DocketNumber: NO. 15-0146
Citation Numbers: 497 S.W.3d 460
Judges: Boyd, Brown, Devine, Green, Guzman, Hecht, Johnson, Lehrmann, Willett
Filed Date: 5/20/2016
Status: Precedential
Modified Date: 1/12/2023
delivered the opinion of the Court,
The State of Texas as amicus curiae argues that the certified questions now before us from the United States Court of Appeals for the Fifth Circuit are premised on an incorrect understanding of Texas law. Our dilemma is whether to address the premise of the questions when the parties have not done so, or answer questions that are hypothetical if the State is right. We choose the latter course.
The Texas Optometry Act
In 1992, Wal-Mart Stores, Inc. (‘Wal-Mart”) began operating “Vision Centers” in its Texas retail stores, selling a variety of ophthalmic goods, such as spectacle lenses, frames, and contact lenses. Wal-Mart leased office space near the Vision Centers to optometrists. A typical lease required the optometrist to keep the office open at least 45 hours per week or pay $200 per day in liquidated damages.
The Act provides that “[a] manufacturer, wholesaler, or retailer of ophthalmic goods may not directly or indirectly ... control or attempt to control the professional judgment, manner of practice, or practice of an optometrist”.
In 1995, the Board advised Wal-Mart that its minimum office-hour requirement violated the Act. Wal-Mart dropped the requirement and changed its lease form, allowing an optometrist lessee to insert daily hours of operation and providing that it would “retain no control whatsoever over the manner and means by which the [optometrist] performs his/her work.” In the Board’s view, these changes were not sufficient to comply with the Act. In 1998, the Board published a newsletter in which it opined that any commercial lease merely referencing an optometrist’s hours violated
In 2007, four Texas optometrists—Doris Forte, Bridget Leesang, David Wiggins, and John Boldan (“the Optometrists”)—all with post-1995 Wal-Mart leases, sued Wal-Mart in federal district court.
The district court instructed the jury that the Optometrists “do not claim that they have suffered any physical or economic damages [and] only seek to recover civil penalties.” The jury awarded the Optometrists $3,953,000 in civil penalties— $1,000 for every day the Optometrists had operated under the leases, the maximum penalty allowed by the Act. The jury also awarded the Optometrists $763,854 in attorney fees. Post-verdict, the court ordered a remittitur, which the Optometrists accepted, reducing the civil penalty to $400 per day, totaling $1,396,400.
On appeal, Wal-Mart contended that its conduct did not violate the Act. The Fifth Circuit rejected this argument.
1. Whether an action for a “civil penalty” under the Texas Optometry Act is an “action in which a claimant seeks damages relating to a cause of action” within the meaning of Chapter 41 of the ■Texas Civil Practice and Remedies Code. In other words, are civil penalties awarded under Tex. Occ.Code § 351.605 “damages” as that term is used in Tex. Civ. Prac. & Rem.Code § 41.002(a).
2, If civil penalties awarded under the Texas Optometry Act are “damages” as that term is used in Tex. Civ. Prac. &*464 Rem.Code § 41.002(a), whether they are “exemplary damages” such that Tex. Civ. Prac. & Rem.Code § 41.004(a) precludes their recovery in any case where a plaintiff does not receive damages other than nominal damages.23
As usual, the Circuit added: “We disclaim any intention or desire that the Supreme Court of Texas confíne its reply to the precise form or scope of the questions certified.”
We accepted the certification.
The State of Texas as amicus curiae argues that Section 351.605 of the Act does not authorize a private suit for penalties. The “remedies” in Section 351.603(b) to which an injured person “is entitled to” under Section 351.605 are not civil penalties, the State contends, but actions for civil penalties brought by the Attorney General or the Board. The State points to Brown v. De La Cruz, where we said that “a statute providing for a daily penalty unrelated to actual losses must be strictly construed, and may be asserted in a private cause of action only if the statute clearly so provides.”
The State’s argument has force. If it is right, we need not consider the effect of Chapter 41 on the recovery of penalties, the subject of the certified questions. We might consider the Fifth Circuit’s disclaimer of precise limitation on the scope of the questions to allow us to reach the State’s argument, but the parties have not chosen to engage on this issue, and we are reluctant to do so without the benefit of their arguments. We are also reluctant to direct them to argue an issue they have elected not to raise. We might decline to answer the certified questions at all, but that would deprive the Fifth Circuit of the guidance it has sought and perversely suggest an end result contrary to the one we would reach. We faced a similar predicament in Diamond Shamrock Refining and Marketing Co. v. Mendez, where Diamond Shamrock argued that malice should be an element of false light invasion of privacy, a tort we had never recognized, but did not argue that the tort itself should not exist.
