Background
Missouri’s tort victims’ compensation fund, established in 1987, compensates uncompensated tort victims using a portion of punitive damages collected from civil judgments. Under section 537.684, the Missouri Division of Workers’ Compensation annually aggregates all approved awards and pays them either in full or on a pro rata basis depending on available funds. Critically, the statute expressly states that any award that cannot be paid due to a lack of appropriated funds “shall not constitute a claim against the state.”
For the 2022 claims period, the division determined aggregate awards totaling approximately $373.3 million. The fund held roughly $274.4 million, but the General Assembly appropriated only $150 million for payment. The division calculated pro rata payments at 40 percent of each award based on the appropriated amount. Claimants argued the division was statutorily required to use the full fund balance — approximately $274.4 million — as the denominator, which would have yielded payments of roughly 73.5 percent per award.
Claimants filed suit in circuit court seeking a declaration that the 40-percent payments were unlawful and not final, and an injunction barring future awards until the 2022 claims were recalculated. The circuit court entered judgment for the state, finding the claims barred by sovereign immunity and alternatively holding that Claimants failed to exhaust administrative remedies. Claimants appealed; after a court of appeals opinion, the Supreme Court of Missouri granted transfer.
The Court’s Holding
The Supreme Court affirmed, holding that sovereign immunity bars Claimants’ suits. The court found that “sue and be sued” language in the enabling statutes for the division (section 287.590) and the commission (section 286.060.1(1)) does not constitute a blanket waiver of sovereign immunity beyond contract claims. The specific statutory framework governing the fund — particularly section 537.684.9’s express prohibition on claims against the state for unpaid awards due to inadequate appropriations — demonstrates the legislature did not intend to waive immunity for suits demanding additional payment from the fund. Because the legislature explicitly bars such claims, permitting suit for additional payment on an award that was already partially paid would be incongruent with that legislative design.
The court further held that Claimants failed to follow the exclusive review path the legislature prescribed. Section 537.690 provides a mechanism for review of “a decision of the division on a claim heard under the provisions of sections 537.675 to 537.693,” which the court read broadly to encompass both the initial eligibility determination and the subsequent pro rata payment calculation. A party aggrieved by the commission’s review decision may then seek judicial review in the court of appeals. Claimants bypassed this process entirely and sued directly in circuit court, thereby failing to comply with the terms of the state’s limited consent to suit.
The court also rejected Claimants’ argument that exhaustion was unnecessary because their challenge raised only legal questions. Because the division’s pro rata calculation involved factual determinations — assessing finality of individual awards, aggregating them, and comparing the total to fund balances — the case presented a mixed question of law and fact. Allowing parties to reframe such mixed questions as purely legal would invite widespread circumvention of administrative exhaustion requirements.
Key Takeaways
- “Sue and be sued” language in an agency’s enabling statute waives sovereign immunity for contract claims but does not constitute a universal waiver for all non-tort claims against the state.
- Section 537.684.9’s express bar on claims against the state for unpaid fund awards due to insufficient appropriations signals that the legislature also did not consent to suit for additional payment on awards that were paid at a reduced pro rata rate.
- Claimants challenging a division payment calculation under the tort victims’ compensation fund must exhaust the administrative review process under section 537.690 before seeking judicial relief — even when the challenge involves a legal question about statutory interpretation.
- A party cannot escape exhaustion requirements by characterizing a mixed question of law and fact as a pure legal issue in order to bypass agency review.
Why It Matters
This decision reinforces the breadth of Missouri’s sovereign immunity doctrine and clarifies the limits of “sue and be sued” enabling-statute language. Attorneys representing claimants against state agencies — particularly those seeking payment or recalculation of statutory benefits — must identify a specific, applicable waiver of sovereign immunity and exhaust any prescribed administrative remedies before filing suit in circuit court. General enabling-statute language will not suffice.
The ruling also has practical significance for the roughly 1,748 tort victims who received 2022 awards at 40 cents on the dollar. Their challenge to the division’s proration methodology is foreclosed at this stage, and the court’s decision leaves undecided the underlying statutory question of whether the division correctly used the appropriated amount rather than the total fund balance as the basis for its pro rata calculation — a question that may recur in future claims periods.