Methodist Hospitals of Dallas v. Texas Workers' Compensation Com'n

• Decision Date: 09 March 1994
• Docket Number: Nos. 3-91-565-CV and 3-91-566-CV,s. 3-91-565-CV and 3-91-566-CV
• Citation: 874 S.W.2d 144
• Parties: METHODIST HOSPITALS OF DALLAS, et al., Appellants, v. TEXAS WORKERS' COMPENSATION COMMISSION; George Chapman; American Insurance Association; Alliance of American Insurers; The National Association of Independent Insurers; and The Texas Workers' Compensation Assigned Risk Pool, Appellees.
• Court: Texas Court of Appeals

Page 144

874 S.W.2d 144

METHODIST HOSPITALS OF DALLAS, et al., Appellants, v. TEXAS WORKERS' COMPENSATION COMMISSION; George Chapman;

American Insurance Association; Alliance of American

Insurers; The National Association of Independent Insurers;

and The Texas Workers' Compensation Assigned Risk Pool, Appellees.

Nos. 3-91-565-CV and 3-91-566-CV.

Court of Appeals of Texas,

Austin.

March 9, 1994.

ABOUSSIE, Justice.

The opinion of the Court dated August 25, 1993 is withdrawn and this opinion is substituted therefor.

In appealing two related causes, appellants ¹ assert the trial court erred in dismissing both proceedings as moot. Because we hold that some of appellants' claims are moot and that the trial court did not have jurisdiction over the remaining claims, we will affirm the trial court's judgment of dismissal in both causes.

BACKGROUND

Under the workers' compensation statutory scheme, health care providers have long been entitled to fair and reasonable compensation for the medical services rendered injured workers. See Act of March 28, 1917, 35th Leg., R.S., ch. 103, § 1, 1917 Tex.Gen.Laws 269, 273 (Tex.Rev.Civ.Stat.Ann. art. 8306, § 7b, since repealed). In 1987, the Legislature directed the Industrial Accident Board to establish and maintain "a guideline of fair and reasonable fees and charges" that health care facilities may collect for their treatment of workers' compensation patients. Act of June 19, 1987, 70th Leg., R.S., ch. 1118, § 1, 1987 Tex.Gen.Laws 3834 (Tex.Rev.Civ.Stat.Ann. art. 8306, § 7b(c)(1), since repealed). In response, the Industrial Accident Board (now the Texas Workers' Compensation Commission) ² adopted its Rule On December 5, 1990, the Commission amended Rule 42.110 on an emergency basis, allowing the guidelines to remain effective beyond their original expiration date, December 31, 1990. 15 Tex.Reg. 7073 (1990). The amended rule continued in effect until June 30, 1991. 16 Tex.Reg. 2039 (1991); 16 Tex.Reg. 3173 (1991). Both the original and amended rule applied to the treatment of injuries that occurred before January 1, 1991. ⁴ On December 21, 1990, the Commission adopted a new Rule 134.400 on an emergency basis, effective January 1, 1991. See 16 Tex.Reg. 78 (1991) (28 Tex.Admin.Code § 134.400, since repealed). This rule contained fee guidelines identical to those in Rule 42.110. Rule 134.400 applied to the treatment of injuries that occurred on or after January 1, 1991. ⁵ Rule 134.400 also remained in effect until June 30, 1991. 16 Tex.Reg. 359 (1991); 16 Tex.Reg. 2007 (1991). Appellants amended their suit against the same defendants, asking the trial court to declare that the amended Rule 42.110 and the new Rule 134.400 were invalidly promulgated and to enjoin their enforcement. The trial court severed the claims involving the original Rule 42.110 (the original cause) from the claims relating to the amended Rule 42.110 and Rule 134.400 (the severed cause). ⁶

                42.110 on October 31, 1989, to be in effect for 1990 only.  See 14 Tex.Reg. 5870 (1989) (28 Tex.Admin.Code § 42.110, since repealed).  This rule established fee guidelines for charges that health care facilities may collect for services they provide employees injured on the job, and for which they are entitled to reimbursement from the employers' insurance company.  Appellants originally filed suit seeking declaratory and injunctive relief from Rule 42.110.  The Commission and its executive director were defendants in this cause.  Several parties intervened in opposition to appellants' allegations. 3  The trial court denied appellants' request for a temporary injunction, a ruling that this Court affirmed on appeal.  We held that although the appellants had demonstrated that the challenged rule was invalidly enacted, we could not hold on the record before us that the trial court abused its discretion by not granting the requested temporary injunction.  Methodist Hosps. v. Industrial Accident Bd., 798 S.W.2d 651 (Tex.App.--Austin 1990, writ dism'd w.o.j.)
                

