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Patino v. Texas Department of Insurance, Division of Workers' Compensation
March 17, 2020
631 S.W.3d 163
Published Opinion

Patino v. Texas Department of Insurance, Division of Workers' Compensation

Court of Appeals of Texas, Houston (14th Dist.).

Dr. Louis PATINO, D.C.; Dr. Stephen Wilson, M.D.; and Dr. Gary Craighead, D.C., Appellants


TEXAS DEPARTMENT OF INSURANCE-DIVISION OF WORKERS’ COMPENSATION; Commissioner Ryan Brannan and Dr. Donald Patrick, in Their Official and Individual Capacities; State Office of Administrative Hearings, Texas; Chief Administrative Law Judge Cathleen Parsley, in Her Official Capacity; Tommy Broyles, in His Official Capacity; the State of Texas; and the Attorney General of the State of Texas, Appellees

NO. 14-18-00274-CV


Opinion filed March 17, 2020

On Appeal from the 126th District Court, Travis County, Texas, Trial Court Cause No. D-1-GN-12-002272

Attorneys & Firms

Kimberly L. Fuchs, Austin, for Appellees.

Bradley D. McClellan, Austin, for Appellants.

Panel consists of Justices Bourliot.


Frances Bourliot, Justice

*1 Appellants Louis Patino, D.C.; Stephen Wilson, M.D.; and Gary Craighead, D.C. (the doctors) challenge the trial court’s dismissal of their claims for lack of jurisdiction against appellees Texas Department of Insurance-Division of Workers’ Compensation (the Division); Commissioner Ryan Brannan (the Commissioner) and Dr. Donald Patrick; State Office of Administrative Hearings, Texas; Chief Administrative Law Judge Cathleen Parsley; Administrative Law Judge Tommy Broyles; the State of Texas; and the Texas Attorney General.1 Concluding that the trial court properly dismissed the doctors’ claims challenging final agency orders but erred in dismissing the doctors’ constitutional and statutory interpretation challenges and ultra vires claims, we affirm in part and reverse and remand in part.


The doctors were excluded from the State’s workers’ compensation system approved doctor list by final agency orders of the Workers’ Compensation Commission (the Commission) in 2004 and 2005 and by final agency order of the Division in 2007.2 Exclusion from the approved doctor list prevents the doctors from treating patients under the workers’ compensation system. Patino did not appeal. Wilson sought declaratory and injunctive relief in response to the 2005 order denying him admission to the approved doctor list. Id. Craighead also sought injunctive relief from the decision to exclude him from the approved doctor list. The trial court concluded, among other things, that Craighead failed to show a “property right to provide health care services in Texas’ statutory workers’ compensation system or that a constitutionally protected liberty interest [was] at issue” and denied Craighead’s application for injunctive relief.

*2 The Division subsequently initiated administrative proceedings against Patino and Craighead in the State Office of Administrative Hearings (SOAH), alleging that Patino and Craighead improperly provided care to or received remuneration from workers’ compensation claimants after being denied admission to the approved doctor list. The doctors filed this lawsuit in July 2012, seeking to enjoin the administrative proceedings from going forward. The trial court denied injunctive relief.

Administrative law judges for the SOAH assessed administrative penalties against Patino and Craighead of $55,000 and $45,000, respectively. The doctors then amended their pleadings in this lawsuit to seek judicial review of the SOAH administrative law judges’ orders.3 Appellees filed pleas to the jurisdiction, which the trial court granted, dismissing all defendants and all claims for want of jurisdiction. The doctors then filed a motion for new trial, which the trial court denied. This appeal followed.


The doctors challenge the trial court’s dismissal of their claims for want of jurisdiction, contending that (1) they can challenge the 2004, 2005, and 2007 final agency orders as void, (2) they can challenge the SOAH administrative law judges’ final orders assessing penalties, (3) their constitutional challenges to the Workers’ Compensation Act and to the Division’s interpretation of the Act were timely and could be brought in the trial court, (4) they were entitled to bring a declaratory judgment action to determine their rights under the statute, and (5) they are entitled to injunctive relief to prevent “continued wrongs from occurring,” “any proven unlawful acts,” and “yet to be proven unconstitutional acts.”4 Appellees contend the trial court lacked jurisdiction over this action because (1) the doctors may not collaterally attack final agency decisions, (2) Patino and Craighead did not wait for the administrative orders to become final before filing suit, and (3) Wilson has no administrative actions to appeal.

