Rule. See, e.g., Kallok v. Medtronic, Inc., 573 N.W.2d 356, 363 (Minn.1998); Fownes v. Hubbard Broadcasting, Inc., 310 Minn. 540, 542, 246 N.W.2d 700, 702 (1976); Benson Cooperative Creamery Association v. First Dist. Ass’n, 276 Minn. 520, 530, 151 N.W.2d 422, 428 (1967). The obvious corollary of this oft-recognized rule that fees may not be shifted absent contractual or legislative authorization is that the legislature, not the court, has the power to determine when, or if, an attorney should be awarded attorney fees against unsuccessful litigants. In my view the legislature has the power to determine when such fees should be awarded and in addition possesses, inherent within this power, the authority to establish statutory máximums. Our role is to review the application of this statutory scheme to ensure that the lower courts have applied it properly.
The majority also contends that a statutory maximum infringes on this court’s power to regulate the practice of law. I disagree. In the context of compensation *146for attorneys representing indigents in criminal cases, courts elsewhere have acknowledged that statutory máximums on fees do not infringe on the court’s power to regulate the practice of law. See, e.g., Pickens v. State, 301 Ark. 244, 783 S.W.2d 341 (1990); Makemson v. Martin County, 491 So.2d 1109, 1112 (Fla.1986), cert. denied, 479 U.S. 1043, 107 S.Ct. 908, 93 L.Ed.2d 857 (1987). The role of the legislature in restricting attorney fees in workers’ compensation matters has long been recognized as a proper exercise of the police power of the state. See Yeiser v. Dysart, 267 U.S. 540, 541, 45 S.Ct. 399, 69 L.Ed. 775 (1925). In fact, most states have statutory restrictions on workers’ compensation fees. See 8 Arthur Larson and Lex K. Larson, Larson’s Workers’ Compensation Law, § 83.14 at 15-1416 (1998). In that the regulation of workers’ compensation fees is a proper legislative function, I would not invoke the Separation of Powers Clause as a basis for invalidating the statute.
That is not to say, however, that the absolute ceiling on fees for the recovery of medical benefits would necessarily be constitutionally permissible. But unless it can be shown that a regulatory scheme makes legal representation unavailable, evidencing the illegitimacy of the scheme, the scheme does not violate constitutional protection. See United States Dep’t of Labor v. Triplett, 494 U.S. 715, 724, 110 S.Ct. 1428, 108 L.Ed.2d 701 (1990). Although relators argue that the statutory limitation on fees for the recovery of medical benefits deprives claimants of adequate legal representation, no evidence was heard or factual findings made. I would remand these cases to the compensation division for the development of a record, factual findings and legal conclusions pertaining to whether workers’ compensation claimants are unable to retain qualified counsel and whether the cause of such inability is the fee system set up by the legislature.