JONES v. MISSOURI LABOR AND INDUSTRIAL RELATIONS COMMISSION (2026)

The Missouri Division of Workers’ Compensation (the “division”) determines and awards compensation to, or on behalf of, uncompensated tort victims through the tort victims’ compensation fund (the “fund”). See sections 537.675-.693.¹ In consolidated actions, a group of plaintiffs (“Claimants”) alleged the division failed to award the full amount of compensation pursuant to statute for claims from the 2022 claims period, a timeframe corresponding with the 2022 calendar year. Claimants sued: the division and its director; the Missouri Department of Labor and Industrial Relations (the “department”) and its director; and the state's Labor and Industrial Relations Commission (the “commission”) and its chairman and a commissioner (collectively, “Defendants”). Claimants’ petitions for relief included requests that the calculation of payments for the 2022 claims period be declared unlawful, that the awarded payments be declared not the full and final payments, and that Defendants be enjoined from paying future awards until the law had been followed with respect to the 2022 awards. The circuit court found, inter alia, Claimants’ lawsuits barred by sovereign immunity. This Court affirms.²

Factual and Procedural Background

In general, the fund serves “to compensate certain tort victims who might otherwise be forced to rely on public assistance, while other tort victims, particularly those receiving large punitive damages awards, receive more than is necessary to pay for their injury.” Fust v. Att'y Gen. for Mo., 947 S.W.2d 424, 430 (Mo. banc 1997). Enacted by the general assembly in 1987, the fund was to take in “[f]ifty percent of any final judgment awarding punitive damages after the deduction of attorneys’ fees and expenses.” 1987 Mo. Laws 811. While the fund collected those sums, disbursements from the fund were not to occur until the general assembly established procedures for payment. Id. Those procedures were adopted in 2001 when House Bill 107 (“HB 107”) provided that the division ³ would have the responsibility “to determine and award compensation to or on behalf of uncompensated tort victims.” 2001 Mo. Laws 335-42. For the initial claims period, the division was to determine the aggregate amount of all awards by June 30, 2003. Id. at 340. The awards were to be paid either “in full” or “on a prorata [sic] basis” by September 30, 2003, depending on “the total amount of money in the fund.” Id. For subsequent claims periods, HB 107 established the process remaining today. Id.

Section 537.684 now provides, in relevant part:

8. For payment of all claims from the fund, the division shall determine the aggregate amount of all awards made on those claims filed during an annual claims period. Such determination shall be made on or before the thirtieth day of June in the next succeeding year. If the aggregate value of the awards does not exceed the total amount of money in the fund, then the awards shall be paid in full on or before the thirtieth day of September in the next succeeding year. If the aggregate value of the awards does exceed the total amount of money in the fund, then the awards shall be paid on a pro rata basis on or before the thirtieth day of September in the next succeeding year.

9. If there are no funds available, then no claim shall be paid until funds have accumulated in the tort victims’ compensation fund and have been appropriated to the division for payment to uncompensated tort victims. When sufficient funds become available for payment of claims of uncompensated tort victims, awards that have been determined but have not been paid shall be paid in chronological order with the oldest paid first, based upon the date on which the application was filed with the division. Any award pursuant to this subsection that cannot be paid due to a lack of funds appropriated for payment of claims of uncompensated tort victims shall not constitute a claim against the state.

While this statute sets forth the specific procedure for paying claims, section 537.678.1 mandates that “[s]eventy-four percent of all payments received by the tort victims’ compensation fund regardless of source or designation shall, upon appropriation, be appropriated to the division of workers’ compensation to assist uncompensated tort victims and shall be used for no other purpose.” (Emphasis added). The remaining 26 percent goes to the basic civil legal services fund. Section 537.675.5. As additional restrictions on awards, section 537.678.2 provides:

The division is not required to award compensation, nor is it required to award the full amount claimed. The division shall base its award of compensation upon independent verification obtained during its investigation. In no case shall the amount paid to the individual exceed the lesser of either the net award granted by the court or jury, or the amount remaining in the tort victims’ compensation fund, provided, however, that no award shall exceed three hundred thousand dollars.

