ACCEPTED
03-14-00808-CV
6830720
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/8/2015 3:36:21 PM
JEFFREY D. KYLE
CLERK
No. 03-14-00808-CV FILED IN
IN THE 3RD COURT OF APPEALS 3rd COURT OF APPEALS
AUSTIN, TEXAS
AUSTIN, TEXAS 9/8/2015 3:36:21 PM
JEFFREY D. KYLE
Clerk
Rosendo Morales, Appellant
V.
Texas Department of Insurance-Division of Workers’
Compensation and Commissioner Ryan Brannan, in his
official capacity, Appellees
On appeal from the 146th District Court of Bell County, Texas;
Cause No. 269,135-B, the Honorable Jack Weldon Jones Presiding
ROSENDO MORALES APPELLANT’S REPLY BRIEF
BRADLEY DEAN McCLELLAN
State Bar No. 13395980
Richard Pena
Law Offices of Richard Pena, P.C
State Bar No. 00000073
Law Offices of Richard Pena, P.C.
1701 Directors Blvd., Suite 110
Austin, Texas 78744
Brad.McClellan@yahoo.com
(512) 327-6884 telephone
(512) 327-8354 facsimile
Counsel for Appellant
September 8, 2015
Oral Argument Requested
TABLE OF CONTENTS
TABLE OF AUTHORITIES iv-
vi
ISSUES PRESENTED ix
ROSENDO MORALES APPELLANT’S REPLY BRIEF 1
SUMMARY OF ARGUMENT 2
ARGUMENT & AUTHORITIES 6
Issue No. 1: Whether the District Court has jurisdiction to determine a
declaratory judgment action brought to properly construe, interpret, and
enforce applicable Texas statutes against the state agency and the head of
the state agency after administrative remedies have been exhausted and a
live controversy remains with allegations that the state defendants have
violated the statutes in question by failing to properly apply the law? 6
CONCLUSION 13
PRAYER 14
CERTIFICATE OF COMPLIANCE 15
CERTIFICATE OF SERVICE 15
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
INDEX OF AUTHORITIES
Cases
City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009) ............................... 7
City of Ingleside v. City of Corpus Christi, Case No 14-0548, 2015 Tex. LEXIS
685, 58 Tex. Sup. J. 1519 (Tex. July 24, 2015) ........................................................ 3
Patel v. Tex. Dep't of Licensing & Regulation, Case No. 12-0657, ___S.W.3d___,
58 Tex. Sup. J. 1298, 2015 Tex. LEXIS 617, *11-12 (Tex. June 26, 2015)
........................................................................................................................................ passim
SWEPI L.P. v. R.R. Comm 'n, 314 S.W.3d 253, 268 (Tex. App--Austin 2010,
pet. denied) ........................................................................................................................ 10
Tex. Dep’t of Ins. v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex. App.—
Austin 2006, pet. denied) ................................................................................................ 5
Tex. Dep’t of State Health Servs. v. Balquinta, 429 S.W.3d 726, 747 (Tex.
App.—Austin 2014, pet. dism’d) ............................................................................... 10
Tex. Workers' Comp. Comm'n v. Garcia, 893 S.W.2d 504, 517-18 (Tex. 1995)
................................................................................................................................................. 11
Statutes
Texas Labor Code § 410.255 ........................................................................................... 13
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
ISSUE PRESENTED
Issue No. 1: Whether the District Court has jurisdiction to determine a
declaratory judgment action brought to properly construe, interpret, and
enforce applicable Texas statutes against the state agency and the head of
the state agency after administrative remedies have been exhausted and a
live controversy remains with allegations that the state defendants have
violated the statutes in question by failing to properly apply the law?
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
No. 03-14-00808-CV
IN THE 3RD COURT OF APPEALS
AUSTIN, TEXAS
Rosendo Morales, Appellant
V.
Texas Department of Insurance-Division of Workers’
Compensation and Commissioner Ryan Brannan, in his official
capacity, Appellees
On appeal from the 146th District Court of Bell County, Texas;
Cause No. 269,135-B, the Honorable Jack Weldon Jones
Presiding
ROSENDO MORALES APPELLANT’S REPLY BRIEF
To the Honorable Justices of the 3rd Court of Appeals:
Courts are the last check on the administrative agencies and agency
officers not following the laws adopted by the Legislature. An administrative
agency does not get the last word on what the law requires and whether the
agency is properly enforcing, applying, and complying with the law’s
requirements. The Judicial Branch ultimately determines the law and
enforces proper compliance with the laws in the State of Texas and in the
United States of America.
