Sanctions Upheld Against State Office of Risk Management (SORM)

 This week the Eastland Court of Appeals affirmed an order by the trial judge for sanctions against two Attorneys General for frivolous filing of a lawsuit.

The case, titled State Office of Risk Management v. Foutz, involved a Texas Department of Criminal Justice corrections officer who witnessed the stabbing and murder of an inmate and was powerless to stop the event. As a result, she developed Post-Traumatic Stress Disorder, or P.T.S.D., and filed a workers' compensation claim. The State Office of Risk Management (SORM) is the state agency charged with handling workers compensation claims for state employees. SORM disputed the claim but requested that Officer Foutz be seen by one of their doctors. When even SORM's own doctor concluded that Officer Foutz suffered from PTSD, the Division of Workers Compensation found in favor of Officer Foutz. As a result, SORM appealed the division finding by suing Officer Foutz in state court to overturn the Division of Workers' Comp's finding. After a jury heard the evidence and ruled for Officer Foutz, the trial judge ordered the two trial attorneys to explain why they and SORM should not be sanctioned or fined for taking up the Court's time by filing such a frivolous lawsuit. After hearing their explanation, the trial judge sanctioned the two attorneys $5,000 and $3,000 and sanctioned SORM $100,000. The Court of Appeals upheld the sanctions but sent the matter back to the trial judge to explain the $100,000 sanction against SORM.

What is important about this case, besides the fact that this brings to light the misdeeds of SORM, is that in Texas you cannot sue the State Office of Risk Management for bad faith handling of a workers' compensation claim. The only way to punish SORM is through the imposition of sanctions. Thus, until the Texas Legislature changes the law to allow its own employees to seek justice when their workers claims are mishandled, we will have to rely upon the courage of judges like those in the Foutz case. Unfortunately, the trial judge in this case was retiring (which may explain his courage in assessing these sanctions). Judges in Texas are elected and are often reluctant to impose sanctions despite such egregious behavior because of the effect it might have on their re-election efforts.