The Austin Court of Appeals has rejected an injured worker’s constitutional challenge to the Texas Workers’ Compensation Act.
Normal Engel v. Texas Department of Insurance-Division of Workers’ Compensation; Commissioner Cassie Brown, in her Official Capacity; The State of Texas and the Attorney General of the State of Texas by and through Ken Paxton in His Official Capacity as Attorney General of the State of Texas; and Illinois National Insurance Company (No. 03-23-00077-CV; Uly 17, 2024) arose from a claim filed by a carpenter after he suffered a ruptured bicep in the course of employment. His employer’s workers’ compensation carrier, Illinois National, covered the claim and paid for the employee’s surgery. In July 2017, a designated doctor selected by DWC examined the employee and certified that he had reached maximum medical improvement (MMI) with a 6% permanent impairment rating. The employee received notice of the certification on July 31, 2017, triggering the statutory 90-day deadline for contesting the certification under § 408.123(e), Labor Code. The employee, however, did not file a dispute of the certification until April 20, 2018, following a re-rupture of the same bicep. After an administrative hearing in October 2018, the DWC ALJ determined that the employee failed to establish that his initial treatment was inadequate or that any other exception applied that would allow his MMI date to be changed. Consequently, the ALJ disallowed the dispute based on the 90-day rule. The employee sought judicial review, raising constitutional, statutory-conflict, and delegation issues. The trial court granted the State parties’ pleas to the jurisdiction and Illinois National’s motion for summary judgment. The employee appealed.
In an opinion by former Chief Justice Jones, the court of appeals affirmed. First, the court determined that Commissioner Brown and Attorney General Paxton were not proper parties to the lawsuit because, even though Plaintiff named them as defendants, he did not plead ultra vires claims against them, thus failing to waive sovereign immunity. Additionally, Plaintiff’s declaratory judgment claims challenging the constitutionality of the Workers’ Compensation Act as to the State of Texas and the Attorney General were invalid because neither “have the requisite ability to enforce the WCA.” The only proper defendant was TDI, which had enforcement authority. Even so, in order for sovereign immunity to be waived, the court must first determine whether Plaintiff’s claim is facially valid (citing Klumb v. Houston Mun. Emps. Pension Sys., 458 S.W.3d 1 (Tex. 2015)).
Turning to the facial validity of Plaintiff’s claim, the court first considered Plaintiff’s argument that TDI unconstitutionally delegated rulemaking authority to “a private company,” the Work Loss Data Institute, which publishes the Official Disability Guidelines-Treatment in Workers’ Compensation. In a prior case decided in 2014, the court of appeals upheld the DWC’s adoption of the ODG guidelines, but the court didn’t need to reach the substantive issue because Plaintiff erroneously challenged the delegation under the UDJA, not the Administrative Procedures Act. He thus failed to invoke the legislative waiver of sovereign immunity contained in § 2001.038, Government Code, which allows a party to challenge an agency rule. The trial court thus had no jurisdiction over the rule challenge and properly granted TDI’s plea to the jurisdiction.
Plaintiff’s challenge to the 90-day statutory rule itself rested on the Open Courts and Due Process of Law provisions of the Texas Constitution, which, as interpreted by SCOTX, provide that “a law is unconstitutional as violating due process when it is arbitrary or unreasonable, and the later occurs when the social necessity the law is to serve is not a sufficient justification of the restriction of liberty involved.” Plaintiff argued that the 90-day rule made it “practically impossible for a plaintiff to enforce his rights” but didn’t really identify how it did that. The court rejected the argument, as well as Plaintiff’s argument that the 90-day rule invalidated the whole WCA because, unlike the 104-week deadline for determining MMI, which was supported by medical testimony, the 90-day dispute deadline had no such justification and was arbitrary. The court agreed that 90 days might be arbitrary in isolation, but it was not so unreasonable as to upset the quid pro quo upon which SCOTX declared the Act constitutional. Finally, the court upheld summary judgment on behalf of Illinois National.
