Untitled Texas Attorney General Opinion ( 1996 )

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DAN MORALES
ATTORNEY
GENERAL July 29, 1996
The Honorable Clyde Alexander Qpiion No. DM-403
Chair, Committee on Transportation
Texas House of Representatives Re: Whether V.T.C.S. article 9030, sec-
P.O. Box 2910 tion 2, which limits the liabiity of an
Austin Texas 787682910 excursion train operator to $5,000,000 per
occurrence, violates Texas Constitution ar-
ticle J, section 13 (RQ-878)
Dear Representative Alexander:
Article 9030, section 2, V.T.C.S., limits the liabiity of an excursion train operator
to $5 million per occurrence. Article J, section 13 of the Texas Constitution prohibits the
legislature from taking an injured person’s right to a legal remedy. We consider whether
V.T.C.S. article 9030, section 2 contravenes article J, section 13 of the constitution. Al-
though we are unable to detinitively answer your question, we believe a court probably
would conclude that V.T.C.S. article 9030, section 2 is unconstitutional.
The legislature enacted the whole of article 9030 in 1995.’ Under the article, the
comptroller may certify the owner of a passenger train as the operator of an excursion
train if the train is used primarily for tourism or public service and promotes the state’s
tourist industty.2 Jn addition, to be certified, the passenger train owner must be insured
against liability resulting from injury to persons or property damage in the amount of at
least %5,OOO,OOO.s Any person who is certified is, according to section 2(a), “not liable for
injury or damages over $5,000,000 resulting fiorn a single occurrence.” Moreover, this
limitation of liabiity extends to the operator of the excursion train the owner of equip
ment the train uses, the owner of the track the train uses (which you call the “trackage”),
and the host carrier.4 The statute does not limit liabiity, however, if the injury or damages
arise t?om “intentional, malicious, or grossly negligent conduct.“s
‘See Act ofMay 21,1995,74th Leg., RS., ch 910,1995 Tcx. Sess. Law Serv. 4448.4448-49.
2V.T.C.S. art. 9030,s l(a).
‘Id. 0 l(b).
‘Id. 0 Z(b). An excursion train operator must noti@ pasengm of the Iimitation on lisbility in
two ways. First, the operator must print, on each passenger’s ticket, in 12-paint boldthce type: “THE
OPERATOR OF THIS TRAlN IS NOT LIABLE FOR PERSONAL INJURY OR WRONGFUL.DEATH
The Honorable Clyde Alexander - Page 2 (DM-403)
In enacting article 9030, the legislature apparently was motivated by a desire to
make excursion train tickets affordable and thereby provide economic benefit to the com-
munities at which the trains stop.6 Prior to 1995, excursion train operators were
governed, with reference to the amount of liability insurance they must carry, by the rules
of the commercial train operators that own the trackage.’ Thus, if a commercial train op-
erator required an excursion train operating on its trackage to carry liability insurance in
the amount of $25 million, the excursion train would have to comply.* The legislature be-
lieved this requirement reduced the chances that an excursion train operation would be
viable and consequently reduced the economic benefit towns at which the train stops
would receive:
[This requirement that excursion tram operators must carry liability
insurance in the amount of $25 million] places a hardship on excur-
sion train operators because they are operating for the sole purpose
of transporting tourists on scenic routes, and their traveling speed
does not exceed 40 m.p.h. at any given time. [It] makes it necessary
for excursion train operators to increase the ticket prices for their
trips to an excessive amount in an attempt to recover the cost of the
liabiity insurance. The excessive amount of the tickets greatly re-
duces the demand for the trips offered by the excursion train
operators, and is detrimental to the economic benefit provided by the
passengers to the small towns where the train stops along the route.g
(footnote continued)
IN AN AMOUNTIN EXCESSOF $5,ooO,OW.” Id. 5 4(l). Second,the operatormust print an identical
disclaimer,in letters at leasttwo incheshigh, and post it near a passenger boarding area. Id. 8 4(2).
51d. 5 2(c). Article 9030, section 2(a), V.T.C.S., does not limit an excorsion train operator’s li-
ability if, at the time of the injory or damages, the operator failed to maintain liability insuranc-0 in the
rqoisite amount or if the operator carried freight (other than personal luggage), commuters, or passengers
tmveliug solely for business or commercial reasons. See also id. 8 5.
