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Filing # 45201254 E-Filed 08/15/2016 10:23:19 AM

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIALCIRCUIT


IN AND FOR MIAMI-DADE COUNTY, FLORIDA
JAMES F. FEE, JR., Individually,
Plaintiff,
vs.

CASE NO. 2016-020607-CA-01

THE NATIONAL COUNCIL ON


COMPENSATION INSURANCE, INC.,
A Delaware not for profit corporation,
THE FLORIDA OFFICE OF INSURANCE
REGULATION, an agency of the State of
Florida, and DAVID ALTMAIER, as
Commissioner of the Florida Office
Insurance Regulation,
Defendants.
________________________________________/
DEFENDANT, THE NATIONAL COUNCIL ON COMPENSATION INSURANCE,
INC.S RESPONSE IN OPPOSITION TO PLAINTIFFS AMENDED EMERGENCY
MOTION FOR EXPEDITED HEARING
Defendant, The National Council on Compensation Insurance, Inc. (NCCI), by and
through undersigned counsel, responds in opposition to Plaintiff, James F. Fee, Jr.s Amended
Emergency Motion for Expedited Hearing, and states:
SUMMARY OF ARGUMENT
1. Plaintiff seeks a hearing on the merits of this case before he has even served the
Defendants with a copy of his Complaint, and appears to be seeking such via a hearing on an
improperly pled temporary injunction, despite the fact that Plaintiff cannot meet the requirements
for a temporary injunction and indeed has not even attempted to meet such requirements. As
more fully developed below, Plaintiff is not entitled to the relief he requests for four primary
reasons:

First, the OIR has filed a Motion to Transfer Venue based on its home venue
privilege, and that motion must be heard and ruled upon prior to a decision on the
merits;

Second, Plaintiffs alleged emergency is of his own creation;

Third, NCCI is not subject to Floridas public records laws, and therefore an
expedited hearing pursuant to section 119.11, Florida Statutes, is moot; and

Finally, section 86.111 does not provide for the type of expedited hearing requested
by Plaintiff, and any expedited hearing granted under section 86.111 should not be
scheduled until the Complaint has been served on all Defendants and the Defendants
have been able to conduct appropriate discovery into Plaintiffs allegations.

2. Importantly, Plaintiff filed his Complaint in an improper venue, as demonstrated by the


Motion to Dismiss/Transfer Venue filed by the Office of Insurance Regulation and the Insurance
Commissioner. The Venue Motion must be heard, and the Complaint dismissed, or transferred
to Leon County, before any hearing on the merits can be conducted.
3. Plaintiffs alleged emergency is also of his own creation, and no true emergency exists.
Although Plaintiff and his counsel have known for weeks (as demonstrated by the July 26, 2016
correspondence attached as Exhibit 2 to the Complaint) of the issues he now alleges necessitate
emergency relief, Plaintiff waited until 10:44PM on Wednesday, August 10th to file his
Complaint. Plaintiff then appears to have waited until 7:59PM on Friday, August 12th, to file his
Emergency Motion for Expedited hearing. Plaintiff has still not served the Complaint on all
Defendants to this action.
4. Plaintiffs sole basis for seeking an expedited hearing is based on his allegations that
NCCI has not complied with Floridas public records laws. Plaintiff alleges that he is entitled to

an expedited hearing pursuant to section 119.11, Florida Statutes, to determine whether NCCI
has complied with Floridas public records laws. However, NCCI is not subject to Floridas
public records laws, and the requested hearing is therefore moot. Additionally, Plaintiffs
Amended Motion appears to seek a hearing far broader than that permitted by section 119.11,
and appears instead to be seeking an improper temporary injunction to prevent the scheduled
August 16, 2016, hearing before the Office of Insurance Regulation (OIR) from being
conducted until after the allegations in this case (including allegations having nothing to do with
Floridas public records laws) are heard. There is no basis in law for such relief, and Plaintiff
has failed, indeed not even attempted, to demonstrate the elements required to obtain a temporary
injunction. Presumably because Plaintiff cannot meet the requirements for a temporary
injunction, Plaintiff instead invites error by seeking to improperly obtain the same relief through
the guise of a section 119.11 hearing.
5. Finally, although Plaintiffs Amended Motion includes a cursory reference to section
86.111 as permitting an expedited hearing to be held, section 86.111 does not provide for the
type of expedited hearing requested by Plaintiff, and any expedited hearing granted under section
86.111 should not be scheduled until the Complaint has been served on all Defendants and the
Defendants have been able to conduct appropriate discovery into Plaintiffs allegations.
Additionally, as Plaintiff admits in his Motion, even if this case could somehow affect the OIRs
approval of NCCIs amended rate filing, the rate will not be effective for insurers which utilize
NCCIs rates unless it is approved following the August 16th public hearing, and even if
approved will not be effective until October 1, 2016 at the earliest. Moreover, the OIRs Notice
of Public Hearing states that public comments will be accepted until August 23, 2016.

