Smith v. Department of Ins.
| Decision Date | 23 April 1987 |
| Docket Number | 69703 and 69704,Nos. 69551,s. 69551 |
| Citation | 12 Fla. L. Weekly 189,507 So.2d 1080 |
| Parties | , 12 Fla. L. Weekly 189, 12 Fla. L. Weekly 277, Prod.Liab.Rep. (CCH) P 11,363 Robert P. SMITH, Jr., et al., Appellants/Cross-Appellees, v. DEPARTMENT OF INSURANCE, et al., Appellees/Cross-Appellants. HARTFORD FIRE INSURANCE CO., Appellant/Cross-Appellee, v. DEPARTMENT OF INSURANCE, et al., Appellees/Cross-Appellants. REGENCY INSURANCE CO., et al., Appellants/Cross-Appellees, v. DEPARTMENT OF INSURANCE, et al., Appellees/Cross-Appellants. |
| Court | Florida Supreme Court |
Robert P. Smith, Jr., Tallahassee, in pro. per., with the Academy of Florida Trial Lawyers.
Alan C. Sundberg, Cynthia S. Tunnicliff and F. Townsend Hawkes of Carlton, Fields, Ward, Emmanuel, Smith, Cutler & Kent, P.A., Tallahassee, for The Cigna Ins. Group, et al.
Frederick B. Karl and Thomas J. Maida of Karl, McConnaughhay, Roland, Maida & Beal, P.A., Tallahassee, for American Ins. Ass'n, Nat. Ass'n of Independent Insurers, Alliance of American Insurers, et al.
Vincent J. Rio, III of Taylor, Day, Rio & Mercier, Jacksonville, for State Farm Ins. Companies.
Arthur J. England, Jr. and Charles M. Auslander of Fine, Jacobson, Schwartz, Nash, Block & England, P.A., Miami, for Hartford Fire Ins. Co.
Frederick B. Karl and Thomas J. Maida of Karl, McConnaughhay, Roland, Maida & Beal, P.A., Tallahassee, for Regency Ins. Co., et al.
Dominic M. Caparello of Messer, Vickers, Caparello, French & Madsen, Tallahassee, for American Indemn. Co. and American Fire and Indem. Co.
W. Donald Cox of Fowler, White, Gillen, Boggs, Villareal and Banker, P.A., Tampa, for Nationwide Mut. Ins. Co. et al.
Brian J. Deffenbaugh and R. Terry Butler, Office of General Counsel, and David A. Yon, Daniel Y. Sumner and John E. Hale, Office of Legal Services, Dept. of Ins., and Thomas M. Ervin, Jr. and Robert King High, Jr. of Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, for State of Fla., Dept. of Ins., et al.
William H. Adams, III and Robert J. Winicki of Mahoney, Adams, Milam, Surface & Grimsley, Jacksonville, for Florida Medical Ass'n, Inc.
DuBose Ausley, William M. Smith and Emily S. Waugh of Ausley, McMullen, McGehee, Carothers & Proctor, Tallahassee, for The Florida R.R. Ass'n and Florida Power & Light Co.
Edward T. O'Donnell of Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, for The Product Liability Advisory Council, Inc. and The Motor Vehicle Manufacturers Ass'n of the U.S., Inc., amici curiae.
This is an appeal from a circuit court judgment holding constitutional substantially all of chapter 86-160, Laws of Florida, known as the "Tort Reform and Insurance Act of 1986." The appellants are Robert P. Smith, Jr., with the Academy of Florida Trial Lawyers; Cigna Insurance Group, representing nine insurance companies; the American Insurance Association, National Association of Independent Insurers, and Alliance of American Insurers, representing 240 insurance companies transacting business in the State of Florida; and State Farm Insurance Companies. The appellees are the State of Florida, Department of Insurance; the Florida Medical Association, Inc., and the Florida Railroad Association, together with Florida Power and Light Company. This appeal comes directly to us under the provisions of article V, section 3(b)(5), Florida Constitution, having been certified by the First District Court of Appeal as an issue of great public importance requiring immediate resolution by this Court. We have accepted jurisdiction.
The trial court, in an extensive final judgment, held: (1) that chapter 86-160, Laws of Florida, did not violate the single subject prohibition of the constitution; (2) that the tort reform sections relating to a $450,000 cap on noneconomic damages, major modifications in joint and several liability, and other tort reform changes including relevant implementing provisions were constitutional; (3) that the insurance regulatory provisions increasing regulatory controls and freezing certain insurance rates were constitutional; and (4) that certain insurance premium rebate provisions, insofar as they retroactively apply to insurance contracts in force when the act became law, were unconstitutional. For the reasons expressed below, we affirm the judgment of the circuit court except that portion approving the $450,000 cap on noneconomic damages which we find unconstitutional.
