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John E Gibson v Texas Department of Insurance Division of Workers Compensation

November 2, 2012 – Case Report

 

This is a factually and legally interesting case.  John E. Gibson, a workers’ compensation claimants’ attorney located in West Texas maintained a website with the words “Texas” and “Workers’ Comp” in the domain name of the website. In February 2011, the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) issued a cease and desist letter to Mr. Gibson claiming his use of the words “Texas” and “Workers’ Comp” in the domain name violated Texas Labor Code § 419.002 and requesting that he no longer use the above-stated domain name.  Labor Code § 419.022 provides:

MISUSE OF DIVISION'S NAME OR SYMBOLS PROHIBITED 

(a)  Except as authorized by law, a person, in connection with any impersonation, advertisement, solicitation, business name, business activity, document, product, or service made or offered by the person regarding workers' compensation coverage or benefits, may not knowingly use or cause to be used:

(1)  the words "Texas Department of Insurance," "Department of Insurance," "Texas Workers' Compensation," or "division of workers' compensation";

(2)  any term using both "Texas" and "Workers' Compensation" or any term using both "Texas" and "Workers' Comp";

            (3)  the initials "T.D.I."; or                      

(4)  any combination or variation of the words or initials, or any term deceptively similar to the words or initials, described by Subdivisions (1)-(3).

(b)  A person subject to Subsection (a) may not knowingly use or cause to be used a word, term, or initials described by Subsection (a) alone or in conjunction with:

      (1)  the state seal or a representation of the state seal;

      (2)  a picture or map of this state; or

(3)  the official logo of the department or the division or a representation of the department's or division's logo.

Mr. Gibson did not provide any written response to TDI-DWC’s letter although the letter requested a response.  Mr. Gibson did not request any form of procedural review from DWC although what that review could be is unknown. Instead, Mr. Gibson filed a lawsuit in the United States District Court in the Northern District of Texas alleging that Labor Code § 419.022 was unconstitutional under the First, Fifth, and Fourteenth Amendments of the United States Constitution. Mr. Gibson sought declaratory and injunctive relief pursuant to 28 U.S.C. § 2201 and 42 U.S.C. § 1983 as well as attorneys’ fees pursuant to 42 U.S.C. § 1988.

 

The district court dismissed Mr. Gibson’s Fifth and Fourteenth Amendment claims under Federal Rule of Civil Procedure 12(b)(6), along with Mr. Gibson’s First Amendment as-applied challenge. Federal Rule of Civil Procedure 12(b)(6) provides that every defense to a claim for relief in any pleading must be asserted in the responsive pleading but a party may assert the  defense of a failure to state a claim upon which relief can be granted in a motion.  The district court declined to consider Gibson’s First Amendment facial challenge.  Mr. Gibson appealed.

 

A three justice Court of Appeals heard the appeal.  Two of the justices held that regulations on commercial speech are permissible as long as they satisfy a four-part test set.  The test is

 

1.      Is the activity lawful and not misleading;

 

2.      Is there an asserted substantial governmental interest;

 

3.      Does the regulation directly advance the governmental interest asserted; and

 

4.      Is the regulation no more extensive than is necessary to serve the asserted interest.

 

TDI-DWC claimed Labor Code § 419.002 is constitutional because Mr. Gibson’s domain name amounts to inherently misleading speech. The Court seems to hold that Mr. Gibson’s domain mimics TDI-DWC’s website.  How the Court arrived at that conclusion would be speculation. TDI-DWC also argued that Mr. Gibson violated Texas law by creating confusion with the government agency.  How TDI-DWC arrived at that conclusion would also be speculation.

 

The Court held that Mr. Gibson had stated a claim under the First Amendment.  The Court held his claims under the Fifth and Fourteenth Amendments were without merit.

 

.The Court reversed the District Court and remand the case for further proceedings on the basis of Mr. Gibson’s claim of a denial of his First Amendment rights.  The Court also held that Mr. Gibson can argue for and adduce evidence in the District Court to support his claim of stronger protection of his domain name as ordinary, communicative speech, and not merely as commercial speech.

 

Justice Reavley, the third justice on the panel, concurred only in the judgment to reverse.  Justice Reavley wrote:

 

The court entertains the First Amendment claim because it reads the Texas statute to prohibit deceptive commercial speech. I see nothing in the statute to justify that reading. The district court saw the word “misuse” in the heading as enough to read deception into the statutory language. I have difficulty with that and, then, with reading Gibson’s domain name as “misuse” or as misleading.

 

John D. Pringle agrees with the concurring opinion.

 

The Gibson v. Texas Department of Insurance, Division of Workers’ Compensation opinion can be read here: http://www.ca5.uscourts.gov/opinions/pub/11/11-11136-CV0.wpd.pdf

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