The curious question in Employees Retirement System of Texas v. Duenez and Duenez, decided July 3 by the state Supreme Court, is whether a state agency can demand dismissal of its own subrogation claim in court because the agency failed to exhaust administrative remedies in front of itself. That’s how Justice Scott Brister began the majority opinion in Duenez. But there are a number of odd things about this case, which stems from a 1997 accident caused by a drunk driver. In 2004, the Supreme Court held in F.F.P. Operating Partners v. Duenez that the Employees Retirement System of Texas (ERS) has exclusive jurisdiction over claims for benefits and dismissed the suit the Duenezes filed against ERS until the plaintiffs exhausted administrative remedies. Brister noted in the July 3 opinion in Duenez that three Duenezes sued the convenience store that had sold the beer to the drunk driver and ultimately settled with the store for $35 million. According to the July 3 majority opinion in Duenez, Blue Cross Blue Shield of Texas filed the current suit against the Duenezes for subrogation on behalf of ERS, but Blue Cross named Duenez as a defendant. “ERS filed a plea to the jurisdiction demanding dismissal for the Duenezes to pursue their claims administratively even though they had no affirmative claims to pursue,” Brister wrote. The 24th District Court in Calhoun County denied the plea to the jurisdiction and the 13th Court of Appeals, which sits in Corpus Christi and Edinburg, affirmed the trial court in 2007. ERS then petitioned the Supreme Court for review. In a 6-3 decision, the Supreme Court rejected ERS’s claim of exclusive jurisdiction over its subrogation claim and dismissed the petition for want of jurisdiction. In his dissenting opinion, Justice Nathan Hecht wrote that a state agency’s dispute with itself is not something the courts can decide. What the Supreme Court should do, according to Hecht’s dissent, is grant ERS’s petition for review, vacate the 13th Court’s judgment and then dismiss the appeal. Justice Dale Wainwright offered a different take on the issue in his dissenting opinion. Wainwright wrote that the Supreme Court should hold that the Texas Government Code and the state’s employee benefit plan vest ERS with exclusive jurisdiction over this dispute. Justice Phil Johnson joined in Wainwright’s dissent.
-- Mary Alice Robbins