Chapter 41 “applies to any action in which a claimant seeks damages relating to a cause of action”,
“Exemplary damages” means any damages awarded as a penalty or by way of punishment but not for compensatory purposes. Exemplary damages are neither economic nor noneconomic damages. “Exemplary damages” includes punitive damages.33
Thus, Chapter 41 applies to “any action” in which exemplary damages are sought. Indeed, most of Chapter 41 governs and limits the recovery of exemplary damages.
Chapter 41 does not refer to civil penalties. To determine whether they are damages, when neither is defined in the statute, we could look to the ordinary meanings of the words. Here, that is of little help. The Optometrists cite the definition of “damages” in the fifth edition of Black’s Law Dictionary as “[a] pecuniary compensation or indemnity” or “a compensation in money for a loss or damage”
We could also look to our own cases or other authorities. We have noted that civil penalties are different from compensatory damages
Given the breadth of Chapter 41, we cannot read in exceptions that would impair its purpose. The Optometrists argue civil penalties under the Act need not be governed by Chapter 41 because they are already limited to at most $1,000 per day,
The Optometrists argue that the Act provides for recovery of both damages
The Optometrists argue that if Chapter 41 applies to their recovery of sanctions, then it also applies to the Attorney General’s or the Board’s imposition of sanctions. But this argument is flawed for at least two reasons. First, the Attorney General and the Board could rarely, if ever, recover damages, so the application of Chapter 41 would destroy their enforcement powers under the Act. And second, the imposition of sanctions by the government is limited by institutional constraints not present when the claimant is a private person.
The Optometrists argue that if Chapter 41 applies to civil penalties under the Act, it must apply to all civil penalties under all statutes. They identify 24 Texas statutes allowing for both damages and civil penalties, and seven others allowing for civil penalties without mentioning damages. But whether Chapter 41 applies to any of these other statutes depends on the analysis we have followed here, not simply on a statutory authorization of civil penalties.
The Optometrists concede that Chapter 41 damages include compensatory damages, statutory multiple damages, and statutory additional damages. The only private monetary recovery excluded in their view is civil penalties. We cannot find justification in the statute for this exception. We conclude that a private recovery of civil penalties under the Act is subject to Chapter 41.
The Optometrists concede that if Chapter 41 damages include private civil penalties under the Act, it is difficult to argue that they are not “exemplary damages”—“damages awarded as a penalty or by way of punishment but not for compensatory purposes.”
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With the reservations we have noted regarding the premise underlying the certified questions, we answer both yes.
.Tex. Occ. Code §§ 351.001-.608. The predecessor to the current Act was passed in 1969, codified as article 4552 of the Texas Revised Civil Statutes, and recodified as Chapter 351 of the Occupations Code in 1999. Act of May 21, 1969, 61st Leg., R.S., ch. 401, 1969 Tex. Gen. Laws 1298 (amended 1981, 1991, and 1999) (formerly codified at Tex. Rev. Civ. Stat. Ann. arts. 4552-1.01 to 4552-6.04), repealed and recodified, Act of May 13, 1999, 76th Leg., ch. 388, §§ 1, 6, 1999 Tex. Gen. Laws 1431, 1720, 2440. The provisions now found in Sections 351.408, 351.603(b), and 351.605 were added in 1981 and have been in effect, substantially unchanged, at all times material to this case. Act of June 1, 1981, 67th Leg., R.S., ch. 758, § 2, 1981 Tex. Gen. Laws 2798, 2807 (formerly codified at Tex. Rev. Civ. Stat. Ann. art. 4552-5.11).
. Tex. Occ. Code § 351.408 (formerly codified as Tex. Rev. Civ. Stat. Ann. art. 4452-5.11(a), (b), (c)).
. Id. §§ 351.051—.163 (describing the board, its membership, powers, and duties).
. Id. § 351.603(b).
. Id. § 351.605.
. Forte v. Wal-Mart Stores, Inc., 780 F.3d 272, 283 (5th Cir.2015).
. Tex Civ. Prac. & Rem. Code §§ 41.001-014.
. Tex. Occ. Code § 351.408(c)(1).
. Id. § 351.408(b)(1).
. Id. § 351.603(b) ("The attorney general or board may institute an action against a manufacturer, wholesaler, or retailer of ophthalmic goods in a district court in the county in which a violation of Section 351.408 is alleged to have occurred for injunctive relief and a civil penalty not to exceed $1,000 for each day of a violation plus court costs and reasonable attorney’s fees.”).