We review a plea challenging the trial court’s jurisdiction de novo. Id. at 227.

I. Collateral Attacks on Final Agency Orders

*3 The doctors contend that they can challenge the 2004, 2005, and 2007 final agency orders as void. Under the Administrative Procedures Act (APA), a person who is aggrieved by a final decision in a contested case and who has exhausted his administrative remedies is entitled to judicial review. See id. at *4.

A trial court generally does not have jurisdiction to review an administrative order that is final and unappealable. See Peterson, 1998 WL 333267, at *3.

The doctors contend that the final orders are void because, according to the doctors, they were issued by the medical advisor, who lacked authority to remove the doctors from the approved doctor list. The doctors assert that before September 2005, the Commission could take action only by a majority vote of its members, and the failure to do so rendered the 2004 and 2005 orders void. See Tex. Labor Code § 415.0215) (“Only the commissioner may impose ... a sanction that deprives a person of the right to practice before the division or of the right to receive remuneration under this subtitle for a period exceeding 30 days.”).

Although the final orders are signed by the medical advisor, they do not reflect that the Commission failed to take a vote before removing Wilson and Patino in 2004 and 2005 from the approved doctor list or that the Commissioner of the Division failed to remove Craighead in 2007. In the 2004 order, the medical advisor notified Wilson that it was “the Commission’s final decision to deny [him] admission to the Approved Doctor List.” (Emphasis added). The 2005 order contains similar language addressed to Patino: “This letter serves as official notice that the Texas Workers’ Compensation Commission ... has denied you admission to its Approved Doctor List.” (Emphasis added). As for the 2007 order, Craighead was notified that “the Texas Department of Insurance, Workers Compensation Division ... denied [his] application for admission to its Approved Doctor List.” Accordingly, these final orders are not inconsistent with the statutes’ requirements and appear valid on their face. On the record before us, the orders are not subject to collateral attack. See, e.g., Jolly, 856 S.W.2d at 861.

II. SOAH Administrative Orders

*4 The doctors also contend that they can challenge the SOAH administrative law judges’ final orders assessing penalties. Appellees contend that the trial court never acquired subject matter jurisdiction over the appeal of the orders assessing penalties because Patino and Craighead did not exhaust their administrative remedies before filing suit. Instead, they filed suit to enjoin the administrative process from going forward. Wilson joined the lawsuit even though he was not subject to any administrative action. The doctors contend that the trial court acquired jurisdiction over the issue when they amended their petition after the penalties were assessed.

The Third Court of Appeals has held that when the APA applies, it requires exhaustion of remedies before seeking judicial review in the courts. Tex. Gov’t Code §§ 2001.001, .051-.178).

In the Id. at 565-66.

The court of appeals addressed “if and when a jurisdictional defect created by a failure to exhaust administrative remedies may ‘ripen’ and whether such jurisdictional defects would require abatement rather than dismissal.” Id. at 568.

Here, there is no dispute that the doctors filed suit before awaiting a final decision from the SOAH. Their amendment after the fact did not cure the trial court’s lack of jurisdiction over the issue.5 See Foster v. Teacher Ret. Sys., 273 S.W.3d 883, 891 (Tex. App.—Austin 2008, no pet.) (“In this case, the trial court lacked jurisdiction over both defendants, and dismissal, not abatement to cure a timing issue, was appropriate.”).

III. Constitutional Challenges

*5 The doctors also contend that the trial court has jurisdiction over their constitutional challenges to the Workers Compensation Act and their challenges to the Division’s interpretation of the Act. Sovereign immunity implicates a trial court’s jurisdiction and when applicable, precludes suit against a governmental entity. See id. at 634-35.

Lawsuits seeking “prospective injunctive relief against future agency orders based on the statutes and regulations” are thus appropriately brought against the governmental agency. Spence, 2019 WL 1868841, at *4.