The 1986 Tort Reform and Insurance Act is the legislative solution to a commercial insurance liability crisis which the legislature found existed. 1 For various reasons, both the insurance industry and the trial lawyers' bar challenge the act's constitutionality. The legislature, to ensure that the public and reviewing courts fully understood the reasons and purpose for enacting this legislation, set forth, in the preamble of the act, detailed legislative findings, including the following: (1) "that there is in Florida a financial crisis in the liability insurance industry, causing a serious lack of availability of many lines of commercial liability insurance"; (2) "that professionals, businesses, and governmental entities are faced with dramatic increases in the cost of insurance coverage"; (3) "the absence of insurance is seriously adverse to many sectors of Florida's economy"; (4) "that if the present crisis is not abated, many persons who are subject to civil actions will be unable to purchase liability insurance, and many injured persons will therefore be unable to recover damages for either their economic losses or their noneconomic losses." 2
The multiple challenges to this act will be discussed in three parts: Part I, The Single Subject Requirement; Part II, Tort Reforms; and Part III, Insurance Regulatory Changes.
Part I. Single Subject Requirement
All the appellants, both the trial lawyers and the insurance companies, contend that chapter 86-160 violates article III, section 6, of the Florida Constitution because it contains multiple subjects. That section of the Florida Constitution provides "Every law shall embrace but one subject and matter properly connected therewith...." We have addressed and rejected single subject challenges to similar legislative acts in State v. Lee, 356 So.2d 276 (Fla.1978), and Chenoweth v. Kemp, 396 So.2d 1122 (Fla.1981).
In Lee, the subject legislation was chapter 77-468, a comprehensive auto insurance and tort reform statute. We explained the act as a legislative attempt to "deal comprehensively with tort claims and particularly with the problem of a substantial increase in automobile insurance rates and related insurance problems." 356 So.2d at 282. Appellees argued that the statute contained "at least two separate subjects, insurance and tort reform." Id. We explained the reasoning behind the constitutional restriction:
The purpose of the constitutional prohibition against a plurality of subjects in a single legislative act is to prevent a single enactment from becoming a "cloak" for dissimilar legislation having no necessary or appropriate connection with the subject matter.
Id. (citation omitted). We found no single subject violation in Lee and said: "Given the profound effect of tort litigation on all phases of the automobile insurance industry, we cannot say that tort law and automobile insurance have no logical connection." Id.
In Chenoweth, appellants contended that chapter 76-260 was unconstitutional because the chapter contained malpractice tort reform and insurance reform in one act. We held that medical malpractice and insurance relate to tort litigation and insurance reform and that they have a natural or logical connection. We reiterated that "the subject of an act 'may be as broad as the Legislature chooses as long as the matters included in the act have a natural or logical connection.' " 396 So.2d at 1124 (quoting from Board of Public Instruction v. Doran, 224 So.2d 693, 699 (Fla.1969)).
Further, in Fine v. Firestone, 448 So.2d 984 (Fla.1984), we distinguished between the single subject requirement contained in article XI, section 3, for constitutional initiative petitions and the single subject requirement for legislative acts contained in article III, section 6. In regard to legislative acts, we stated, "[W]e have taken a broad view of this legislative restriction," id. at 988 (emphasis added), and explained why the two constitutional provisions should be distinguished, stating:
First, we find that the language "shall embrace but one subject and matter properly connected therewith" in article III, section 6, regarding statutory change by the legislature is broader than the language "shall embrace but one subject and matter directly connected therewith," in article XI, section 3, regarding constitutional change by initiative.
Id. at 988-989. We also stated that we should take a broader view of the legislative provision because in that process there was an opportunity for legislative debate and public hearing which was not available under the initiative scheme for constitutional revision, and, also, that we should require strict compliance with the single subject rule for initiative constitutional change because our constitution is the basic document that controls our governmental functions.
In the instant case, appellants claim that chapter 86-160 goes further than the statutes upheld in Lee and Chenoweth. Appellants argue that our decisions in those two cases mark the outer limits of permissible subject matter inclusion if the single subject requirement is to remain a viable restriction. Appellants also take the position that chapter 86-160 contains not only insurance regulation and tort reform, but also broad reforms in the civil damage litigation area. We disagree.
Chapter 86-160 is extensive, but can easily be divided into five basic areas. We use the words of the trial judge to summarize the five parts of the act. The first part contains long-term insurance reform which "(a)...
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