The recent Texas Supreme Court decision in Ruttiger has staggered injury lawyers everywhere after holding that plaintiffs cannot sue workers compensation insurers for knowing violations of the Texas Insurance Code or deceptive trade practices. This dramatic overhaul of Texas law will have far-reaching consequences.
The Ruttiger case involved a plaintiff who was injured at work. In trial, the carrier admitted that it did not follow its own guidelines by denying the claim when it failed to even contact the employee/plaintiff or plaintiff’s physician. The jury found that this constituted a knowing refusal to conduct a reasonable investigation and held that the plaintiff was entitled to treble damages under the DTPA and Texas Insurance Code.
On appeal, the Texas Supreme Court disagreed and imposed a ground-breaking new rule that the Texas Labor Code precludes such a suit made under the Insurance Code or DTPA. As a result, the workers compensation act will be the exclusive remedy, barring even knowing violations of the DTPA or Texas Insurance Code. It appears that Texas injury lawyers and their clients are now facing yet another obstacle to recovering in the Lone Star State.
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