Court Opinion

ID: 4072966
Source: CourtListenerOpinion
Date Created: 2016-09-30 03:22:36.330622+00
Date Added: 2024-06-11T14:32:35.618212
License: Public Domain

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

                                                                            ii
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

                                                                                                                                                  iii
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?

                                                                          iv
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.

                                                                           1
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).

                                                                                 2
No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
      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.

                                                                                  3
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.

                                                                               4
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.

                                                                             5
No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
                       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

                                                                                   6
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

                                                                              7
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

                                                                                     8
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.

                                                                              9
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
                                                                              10
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
                                                                                   11
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

                                                                                 12
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.

                                                                           13
No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief
                                      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

                                                                              14
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

                                                                               15
No. 03-14-00808-CV Rosendo Morales Appellant’s Reply Brief