%SeeHouse Tramp. Comm., Bill Analysis, H.B. 1208,74th Leg. (1995).
*Id. Howe Bill 1208’s bill analysisststesthat federallaw requiresa commercialtrain operatorto
maintain liability iusunmce in the amount of $25 million per occunaee. Id. We were onable to find that
federal law, however. If the law exists,it preemptsstate law to the extent of any contlict. See Attorney
General Opinion DM-154 (1992) at 4 (stating that, under United States constitution article Vl, clause 2,
state law that contlictswith federallaw is preempted) (citing English Y. General Elm. Co., 4% U.S. 72,
79 (1990)).
%Ioose Tramp. Comm., Bill Analysis, H.B. 1208,74th Leg. (1995).
p. 2212
The Honorable Clyde Alexander - Page 3 (DM-403)
You indicate that, despite the new statutory limitation on liability, a commercial
train operator, Union Pacific Rail Corporation, requires excursion train operators that use
its trackage to carry liability insurance in a minimum amount of $25 million per occur-
rence. Union Pacific, you state, believes that the new law is unconstitutional. You
therefore ask about the constitutionality of V.T.C.S. article 9030, section 2(a) and (b).
You do not indicate which constitutional provision or provisions you are concerned about.
We believe, however, that article I, section 13 of the Texas Constitution is the relevant
provision.
Article I, section 13 of the Texas Constitution mandates that all courts be open and
that every person whose real or personal property, body, or reputation is injured have a
remedy by due course of law.rs Article I, section 13 guarantees not only access to the
courts, but meunin@id access.rr As one court has said, article I, section 13 guarantees a
plait&f the right “to obtain 6111redress for injuries caused by another’s wrongtirl con-
duct.“t2 The Texas Supreme Court has interpreted this “open courts” provision to forbid
the legislature to deny a citizen the right to seek through the courts a remedy for an inten-
tional injury.13 In addition, the court has applied the open courts provision in cases
involving negligent injury.r4
In our opinion, the Texas Supreme Court’s decision in Lucus v. United .St~fes``
controls how we must analyze your question. In that case, the court addressed the consti-
tutionality of the statutory limitation on damages a plaintiff can receive in a medical-
malpractice action.16 Specifically, V.T.C.S. article 459Oi, section 11.02(a) limits a physi-
cian’s or health-care provider’s civil liability in a medical malpractice action to $500,000.r7
This liitation does not apply to medical, hospital, and custodial-care expenses, how-
%ee generally 1 GFDRGED. BRADENET AL., THE CONSTITUTION
OF THESTATEOFTFXA% AN
ANNOTATEDANDCOMPARATIVE ANALYSIS47,50-51 (1977).
‘&x.s v. UnitedStofes, 757 S.W.Zd 687,690 flex. 1988) (emphasisadded).
%e?ar Hosp., Inc. Y.Estrada, 694 S.W.2d 359, 366 (Tex. App.-Corpus Christi 1985, no tit).
13Middleton v. Texas Power & Light Co., 185 SW. 556, 561 (Tex. 1916). See generally
Joseph P. Witherspoon, ConstihMonalily ofthe Texas Stab& Limiting Liabilityfir Medical Mdpractice,
10 TFX TECH.L. REV.419.424-26 (1979).
“See Lucas, 757 S.W.2d at 688, 690; Sax v. Votteler, 648 S.W.Zd 661. 664, 665 (Tex. 1983);
see also Detar Hosp., Inc., 694 S.W.2d at 361, 365-66.
15757S.W.2d 687 (Tex. 1988).
161d. at 687.
171d. at 688-89 (quoting V.T.C.S. art. 45901, 5 11.020)).
