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Click here for the full text of this decision FACTS:Approximately 80 percent of the patients who visit First Rio Valley Medical are workers’ compensation claimants. In March 2002, First Rio and its owner, Robert Howell, a chiropractor, filed a suit in Travis County challenging the constitutionality of rules regarding fees and the review conducted by independent review organizations (IROs) in workers’ compensation cases. First Rio’s suit was against an IRO called Envoy and it sought declaratory relief and an injunction permitting First Rio to file medical necessity disputes without paying the IRO fee. The legislature created IROs in 1997 to review the medical necessity of procedures in disputes between medical insurance carriers and persons insured by employer-provided health benefit plans. In the workers’ compensation system, a health care provider seeking review of a medical necessity dispute involving denial or reduction of payment for medical services must file its request with the insurance carrier and the medical review division of the Texas Workers’ Compensation Commission in what is called a “retrospective necessity dispute.” The TWCC forwards the request to an IRO, who then notifies the parties of the assignment and requests documentation. The health care provider must submit the documents and a fee of for IRO review. The fee for “tier one” doctors is $650; “tier two” doctors pay $460. If the health care provider wins the review, the fee is reimbursed. Whoever loses at this stage can request a contested case hearing before the State Office of Administrative Hearings. The losing party at this stage may appeal to a trial court in Travis County. After First Rio filed its suit, this court issued an opinion in 2002, which held that the TWCC had improperly delegated audit powers of medical bills to private insurance carriers. Subsequently, First Rio filed 723 suits in Cameron County justice of the peace courts against workers’ compensation insurance carriers, seeking payment of medical bills the carriers either partially paid or denied, as well as $1,050 in attorneys’ fees for each suit. In the Travis County action, the TWCC filed an answer and a counterclaim, saying First Rio had to go through the TWCC’s statutes and rules to complain of the fees in the Cameron County suits, and asked for temporary and permanent injunctions against the filing of any more suits in Cameron County. Meanwhile, Texas Mutual filed a petition to intervene, and First Rio filed a motion to sever the injunction claims and transfer them to Cameron County. The trial court issued a temporary restraining order prohibiting First Rio from filing more suits in Cameron County. At the hearing on TWCC’s request for temporary injunction, Howell testified that he was going to file another suit every time a bill was denied or reduced. The trial court thus granted the temporary injunction. The rest of the case was set for a nonjury trial on Sept. 30, 2002. First Rio’s interlocutory appeal and request for mandamus were rejected. The case was reassigned to a different trial court in Travis County, but had to be rescheduled for Dec. 10. In October, First Rio filed a jury demand and a jury fee. In November, First Rio got a 14-day temporary restraining order against Texas Mutual in one of the Cameron County actions. On Dec. 3, Texas Mutual filed a motion to strike First Rio’s jury demand, and on Dec. 4, First Rio filed for a continuance on the ground that a medical condition would prevent Howell from being available on the 10th. On Dec. 10, the trial court granted Texas Mutual’s motion to strike the jury demand, and denied First Rio’s motion for continuance. After a three-day bench trial, the trial court granted declaratory relief requiring payment disputes to be handled through TWCC’s administrative procedures and issued a permanent injunction enjoining First Rio from filing new suits and pursuing the suits already filed in Cameron County except as allowed by rule or statute. The court also stated an intention to award attorneys’ fees against First Rio. Three months later (after hearing settings and continuances), the trial court held a hearing on Texas Mutual’s motion for sanctions against First Rio’s law firm. The trial court granted the motion finding First Rio got its 14-day, ex parte TRO “for the purpose of preventing discovery and delaying trial,” “engaged in extraordinary efforts to prevent Texas Mutual from taking the depositions of the Respondents’ clients,” “designed and carried out a vexatious litigation campaign,” and “made false statements of material fact to the Court” at the hearing on the motion for sanctions. The court also awarded $13,000 in attorneys’ fees sanctions to Texas Mutual. Then, sua sponte, the trial court imposed an additional $3,200 in sanctions when First Rio’s attorney did not appear at the hearing for a motion for judgment. After final judgment was entered, which included a finding that the rules First Rio initially challenged were constitutional, First Rio asked for findings of fact and