Court Approves $10,000 Fine Against Lubbock Chiropractor
The Austin Court of Appeals has affirmed a judgment that approved the Division’s $10,000 fine against Robert Coolbaugh, D.C. for failing to pay a $8,326.90 refund to an insurance company as a final disposition of a medical-fee dispute. The Decision comes in Coolbaugh v. Texas Department of Insurance-Division of Workers’ Compensation, et al., (No. 03-18-00345-CV) decided September 10, 2019.
Dr. Coolbaugh had allowed the refund order to become final when he failed to seek judicial review of a SOAH decision in a fee dispute. Thereafter, Division staff filed a complaint with SOAH seeking imposition of a $30,000 administrative penalty. The administrative law judge conducted a hearing to determine the appropriate amount of the penalty. He heard testimony from one witness called by the Division as well as from Dr. Coolbaugh.
The Division’s witness, Darryl Cooper, the Division’s Manager of Audits and Investigations, testified that Dr. Coolbaugh’s violation was serious because of the amount owed and his on-going noncompliance—Cooper was 1,400 days late in payment as of the hearing. He testified further, “An order violation is considered [a] very serious violation. All system participants that have statutory duties are expected to comply with their requirements without being ordered, but if they fail to, the commissioners can issue orders [for them] to come into compliance. If they fail to comply with those orders, then it makes it virtually impossible for the agency to regulate the system.” Mr. Cooper noted that Dr. Coolbaugh had received two warning letters in the past about late submission of forms. He also opined that Dr. Coolbaugh failed to demonstrate good faith in that he did not respond to the Division orders and that he still owed the refund to the insurance companies.
Following the close of the record, the ALJ proposed and the Commissioner issued a Penalty Order, which imposed a $10,000 administrative penalty for Dr. Coolbaugh’s failure to comply with Division orders requiring him to produce requested information and to furnish proof of payment of the Refund Order to the insurance company.
Dr. Coolbaugh filed a declaratory-judgment suit complaining, among other things, of both underlying orders: (1) the 2013 SOAH order requiring him to pay a $8,326.90 refund to an insurance company as a final disposition of a medical-fee dispute and (2) the Commissioner’s $10,000 penalty order for his failure to comply with Division orders requiring him to produce requested information and to furnish proof of payment of the Refund Order to the insurance company.
The Division claimed that the court lacked jurisdiction to review Dr. Coolbaugh’s challenge to the Refund Order because it became final when he did not seek judicial review. After hearing, the district court granted the plea and dismissed all of Dr. Coolbaugh’s claims save for his claim for judicial review of the Commissioner’s Penalty Order. After conducting the suit for judicial review, the district court rendered judgment affirming the Commissioner’s Penalty Order. Dr. Coolbaugh appealed the judgment to the Court of Appeals.
On appeal, the court first noted that Dr. Coolbaugh had filed no reporter’s record with the appellate court. In the absence of such filing, the court of appeals presumed that the suit was filed more than two years after the Refund Order had become final and concluded that the district court had correctly determined that it lacked jurisdiction to review the order. The court wrote that Dr. Coolbaugh could not “side-step the district court’s lack of jurisdiction to review the Refund Order “by cloaking . . . [his] complaint in the mantle of a suit for declaratory judgment.” The court concluded that the Refund Order had become final and could not be further challenged.
With respect to the Penalty Order, Dr. Coolbaugh had alleged that the Penalty Order was an ultra vires act by the Commissioner. In its order granting the plea to the jurisdiction, the district court concluded that Coolbaugh failed to plead a valid ultra vires claim against the Commissioner and dismissed him from the lawsuit. The court rejected Dr. Coolbaugh’s allegations.
To avoid the Division’s plea to the jurisdiction asserting sovereign immunity, Coolbaugh alleged that the Penalty Order was an ultra vires act by the Commissioner. In its order granting the plea to the jurisdiction, the district court concluded that Coolbaugh failed to plead a valid ultra vires claim against the Commissioner and dismissed him from the lawsuit.
The ultra vires exception to the sovereign-immunity doctrine permits suits against state officials for nondiscretionary acts unauthorized by law. Texas Dep’t of Transp. v. Sefzik¸ 355 S.W.3d 618, 621 (Tex. 2011). Coolbaugh alleged generally that the Division misapplied the Labor Code and the Division rules. It is true that Coolbaugh sued the Commissioner in his official capacity, but as we understand his pleadings, he asserted no factual allegations against the Commissioner that are distinct from those of the Division as a whole. The only distinct claim asserted against the Commissioner was that he undertook ultra vires acts in rendering the Penalty Order. The Commissioner argues, correctly, that this cannot be a valid ultra vires claim since the Labor Code expressly empowers him to assess administrative penalties for failure to comply with “a rule, order, or decision of the commissioner.” Tex. Lab. Code § 415.021(a).
Next, Dr. Coolbaugh argued that the Penalty Order was not supported by substantial evidence. The Court of Appeals disagreed, writing:
It is undisputed that Coolbaugh failed to reply to orders for production or provide proof of payment of the refund to the insurance company. Accordingly, the Division was authorized to assess an administrative penalty. Under this record, this Court has concluded that the Commissioner’s imposition of the $10,000 Penalty Order is amply supported by substantial evidence.
The judgment of the trial court was affirmed.
FOLIO
