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A federal judge has dismissed a lawsuit challenging the constitutionality of amendments to Pennsylvania’s Workers’ Compensation Act that require approval by a workers’ compensation judge for any lawyer’s fee that exceeds 20 percent of the claimant’s award. In the suit, attorney Larry Pitt alleged that Sections 442 and 449 of the Pennsylvania Workers’ Compensation Act — which provide for the review and approval of attorney fees by workers’ compensation judges — are unconstitutional because they violate the state separation of powers doctrine. But U.S. District Judge Timothy J. Savage found that Pitt’s federal suit is barred by the Rooker-Feldman doctrine because the Pennsylvania courts have already rejected identical arguments. “Because the constitutionality of the statute has been determined by the state court and we cannot question that determination, we cannot entertain enjoining the defendants from applying the statute,” Savage wrote in his 11-page opinion in Larry Pitt v. Commonwealth of Pennsylvania. Pitt could not be reached for comment on the ruling. In court papers, Pitt argued that Section 442 is unconstitutional because it amounts to a delegation of judicial power to the legislative and executive branches of state government. The flaw in the law, he said, is that it empowers workers’ compensation judges, who are members of the executive branch, to determine the award of attorney fees. He also argued that the state legislature violated the state constitution by delegating to the executive branch a duty that amounts to the regulation of the practice of law — a function that, he said, is reserved solely for the judicial branch. Pitt argued that although his challenges were all premised on the Pennsylvania Constitution, they nonetheless took on a federal dimension by resulting in a denial of substantive and procedural due process and equal protection. On several occasions, Pitt claims in the suit, workers’ compensation judges, who reduced his fee to 20 percent, have rejected the fee agreements he struck with clients that promised him one-third of any award. But the Pennsylvania Attorney General’s Office urged Savage to dismiss the suit, arguing that Pitt was trying to relitigate an issue he has already lost several times in the Pennsylvania courts. Deputy Attorney General Linda S. Lloyd argued that Pitt’s suit was clearly barred by the Rooker-Feldman doctrine, which prohibits the federal courts from hearing cases that effectively challenge a valid state court judgment. “It is evident from the complaint that the plaintiff is dissatisfied with the state court’s treatment of the issues. However, Rooker-Feldman does not permit a disappointed state plaintiff to seek review of a state court decision in the federal courts by masquerading his complaint in the form of a federal civil rights action,” Lloyd wrote. Pitt argued that the Rooker-Feldman doctrine should not apply to this case because he was not a party in three of the cases brought in the Commonwealth Court. Savage disagreed, saying Pitt’s argument “defies logic and common sense.” In the federal suit, Savage noted, Pitt relies on the state court proceedings in those cases. “Bringing those cases in his clients’ names when he was the real party in interest was a fiction. He was the one who would have benefited from favorable rulings,” Savage wrote. “Indeed, the attorney’s fee was deducted from the claimant’s recovery. Hence, under those circumstances, we cannot permit Pitt to circumvent the application of the Rooker-Feldman doctrine by claiming he was not a party to the state court actions,” Savage wrote. In the suit, Pitt alleged that his fees were reduced to 20 percent in several cases in which he had fee agreements with the clients that said he would be entitled to one-third of any recovery. In each case, the suit said, unsuccessful appeals were taken to the Workers’ Compensation Appeal Board and later to the Pennsylvania Commonwealth Court to challenge the fee decisions. After each Commonwealth Court decision denying the appeals, Pitt claims he filed applications for allowances of appeal to the Pennsylvania Supreme Court, but he was denied every time. In November 2000, Pitt also filed suit in the Court of Common Pleas of Philadelphia County seeking a declaratory judgment to have Section 442 of the act declared unconstitutional. That suit ultimately failed after the Philadelphia court ruled that the Commonwealth Court had original jurisdiction, and the Commonwealth Court in 2001 sustained the government’s preliminary objections and dismissed the case. Now Savage has ruled that Pitt’s federal lawsuit amounted to nothing more than an attempt to relitigate an issue he already lost in the Pennsylvania courts. “We conclude that Pitt’s federal lawsuit is an improper attempt to recast the same claims he unsuccessfully presented in the Pennsylvania courts as purported federal constitutional claims,” Savage wrote. Savage found that Pitt’s first suit directly challenging the law — captioned Larry Pitt & Associates v. Butler — was dismissed by the Commonwealth Court for “failure to exhaust administrative remedies.” The Commonwealth Court held in Butler that Pitt had failed to exhaust his available statutory remedies because the law provides an adequate remedy to resolve any lawyer’s fee dispute. Under Section 442, the Butler court said, the reasonableness and extent of the amount awarded as attorney fees is a finding of fact that must be made initially by a WCJ whose decision is subject to review on appeal to the Workers’ Compensation Board and, ultimately, is subject to further review on appeal to the Commonwealth Court. The Butler court also rejected Pitt’s argument that a constitutional challenge to a statute relieved him from the exhaustion requirement. Instead, the court concluded that a litigant cannot circumvent the exhaustion requirement by raising a constitutional claim when there is an adequate statutory remedy. In light of the Butler court’s ruling, Savage found a flaw in Pitt’s federal claim. “Contrary to Pitt’s characterization that the statute fixes an absolute 20 percent cap on attorney’s fees, an attorney can obtain a fee award consistent with the terms of his agreement in excess of 20 percent, provided the fee is found reasonable,” Savage wrote. The Commonwealth Court, Savage said, “concluded in Butler that Pitt possessed an adequate administrative remedy for pursuing his claim through the statutory framework provided for those seeking attorney’s fees in excess of the presumptively reasonable fee.” As a result, Savage concluded that the Commonwealth Court had “unequivocally concluded that the ultimate decision on the amount of the fee that could be awarded rested with the state judicial branch.” Pitt, he said, “chose to avoid that route and elected to resort to the federal court.” But under the Rooker-Feldman doctrine, Savage said, such a tactic is not allowed. “A losing party in state court cannot skip the state appellate process and seek review in the federal court by disguising his claims as federal constitutional ones,” Savage wrote. “Allowing Pitt to pursue his federal lawsuit would permit him to bypass the procedure prescribed by the statute. To do so would render the Commonwealth Court’s Butler decision ineffectual,” Savage wrote. Entertaining Pitt’s claim, Savage said, “would require us to critically re-examine the Pennsylvania courts’ decisions. If this court were to find for Pitt and issue the requested declaration, our ruling would have the practical effect of ‘revers[ing] the state court judgment’ and ‘would prevent a state court from enforcing its orders.’” In order to grant Pitt the relief he requested, Savage said, “we would have to find that the workers’ compensation statutory scheme violates the state constitution and that the Commonwealth Court had erroneously concluded otherwise. We cannot do so.”

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