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Texas Supreme Court issues important workers' comp ruling (2 of 2)

Welcome back. We are currently discussing an important ruling handed down by the Texas Supreme Court last week. The state's highest court held that workers can no longer bring a civil lawsuit against workers' compensation insurance carriers that act in bad faith when handling their claims.

The case involved Texas Mutual Insurance Co. of Austin, the largest workers' compensation insurance carrier in the state, and a worker whose benefits were initially denied. The worker sued Texas Mutual under the insurance code, deceptive trade practices law and bad-faith tort law.

A Houston jury awarded the worker a large sum, which was overturned by the Texas Supreme Court last summer. The case was then remanded to a lower court to consider the bad-faith claim only. But the appellate court never got to hear the case; instead the Texas Supreme Court granted a motion to re-hear the case and a new decision was issued.

In its new decision, the state Supreme Court held that the worker could not even sue Texas Mutual under the bad-faith claim. The concurring justices wrote that the bad-faith provision was a "judicial gap-filler" that arose out of case occurring before the state's workers' compensation system had been overhauled.

Essentially, the majority decided that allowing these bad-faith tort claims to be adjudicated outside of the workers' compensation system would add too many inconsistencies and complications to the system. They reasoned that the tort claims are unnecessary in the wake of the system's reform.

However, four of the justices on the bench disagreed with the decision, including the chief justice. In a dissenting opinion, the chief justice reasoned that in 1989, the state Legislature had chosen to keep bad-faith claims on the books as a way to balance competing interests in the workers' compensation system.

The chief justices wrote that the court was effectively "substitut[ing] its judgment for the Legislature's."

Source: statesman.com, "State Supreme Court rules injured workers can't sue for bad faith," Laylan Copelin, June 24, 2012

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