3d DCA Rules Florida's Proposal for Settlement Laws Conflict With Federal Maritime Law

04.14.14 | Permalink

Posted by: Armando G. Hernandez

On April 9, 2014, the Third District Court of Appeal of Florida issued an en banc opinion in Royal Caribbean Cruises, Ltd. v. Cox, Case No. 3D09-2712. The case put to rest decades of unrest and tension between the status of Florida’s offer of settlement law as interpreted by the Third District and federal maritime law. The Third District finally aligned itself with its sister courts and Florida’s federal courts in holding that Florida’s offer of judgment laws conflict with federal maritime law and a prevailing party is not entitled to recover attorney’s fees. 

There is a protracted procedural history to this matter.  The plaintiff, Mr. Bryon Cox, brought suit against Royal Caribbean in the underlying suit to recover for personal injuries sustained while employed aboard a Royal Caribbean vessel. Mr. Cox served an offer of judgment pursuant to Florida Statute §768.79 and Florida Rule of Civil Procedure 1.442. Royal Caribbean moved to strike the offer of judgment, arguing that §768.79 conflicted with federal maritime law. In response, Mr. Cox cited Royal Caribbean Corp. v. Modesto, 614 So. 2d 517 (Fla. 3d DCA 1992) (holding that Florida statute providing for confidentiality of mediation proceedings was not preempted by maritime law and finding “no conflict between Florida’s rule of law regarding offers of judgment and federal maritime law.”). The case proceeded to trial and the jury found in favor of Mr. Cox, who sought attorney’s fees based on his offer of judgment. The trial court judge granted an award of $245,856.87 in attorney’s fees pursuant to plaintiff’s offer of judgment. 

The original appeal was taken from the trial court’s order, which the Third District affirmed, relying on the rationale enunciated in Modesto. Royal Caribbean moved for a rehearing en banc. The en banc panel consisted of Chief Judge Frank Shepherd and Judges Well, Suarez, Rothenberg, Lagoa, Salter, Emas, Fernandez, Logue and Scales. On rehearing, Royal Caribbean argued that the Third District should recede from the ruling in Modesto

By way of background, and contrary to Modesto,several other state and federal courts have held that “under federal admiralty law, the prevailing party is not entitled to attorney’s fees . . . even when a state statute establishes an entitlement to fees.” See Nicoll v. Magical Cruise Co., 110 So. 2d 98, 98 (Fla. 5th DCA 2013) (citing Misener Marine Constr., Inc. v. Norfolk Dredging Co., 594 F.3d 832, 841 (11th Cir. 2010) (explaining that federal maritime law follows the American rule regarding attorney’s fees); Texas A&M Research Found. v. Magna Transp. Inc., 338 F.3d 394, 405 (5th Cir. 2003); Am. Nat'l Fire Ins. Co. v. Kenealy, 72 F.3d 264, 270 (2d Cir. 1995); Southworth Mach. Co. v. F/V Corey Pride, 994 F.2d 37, 41 (1st Cir. 1993); Su v. M/V S. Aster, 978 F.2d 462, 475 (9th Cir. 1992); Sosebee v. Rath, 893 F.2d 54, 56–57 (3d Cir. 1990)); see also Garan, Inc. v. M/V Aivik, 907 F.Supp. 397, 400 (S.D. Fla. 1995) (finding that Modestomisconstrued the holding in Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962), involving an exception for a discretionary award of attorneys' fees in the maritime context when the non-prevailing party has acted in bad faith).

Given the uncertainty Modesto generated, the issue of whether state-based recovery of attorney’s fees is compatible with federal maritime law was ripe for clarification and decision. Ultimately, the Third District Court of Appeal receded from Modesto and finally clarified that Florida’s offer of judgment statute conflicts with federal maritime law. The Third District stated a prevailing party is not entitled to attorney’s fees under federal maritime law absent certain exceptional circumstances (i.e. bad faith) even when a state statute establishes entitlement. 

One of the overarching and central tenets of maritime law is uniformity, which the recent en banc decision aims to serve. See Texas A&M Research Found., 338 F.3d at 405. The decision has the practical and immediate impact of rendering any already filed or pending proposals for settlement relying on Modesto in a maritime action a nullity and non-enforceable. This ruling is especially significant given the prevalence of forum selection clauses in Miami, which is the epicenter of the cruising industry. The en banc decision is a neutralizer for both plaintiffs and defendants as the offer of judgment rule and statute can apply pressure and encourage settlement on both sides. The recent decision also impacts the already strategic choice-of-law decision and manner of pleading between admiralty and state substantive law. 