6. In sum, Plaintiff has no legal right to the relief he requests. Moreover, the relief
requested by Plaintiff, essentially an improper temporary injunction delaying the August 16th
OIR hearing, could cause severe public harm, as workers compensation rates are currently not
adequate to meet claims. Delaying the hearing would likely delay the effective date of any
necessary rate increase. Thecombined total statewide unfunded liability to workers
compensation insurers (including self-insurers) estimated up to October 1, 2016 could potentially
exceed $1 billion dollars. If delayed, the unfunded liability will increase by tens of millions of
dollars each month and may threaten the solvency of Florida workers compensation insurers and
their ability to pay claims. Insurers may react to this threat in ways that impact the availability
and affordability of insurance products for Florida employers. For the above reasons, as
discussed in more detail below, NCCI requests the Motion be denied, the Venue Motion be
granted, and this case be heard in an orderly fashion in accordance with applicable rules of
procedure.
FACTUAL BACKGROUND
7. NCCI is a national workers compensation rating, advisory, and statistical organization,
which is licensed by the State of Florida to make workers compensation rate filings on behalf of
its members and subscribers, licensed Florida workers compensation insurers, subject to
regulatory approval.
8. The OIR is an agency of the State of Florida, to which the Florida Legislature has
delegated the authority to regulate insurance companies and related organizations, including
rating organizations like NCCI, that provide services to entities licensed to transact insurance in
Florida.

9. On April 28, 2016, the Supreme Court of Florida issued its decision in Castellanos v.
Next Door Co., 192 So. 3d 431 (Fla. 2016), which declared the mandatory attorney fee schedule
set forth in section 440.34, Florida Statutes, unconstitutional. As a result of this decision, and
2016 Senate Bill 1402, which ratified updates to the Florida Workers Compensation
Reimbursement Manual for professional health care providers, NCCI proposed a rate increase of
17.1% in order to account for the additional insurance liability which will be incurred by
insurers.
10. On May 27, 2016, NCCIs proposed rate filing was submitted to the OIR on behalf of
those insurers who are members or subscribers of NCCI in this state, pursuant to section
627.091, Fla. Stat.
11. On June 30, 2016, NCCI amended its rate filing to include the estimated impact on
workers compensation insurer liability resulting from the Florida Supreme Courts decision on
June 9, 2016 in Westphal v. City of St. Petersburg, etc. et al, No(s) SC13-1930 and SC13-1976,
2016 WL 3191086 (Fla. June 9, 2016). The amended rate filing proposed an overall average rate
level increase of 19.6% for industrial classifications, as the existing workers compensation rates
are inadequate, in part, due to the rulings in Castellanos and Westphal. Current projections
demonstrate the unfunded liability for workers compensation to date may exceed $1 billion
dollars, and a continuation of inadequate rates could threaten the solvency of Florida workers
compensation insurers, as workers compensation insurers in Florida are prohibited from
recouping prior losses or recouping unfunded liabilities. The rate level increase is required to
ensure the rates charged by workers compensation insurers are not inadequate and in violation
of statutory requirements for insurance rates in Florida pursuant to section 627.062, Florida
Statutes.

12. The OIR determined that it was in the public interest to hold a public hearing to hear
public comment and determine whether the amended rate filing meets the requirements of
chapter 627, Florida Statutes. On July 1, 2016, in accordance with section 627.101, Florida
Statutes, the OIR issued a Notice of Public Hearing, to be held on August 16, 2016.
13. Thousands of pages of NCCI filings, including filings related to the August 16, 2016,
hearing, are publicly available online from the OIR, and have been available for review prior to
the public hearing. Indeed, Plaintiff retained the services of an actuary who obtained such
publicly available documents and has already prefiled his own testimony with the OIR for
purposes of the August 16, 2016, hearing. Plaintiffs actuary has also advised that he will be
testifying at the August 16th hearing on behalf of the Plaintiff.
14. On August 10, 2016, 41-days after OIR issued the Notice of Public Hearing and 6 days
prior to the hearing, Plaintiff filed his Complaint in this Court against the OIR, the Insurance
Commissioner, and NCCI. In addition to a number of other allegations, the Complaint
incorrectly alleges that NCCI is subject to Floridas public records laws and was, and is, required
to provide Plaintiff with more information on the proposed rate increase than NCCI was required
by law to provide to OIR.
15. On August 12, 2016, at 7:59 P.M., Plaintiff filed an Amended Emergency Motion for
Expedited Hearing, seeking an expedited hearing pursuant to section 119.11, Florida Statutes.
As of the time of this filing Plaintiffs Complaint has not been served on all Defendants.
Plaintiffs counsel emailed a copy of the Complaint and Motion to NCCIs counsel after 8PM on
Friday, August 12th, and stated that NCCI would be formally served with the Motion and the
Complaint on Monday, August 15, 2016. Plaintiffs email is attached hereto as Exhibit A.