. Id. § 351.605 ("A person injured as a result of a violation of Section 351.408, including an optometrist who is a lessee of a manufacturer, wholesaler, or retailer, is entitled to the remedies in Sections 351.602(c)(2), 351.603(b), and 351.604(3).”).
. Id. § 351.602(c)(2) ("A person may institute an action in a district court in the county in which the violation is alleged to have occurred for injunctive relief or damages plus court costs and reasonable attorney’s fees if the person is injured by another person who violates; (1) Section 351.403; or (2) Section 351.408.”).
. Id. § 351.604(3) ("A violation of any of the following sections is actionable under Sub-chapter E, Chapter 17, Business & Commerce Code: ... (3) Section 351.408 .... ’’); see Tex. Bus. & Com. Code§§ 17.41-63.
. Tex Occ. Code § 351.606("(a) A person commits an offense if the person violates this chapter, (b) An offense under Subsection (a) is a misdemeanor punishable by: (1) a fine of not less than $100 or more than $1,000; (2) confinement in county jail for a term of not less than two months or more than six months; or (3) both the fine and confinement, (c) A separate offense is committed each day a violation of this chapter occurs or continues.”).
. The suit was filed on behalf of about 400 similarly situated optometrists, but the court refused to certify a class and required that four test-case plaintiffs be designated.
. While the suit was pending, Wal-Mart deleted the requirement that office hours be stated in its leases and notified all leasing optometrists that it would not enforce any provision related to operating hours.
. Forte v. Wal-Mart Stores, Inc., 763 F.3d 421, 425-428 (5th Cir.2014), vacated, 780 F.3d 272 (5th Cir.2015).
. Tex, Civ. Prac. & Rem. Code § 41.002(a).
. Id. § 41.001(5).
. Id. § 41.004(a).
. Forte, 763 F.3d at 425-428,
. Forte, 780 F.3d at 281.
. Id. at 283.
. Id.
. 58 Tex.Sup.Ct.J. 427 (March 6, 2015). The Fifth Circuit held that Wal-Mart violated the Act. Forte, 780 F.3d at 277-278. The Chamber of Commerce of the United States and Texas Association of Business argue as amici curiae that this holding was incorrect. We express no view on that issue.
. 156 S.W.3d 560, 565 (Tex.2004).
. 844 S.W.2d 198, 200 (Tex.1992).
. Id. (deciding the "actual malice” issue in reversing and remanding the cause for a new trial).
. Tex. Civ. Prac. & Rem. Code § 41.002(a).
. Id, § 41.002(d). The exceptions are for actions under Section 15.21 of the Texas Business and Commerce Code (Texas Free Enterprise and Antitrust Act of 1983), Chapter 17 of the Texas Business and Commerce Code
. Id. § 41.002(b).
. Id. § 41.001(4), (5), (8), (9), (12).
. Id. § 41.001(5).
. Black’s Law Dictionary 351 (5th ed.1979).
. See Geters v. Eagle Ins. Co., 834 S.W.2d 49, 50 (Tex.1992) (per curiam) ("Damages” are " ‘compensation in money imposed by law for loss or injury.’ ”).
. Black's Law Dictionary 246 (6th ed.1990).
. See Agey v. Am. Liberty Pipe Line Co., 141 Tex. 379, 172 S.W.2d 972, 974 (1943) (noting in passing that a claimant seeking statutory civil penalties "did not sue for damages”).
. In re Longview Energy Co., 464 S.W.3d 353, 361 (Tex.2015) ("Disgorgement is compensatory in the same sense attorney fees, interest, and costs are, but it is not damages.”); In re Nalle Plastics Family Ltd. P'ship, 406 S.W.3d 168, 173 (Tex.2013) ("Not every amount, even if compensatory, can be considered damages.”).
. Wal-Mart cites a variety of federal cases that equate civil penalties and damages, See, e.g., United States v. Ford Motor Co., 497 F.3d
. Tex. Gov’t Code § 311.023(1)~(2).
. Tex. Civ. Prac. & Rem. Code §§ 41.003(a)-(c), 41.005(b), 41.008(c)-(d).
. Id. § 41.011(a).
. Id. §§ 41.003(d), 41.008(a), 41.012.
. Id, § 41.009; see also id. § 41.011(b).
. Id. § 41.003(d).
. Id. § 41.013(a).
. Id. § 41.008(b).
. Id. § 41.004(a).
. Supra note 30.
. Tex. Occ. Code § 351.603(b).
. Id. § 351.602(c)(2).
. Id. § 351.605.
. Tex. Civ. Prac. & Rem. Code § 41.002(b).
. Id. § 41.001(5).