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
SUMMARY OF THE ARGUMENT
Subsequent to the initial Appellant’s brief, the Texas Supreme Court in
two very recent decisions in June and July of this year Patel and Ingleside v.
Corpus Christi. The Appellees appear to reassert legal arguments the
Supreme Court rejected in Patel. Patel allowed for declaratory judgment
against a state agency and explained the Heinrich, DeQueen, and Sefzik
opinions allowed for declarations to require compliance with statutes. The
Ingelside v. Corpus Christi case recently determined the interpretation of city
law’s presented a justiciable controversy for a declaratory judgment. In Patel,
the Texas Supreme Court rejected a state agency’s attempt to invoke
immunity, standing, and redundancy (as all three argued in this matter) to
avoid a declaratory judgment action to require compliance with the law by a
state agency and explained suits to require statutory compliance are allowed.
In the Patel decision issued on June 25th, the Texas Supreme Court
stated: “In Heinrich we decided that sovereign immunity does not prohibit
suits brought to require state officials to comply with statutory or
constitutional provisions. 284 S.W.3d at 372.” Patel v. Tex. Dep't of
Licensing & Regulation, Case No. 12-0657, ___S.W.3d___, 58 Tex. Sup. J. 1298,
2015 Tex. LEXIS 617, *11-12 (Tex. June 26, 2015).
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In the City of Ingleside v. City of Corpus Christi, Case No 14-0548, 2015
Tex. LEXIS 685, 58 Tex. Sup. J. 1519 (Tex. July 24, 2015), the Texas Supreme
Court explained: “Interpreting and applying an ordinance is also well within
judicial authority. Cf. City of Fort Worth v. Gulf Ref. Co., 125 Tex. 512, 83 S.W.2d
610, 617 (Tex. 1935) (construing and applying several ordinances regulating
filling station businesses).” Id. at 2015 Tex. LEXIS 685, *8-9. The
interpretation and application of laws are well within judicial authority even
to bind governmental entities.
The state Appellee’s in part assert: “the UDJA does not waive the State’s
immunity for claims seeking an interpretation of, or a declaration of rights
under, a statute” and that Mr. Morales is “requesting sweeping declarations
that go beyond any present or imminent dispute.” Appellee’s Brief p. 6,7. The
Texas Supreme Court in the Patel decision rejected these arguments like
DeQueen did previously, and unquestionably this is a present and imminent
dispute with exhausted administrative remedies (beyond the Patel dispute
level of threatened agency action) over whether a four level cervical neck
fusion is rated a 5% (“a minor impairment” see p. 110 of the AMA Guides
attached as to Appellant’s Brief) or a 27% for major impairment to the
cervical spine from the permanently fused spinal segments.
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
The final decision and order of the Texas Department of Insurance-
Division of Workers’ Compensation and the DWC Commissioner Brannan,
collectively the DWC, ignores pre-maximum medical improvement spinal
surgeries—and not just a minor spinal surgery, but a four level cervical neck
fusion. The law does not allow such in assigning permanent impairment
ratings which are determined based upon a worker’s condition at maximum
medical improvement.
The DWC appellants’ argue baldly and erroneously that the UDJA: “At
most, it waives immunity for challenges ‘to the validity’ of a statute.” DWC
Appellee’s Brief at p. 9, citing to Patel. The Texas Supreme Court in Patel
recently again disagreed with this statement by explaining: “In Heinrich we
decided that sovereign immunity does not prohibit suits brought to
require state officials to comply with statutory or constitutional
provisions. 284 S.W.3d at 372.” (Emphasis added.) Patel v. Tex. Dep't of
Licensing & Regulation, Case No. 12-0657, ___S.W.3d___, 58 Tex. Sup. J. 1298,
2015 Tex. LEXIS 617, *11-12 (Tex. June 26, 2015). The Court made clear
statutory compliance or constitutional compliance are proper waivers of
sovereign immunity without addressing where the state agency actually joins
a lawsuit and seeks legal interpretations such as here.
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
Again, Appellant is not seeking liability damages from the state
Defendants. Appellant is seeking to enforce the statutory rights violated by
the Appellees and failed to be enforced and properly followed by the
Appellees.
