Confirmation Hearing Reinforces Serious Concerns About Justice Priscilla Owen’s Record

Owen's Anti-Consumer, Pro-Business Judicial Activism

anti-consumer record has led Texas Watch to conclude that “Justice Owen has proven herself to be an anti-consumer judge with biases towards corporate and insurance interests.”2 At Owen’s confirmation hearing, Senator Feinstein stated to Justice Owen that “I had some Texas lawyers come to me who were consumer lawyers. And they said their concern was they didn’t believe they could ever get a fair shot in your courtroom. . . [I]n ten years of serving on this committee no one has ever said that before.”3

Given these serious concerns, a number of Senators questioned Justice Owen specifically about her pro-business, anti-consumer record. Senator Edwards prefaced his questions on this subject by identifying several of the cases in which Owen had dissented from majority rulings in favor of consumers and other citizens and been sharply criticized by the Court majority. He then asked Owen to identify any cases “where you have been criticized by your colleagues on the court for having gone too far in favor of an individual, child, a family who brought a case against a defendant, a manufacturer or a corporation.”4 Owen replied by citing Saenz v. Fidelity Guaranty Insurance Underwriters, 925 S.W.2d 607 (Tex. 1996), a case she had identified earlier in the hearing in an effort to address concerns about her record. A review of Saenz, however, clearly demonstrates that the case does not address those concerns.

Corina Saenz was a secretary who had been injured on the job when she “fell over backward in a chair and hit her head on the floor;” she was diagnosed with post-concussion syndrome, suffered from chronic headaches and seizures, and faced the potential of significant future medical expenses. 925 S.W.2d at 608-611. Ms. Saenz contended that she had been fraudulently induced to settle her worker’s compensation claim by the insurance company for the amount of $65,000. In particular, she claimed that the company had led her to believe that she was only entitled to five years of medical benefits, when in fact state law provided for lifetime benefits. Unbeknownst to Ms. Saenz at the time of settlement, the insurance company’s lawyer had reported to the company’s adjuster that he regarded the claim as “very serious” and “very dangerous,” and that by settling, the company “avoid[ed] the possibility that this lady’s condition could deteriorate and eventually result in a condition of imbecility which would cause us to pay statutory lifetime compensation benefits in addition to lifetime medical benefits.” 925 S.W.2d at 609-10. When Ms. Saenz learned the truth about the availability of lifetime medical benefits, she sued the company for bad faith and deceptive trade practices. Although her complaint initially asked to cancel or rescind the settlement agreement with the company, she did not pursue that claim.

At trial, the jury found in favor of Corina Saenz on her claims of bad faith and fraud, awarding her $500,000 in future medical expenses plus other damages. The court of appeals reversed in part, including as to the future medical expenses, holding that Ms. Saenz’s only remedy with respect to such damages was to rescind the settlement agreement and pursue her worker’s compensation claim. The appellate court ordered that the case be remanded so that Ms. Saenz could pursue rescission. Ms. Saenz, however, claimed that this was error, and argued before the Texas Supreme Court that her case was about bad faith and fraud and not about rescission. A majority of the Texas Supreme Court, including Justice Owen, rejected those claims and held that Ms. Saenz’s sole remedy in terms of future medical expenses would have been to rescind the settlement agreement and pursue her worker’s compensation claim. However, because Ms. Saenz had expressly stated that she did not want to pursue rescission, five Justices declined to order it. 925 S.W.2d at 613. The Court majority, including Justice Owen, agreed that Ms. Saenz could not recover any of the damages that the jury had awarded.

Owen did not write a dissent in the case; she joined an opinion by Justice Phillips concurring in part and dissenting in part from the judgment. In that opinion, Owen agreed with the court majority that the jury verdict in favor of Ms. Saenz should be overturned, as Owen acknowledged at her hearing. The Phillips opinion that Owen and Justice Cornyn joined would have allowed Ms. Saenz to pursue rescission of the settlement agreement.

Owen’s testimony on July 23 about the rescission issue was this: “[U]nder the law, [the worker is] entitled to rescind that worker’s comp decision and go back and claim her benefits and start all over again. And a majority of the court disagreed with me and said no, she does not get to rescind, she does not get to go back and start all over.”5 This testimony appears to suggest that the majority had ruled against a claim by Ms. Saenz to rescind the agreement, and that the majority had disagreed with Justice Owen as to whether Ms. Saenz had established the legal grounds for rescission. This was not the case at all. What Justice Owen neglected to mention in her testimony was that Ms. Saenz had expressly disclaimed rescission; she did not ask to rescind the settlement agreement and in fact had argued to the Supreme Court that the court of appeals had erred in ordering rescission. In declining to order rescission, the Supreme Court majority was merely following the position taken by Ms. Saenz.

While the opinion that Justice Owen joined could in theory have benefited Ms. Saenz at some point in the future, it was unknown whether Ms. Saenz could bring a successful rescission claim or what amount she would recover even if she did succeed. Owen’s position still deprived Ms. Saenz of the entire, substantial jury verdict that she had been awarded. By contrast, and also not mentioned by Justice Owen at her hearing, there was a full dissent in the case by Justice Spector. Unlike Justice Owen, Justice Spector would have upheld the jury verdict in favor of Ms. Saenz. As Justice Spector explained, the majority, which included Owen on this point, had mischaracterized the damages awarded by the jury by holding that the insurance company’s bad faith did not cause Ms. Saenz to suffer physical injury. However, Justice Spector would have ruled that Ms. Saenz’s “uncompensated future medical expenses were caused by Fidelity’s misconduct,” and “should be recoverable as damages for Fidelity’s tortious conduct.” 925 S.W.2d at 617-18.

Saenz was not responsive to Senator Edwards’s question; the majority had not criticized Owen in that case. Moreover, Saenz simply does not answer the very serious concerns raised about Justice Owen’s record of anti-consumer, pro-business judicial activism during her more than seven years on the Texas Supreme Court. As we demonstrated in our report of July 16, Justice Owen has frequently dissented in cases in which the Court majority has upheld the rights of consumers and other citizens. Her dissents have consistently favored businesses against consumers, and her dissenting views would have seriously impaired the right of ordinary citizens to obtain relief for a variety of injuries.

2 Texas Watch, “Texas Supreme Court Justice Priscilla Owen: No Friend to Consumers,” at 1 (July 2002).
3 Senate Judiciary Committee, Hearing on Judicial Nominations (July 23, 2002), Federal News Service Transcript (hereafter “Trans.”), at 49 (PFAW pagination) (emphasis added).
4 Trans. at 65.
5 Trans. at 65 (emphasis added).

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