Federal Judge Denies Injunction to Stop Florida Auto Insurance Reforms

Published January 7, 2013

A federal judge has denied an injunction that would have blocked reforms to the personal injury protection portion of Florida’s auto insurance law that were enacted in 2012.

Backers of the reforms say the judge’s ruling is a big win for Florida’s auto insurance consumers.

In his decision, U.S. District Court Judge Richard Lazzara refused to grant an injunction requested by a group of chiropractors, massage therapists, and acupuncturists. He ruled the plaintiffs “utterly failed to demonstrate that there is a substantial likelihood they will eventually prevail on the merits” of their claims. The plaintiffs argued the reforms infringe on their ability to make a living.

‘A Win for Florida Consumers’

The injunction was requested as part of a lawsuit filed against the Florida Office of Insurance Regulation that seeks to overturn H.B. 119. Signed in May 2012 by Gov. Rick Scott, the law requires PIP claimants to receive treatment from a doctor or hospital within two weeks of an accident. It also proscribes treatment from acupuncture and massage facilities. The law also raises penalties for auto insurance fraud and sets limits on attorneys’ fees.

“While this is just a short-term procedural victory and the case will now proceed to trial, Justice Lazzara has handed down a defeat to the opponents of reform,” Christian Cámara, Florida Director of the Washington, DC-based R Street Institute, said. “This also marks a win for Florida consumers, who stand to benefit from containing the escalating costs in our auto insurance market.”

Several constitutional challenges to the PIP law were at issue. The chief one focused on the reforms placing restrictions on certain medical providers and not on others. Plaintiffs contend this violates the equal protection clause of the Constitution.

Rational Basis Needed

Lazzara quoted an earlier case where a district court blocked a law preventing the state from imposing fee caps on diagnostic imaging services with an exception for hospitals and group practices. The court later reversed the ruling, saying as long as the state could show a rational basis for the law, it did not violate the equal protection clause. The court put the burden of proving there is no rational basis on medical providers.

“The proper inquiry is concerned with the existence of a conceivable rational basis, whether or not that basis was actually considered by the legislative body,” the court wrote.

Lazzara ruled similar reasoning should apply to the PIP law, declaring as long as the state can demonstrate a rational basis, the law should stand.