Case File
The U.S. District Court for the Northern District of Mississippi held that a workers’ compensation claimant must fully exhaust all administrative remedies before filing a bad faith or breach of good faith and fair dealing lawsuit. Otherwise, the court lacks subject matter jurisdiction over the case. Because the driver’s underlying claim for certain disability benefits remained unresolved before the state commission, the court ruled the lawsuit was premature. It remanded the case to the state court.
Case
Davenport v. Delta Bus Lines, Inc., No. 4:26-CV-59-RPC-DAS (N.D. Miss. 07/01/26)
What Happened?
A bus driver was injured on the job when an armed theft suspect rammed a parking lot gate into him. The driver filed a workers’ compensation claim, which was denied in its entirety. The employer justified the denial by relying on workplace rumors that the attacker was a romantic rival confronting the driver over an extramarital affair — a claim which even the thief asserted was untrue.
Even after the incarcerated assailant testified he was only there to steal drug money, the employer declined to award benefits. The workers’ compensation commission ruled the injury was fully compensable. However, it left the determination of specific temporary or permanent disability benefits for a later date. Meanwhile, the driver sued the employer for bad faith.
Rule of Law
Under Mississippi law, an employee may not sue for bad faith without first exhausting his administrative remedies. There must first be a total resolution of the worker’s compensation claim in order for the bad faith lawsuit to proceed.
What the Court Said
A workers’ compensation claimant must fully exhaust all administrative remedies before a court has subject-matter jurisdiction to hear a bad faith lawsuit. Because the commission expressly reserved the issue of disability benefits for future determination, the driver had not exhausted the administrative process. Allowing the bad faith claims to proceed in court before a complete, final decision by the commission would result in the improper “piecemealing” of claims, the court said.
Verdict: The U.S. District Court for the Northern District of Mississippi remanded the case to state court for further proceedings.
Takeaway
A Mississippi employer being sued for worker’s compensation bad faith should look at whether the employee completed the workers’ compensation administrative process. If even part of the underlying claim remains unresolved, the employer may have a good argument that the court lacks authority to consider the bad faith claim at this time.