Due to the fund's reliance on punitive damage final judgments, annual deposits into the fund can vary significantly. Consequently, the fund balance can fluctuate dramatically. As Claimants’ evidence presented at trial demonstrated, the fund had a balance of approximately $674,000 in June 2019. Two years later, the fund had a balance in excess of $484 million. The number of claimants receiving awards also varies widely. The division awarded 16 awards for the 2017 annual claims period and 1,748 awards for the 2022 annual claims period. Given the potential for shortfalls, subsections 8 and 9 of section 537.684 serve to provide some relief in the spirit of the fund's intent, albeit partial or delayed.

With this background of the fund in mind, the Court now turns to Claimants’ petitions. Claimants filed claims during the 2022 claims period. The division determined Claimants were eligible to receive an award and informed Claimants of the amount to which each was entitled. Claimants were further informed they may be entitled to a lesser amount pursuant to statute and regulation based on “the amount in the fund.” The notice of the administrative determination informed Claimants of the process for seeking review of the decision.

The division issued awards for the 2022 claims period totaling $373,325,000.⁴ The fund balance on June 30, 2023, was $274,418,251.31. In House Bill 7, the general assembly appropriated $150 million to the division “[f]or payment of claims to tort victims[.]” 2023 Mo. Laws 156.

The division then sent Claimants a “Notice of Final Payment of Claim” informing Claimants each claim would be paid at 40 percent of its full value. The letter informed Claimants the prorated awards were based on the operation of section 537.684.8(2)⁵ and the value represented the full and final payment of the claim. A check was enclosed with the notice. The notice provided no reference to review of this determination.

In two separate lawsuits, Claimants challenged the division's payment calculation as unlawful. The division made its pro rata calculation by taking the aggregate amount of the awards and dividing it by the appropriation. Claimants argued the division, pursuant to section 537.684.8, was required to base the pro rata calculation on “the total amount of money in the fund,” without regard to the amount the general assembly appropriated. Had the division used the total value of the fund, instead of the lesser appropriated amount, the proration calculation for payments would have been approximately 73.5 percent of each respective award. Claimants sought a judgment declaring their award payments, based on a 40-percent proration, did not represent the full and final payment of their awards and enjoining Defendants from paying future awards until those with awards for the 2022 claims period were paid according to Claimants’ interpretation of section 537.684.

Following a bench trial, the circuit court entered judgment in Defendants’ favor. The circuit court found Claimants failed to establish an applicable waiver of Defendants’ sovereign immunity and failed to exhaust their administrative remedies. Alternatively, the circuit court held Defendants’ interpretation of section 537.684 prevailed over Claimants’. Claimants appeal.⁶

Standard of Review

“The circuit court's judgment will be affirmed ‘unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law.’ ” City of Harrisonville v. Bd. of Trs. of MO Petroleum Storage Tank Ins. Fund, 655 S.W.3d 770, 774 (Mo. banc 2022) (quoting Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976)). “[T]he existence of sovereign immunity and questions of statutory interpretation are issues of law, which this [C]ourt reviews de novo.” Ramirez v. Mo. Prosecuting Att'ys’ & Cir. Att'ys’ Ret. Sys., 694 S.W.3d 432, 435 (Mo. banc 2024) (internal quotation omitted).

Analysis

“Sovereign immunity is the default rule in all suits against the state.” Id. at 437. The doctrine, which prevents suit against the government, “applies ․ unless waived or abrogated or the sovereign consents to suit.” Metro. St. Louis Sewer Dist. v. City of Bellefontaine Neighbors, 476 S.W.3d 913, 921 (Mo. banc 2016). “[W]ithin constitutional limits, a sovereign may prescribe the terms and conditions under which it may be sued, and the decision to waive immunity, and to what extent it is waived, lies within the legislature's purview.” Winston v. Reorganized Sch. Dist. R-2, Lawrence Cnty., Miller, 636 S.W.2d 324, 328 (Mo. banc 1982). Courts strictly construe statutes waiving sovereign immunity. Allen v. 32d Jud. Cir., 638 S.W.3d 880, 891 (Mo. banc 2022).

Claimants argue sovereign immunity was waived for the purpose of their suits against the commission and the division through sections 286.060.1(1) and 287.590.⁷ Those statutes permit the commission and the division to “sue and be sued in [their] official name[s.]” Sections 286.060.1(1) (addressing the commission); 287.590 (addressing the division).⁸ While the division and the commission may be sued in limited circumstances pursuant to their enabling statutes, the specific issue to be resolved here is whether either entity can be sued on the basis that the fund owes Claimants additional payment.