p. 2213
The Honorable Clyde Alexander - Page 4 W-403)
ever. I8 In the event section 11.02(a) is found unconstitutional, section 11.03 provides au
alternative limitation on damages: a physician or health-care provider’s civil liability in a
medical malpractice action is limited to $150,000 for all past and future noneconomic
losses.‘g
The Lucus court analyzed the constitutionality of sections 11.02 and 11.03 using a
two-pronged approach.20 Fist, to find a statute unconstitutional under article I, section
13 of the Texas Constitution, a court must find that the statute restricts a “cognizable
common[-]law cause of action.“21 Second, the court must find that, when balanced
against the purpose and basis of the statute, the statute unreasonably or arbitrarily restricts
the right to redress.**
The court found that a victim of medical negligence has an undisputed, well-
detined common-law right of action.23 The court therefore proceeded to consider
whether, given the purpose of the statute, the statutory limit on damages unreasonably or
arbitrarily restricts that right.*’ The legislature articulated the purposes of V.T.C.S. article
4590i in section 1.02, and they are, primarily, to reduce the fresuency and severity of
health-care liability claims, to decrease the costs of these claims and ensure that awards
are rationally related to actual damages, and to make available to health-care providers
liability insurance at “reasonably affordable rates.” The court found that the legislature did
not intend to strike only at frivolous medical malpractice lawsuits, but at all medical mal-
practice lawsuits.25 The court tbrther found that legislature itself was unsure whether the
limitation on damages would lower liability insurance rates.26
The stated purposes, the court concluded, did not support the restriction on re-
dress.*’ Significantly, the legislature failed to provide sn adequate substitute through
‘*Id. at 689 (quotingV.T.C.S. art. 459Oi, 5 11.02(b)).
lgId. (quoting V.T.C.S. art. 45901, § 11.03)
2oSee id. at 690 (quoting Szx v. Votteler, 648 S.W.2d 661,666 (Tex. 1983)).
l’Id. (quoting Sax, 648 S.W.2d at 666).
**Id. (quoting Sac, 648 S.W.2d at 666).
231d.
*‘Id. at 690-92
151d. at 691
261d. (quoting V.T.C.S. art. 45901, 5 l.O2(a)(12))
*‘See id.
The Honorable Clyde Alexander - Page 5 (DM-403)
which a medical-malpractice plaintiff may obtain redress for his or her injuries.28 As an
example of an adequate substitute, the court pointed to similar statutes in two other states
in which the legislature limited a health-care provider’s liability but also established a pa-
tient-compensation fund.29 Presumably, a medical-malpractice plaintiff who is not fblly
compensated for his or her injuries by the physician or health-care provider may seek ad-
ditional recompense from this fbnd. The court noted that alleged benefits to society
generally are insufficient to uphold a statute against attack under Texas Constitution arti-
cle I. section 13.M
In addition, the court found that the legislature unreasonably limited the recovery
available to persons who were catastrophically injured by medical malpractice because the
legislature desired to conduct a “speculative experiment” to determine whether medical-
malpractice liability insurance rates would decrease.31 Furthermore, the legislature’s
stated purpose to ensure that awards are rationally related to actual damages intruded
upon the province of the courts.32 In any event, the court concluded, the legislature un-
reasonably and arbitrarily determined “that arbitrary damages caps, applicable to all
claimants no matter how seriously injured,” assured “a rational relationship between actual
damages and amounts awarded.“”
We consider now V.T.C.S. article 9030, section 2(a), the statute you cite. Using
the two-pronged analysis set forth in Lucq we must decide first whether article 9030,
section 2(a) restricts a cognizable common-law cause of action. Second, we must analyze
whether the statute unreasonably or arbitrarily restricts the cause of action given the pur-
pose and basis of the statute.
We find a well-established, cognizable, common-law cause of action for victims of
common-carrier negligence.34 The issue thus becomes whether article 9030, section 2(a)
=“Id. at 690.
lgId. at 691.
Mid. at 690 (citing Wright v. Central Du Page Hosp. Ass’n, 347 N.E.Zd 736,742 (Ill. 1916)).
3’Id. at 691.
‘=Id.
%ee T&on v. PanAmerican World Airways, Inc., 399 F. Supp. 335, 339 (S.D. Tex 1975);
Jackson v. City ofDallas. 443 S.W.2d 771, 780 (lb. Cii. App.-Dallas 1%9), rev’d on other grounds,
450 S.W.Zd 62 (1970); Simpson v. Dallas Ry. & Terminal Co., 143 S.W.Zd 416, 418 (Tex. Cii. App.-
Dallas 1940, wit dism’d); see ah 13 C.J.S. Carriers 5 508, at 458 (1990) (stating that common carrier
p. 2215
The Honorable Clyde Alexander - Page 6 cDMm403)
unreasonably or arbitrarily restricts the cause of action. Ultimately, this is a question of
fact that is inappropriate to the opinion process. 3J We believe, however, that a court
would find the restriction unreasonable.