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Beware of Attorney Charging Liens

11.06.13 | Permalink

Posted by: Damien A. Orato

Attorneys’ fee liens, commonly referred to as “charging liens,” pose a difficult problem for defendants.  Increasingly, plaintiffs are represented by multiple attorneys due to plaintiffs switching attorneys or attorney referrals.  This is particularly true in product liability cases where it is typical for the original plaintiff’s attorney to refer the case to an attorney specializing in product liability.  Sometimes former plaintiff’s attorneys file a formal notice of lien in the lawsuit.  However, other times the former plaintiff’s attorney does not file a formal lien notice with the court.  When a settlement is reached it is typical for the defendant to require the plaintiff to resolve all liens, including any attorney charging liens, as a condition of the settlement.  However, if the plaintiff and current plaintiff’s attorney fail to resolve a charging lien, then the former attorney claiming a charging lien may seek to collect from defendant either in the original action or in a separate action.


Under Florida law, a former attorney’s charging lien is enforceable against a defendant.  Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik, P.A. v. Baucom, 428 So. 2d 1383, 1385 (Fla. 1983).  When a defendant has notice of a charging lien before settlement of the case, the defendant may be held liable to the former plaintiff’s attorney.  The Florida Supreme Court has held that “there are no requirements for perfecting a charging lien beyond timely notice.”  Id.  Florida courts have found that “to give timely notice of a charging lien an attorney should either file a notice of lien or otherwise pursue the lien in the original action.”  Daniel Mones, P.A. v. Smith, 486 So. 2d 559, 561 (Fla. 1986).  While courts have not defined what constitutes “pursuit” of the lien, the former attorney is probably not required to file a formal notice of lien with the Court to perfect the charging lien.  Any notice of the charging lien, regardless of form, at any stage of the lawsuit, may be sufficient to hold a defendant liable for the charging lien. 


Because of the risk that charging liens pose to defendants, it is important that defendants identify any potential charging liens.  Defendants should include an indemnification provision in the settlement agreement that requires the plaintiff to indemnify the defendant against any charging liens.  However, this provision often provides limited protection, because the plaintiff has exhausted the settlement money and lacks other assets.  Florida Bar Rules prevent defendants from including indemnity provisions in settlement agreements that would require the settling plaintiff’s attorney to indemnify the defendant should a lienholder assert a claim. Therefore, when significant settlement sums are involved, a defendant should take steps to ensure that the charging liens are resolved as part of the settlement reached with the settling plaintiff’s attorney.  For example, a defendant can refuse to disburse the settlement funds until the plaintiff proves that any charging liens have been resolved.  By taking steps to ensure that plaintiff’s and settling plaintiffs’ attorneys comply with their duties to resolve any liens, defendants can minimize their exposure to charging liens. 


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What Lies Ahead as Florida Transitions to Daubert

06.04.13 | Permalink

Posted by: Armando G. Hernandez

Florida Governor Rick Scott has signed into law a piece of legislation that transforms Florida into a Daubert jurisdiction, aligning Florida courts with their federal counterparts. Florida was one of only 10 remaining hold-outs in the minority of states still applying the nearly century-old requirements of Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). In its third year up for vote, the Florida legislature finally approved the legislation and teed it up for the Governor’s approval.         

Florida’s recent expert testimony reform and amendment of Florida Statute §90.702, makes the standard of admissibility of expert testimony in Florida courts stricter and more exacting. Simply stated, the Daubert standard requires that:

a)     the testimony is based on sufficient facts or data;

b)     the testimony is the result of reliable principles and methods; and

c)      the witness has applied the principles and methods reliably to the facts of the case.

The Daubert standard contemplates the trial court as a “gatekeeper” that independently assess the scientific validity and reliability of the reasoning, methodology and principles underlying proffered expert evidence. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Under the Daubert standard, the trial court can exclude a scientific expert’s opinion even if the expert had used reliable and accepted methodology if the trial court, as gatekeeper, determined the expert’s conclusion(s) were unsupported by the given methodology’s data. See General Electric Co. v. Joiner, 522 U.S. 136 (1997). The Daubert standard is applicable to all experts under Federal Rule of Evidence 702 and is not limited in its reach to only “scientific” experts. See Kuhmo Tires Co. v. Carmichael, 526 U.S. 137 (1999). Pure opinion testimony, which differs from offering a scientific fact, will no longer be admissible unless the opinion testimony satisfies the Daubert test.