After severance of their claims, appellants once again amended their pleadings, seeking additional relief. Appellants asked the court to certify a class of defendants consisting of all insurance companies that had engaged in writing workers' compensation insurance in Texas since February 4, 1989. Appellants asked the court to declare Rule 42.110 and Rule 134.400 invalid and to enjoin the Commission and the class defendants from relying directly or indirectly upon the fee guidelines in determining the fair and reasonable amount due appellants for the services they provided to workers' compensation claimants after February 4, 1989. Finally, appellants sought declaratory and injunctive relief requiring the class defendants to determine the After the amended Rule 42.110 and Rule 134.400 expired on June 30, 1991, the defendants and intervenors filed a motion to dismiss in both causes, claiming that appellants' claims were moot. Appellants assert the trial court incorrectly granted these motions because at least two controversies remained: (1) the fair and reasonable charges due for appellants' services since February 4, 1989, and (2) the validity of Rule 42.110, Rule 134.400, and the fee guidelines. They also claim they were entitled to judgment based upon this Court's decision in the earlier appeal from the denial of the temporary injunction. Appellants bring three points of error in Cause No. 3-91-565-CV involving the original Rule 42.110 (the original cause), and five points of error in Cause No. 3-91-566-CV involving amended Rule 42.110 and Rule 134.400 (the severed cause).

correct amount due for appellants' services and seeking damages for the difference between the amount the class defendants had previously paid appellants and the proper reimbursement due them.

PRELIMINARY ISSUES

In appellants' third point of error in the original cause, they assert that the trial court should have granted their motion for judgment declaring the fee guidelines invalid. Appellants contend that this Court's opinion in Methodist Hospitals constitutes the "law of the case" and required the trial court to grant their motion. We agree that our earlier opinion, although a decision on appeal from the refusal of a temporary injunction, constitutes the law of this case as to the legal principles declared therein. Texaco, Inc. v. Parker, 373 S.W.2d 870, 872 (Tex.Civ.App.--El Paso 1963, writ ref'd n.r.e.).

In our earlier opinion, we stated that former section 5 of the Administrative Procedure and Texas Register Act, Tex.Rev.Civ.Stat.Ann. art. 6252-13a (West Supp.1993) ("APTRA") ⁷, established the procedures the Commission was bound to observe in adopting Rule 42.110 and that section 5(e) of APTRA declares that no rule is valid unless adopted in substantial compliance with these requirements. As we held, substantial compliance is a question of law for the court, not one of fact, and must be determined solely from the face of the Commission's order adopting the rule. Methodist Hosps., 798 S.W.2d at 659.

Our conclusion after reviewing the Commission's order was that Rule 42.110 was invalidly enacted because it was not adopted in substantial compliance with APTRA § 5(c-1)(1). Methodist Hosps., 798 S.W.2d at 659. Our conclusion on a question of law constitutes the law of the case binding the trial court and the Commission and rendering further orders unnecessary. When the trial court granted appellees' motion and dismissed the cause as moot, however, it lost the power to grant appellants' motion or adjudicate issues further. When a cause becomes moot, the only proper judgment is one dismissing the cause. Polk v. Davidson, 145 Tex. 200, 196 S.W.2d 632, 633 (1946). This point is overruled.

Appellants' fourth and fifth points of error in the severed cause complain about the trial court's "finding" that the challenged rules were validly enacted. Appellants admit in their brief to this Court, however, that no written ruling to this effect exists; the trial court simply dismissed the cause. These points are overruled.

MOOTNESS

Appellants' second points of error in both causes contend that their claims for any further declaratory and injunctive relief regarding the original and amended Rule 42.110 and Rule 134.400 are not moot, despite the expiration of these rules. Having expired, no rule exists for the trial court to enjoin the Commission from enforcing. As to appellants' declaratory relief, this Court has held that "a judgment ... under these circumstances would be ineffectual for want of a subject matter upon which it could operate, the validity of [the rule] being immaterial." Texas Parks & Wildlife Dep't v. Texas Appellants contend that the fee guidelines could be reenacted at any time. The validity of any future rule can be challenged at a later date. Courts are not empowered to decide cases predicated upon future contingencies. Id. at 596. Appellants' second points of error are overruled.

Ass'n of Bass Clubs, 622 S.W.2d 594, 596 (Tex.App.--Austin 1981, writ ref'd n.r.e.) (agency rule superseded by statute).

Appellants' third point in the severed cause claims that the Commission's issuance of fee guidelines is an act "capable of repetition yet evading review," an exception to the mootness doctrine. See General Land Office v. Oxy USA, 789 S.W.2d 569, 571 (Tex.1990); Texas Educ. Agency v. Dallas Indep. Sch. Dist., 797 S.W.2d 367, 369 (Tex.App.--Austin 1990, no writ).

Appellants claim the emergency extension of Rule 42.110 for six months shows the Commission's willingness to use its emergency powers to extend rules indefinitely. The record reflects the Commission was faced with a difficult transition from enforcing the existing workers' compensation law, the "old law," to implementing the "new law" applying to post-1990 injuries. It chose to extend a rule dealing with the "old law" while it concentrated its resources on establishing rules under the "new law." The trial court dismissed ap...