Viable Claim. Applying these principles, we must determine whether the doctors pleaded a viable claim challenging the constitutionality of a statute or challenging governmental interpretation of any statute or ordinance, and we look to the underlying nature of the claims to make this determination. See Chisholm Trail SUD Stakeholders Grp. v. Chisholm Trail Special Util. Dist., No. 03-16-00214-CV, 2017 WL 2062258, at *6 (Tex. App.—Austin May 11, 2017, pet. denied) (mem. op.).

The doctors argue on appeal that the “requirements of the Texas Workers’ Compensation Act violate” their constitutional rights to property and liberty. See Texas Constitution article I, section 19 to exercise one’s occupation “free from unreasonable governmental interference”).6

*6 The doctors allege in their live petition, “This suit ... raises critical statutory rights of health care providers in Texas, including statutory interpretation, statutory conflicts, jurisdictional questions, and constitutional challenges.” They allege that the Commissioner, the Division, and its “named officials and employees ... exceeded their statutory authority by improperly, unlawfully, and impermissibly attempting to deny and continuing to enforce the denial and restriction of the statutory rights of [the doctors] under the Texas Workers’ Compensation Act.” They also allege, “The government and its official and its employees, the Defendants, are unreasonably interfering with the [doctors’] statutory and Constitutional rights to practice their professions and right to engage in business and property” and “the Defendants’ actions have been and continue to be made through unlawful procedure and error of law and in violation of the Constitution.” The doctors seek prospective injunctive relief (1) “to prohibit the application, use, and enforcement of the improper denial of the” doctors to the approved doctor list, (2) to abate “any further administrative proceedings before SOAH and the [Division],” and (3) to remove the doctor’s names from the Division’s website “as being disciplined and being denied to the [approved doctor list] until the legal issues in this lawsuit are resolved.”

As the doctors point out, their claims are akin to claims brought by the plaintiffs in Id. at 74, 77.

Construing the pleadings liberally, see Tex. Labor Code § 402.061).

Under the Act, the Division is authorized to develop and adopt requirements for admission to the approved doctor list. id.

*7 Standing. The Division contends that the doctors lack standing to bring their constitutional claims because they “have not been asked to pay the assessed penalties or to provide a security bond” and thus have shown no harm. The standing doctrine identifies suits appropriate for judicial resolution. id.

Ripeness. The Division also contends that the doctors’ claims are not ripe because disciplinary actions against Patino and Craighead were still pending when the lawsuit was filed. Under the ripeness doctrine, courts “consider whether, at the time a lawsuit is filed, the facts are sufficiently developed so that an injury has occurred or is likely to occur, rather than being contingent or remote.” id.

Redundant Remedies. The Division also argues that the doctors’ constitutional challenges are barred under the redundant remedies doctrine because the doctors could have obtained relief through a timely filed suit for judicial review of the SOAH orders. Under that doctrine, claims seeking a declaratory judgment are barred when the same claim could be brought through different channels. id.

Proper Parties. The doctors contend that the Commissioner and his predecessor, the SOAH and named administrative law judges, and the attorney general are also proper parties to the constitutional challenges and challenges to the Division’s interpretation of the Act because these appellees are all interested parties. See Tex. Civ. Prac. & Rem. Code § 37.006(a) (“When declaratory relief is sought, all persons who have or claim any interest that would be affected by the declaration must be made parties.”). We disagree.

In Spence, 2019 WL 1868841, at *4 (“If the plaintiff fails to plead a viable claim, ... the governmental defendant remains immune from suit.”).

IV. Ultra Vires Claims

*8 The doctors also contend that their ultra vires claims are not barred by sovereign immunity. The Commissioner argues that he should not have been joined as a defendant because there is no allegation that he committed specific ultra vires acts.

A suit asserting that a government officer acted without legal authority or seeking to compel a governmental official to comply with statutory or constitutional provisions is an ultra vires suit and is not subject to pleas of governmental immunity. Hall v. McRaven, 508 S.W.3d 232, 238 (Tex. 2017).