This Court previously allowed a declaratory judgment action against
the DWC in Tex. Dep’t of Ins. v. Lumbermens Mut. Cas. Co., 212 S.W.3d 870 (Tex.
App.—Austin 2006, pet. denied), which resulted in erroneous applications of
the law from dicta which the DWC and TMIC have not allowed impairment
ratings to consider spinal surgeries even occurring before maximum medical
improvement. Workers who undergo insurance carrier approved and paid for
major spinal fusion surgeries occurring before the worker’s recovery
stabilizes at maximum medical improvement must have such surgeries and
the effects of such surgeries considered and rated when impairment ratings
are assigned under the Texas Workers’ Compensation Act, and the DWC and
the DWC Commissioner must follow the law.
The Judicial Branch of Texas is still the proper and last avenue to seek
compliance with adopted state laws.
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REPLY ARGUMENT & AUTHORITY
Issue No. 1: Whether the District Court has jurisdiction to determine a
declaratory judgment action brought to properly construe, interpret,
and enforce applicable Texas statutes against the state agency and the
head of the state agency after administrative remedies have been
exhausted and a live controversy remains with allegations that the state
defendants have violated the statutes in question by failing to properly
apply the law?
The DWC and the Commissioner appear to allege declaratory relief is not
available at all against the DWC and the Commissioner except for The DWC
argues (Appellees’ Brief p. 9):
Morales pursued declaratory relief “to properly construe, interpret, and
enforce applicable Texas statutes against the state agency and the head of
the state agency.” Br. of Appellant ix (Issue Presented); see also, e.g., id. at
3 (“This case involves a proper request for declaratory judgment with a
challenge to the DWC Defendants [sic] improper enforcement of the
law.”). The UDJA does not waive immunity for these claims. At most, it
waives immunity for challenges to “the validity of” a statute.
The Texas Supreme Court in Patel rejected this similar argument of another
state agency and emphasized statutory compliance is a proper use of
declaratory judgment actions.
1. The Patel Decision Rejected State’s Arguments of Immunity,
Redundancy, Ripeness and Standing.
Courts should wonder what so concerns the state over the proper
enforcement of statutory terms, and why the state agency and state official
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
want to avoid proper statutory application, interpretation and enforcement.
The Texas Supreme Court just a couple of months ago in Patel v. Tex. Dep't of
Licensing & Regulation, Case No. 12-0657, ___S.W.3d___, 58 Tex. Sup. J. 1298,
2015 Tex. LEXIS 617, *11-12 (Tex. June 26, 2015) rejected analogous
arguments from a state agency attempting to claim four basic obstacles also
asserted in this matter as to why the plea to the jurisdiction of a state agency
should be granted: immunity, redundancy, ripeness and standing. In Patel, the
Court emphasized:
In Heinrich we decided that sovereign immunity does not prohibit
suits brought to require state officials to comply with statutory or
constitutional provisions.
Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617, *10, 58 Tex.
Sup. J. 1298 (Tex. 2015).
The Texas Supreme Court explained the rationale that from Heinrich
that “it is clear that suits to require state officials to comply with
statutory or constitutional provisions are not prohibited by sovereign
immunity.” City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009). This
matter involves a statutory challenge in part that the state agency and state
officials have failed to comply with statutory provisions and the ultra vires
allegations that the final decision and order is in violation of the statutory
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
provisions of the Labor Code, and If there is any doubt, then Appellant should
be allowed to plead more specifically the allegations.
2. State Agency Immunity is Waived When Statutes are Challenged as
Not Being Properly Applied and Enforced as Again Explained by the
Texas Supreme Court in Patel.
The Texas Supreme Court, in rejecting a state agency’s arguments for
sovereign immunity in a jurisdictional plea, made clear this in Patel:
. . . in Heinrich we clarified that "[f]or claims challenging the validity of . .
. statutes . . . the Declaratory Judgment Act requires that the relevant
governmental entities be made parties, and thereby waives immunity."
Id. (citing Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994)).
And we have reiterated the principle more recently. See Tex. Dep't of
Transp. v. Sefzik, 355 S.W.3d 618, 621-22 & n.3 (Tex. 2011) (restating
that state entities can be—and in some instances such as when the
constitutionality of a statute is at issue, must be—parties to challenges
under the UDJA); Tex. Lottery Comm'n v. First State Bank of DeQueen,
325 S.W.3d 628, 634 (Tex. 2010) (holding that allegations against the
lottery commissioner were not ultra vires allegations because the claim
challenged a statute and was not one involving a government officer's
action or inaction).
Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex. LEXIS 617, *11-12 (Tex.
June 26, 2015). The Texas Supreme Court allowed declaratory judgment to
proceed and required the relevant governmental entities be made parties, and
Mr. Morales has plead both ultra vires claims and claims challenging the
proper application and enforcement of statutory terms.
In DeQueen subsequent to Heinrich, the Texas Supreme Court reiterated
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
that Declaratory Judgment Act suits to construe statutes are expressly allowed
jurisdictionally against a state agency. Texas Lottery Commission v. First State
Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010). The Supreme Court in DeQueen
reiterated that jurisdiction over the state agency existed and citing to Leeper
explained:
[T]he DJA permits statutory challenges and governmental entities
may be bound by those challenges, the DJA contemplates entities
must be joined in those suits. Leeper, 893 S.W.2d at 446.
The Texas Supreme Court further explained in DeQueen that statutory
clarification, as expressly sought in this matter, that the state agency is a
proper party DeQueen, 325 S.W.3d 628 at 635 [emphasis added]:
Next, the Commission asserts that the DJA does not waive immunity
because it applies only to suits involving constitutional invalidation and
not to those involving statutory interpretation. But the language in the
DJA does not make that distinction. . . . The trial court properly
exercised jurisdiction over this claim.
Further, this matter involves partially a final decision of the DWC and the
DWC Commissioner, so this matter does not just involve challenging the
agency’s interpretation of the statutes but also the actions of the agency head
by failing to properly apply and enforce the statutes.
3. Declaratory Remedies To Prevent Future Abuses Are Not Redundant.
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
The DWC Appellees argue redundancy citing to rely upon inapplicable
cases in SWEPI L.P. v. R.R. Comm 'n, 314 S.W.3d 253, 268 (Tex. App--Austin
2010, pet. denied); Tex. Dep’t of State Health Servs. v. Balquinta, 429 S.W.3d
726, 747 (Tex. App.—Austin 2014, pet. dism’d). Appellees’ Brief p. 21, 22.
However, in all those cases the state agency was a party and would have been
legally bound by the determinations.
The Texas Supreme Court in Patel also rejected the redundancy
argument because the mere judicial review of an agency order would be
limited to that particular order and not declarations of rights and protection
against future attempts to misapply the law under the statutes:
The available remedies on appeal from an administrative finding
are limited to reversal of the particular orders at issue. Id. But the
Threaders seek more than a reversal of the citations issued to Momin
and Yogi. They seek prospective injunctive relief against future agency
orders based on the statutes and regulations. Accordingly, because the
declaration sought goes beyond reversal of an agency order,
Section 2001.174 of the APA does not provide a redundant remedy.
(Emphasis added.) Patel v. Tex. Dep't of Licensing & Regulation, 2015 Tex.
LEXIS 617, *18-19 (Tex. June 26, 2015).
The declaratory relief in this matter goes well beyond the reversal of an
individual order, but seeks to require the Defendants including the Appellees
to all properly apply and enforce the statutes in the future. Plaintiff has plead
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
declaratory relief beyond just the reversal of the DWC and the DWC
Commissioner’s final decision and order:1
The DWC Defendants and Texas Mutual may not ignore and must
consider invalid an impairment rating that does not follow the Texas
Workers’ Compensation Act which requires pre-MMI surgeries and the
effects of the surgery to be considered in assigning an impairment. This
Court should so declare and enforce.
Mr. Morales clearly seeks to ensure that the DWC and the Commissioner and
the Insurance Carrier properly interpret and properly apply the laws in the
future and make sure the erroneous application and violation of the statutes
does not occur in the future.
4. Ripeness and Standing Exists with a Live Controversy. Patel explains
Ripeness is Shown by Mere Initial State Action—Here an Erroneous
Final State Decision & Order Exists
In Patel, the Texas Supreme Court rejected the state agency’s analogous
arguments as to standing and ripeness:
The standing doctrine identifies suits appropriate for judicial
resolution. Brown v. Todd, 53 S.W.3d 297, 305 (Tex. 2001). Standing
assures there is a real controversy between the parties that will be
determined by the judicial declaration sought. Id. (quoting Tex. Workers'
Comp. Comm'n v. Garcia, 893 S.W.2d 504, 517-18 (Tex. 1995)). "[T]o
challenge a statute, a plaintiff must [both] suffer some actual or
threatened restriction under the statute" and "contend that the statute
1
CR 51, Plaintiff’s Amended Petition and Suit for Declaratory Relief, Par. 13
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
unconstitutionally restricts the plaintiff's rights." Garcia, 893 S.W.2d at
518.