16. On August 15, 2016, the OIR and the Commissioner filed a Motion to Transfer Venue,
seeking an order transferring venue in this matter to Leon County, where the OIR is
headquartered, pursuant to the home venue privilege afforded to the State, its agencies, and its
political subdivisions.
MEMORANDUM OF LAW
Plaintiff is not entitled to the emergency hearing it seeks for several reasons. First, the
OIRs pending Motion to Transfer Venue must be heard and venue transferred prior to a hearing
on the merits. Second, the alleged emergency is of the Plaintiffs own making. Third, the
Florida Public Records Act does not apply to NCCI, a private corporation, and the expedited
hearing permitted by section 119.011 is therefore not applicable. Fourth, even if chapter 119
applied and Plaintiff was entitled to an expedited hearing regarding public records issues,
Plaintiff is not entitled to an expedited hearing, let alone an emergency hearing, on its other
allegations.
I.

The OIRs Motion to Transfer Venue Must Be Heard Before the Merits of this Case
are Considered
As detailed in the OIRs Motion to Transfer Venue, [i]t has long been established

common law of Florida that venue in a civil actions brought against the state or one of its
agencies or subdivisions, absent waiver or exception, properly lies in the county where the state,
agency, or subdivision, maintains its principal headquarters. Carlile v. Game & Fresh Water
Fish Commn, 354 So. 2d 362, 363-64 (Fla. 1977). The purpose of the home venue privilege
given to state agencies is to promote orderly and uniform handling of state litigation and to
minimize expenditure of public funds and manpower. Fish and Wildlife Conservation Commn
v. Wilkinson, 799 So. 2d 258, 263 (Fla. 2d DCA 2001) (marks and citation omitted). It is
undisputed that the OIRs principal headquarters are in Leon County, Florida. Accordingly,

venue for this lawsuit is improper, and the case should either be dismissed, or venue transferred
to Leon County, prior to any determination on the merits. See, e.g., Fla. Dept of Mgmt. Serv. v.
Fastrac Const. Inc., 701 So. 2d, 1200 (Fla. 5d DCA 1997) (reversing order requiring a state
agency to litigate the merits while a motion to transfer venue based on home venue privilege was
pending because by requiring the Department to litigate the merits, the order fixes the locus of
the action, and thus concerns venue); Straughn v. Grootemaat, 291 So. 2d 669, 669 (Fla. 2d
DCA 1974) (reversing denial of motion to transfer venue and vacating order on motion to
dismiss because the motion should not be considered until after the change of venue has been
accomplished).
Any assertion by Plaintiff that this Court should rule on the merits of this case prior to
venue being transferred would be a clear violation of Florida law, and would violate the
Defendants due process rights to properly and completely defend themselves against claims
brought against them in the proper court.

II.

An Expedited Hearing Pursuant to 119.11, Florida Statutes is Not Warranted


Because NCCI is Not Subject to Floridas Public Records Act.
Plaintiffs request for an expedited hearing regarding NCCIs alleged failure to comply

with Floridas Public Records Act (chapter 119, Florida Statutes) must be rejected, as NCCI is
not subject to chapter 119. Plaintiffs assertion that NCCI is subject to chapter 119 is based on
an apparent misunderstanding by the Plaintiff of NCCIs business and duties.
Plaintiff alleges that because NCCI is responsible for researching, analyzing and filing
[workers compensation rates] on behalf of the vast majority of insurers within the State, it has
been delegated an otherwise governmental responsibility and is therefore acting on behalf of a
governmental agency. This assertion is incorrect. NCCI is not a state agency, and does not