conclusions of law. The trial court complied, including 36 stipulated matters and 16 additional oral stipulations that had been read at trial. HOLDING:Affirmed, as reformed, in part; reversed and remanded in part. First Rio first claims that the Travis County court was without jurisdiction to issue the injunctions related to the Cameron County suits. The court reminds First Rio that it filed its Travis County suit first, so primacy in time was not an issue. Furthermore, the injunctive venue statute, which would otherwise place venue in the county where either party is domiciled, applies only when the relief sought is purely or primarily injunctive. Here, as evidenced by the petitions filed with the court, the principal and primary relief sought was to establish by court decree the constitutionality of the IRO fee rule and the requirement that First Rio first exhaust administrative remedies. The anti-suit injunction was ancillary, and venue was proper in Travis County. With venue established, the court goes on to find that the Travis County court had jurisdiction to issue the anti-suit injunction, based on Howell’s testimony. The injunction did not enjoin the Cameron County justice courts, it merely enjoined Howell and First Rio. The court then turns to the issue of whether First Rio had to first exhaust administrative remedies in medical payment disputes before seeking relief in court. Because the statutory scheme demonstrates that the legislature has granted to the TWCC the sole authority to make an initial determination of a medical fee or medical necessity dispute, the court holds that the TWCC has exclusive jurisdiction over these disputes. If an agency has exclusive jurisdiction, typically a party must exhaust all administrative remedies before seeking judicial review of the agency’s action, and trial courts have only limited review of the administrative action. Consequently, First Rio is required to first go through the TWCC’s procedures before seeking the judicial relief it desires. The court next reviews the denial of First Rio’s jury demand. The trial court, in its findings of fact, found that First Rio filed the jury demand solely to delay the proceedings, and also found that any delay would disrupt the trial court’s docket and ordinary business. The court finds the evidence supports these findings, noting that First Rio never requested a continuance, nor did it request a hearing on its jury demand. A jury trial would not have been have been able to be set until July 2003, which would harm the parties and the court, and many of the issues were issues of law that the trial court would have had to decide anyway. The court rejects First Rio’s claim that the trial court’s declaratory judgment was an impermissible advisory opinion, and that the TWCC lacked standing to request declaratory relief. Because the trial court’s declarations were based on the case before it, not on hypothetical claims or abstract questions of law, they were not advisory in nature. Further, there is no authority for the proposition that the TWCC would not have standing to pursue a declaratory judgment. The court considers the propriety of the attorneys’ fees assessed in the declaratory judgment action, finding that the relief sought by the declaration and the injunction were separate. If the declaratory relief parroted the injunctive relief, and it was clear the declaratory judgment statute was used solely as a vehicle to obtain attorneys’ fees, the judgment would be different. The court rebuffs First Rio’s claim challenging the constitutionality of several of the trial court rulings as applied to him: 1. issuance of a permanent injunction violated the right to contract; 2. declaration that the IRO fee rules are constitutional violates the open courts provision of the Texas Constitution; 3. declaration that First Rio must exhaust administrative remedies before seeking resolution of a medical payment dispute in a court is unconstitutional for all disputes under $200; and 4. variance between its oral ruling and final judgment denies First Rio due process of law. The court is somewhat sympathetic, however, to First Rio’s argument that the trial court abused its discretion by twice sanctioning its law firm. The trial court’s order in the first case was based on 1. discovery abuse; 2. the ex parte TRO; 3. the filing of 43 identical affidavits; 4. the filing of vexatious litigation; 5. the making of false statements involving the filing of the lawsuits; 6. the motion to strike Texas Mutual’s counsel; and 7. the filing of a patently frivolous petition for writ of mandamus. The court finds support for the sanctions based on all but the third ground. As Texas Mutual originally sought $23,000 in sanctions, and the trial court ordered $13,000, the court remands for a recalculation in light of its finding that the third ground was an abuse of discretion. The court then finds that the law firm failed to object to the sua sponte sanctions, so that issue is waived. OPINION:Patterson, J.; Law, Patterson and Puryear, JJ.

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