Texas Bill Aims to Reverse State High Court Ruling in Work Comp Case

April 17, 2009

Texas lawmakers, unhappy with a recent state Supreme Court decision in a high profile workers’ compensation case, have passed out of committee a measure its sponsors say will overturn the Court’s ruling in Entergy v. Summers.

In early April the Texas Supreme Court upheld by a vote of 6 – 3 an earlier decision, that a “premises owner” cannot be sued by injured employees of a contractor. The Court had agreed to rehear the case – something it rarely does – after lawmakers objected to its original unanimous 2007 ruling.

Turbine mechanic John Summers was injured in a 2001 accident while repairing a leak on a hydrogen generator at an Entergy Gulf States plant in Bridge City. Summers has since died of unrelated causes, according to Associated Press reports.

Entergy covered his injury with a workers’ compensation policy that protected the company from being sued. In its original 2007 ruling and again in its April 2009 decision, the Court expanded the immunity that had before been applied only to suits filed by direct employees to cover contractors as well.

Lawmakers said it was never their intention that the workers’ compensation law would apply to contractors. State legislators previously have tried but failed to pass bills that would have supported Summers’ position in the case. In its written opinion, the Supreme Court basically told lawmakers they need to go back to the drawing board as current workers’ compensation law favors Entergy. “The Court can attach no controlling significance to the Legislature’s failure to enact legislation,” the opinion stated.

The new bill, HB 1657, by Rep. Helen Giddings of DeSoto, passed out of the House Business and Industry Committee by a 9 – 0 vote after being stalled in committee for nearly a month, the House of Representatives reported.

According to Rep. Giddings, “the vast majority of members of the Texas House of Representatives believe that the court overstepped its bounds and ignored legislative intent” proving that legislators can set aside party lines in their efforts to “return the policy writing to the Texas Legislature where it rightfully belongs.”

The American Insurance Association (AIA) has expressed strong opposition to the measure. The AIA says H.B. 1657 would expose premises owners to third-party lawsuits, serve as a disincentive for jobsite owners to provide workers’ compensation insurance and will lead to increased litigation and construction costs.

“Under current law, injured workers are able to obtain fair compensation for a workplace injury from an employer who carries workers’ compensation coverage without proof of fault in a court of law,” said John Marlow, assistant vice president for AIA’s Southwest Region in a statement released by the association. “H.B. 1657 will force injured workers to go to court to prove fault for their injury before receiving appropriate compensation for medical care and lost wages,” Marlow said.

HB 1657 seeks to undermine the Texas workers’ compensation system by eliminating tort immunity for owners of a jobsite, currently accorded “statutory employer” status by virtue of the Entergy decision, and by fostering third-party lawsuits, according to the AIA.

AIA said it has joined a broad coalition of the business community to urge committee members of House Calendars Committee to not advance the bill.

Sources: AIA, www.aiadc.org; Texas House of Representatives, www.house.state.tx.us; Associated Press

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