On Rehearing, Houston Court Again Dismisses WC-Based Declaratory Judgment Claim
Following a motion for rehearing, the First District Court of Appeals, sitting in Houston, again dismissed a declaratory judgment action filed in relation to a suit for judicial review of a workers’ compensation decision. In that case the claimant, Linda Green, who was unhappy with a Division decision, sought judicial review of the agency’s unfavorable decision. She included as a part of her lawsuit, a request that the trial court issue a declaration under the Uniform Declaratory Judgments Act that the Division had misinterpreted Texas workers’ compensation law. Green sought the recovery of attorneys’ fees under the UDJA.
In December 2015, the Houston Court of Appeals (1st District) reversed the trial court’s refusal to dismiss the DJ action. Texas Department of Insurance, Division of Workers’ Compensation v. Green (No. 01-15-00321-CV, May 10, 2016). Now, following Green’s motion for rehearing, the court of appeals again concluded that the claimant’s suit against the Division was barred by the doctrine of sovereign immunity and that the Division did not waive its sovereign immunity from suit by filing an intervention in the underlying lawsuit.
In Green, the injured worker’s lawsuit sought (1) a judicial review of the Division’s Administrative decision denying her relief under the “injurious practices” defense and (2) a declaratory judgment that the “injurious practices” defense is not available under current Texas law. The Division argued that the trial court lacked jurisdiction over the declaratory judgment action against it. The court of appeals agreed with the Division and accordingly reversed the trial court’s denial of the Division’s plea to the jurisdiction and dismissed the declaratory judgment action against the agency. The court wrote:
Green’s petition does not challenge the validity of any statute. It requests declaratory relief “that the injurious practice defense no longer applies.” Closely related to this assertion, Green contends that in the absence of that defense, (1) the worker’s compensation statute “does not permit the reduction or termination of medical benefits” or the termination of impairment income benefits and (2) the decision and order made in the Division’s contested case hearing are “final and binding.” All of these claims concern the proper interpretation of the statute to be applied to her claims, not its validity. Thus, DeQueen does not establish jurisdiction over Green’s claims against the Division for declaratory relief seeking a statutory interpretation.
Green maintains that the Supreme Court rejected the distinction between declaratory relief seeking an interpretation of a statute from that challenging a statute’s validity in Patel v. Texas Department of Licensing & Regulation. See 469 S.W.3d at 76–77. The Supreme Court, however, did not hold, like Green contends, that “state agency immunity is waived when statutes are challenged as not being properly applied and enforced.” Instead, the Court held that, because the plaintiffs there challenged “the validity” and constitutionality of the statutes and regulations at issue, “rather than complaining that officials illegally acted or failed to act,” sovereign immunity did not apply. Id. Green does not challenge the constitutionality or validity of any regulations and, thus, Patel does not support her contention.
The case is important for another reason. The Division argued that the case should be dismissed because the remedies that Green sought in her declaratory judgment action were redundant of remedies that she was seeking to obtain in her suit for judicial review. A decision to allow redundant declaratory judgment claims in workers’ compensation cases would create an entirely new incentive for filing suit for judicial review and would expose workers’ compensation carriers to fee-shifted attorneys’ fees even in cases where the claimant filed suit.
Because the case was dismissed on sovereign immunity grounds, the court of appeals did not directly address the redundant remedies argument. However, in a footnote, the court clearly signaled that it agreed with the Division regarding its redundant remedies argument:
Although we do not reach the issue because we hold that Green’s claim against the Division is barred by sovereign immunity, Green’s UDJA claim may be duplicative of her appeal of the Division’s administrative ruling and therefore may also be barred by the “redundant remedies” doctrine. Under that doctrine, “a litigant’s couching its requested relief in terms of declaratory relief does not alter the underlying nature of the suit . . . .” Balquinta, 429 S.W.3d at 746. When a plaintiff “has invoked a statutory means of attacking an agency order, a trial court lacks jurisdiction over an additional claim under the UDJA that would merely determine the same issues and provide what is substantively the same relief that would be provided by the other statutory remedy.” Id. Both Green’s appeal of the Division’s administrative order and of the UDJA action would determine the same issue (whether the injurious practices defense was correctly applied to Green’s case) and would provide the same relief, if Green were to be successful (i.e., Green receiving an increased amount of worker’s compensation benefits). Thus, the Division argues that Green’s UDJA claim is barred because it is duplicative of her administrative appeal.
In reaching a decision in Green, the court of appeals relied heavily upon a case decided last year by the Corpus Christi Court of Appeals, Harvel v. Texas Department of Insurance— Division of Worker’s Compensation, No. 13– 14–00095–CV (June 11, 2015, pet. filed). Harvel is currently pending on motion for rehearing to the denial of petition for review at the Texas Supreme Court.
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