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Langham: The Law of the Case

  • State: Texas
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Here's an interesting decision from Texas: Steele v. Murphy & Beane Inc. and Viacom.

Judge David Langham

Judge David Langham

The plaintiff was hired as an independent makeup artist on a television series. After lights were extinguished following a taping, she "fell down two flights of stairs and suffered severe injuries." One of the defendants offered benefits, but eventually, there was a lawsuit in which Melanie Steele (the makeup artist) alleged deceptive practices fraud, fraudulent inducement, gross negligence and more. 

The defendants claimed workers' compensation immunity and alleged that the Texas "Division of Workers’ Compensation (Division), had exclusive jurisdiction over Steele’s claims." The trial court agreed and dismissed the lawsuit. The appellate court agreed and affirmed the dismissal. It is noteworthy that the injury occurred in Texas, and that workers' compensation is optional there. 

The court noted that medical care was provided by Viacom, and Steele signed "a Texas Workers Compensation Work Status Report." Steele was surprised when Murphy & Beane filed "an Employer’s Report of Occupational Injury or Illness in California." 

Steele also alleged various other representations or omissions conveyed to her by Murphy & Beane. She thereafter received some care, even traveling to California at one point for a qualified medical evaluation, but did not receive that evaluation. She complained that the California "medical-treatment guidelines" were used in her claims.

The decision leaves the analysis of such questions of jurisdictional issues in doubt. The court concludes that the Texas division has authority, but does not explain why California's division does not. 

After the civil complaint in Texas was dismissed, the Texas division became involved. It was eventually concluded that "Steele’s recovery was barred by the Texas Workers’ Compensation Act (TWCA)." Therefore, she filed a second civil lawsuit. She contended that the Texas division conclusion was an exhaustion of her administrative remedies, and thus that she could file the second civil lawsuit.

The appellate court explained the necessity of pursuing administrative remedies such as workers' compensation. The court relied upon the earlier dismissal and that court's conclusion "that the division has exclusive jurisdiction over Steele’s claims."

The court explained that once the initial appellate court had so concluded, that "opinion is the law of the case." The court further concluded that "Steele did not exhaust administrative remedies."

The court described a multi-step process regarding resolution of Texas workers' compensation disputes. Steele pursued only a benefits review conference (BRC), “a nonadversarial, informal dispute resolution proceeding.” This might be similar to pursuing a workers' compensation claim in Florida, but only to the mediation. 

The court explained that there are two types of benefit disputes in Texas. The agreement reached at the BRC addressed only "issues of compensability," the first type of dispute. It did not reference any "dispute about the extent of injury, preauthorization, medical necessity or administrative violations," the second type of dispute. 

The court noted that the division is empowered to investigate claims "alleging that a workers’ compensation carrier has improperly investigated, handled or settled a workers’ claim for benefits.” The record in the appellate court did not demonstrate "that Steele has either exhausted administrative remedies under Chapter 413 or provided the division with notice of administrative violations" regarding her allegations about the manner in which the defendants administered her Texas accident.

Thus, before a lawsuit for alleged mistakes or misstatements in the process, the court concluded that Steele must ask the Texas division to investigate those. 

Similarly to collateral estoppel, the law of the case may preclude a party from re-litigating an issue once that issue has been decided. Therefore, the timing and thoroughness of bringing a claim may be of significant importance.

The Steele analysis is also an important reminder of the potential for claims to be within the authority of multiple states. This injured worker would seemingly be within the jurisdiction of the Texas system (per the court's analysis) and simultaneously the California system (per the Murphy & Beane election to provide care under that law). 

The case illustrates that workers' compensation can be both complicated and challenging for even seasoned practitioners. When presented with injuries and allegations, an attorney may have an obvious alternative as well as various less-than-obvious potentials. The implications of California and Texas law my differ regarding details such as when and how a claim must be filed. The elements of proof and available benefits may likewise differ from state to state. And this case illustrates that the determination of who the responsible employer is may require some sorting (as between Murphy & Beane and Viacom). 

There will correspondingly be events in which determinations of state law, the correct jurisdiction, venue and parties are more clean and concise. But complications are often present, requiring the navigation skills of an attorney with a breadth and depth of knowledge in a variety of challenges. The involvement of multiple potential jurisdictions and parties can make a workers' compensation accident significantly complex. 

David Langham is deputy chief judge of the Florida Office of Judges of Compensation Claims. This column is reprinted, with his permission, from his Florida Workers' Comp Adjudication blog.

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