Patel at 2015 Tex. LEXIS 617, *14, 58 Tex. Sup. J. 1298.
The substantive statutory issues are clear and laws are being ignored or
erroneously applied and not enforced. Without question a live controversy
exists over the inclusion and consideration of spinal fusion surgeries in
impairments and impairment ratings under the Texas Workers’
Compensation Act.
5. Under Labor Code Section 410.255, the DWC is a proper party for all
other issues, which likely includes the Proper Enforcement of the Law
for Assigning Impairment Ratings.
The state appellees argue that § 410.255 does not matter at p. 15 of their
brief:
. . . . the Legislature provided the Division with authority to intervene
where it believed there was a possible violation of applicable laws and
rules. See id. § 410.254. That authority would be largely superfluous if
the Division could be dragged into court regardless of its wishes.
That is the whole problem with the DWC’s circular argument that only the
DWC gets to decide “if there was a possible violation of applicable laws.” This
would conveniently avoid the purpose of the Judicial Branch in Texas to
ensure a state agency and state officials follow the law. The DWC is a proper
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
party under Texas Labor Code § 410.255 as the Legislature envisioned.
CONCLUSION
This Court should follow the Patel and Lumbermens decision allow
Rosendo Morales to proceed with the declaratory judgment claim and keep as
parties both the DWC and the Commissioner, in his official capacity. The
jurisdiction exists due to the live controversy, exhaustion of administrative
remedies, and the state agency and state official are necessary parties for
proper enforceability of the statutes and to ensure proper compliance with
statutory terms alleged to be violated. Otherwise only the few who continue
to fight will have a chance for justice on a piece by piece basis and the harm
may occur again and again. The purpose of the Declaratory Judgment Act is to
make the laws clear to all affected and to make sure the laws are properly
applied and not violated by the state agency and the head of the state agency.
The Judiciary oversees the Executive Branch both to uphold its proper actions
but to also to protect Texans’ rights to make sure the laws are properly
applied and correctly interpreted and rightly enforced.
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PRAYER
Rosendo Morales, Appellant, respectfully prays and ask that this Court
reverse the ruling of the District Court on the plea to the jurisdiction granted
to the DWC and the Commissioner, and this Court should not allow the
dismissal of the DWC and the Commissioner, and that this Court determine
that the District Court has jurisdiction to determine the declaratory judgment
matters sought by Appellant including against the DWC and the
Commissioner. Appellant ask for all other relief to which he is entitled
including costs of court.
Respectfully,
/s/ Brad McClellan
Bradley Dean McClellan
State Bar No. 13395980
Of Counsel, Law Offices of Richard Pena, P.C.
Richard Pena
Law Offices of Richard Pena, P.C
State Bar No. 00000073
1701 Directors Blvd., Suite 110
Austin, Texas 78744
Brad.McClellan@yahoo.com
(512) 327-6884 telephone
(512) 327-8354 facsimile
Attorney for Appellant
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No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
CERTIFICATE OF COMPLIANCE
I certify that I have 3,325 word count checked by the word program in
compliance with the Texas Rules of Appellate Procedure.
/s/ Brad McClellan
Bradley Dean McClellan
CERTIFICATE OF SERVICE
I certify that a copy of the foregoing Appellants’ Reply Brief was served
on the through counsel of record by the method indicated below on
September 8, 2015.
Adrienne Butcher, Assistant Attorney General Via efiling/eservice
Administrative Law Division
Office of the Attorney General of Texas
P.O. Box 12548 (MC-018), Capital Station
Austin, Texas 78711-2548
512-475-4208
Facsimile: (512) 320-0167
adrienne.butcher@texasattorneygeneral.gov
Attorneys for DWC and Commissioner
Courtesy copy provided to other Defendant Via efiling/eservice
below
Scott Placek & Matthew Foerster
Arnold & Placek, LLC
203 East Main Ave, Ste. 203
Round Rock, TX 78664
Attorneys for Defendant
/s/ Brad McClellan
Bradley Dean McClellan
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