possess any authority delegated by a state agency with regard to workers compensation rate
filings. Instead, NCCI is a private corporation, organized under the laws of the State of
Delaware, which performs a private function on behalf of private insurance companies
throughout Florida. NCCI is therefore not an agent of the state, but is a private company which
provides services to private insurers who are members or subscribers of NCCI.
Contrary to Plaintiffs assertions, the Florida legislature delegated to the OIR the
authority to regulate insurance rates as herein provided to the end that they shall not be
excessive, inadequate or unfairly discriminatory. 627.031, (1)(a), Fla. Stat. The OIR
complies with its regulatory responsibilities by requiring all insurers, and rating organizations,
to file rates, classifications, rules, and rating plans with the OIR. See 627.091(1), Fla. Stat. In
lieu of making its own rate filing, a workers compensation insurer may adopt the rate
recommendation filed by a rating organization. Upon receipt of the filed rates (whether filed by
an individual insurer or a rating organization such as NCCI), the OIR reviews such rates to
determine if they meet the statutory requirements, and such rates do not become effective until
they are approved by the OIR.

627.101, Fla. Stat.

The OIR has not delegated its

responsibility to NCCI as it does not solely rely on the recommendation of NCCI. The OIR
considers other information, conducts an independent analysis, and regularly makes a rate
determination which is different than NCCIs recommendation, just as it would if a rate filing
was made by a workers compensation insurer. If the OIR had delegated its authority, one
might assume that NCCIs rate recommendations would be approved as filed. Thus, the OIRs
role is to review and approve, or disapprove, rate recommendations requested by private entities
which are filed for review by the OIR.

The Public Records Act provides that all state, county, and municipal records are open
for personal inspection and copying by any person. 119.01(1), Fla. Stat. Accordingly, the
legislature intended the Public Records Act to apply only to governmental bodies of the State of
Florida. Florida courts have also determined that a private corporations records may be subject
to the Public Records Act in limited situations where the private corporation is acting on behalf
of a governmental agency. See News and Sun-Sentinel Co. v. Schwab, Twitty & Hanser
Architectural Grp, Inc., 596 So. 2d 1029, 1031 (Fla. 1992). The Florida Supreme Court, in
Schwab, set forth a totality of factors test to determine when a private entity is subject to the
Public Records Act. Id. These factors include: 1) the level of public funding; 2) commingling
of funds; 3) whether the activity was conducted on publicly owned property; 4) whether
services contracted for are an integral part of the public agency's chosen decision-making
process; 5) whether the private entity is performing a governmental function or a function
which the public agency otherwise would perform; 6) the extent of the public agency's
involvement with, regulation of, or control over the private entity; 7) whether the private entity
was created by the public agency; 8) whether the public agency has a substantial financial
interest in the private entity; and 9) for who's benefit the private entity is functioning. Id.
(citing Sarasota Herald-Tribune Co. v. Community Health Corp., Inc., 582 So. 2d 730 (Fla.2d
DCA 1991). As described in more detail below, each of these factors demonstrates that NCCI
is not subject to the Public Records Act.
As a preliminary matter, NCCI simply does not act on behalf of the OIR. If NCCI
ceased operations in Florida, the services performed by NCCI still would not be performed by
the OIR. Workers' compensation insurers would have to create and file their own workers'
compensation rates, a far less efficient and more costly process than exists today. Second,

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NCCI: (1) does not receive public funding; (2) does not commingle funds with the OIR; (3)
does not conduct activity on publicly owned property; (4) does not contract with the OIR to
provide rate-making services (NCCI instead works on behalf of private insurers); (5) is not
subject to any greater regulatory oversight by the OIR than a private insurer; (6) was not created
by the OIR; (7) the OIR has no financial interest in NCCI, and (9) NCCI does not function as a
benefit to the OIR. Accordingly, NCCI is clearly not performing a governmental function and
is not subject to the Public Records Act. Because NCCI is not subject to the Public Records
Act, there is no basis for the Plaintiff to request, or obtain, an expedited hearing in this
proceeding.

III.

Plaintiffs Remaining Allegations Do Not Entitle Plaintiff to an Expedited Hearing.