The statutory framework governing the fund demonstrates sovereign immunity is not waived to permit such an action. The division is tasked with “determin[ing] the aggregate amount of all awards made on those claims filed during an annual claims period.” Section 537.684.8. If funds are available, this amount is either paid “in full” or “on a pro rata basis” before the end of the next September. Id. “If there are no funds available, then no claim shall be paid until funds have accumulated in the tort victims’ compensation fund and have been appropriated to the division for payment to uncompensated tort victims.” Section 537.684.9.⁹ The statute then establishes a queue for paying determined awards “[w]hen sufficient funds become available.” Section 537.684.9. “Any award pursuant to this subsection that cannot be paid due to a lack of funds appropriated for payment of claims of uncompensated tort victims shall not constitute a claim against the state.” Id. (emphasis added).

Accordingly, section 537.684.9 prohibits a claim against the state due to a lack of appropriated funds when an award's position in chronological order results in nonpayment. Unless sufficient funds become available, it may be the case these awards are never paid. The clear legislative intent apparent in the plain language of the statute is to not permit a claim under such circumstances. Because the general assembly explicitly bars a claim against the state on the basis of these unpaid claims due to inadequate appropriations, it strains credulity that a claim against the state for additional payment, on an award that was paid, would be permitted. Based on the statute's structure, it was not the legislature's intention to waive sovereign immunity to permit the type of claim brought here, i.e., one essentially demanding payment from the fund.

Section 537.690 further demonstrates the limited nature of the state's consent to suit for a grievance involving the fund premised on a division decision. That statute broadly provides a review mechanism for “a decision of the division on a claim heard under the provisions of sections 537.675 to 537.693.” Section 537.690.1. The commission has the discretion to review a party's petition for review. Id.¹⁰ A party aggrieved by the commission's decision may then seek judicial review in the court of appeals. Section 537.690.3. Because the general assembly is permitted to control the extent and manner to which the state consents to suit, a party must follow a statutorily prescribed review process if one exists. Winston, 636 S.W.2d at 328; Gas Serv. Co. v. Morris, 353 S.W.2d 645, 655 (Mo. 1962) (“When a state consents to be sued, it may be proceeded against only in the manner and to the extent provided by the statute; and the state may prescribe the procedure to be followed and such other terms and conditions as it sees fit.”). Claimants did not attempt review through section 537.690 and, therefore, failed to comply with the terms of the state's limited consent to suit.

Claimants contend following section 537.690 would not have been appropriate because, in their view, that statute applies to challenges to awards, not to issues concerning the division's subsequent proration calculation. While the Court agrees section 537.690.1 permits review of the division's initial decision relating to compensation on a claim, the plain language of the statute also covers the division's subsequent decision relating to payment under section 537.684.8. Section 537.684.8 first requires the division to “determine the aggregate amount of all awards made on those claims filed during an annual claims period.” Next, the statute requires a proration calculation if there is a shortfall. Id. The reduction figure is applied to each claim. The end result of the payment of a claim by operation of section 537.684.8 is “a decision of the division on a claim heard under the provisions of sections 537.675 to 537.693[,]” as that phrase is used in section 537.690. Section 537.684.8 plainly falls within the range of statutes enumerated in the review statute, and “a decision ․ on a claim heard” is broad enough to encompass the division's determination of the total amount of awards within an annual claims period and the consequent pro rata payment calculation. This later event is still “a decision” premised “on a claim heard.”

Claimants further argue exhausting administrative review is unnecessary when the only issue presented is a legal issue. “As a general rule, courts will refrain from acting until the litigants have exhausted all available administrative remedies provided by statute.” Council House Redevelopment Corp. v. Hill, 920 S.W.2d 890, 892 (Mo. banc 1996).

Exhaustion is generally required as a matter of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review.

Farm Bureau Town & Country Ins. Co. of Mo. v. Angoff, 909 S.W.2d 348, 352 (Mo. banc 1995) (internal quotation omitted). Exhaustion, however, is not required when the matter to be resolved “poses no factual questions or issues requiring the special expertise within the scope of the [agency's] responsibility, but instead proffers only questions of law clearly within the realm of the courts.” Council House Redevelopment Corp., 920 S.W.2d at 893 (emphasis added). While Claimants rely on this carveout to the requirement of exhaustion, Claimants’ suit challenged a division decision rooted in both law and fact.