There are several upsides to the change to Daubert. The prospect of Daubert hearings to challenge the validity of expert testimony may serve as a disincentive to some plaintiffs from bringing suit in the first place. Novel scientific expert testimony used to establish causation may likely be scrutinized to a greater degree, which in turn will prohibit the introduction of unreliable and unsupported expert testimony. A successful challenge of a plaintiff’s expert witness on Daubert grounds can put a prompt and definitive end to a plaintiff’s case. Verdicts predicated upon “junk science” may become less common.

Opponents of the reform contend that a shift to the more expansive Daubert standard will lead to an increase in costs, mini-trials, prolonged litigation, and parties retaining experts to testify about other experts as well as the reliability of the principles and methods. Opposing counsel will likely argue that defense counsel is merely stalling the litigation with motions challenging plaintiff’s experts, there is meager precedent regarding Florida’s application of Daubert, and pivot to policy concerns regarding wastedmoney, time and judicial resources involved in expert challenges.  

The new law will take effect on July 1, 2013 and is not intended to apply retroactively. The inclusion of an effective date in the enacting legislation rebuts any argument that the legislature intended retroactive application. Any attempts to enforce the law in the interim period from the date the governor signs the legislation into law until the actual date of enactment for trials during that interim period will likely prove futile. Therefore, the reformed standard will apply to all cases tried on or after July 1, 2013, even if the case was filed prior to the enactment date. Moreover, for any cases retried following a favorable appellate decision after July 1, 2013, the case would likely be tried under Daubert.

The effective date and temporal application of the law will present various issues in pending litigation. Practioners and clients alike with pending state court cases will be faced with procedural conundrums and strategic considerations. 

Hypothetical #1: Several, if not all, expert depositions have already been taken but trial is post-enactment. Defense counsel may want to consider opening up any expert depositions for the limited purpose of determining any unknown basis to strike on Daubert grounds. Alternatively, defense counsel may seek to propound expert interrogatories to obtain that information.

Hypothetical #2: Several, if not all, expert depositions have already been taken but trial is post-enactment. Defense counsel did not update the Frye depositions and has not yet moved to strike any experts. Under such circumstances, defense counsel may want to strike the experts under Daubert.

Hypothetical #3: Several, if not all, expert depositions have already been taken but trial is post-enactment. Defense counsel has filed Frye motions to strike experts. Defense counsel may need to amend the motions applying the Daubert standard and conduct any necessary Daubert hearings. 

Hypothetical #4: Post-enactment, plaintiff seeks to amend or substitute experts given the shift to Daubert. Will the Court allow plaintiffs in cases to do so? As a result, will all discovery be reopened or extended?       

All in all, here is what can reasonably be anticipated. There will be varying degrees of understanding, adaptation, and rulings from different trial court judges given their varying levels of experiences in federal court and familiarity with Daubert. Pre-trial motion practice may see an increase in the early stages of the transition. The Florida Senate expected as much. Motions for continuance will likely be more liberally granted for pending cases that are set for trial close in time to the enactment date. Court dockets may experience a temporary backlog. A 2011 study on the effects of the Daubert standard revealed a noteworthy increase in Daubert challenges to all types of experts from 2000 to 2010. The study also revealed a 49% success rate of having experts stricken in whole or in part. Members of the plaintiff’s bar who are unaccustomed to litigating in federal court will be at a disadvantage. 

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Recent Updates

04.14.14  3d DCA Rules Florida's Proposal for Settlement Laws Conflict With Federal Maritime Law  Read Article >>

11.06.13  Beware of Attorney Charging Liens  Read Article >>

06.04.13  What Lies Ahead as Florida Transitions to Daubert  Read Article >>

05.02.13  Florida's 4th DCA Underlines Importance of Rules Governing Depositions of Designated Corporate Representatives  Read Article >>

04.08.13  Update Regarding Florida's Proposed Product Liability Instructions  Read Article >>

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