None of Plaintiffs remaining allegations, founded on section 627.291, Floridas

Sunshine Law, and Floridas declaratory judgment statute, entitle Plaintiff to the expedited
hearing he seeks. In addition to section 119.11, which does not apply to NCCI, Plaintiff asserts
he is entitled to a speedy hearing pursuant to section 86.111, Florida Statutes. However,
nothing in section 86.011 permits Plaintiff to obtain the relief he requests.
Plaintiffs sole asserted need for an expedited hearing is that a public hearing is scheduled
to begin on August 16th to hear public comment regarding the amended rate filing made by
NCCI. The Public Hearing was properly noticed in accordance with section 627.111, Florida
Statutes, on July 1, 2016 47-days prior the Public Hearing date. See Notice of Hearing
attached hereto as Exhibit B. As evidenced by numerous correspondence between the Plaintiff
and NCCI and OIR, Plaintiff was aware of the scheduled Public Hearing at the time it was
noticed. Yet, Plaintiff provides no explanation of why it was necessary or reasonable for

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Plaintiff to delay until one day before the scheduled public hearing to attempt to obtain from this
Court improper extraordinary relief, rather than file the Motion and Complaint with sufficient
time for all Defendants to be served and prepare their own evidence and arguments. Plaintiffs
delay in bringing this action appears to be nothing more than a calculated effort to feign an
emergency in an attempt to limit Defendants ability to respond to Plaintiffs meritless
allegations in a reasonable manner.
Additionally, no emergency exists, as Plaintiff has failed to identify any harm which it
will suffer if it is not provided a hearing on its allegations prior to the August 16th public hearing.
As Plaintiff admits in his own Motion, even if this case could somehow affect the OIRs
approval of NCCIs amended rate filing, the rate will not be effective for insurers which utilize
NCCIs rates unless it is approved following the August 16th public hearing, and even if
approved will not be effective until October 1, 2016 at the earliest.
Finally, section 86.111, does not require an expedited preliminary hearing of the nature
requested by Plaintiff, but instead permits the court, in its discretion, to order a speedy hearing
of an action for a declaratory judgment. The purpose of this statutory provision is not to
provide for an emergency hearing in lieu of seeking injunctive relief, but instead to permit
courts, in their discretion, to consider the setting of expedited trial dates when necessary in
declaratory judgment actions. Florida law clearly provides that a trial date cannot be set until
the action is at issue and the notice requirements of Rule 1.440(c), Rules of Civil Procedure, are
complied with. See Amber Reinforcing, Inc. v. Hubbard Construction Co., 801 So. 2d 314 (Fla.
1st DCA 2001). An action is not at issue until after any motions directed to the last pleading
served have been disposed of or, if no such motions are served, 20 days after service of the last
pleading. Fla. R. Civ. P. 1.440(a). As discussed herein, none of the Defendants have been

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served in this case with the Complaint, and the Court has pending before it the OIRs Venue
Motion, which must be heard prior to the setting of any expedited trial dates. Accordingly,
although a court has discretion under section 86.011 to order a speedy hearing, that is not what
Plaintiffs request here, and in any event such hearing cannot be ordered until after the case is atissue.
CONCLUSION
For the foregoing reasons, Plaintiff has failed to demonstrate any legal right to the
expedited hearing he seeks, and NCCI respectfully requests that this Court deny Plaintiffs
Motion in its entirety or, in the alternative, defer ruling on Plaintiffs Motion until this Court
rules on the OIRs Venue Motion.

Respectfully submitted this 15th day of August, 2016

William E. Davis
Wdavis@foley.com
Fla. Bar. No. 191680
Foley & Lardner LLP
One Biscayne Tower
2 South Biscayne Boulevard
Suite 1900
Miami, FL 33131
(305) 482-8400 (Telephone)
(305) 482-8600 (Fax)

/S/ JAMES A. MCKEE


James A. McKee
jmckee@foley.com
Fla. Bar No. 638218
Nicholas R. Paquette
npaquette@foley.com
Fla. Bar. No. 104800
Foley & Lardner LLP
106 E. College Avenue
Suite 900
Tallahassee, FL 32301
(850) 222-6100 (Telephone)
(850) 561-6475 (Fax)
Counsel for NCCI

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was formally served
on the following individuals this 15th day of August, 2016:
Shaw Stiller
Chief Assistant General Counsel
Lacy End-Of-Horn
Assistant General Counsel
Office of Insurance Regulation
200 East Gaines Street
Tallahassee, Florida 32399-4206
Telephone: (850) 413-4317
Fax: (850) 922-2543
shaw.stiller@floir.com
Lacy.End-Of-Horn@floir.com
Counsel for OIR and Commissioner
David Altmaier.
John K. Shubin, Esq.
Lauren G. Brunswick, Esq.
Mark E. Grafton, Esq.
SHUBIN & BASS, P.A.
46 S.W. First Street, Third Floor
Miami, Florida 33130
Tel (305) 381-6060
Fax (305) 381-9457
jshubin@shubinbass.com
lbrunswick@shubinbass.com
mgrafton@shubinbass.com
Counsel for Plaintiff

/S/ JAMES A. MCKEE

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EXHIBIT A

EXHIBIT B

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