TX Trumps CN Jurisdiction

State jurisdictional issues are rare, but not unusual in workers' compensation.

International jurisdictional issues are even more rare, and with regards to the state of Texas, are unusual.

In a case I believe to be of first impression a Texas appellate court on Tuesday ruled that the state's judicial system had jurisdiction over a British citizen's tort claim against his alleged Houston-based employer for a frostbite injury he sustained while working in Canada.

Spectraseis is an oil and gas exploration company headquartered in Houston, but operations worldwide.

In early 2011, it was in need of workers to carry out a seismic survey in Saskatchewan, a province in the central part of Canada.

Due to potential visa problems, the company decided to bring in workers from the U.K. To accomplish this, the company says it hired Bill Rowlands as an independent contractor. Rowlands then recruited Christopher Mulgrew for the project.

It was bitterly cold at the project site, with temperatures ranging from -30 Celsius to -40 Celsius. By mid-day on his first day on the job, Mulgrew claimed that his fingers had started turning gray. 

Mulgrew sought treatment at a hospital, and he used his own travel insurance to cover the cost. He did not report the injury as being work-related at the time. 

Doctors determined that he was suffering from frostbite, leading to Mulgrew three fingers on one hand being amputated.

Mulgrew then sought to sue Spectraseis for negligence in a Texas court. Spectraseis moved to dismiss the suit for lack of subject matter jurisdiction, claiming that the action was barred by the exclusivity of the Saskatchewan Workers' Compensation Act.

Not Canada, Texas says.

The Texas District Court sided with Spectraseis and dismissed Mulgrew's case.

On appeal Mulgrew argued that "the practical effect often achieved through the dismissal of a case in favor of a foreign forum" is "typically a death knell" for the claim,  and that there there had been no showing that Mulgrew would even potentially be able to obtain workers' compensation benefits in Saskatchewan, especially since Spectraseis had refused to file an industrial accident report and denied liability for his injury. 

Mulgrew also argued that Spectraseis had failed to establish that it would be conferred immunity under Saskatchewan law since it disclaimed an employer-employee relationship with Mulgrew. 

If Mulgrew were an independent contractor, as Spectraseis claimed, then the Saskatchewan Workers' Compensation Act would allow him to bring a suit against the company that is akin to a third-party tort action under Texas law. 

Finally, Mulgrew argued that nothing in Texas law directed the exclusive remedy provisions of the administrative agencies of other states be controlling, much less the administrative bodies for foreign countries.

Consequently, he argued, the Texas court system could and should take jurisdiction over Mulgrew's claim.

The 14th Court of Appeals agreed. 

Since the Texas trial courts are courts of general jurisdiction, the appellate court reasoned, they are presumed to have jurisdiction unless a showing is made to the contrary. As the only jurisdictional argument raised by Spectraseis was the exclusive jurisdiction doctrine, and the doctrine was inapplicable to this case, the court concluded that the trial judge erred in dismissing Mulgrew's lawsuit. 

To read the court's decision, click here.