As we have indicated, the legislative purpose for article 9030, section 2(a)‘s limi-
tation on liability is to reduce the amount of liability insurance an excursion train operator
must carry. The legislature thereby hoped to reduce the ticket price excursion train opera-
tors charge and increase tourism dollars flowing to towns along the trams’ routes. The
legislature did not estimate the article’s impact on either ticket prices or revenues from
tourists.
We note that the statute accomplishes its purposes at the expense of injured pas-
sengers, and particularly at the expense of passengers involved in a large accident. Under
section 2(a), the operator’s liability is limited to SS,OOO,OOO per occurrence. While a
court may find that the statute provides meaningfid access to the courts for one or two
persons injured in an excursion train accident, we doubt a court would find the same for a
train accident involving, for example, fitly passengers. Furthermore, we question whether
a court would tind that a decrease in ticket prices, the size of which the legislature has not
estimated, and the increase in tourist dollars, the size of which the legislature has not esti-
mated, justify limiting the damages injured passengers may receive. The purported
decrease in ticket prices is even more speculative when we note that article 9030, section
2(a) does not preclude a commercial tram operator such as Union Pacific Rail Corporation
from attaching any legal condition it desires to a contract with a train that wishes to use
the commercial train operator’s trackage. Accordingly, nothing prohibits the commercial
train operator from demanding as much insurance coverage as it wishes. Similar to the
statute examined in LUUJS,section 2(a) places the burden of (possibly) lower ticket prices
and (possibly) more tourism dollars “upon those persons who are most severely injured
and therefore most in need of compensation.“36 Finally, the legislature has not provided
an alternative source, such as the patient-compensation find mentioned in Lucus, from
which injured passengers may collect damages above and beyond the %5,000,000 damages
they may collect under section 2(a).
(footnote continued)
is liile for slightest negligence,even if third party’s concurring negligence contributes primarily to acci-
dent).
35See, e.g., Attorney General Opinions DM-98 (1992) at 3, H-56 (1973) at 3, M-187 (1%8) at 3,
O-2911 (1940) at 2.
36Lucas v. United States, 757 S.W.2d 687, 692 (Tex 1988) (quoting Carson v. Maurer, 424
A.2d 825,837 (NH. 1980)).
p. 2216
The Honorable Clyde Alexander - Page 7 (DM-403)
For all of these reasons, we believe a court would find the limitation on liability in
V.T.C.S. article 9030, section 2(a) contravenes article I, section 13 of the Texas Constitu-
tion.37
SUMMARY
To determine whether V.T.C.S. article 9030, section 2(a) con-
travenes article I, section 13 of the Texas Constitution, a court would
apply a two-pronged analysis. The court would consider first
whether section 2(a) restricts a cognizable common-law right of ac-
tion. Next, the court would consider whether, in light of the purpose
and basis of the statute, the statute unreasonably or arbitrarily re-
stricts that right. A court probably would find that the limitation on
liability in V.T.C.S. article 9030, section 2(a) contravenes article I,
section 13 of the Texas Constitution.
DAN MORALES
Attorney General of Texas
JORGE VEGA
First Assistant Attorney General
SARAH J. SHIRLEY
Chair, Opinion Committee
Prepared by Kymberly K. Oltrogge
Assistant Attorney General
37Acotut is less likely to concludethat V.T.C.S.article 9030,section2(a) violatesthe Due F’mc-
essor EqualProtectionClausesof the Unites StatesConstitution. The United StatesCourtof Appealshas
concluded Ihat the limitation on damages in V.T.C.S. article 45901, section 11.02 (the statute at issue in
Lucas)was consistentwifh these constitutionalprovisions. Lucm v. United States, 807 F.2d 414, 417,
421-22 (5th Cir. 1987).
The Texas Supreme Court has, on the other hand, suggested that limitation provisions such as
article 45901, s&ions 11.02and 11.03,which are similar to the limitation statute about which you ask,
may violateTexas Constitutionarticle I, section 3 or article III, section 56. See Lucas v. United St&%
757 S.W.Zd 687,689 n.1 flex. 1988).
p. 2217