Section 537.684.8 requires the division to “determine the aggregate amount of all awards made on those claims filed during an annual claims period.” This step, which follows the division's investigation and determination of compensation eligibility, first requires the division to assess the awards of all individual claims within the relevant claims period to determine if those awards are final. See 8 C.S.R. 50-8.010(7)(A). The division then aggregates those final awards and those that became final from prior claims periods. Id. The division determines whether a proportional reduction is required by comparison of the aggregated amount with “the total amount of money in the fund.” Section 537.684.8. If so, the division applies that reduction to each claim. See id. While a legal issue potentially looms in determining whether a proportional reduction is required, i.e., what is meant by “the total amount of money in the fund,” resolving that issue stands beside division assessments grounded in factual determinations.

Review by the commission, pursuant to section 537.690, could have served to correct any perceived error in the process. This review could have resolved whether an erroneous factual determination impacted the final calculations. The commission could also have addressed the statutory interpretation issue Claimants raised, an issue arising from how the division assessed the annual claims period. The commission's final decision, theoretically, could have negated need for further judicial review. Claimants’ chosen review path – suit against the division, the department, the commission, and associated officials – prior to commission review, runs contrary to the policy behind exhaustion of administrative remedies: it interferes with agency processes, deprives the agency of the opportunity to correct its own errors, and takes away from the parties and the courts the benefit of the agency's experience and expertise in addressing the matter. See Farm Bureau Town & Country Ins. Co. of Mo., 909 S.W.2d at 352. More fundamentally, permitting the issue here to be framed solely as a legal issue, immune from administrative exhaustion, would invite circumvention of exhaustion requirements for mixed questions of law and fact in other circumstances. A party should not be able to extract an agency's legal determination from an otherwise fact-intensive review. The legislature did not intend administrative review to be so easily brushed aside.

Conclusion

The “sue and be sued” language in the enabling statutes for the division and the commission did not waive sovereign immunity for Claimants’ actions. Because the specific statutes governing the fund's operation do not permit a claim of the nature brought here, sovereign immunity applies. Moreover, Claimants did not follow the legislature's review process for a division decision of a claim heard under the fund statutes. That is the only avenue by which the state has consented to be brought into court for challenges to these decisions. The circuit court's judgment is affirmed.

FOOTNOTES

1.   All statutory references are to RSMo 2016, unless otherwise specified.

2.   Because sovereign immunity applies, this Court does not reach Claimants’ points relied on concerning class certification, the interpretation of section 537.684, or the exclusion of certain evidence or argument.

3.   The division is under the purview of the department, section 286.110(1), which, in turn, is “under the control, management and supervision of” the commission. Section 286.010.

4.   This included awards following appeals of claims filed during the prior annual claims period. See 8 C.S.R. 50-8.010(7)(A).

5.   This reference appears to refer to the prior version of the statute. The current version of the statute does not have subdivisions within subsection 8 of section 537.684.

6.   After an opinion by the court of appeals, this Court granted transfer. Mo. Const. art. V, sec. 10.

7.   Claimants’ briefing relies upon these two statutes and offers no support for a waiver of sovereign immunity for the remaining Defendants. As a result, Claimants have waived any argument with respect to sovereign immunity against the remaining Defendants. See State v. Nunley, 341 S.W.3d 611, 625 (Mo. banc 2011) (holding issues not raised in points relied on are waived).