The Commissioner contends that no specific ultra vires actions by him have been pleaded. We disagree. The doctors allege that the Commissioner acted beyond his “statutory authority and in violation of the Texas Workers’ Compensation Act” in (1) removing the doctors from the approved doctor list without following the protocol set forth in the statute, (2) prohibiting the doctors from owning, being employed by, and investing in a healthcare facility in Texas, and (3) wrongfully listing the doctors on the Division’s website as being disciplined. As pleaded, the Commissioner is the “state agency head,” and he purportedly violated the Act in taking the alleged actions described above. Although the doctors allege that the Division and others also committed these acts, the doctors’ allegations implicate the Commissioner as the allegedly responsible government actor in his official capacity.9 See, e.g., id.


*9 We conclude that the trial court did not err in dismissing the doctors’ challenges to the SOAH’s final agency orders for lack of jurisdiction. The trial court, however, erred in dismissing the doctors’ (1) claims against the Division challenging the constitutionality of the Workers’ Compensation Act and the Division’s interpretation of the Act, and (2) ultra vires claims against the Commissioner. We reverse the trial court’s order dismissing these claims against the Division and the Commissioner and affirm the trial court’s order dismissing all other claims against all other parties.


1 The current commissioner has been substituted for his predecessor. See Tex. R. App. P. 7.2(a) (“When a public officer is a party in an official capacity to an appeal or original proceeding, and if that person ceases to hold office before the appeal or original proceeding is finally disposed of, the public officer’s successor is automatically substituted as a party if appropriate.”).

This case was transferred to our court from the Third Court of Appeals; therefore, we must decide the case in accordance with its precedent if our decision would be otherwise inconsistent with its precedent. See Tex. R. App. P. 41.3.

2 Effective September 1, 2005, the Commission was abolished and reorganized under the Division. See Act of May 29, 2005, 79th Leg., R.S., ch. 265, § 8.001, 2005 Tex. Gen. Laws 469, 607-08.
3 The doctors sued the Division, the Commissioner, an employee of the Division, SOAH, two administrative law judges, the State, and the attorney general.
4 The Workers’ Compensation Act establishes a “comprehensive scheme whereby employees who are covered by workers’ compensation insurance and incur ‘compensable’ injuries are provided the exclusive remedy of ‘workers’ compensation benefits,’ ” including “medical benefits” (i.e., “all health care reasonably required by the nature of the injury as and when needed”), to be paid by the insurance carrier that covers each worker. 506.002.
5 The APA was amended effective September 2015 to allow for “prematurely filed petition[s] ... to initiate judicial review.” See Tex. Gov’t Code § 2001.176. The amended statute was not in effect when this lawsuit was filed and the SOAH administrative penalties were assessed.
6 As Justice Willett noted,

The U.S. Supreme Court has repeatedly declared that the right to pursue a lawful calling “free from unreasonable governmental interference” is guaranteed under the federal Constitution, and is “objectively, deeply rooted in this Nation’s history and tradition.” A pro-liberty presumption is also hardwired into the Texas Constitution, which declares no citizen shall be “deprived of life, liberty, property, [or] privileges or immunities”—phrasing that indicates citizens already possess these freedoms, and government cannot take them “except by the due course of the law of the land.”

Greene, 360 U.S. at 492, 79 S.Ct. 1400).

7 The Division argues the doctors lack standing to challenge the constitutionality of the Workers’ Compensation Act under the Texas open courts doctrine. See article I, section 19 of the Texas Constitution, we need not address standing under the open courts doctrine.
8 Accordingly, we agree with the SOAH and administrative law judges that they are not proper parties to the doctors’ declaratory judgment claims. See Tex. Civ. Prac. & Rem. Code § 37.006(b). But the statute does not require the attorney general to be named as a party in such proceedings.
9 The doctors also sued Dr. Donald Patrick. The doctors pleaded that Patrick is an employee of the Division but did not allege that Patrick was responsible for any ultra vires actions. Accordingly, the trial court did not err in dismissing the doctors’ claims against Patrick. See id.
10 We have noted that there is no “legal or policy reason” preventing a party from raising statutory challenges and ultra vires claims both in the same lawsuit. See id.
End of Document