8.   Relying on prior opinions, Claimants contend “sue and be sued” language waives sovereign immunity. In V. S. DiCarlo Construction Co. v. State, 485 S.W.2d 52, 56 (Mo. 1972), this Court recognized enabling statutes with “sue and be sued” language “conferr[ed] broad authority for those agencies to sue and be sued.” The Court had no reason to discuss the extent of that authority because the narrow issue in the case concerned whether the state itself could avoid suit from contract claims when the state entered into a construction contract. Id. at 53 (“Our decision is limited to the single issue of whether the doctrine of sovereign immunity denies to plaintiff in this case the opportunity to have such contract claims against the State heard and adjudicated.”). While agencies’ enabling statutes “provide a continuing waiver of sovereign immunity as to those agencies, ․ they do not imply an intention on the part of the General Assembly to withhold such waiver in cases wherein it had authorized and provided the funds for a particular contract.” Id. at 56.In Jones v. State Highway Commission, 557 S.W.2d 225, 227 (Mo. banc 1977), this Court abrogated sovereign immunity against tort liability. This Court explained “sue and be sued” language in an agency's enabling statute would, in the then-absence of the defense of sovereign immunity in tort, permit tort liability. Id. at 230 (“Now that the defense of sovereign immunity in tort is gone there is no reason to require an express assumption of tort liability or to give to the words ‘sue and be sued’ any meaning other than the usual and ordinary one conveyed by the language used, which is that the entity in question may sue and be sued, without restriction as to kind of liability sought to be imposed.”). This Court's language in Jones, implying “sue and be sued” language permits suit “without restriction as to kind of liability sought to be imposed[,]” must be read in that context. See id. The general assembly swiftly reinstated sovereign immunity in tort as it existed prior to Jones. See section 537.600; 1978 Mo. Laws 983.In Kubley v. Brooks, 141 S.W.3d 21, 30 (Mo. banc 2004), this Court held “an enabling statute's provision that the agency can ‘sue and be sued’ is sufficient to constitute a consent to suit other than in tort.” But that pronouncement specifically applied to contract claims. See id. at 23 (noting “it is well-settled that [sue and be sued language in statutes] is sufficient to constitute consent to suit in contract” (emphasis added)).Claimants’ citations to caselaw fail to convince this Court that “sue and be sued” language in an enabling statute would, beyond contract claims, serve to universally override sovereign immunity.Claimants cite two decisions from the court of appeals to suggest sovereign immunity does not bar claims for declaratory and injunctive relief seeking to establish a right to payment of state funds: Wyman v. Missouri Department of Mental Health, 376 S.W.3d 16 (Mo. App. 2012), and Goines v. Missouri Department of Social Services, Family Support & Children's Division, 364 S.W.3d 684 (Mo. App. 2012). Wyman held “sovereign immunity does not necessarily bar a claim for injunctive relief which seeks to reverse a state agency's prior violation of its statutory obligations, or to prevent future violations.” 376 S.W.3d at 23 (emphasis added). But the court of appeals found waiver of sovereign immunity in that case due to the state's statutory obligation to comply with provisions of chapter 287. See id. at 24. To the extent Goines can be read to suggest “sue and be sued” language permits any non-tort claim against the state, it takes from Kubley a proposition not intended in that case. See 364 S.W.3d at 687 (citing Kubley but not recognizing Kubley addressed an action sounding in contract).Relying on Crain v. Missouri State Employees’ Retirement System, 613 S.W.2d 912 (Mo. App. 1981), Claimants briefly argue sovereign immunity is waived when a claim involves an effort to enforce a statutory benefit. That case concerned an action by beneficiaries seeking “a declaration that they were entitled to receive certain retirement compensation and other benefits.” Id. at 914. The court of appeals found the sovereign immunity argument difficult to understand due to a “lack of a lucid analysis.” Id. at 916. Nevertheless, the court found a waiver of sovereign immunity in section 104.530, RSMo 1978. Id. at 917. In dicta, citing V. S. DiCarlo Construction Co., the court further stated, “when a statute provides a benefit or awards a contract, the requisite waiver of immunity from suit to enforce the benefit or contract is inferred.” Id. V. S. DiCarlo Construction Co., discussed above, focuses on contracts awarded by the state. Caselaw recognizes Crain involves contract principles. State ex rel. Kan. City Symphony v. State, 311 S.W.3d 272, 276 (Mo. App. 2010) (“Both Crain and DiCarlo involve clear contract principles that do not exist in this case.”).

9.   This section recognizes the need for an appropriation of funds to the division, a necessity perhaps left to implication in the prior section. See section 537.678.1 (specifying a percentage of payments received by the fund “shall, upon appropriation, be appropriated to the division of workers’ compensation to assist uncompensated tort victims and shall be used for no other purpose”); Fust, 947 S.W.2d at 430 (noting “an appropriation is necessary for the expenditure of any money in the tort victims’ compensation fund”).

10.   Contrary to Claimants’ assertion, the discretionary nature of this review does not impact the analysis. The path to judicial review is available to “[a]ny party who is aggrieved by a final decision of the commission entered pursuant to the provisions of subsections 1 and 2 of” section 537.690. Section 537.690.3. If a petition for review is denied, the aggrieved party could seek judicial review of the commission's decision. The statute here is unlike the exhaustion requirements in cases Claimants cite. See, e.g., Santos-Zacaria v. Garland, 598 U.S. 411, 425 (2023) (discussing a federal statute not requiring exhausting discretionary review where that statute required exhaustion of remedies available “as of right”).

Robin Ransom, Judge

All concur.