X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:John and Barbara Robinson sued Crown Cork Seal Co. Inc. and others after discovering John had developed mesothelioma from years of working with products containing asbestos. In the trial court, Crown Cork admitted liability; however, before the court entered judgment, the Legislature enacted — and made immediately effective — a law that would preclude any recovery by the Robinsons from Crown Cork. The Legislature, concerned about the financial toll of asbestos suits, limited the liability of corporations that 1. had purchased companies manufacturing asbestos, but 2. did not continue in the asbestos business. By making the legislation effective immediately, the Legislature affected the Robinsons’ suit. Crown Cork moved for summary judgment, arguing that the legislation exempted it from paying any damages to the Robinsons because the damages it had already paid to other plaintiffs exceeded the monetary cap contained in the legislation. The trial court agreed and granted summary judgment in favor of Crown Cork. Mr. Robinson died during the litigation in the trial court, and Barbara Robinson continued to pursue his claims under the wrongful death statute. HOLDING:Affirmed. The court discusses the difficulty in deciding whether an allegedly vested right was retroactively altered in an unconstitutional way. The court decides to use a gauge other than vested rights to measure the statute’s constitutionality. When a statute is attacked as violating the retroactivity clause, the language of the clause must be balanced against the state’s interest in exercising its police power. Texas State Teachers Ass’n v. State, 711 S.W.2d 421 (Tex. App. – Austin 1986, writ ref’d n.r.e.). The fiscal health of the state and its inhabitants were the main goals of this legislation, the court states. The court quotes extensively from the statement of legislative intent accompanying the statute to illustrate the reasonableness of the statute’s purpose and the Legislature’s attempts to make its impact as narrow as possible. Courts of this state have held that two considerations determine whether a legislative act is valid under the police power: 1. whether the act is appropriate and reasonably necessary to accomplish a purpose within the scope of the police power, and 2. whether the ordinance is reasonable by not being arbitrary and unjust or whether the effect on individuals is unduly harsh so that it is out of proportion to the end sought to be accomplished. The purpose for which this statute was enacted — the financial viability of the state and businesses in the state — is a valid exercise of police power. The Legislature limited the statute’s detrimental impact on plaintiffs such as the Robinsons so that the impact was not out of proportion to the end sought. The requirements restrict the number of corporations that qualify for the limitation of liability, and therefore leave the pool of potential defendants as large as possible for claimants having valid claims for damages resulting from asbestos products. The statute was limited in scope to target those corporations most in need of financial relief and/or assistance — those corporations subject to asbestos suits and payouts because they purchased companies that manufactured asbestos. The statute also restricts its scope to those companies who are least responsible for the continued manufacture of asbestos and, therefore, least responsible for the continued negative impact of asbestos-related health problems on the public. As a result, Crown Cork was the only defendant of the number of companies the Robinsons sued that was able to take advantage of the statute. Although Robinson claims that the statute is unconstitutional, the court finds that her claims at most show that room for a fair difference of opinion exists as to the necessity and reasonableness of the statute. By enacting the statute, the court concludes that the Legislature made an appropriate judgment call on an issue uniquely within its purview and within its police power. Finding a reasonable basis for that decision, the court declines to declare the statute void. Robinson relies on City of Tyler v. Likes, 962 S.W.2d 489 (Tex. 1997), and Baker Hughes Inc. v. Keco R. & D. Inc., 12 S.W.3d 1 (Tex. 1999). Unlike this case, in both Keco and Likes, the court had “rather simple, straightforward” answers available to it. There was no reason for the court in those cases to consider the Legislature’s police power. The court declines to apply the reasoning of the Pennsylvania Supreme Court in Ieropoli v. AC&S Corp., 842 A.2d 919 (Pa. 2004), in which that court held that a similar statute enacted in Pennsylvania was unconstitutional as applied under the Pennsylvania Constitution. The court distinguishes that case by citing several differences, the most important difference appearing in the statutes themselves. The Pennsylvania statute was not as narrowly drawn as the statute here, the court believes. The court holds that the statute is not unconstitutionally retroactive as applied to Robinson’s claims because it is a valid exercise of the Legislature’s police power. In her second issue, Robinson contends the statute is a special law in violation of Texas Constitution Article III, �56. The “primary and ultimate” test of whether a law is general or special is whether there is a reasonable basis for the classification made by the law, and whether the law operates equally on all within the class. The court holds that a reasonable basis exists for the statute’s classification of innocent successor corporations, like Crown Cork, burdened by asbestos liabilities. Crown Cork’s inclusion in the class is rationally related to the Statute’s stated purposes, because it will cap the amount of money Crown Cork is liable to pay out for asbestos-related liabilities resulting solely from its merger with Mundet Cork Corp in 1966. Robinson’s contention that a member of the Texas Senate State Affairs Committee made comments that unmask the statute as creating a prohibited “pretend class” based on an agreed arrangement to advance Crown Cork’s personal interests rather than the public welfare. During a meeting of this committee, its chair described Article 17 of House Bill 4 to the members of the committee as follows: “Article 17, limitations in civil actions of liabilities relating to certain mergers or consolidations. This, members, is the Crown Cork and Seal asbestos issue. What we have put in this bill is what I understand to be an agreed arrangement between all of the parties in this in this matter.” “The senator’s brief mention of Crown Cork as a beneficiary of the Statute — in a single paragraph of a fifteen-page transcript — demonstrates at most that Crown Cork’s situation may have provided the impetus for its passage. It does not, as Robinson suggests, demonstrate that the Legislature acted improperly to evade constitutional requirements.” Finally, Robinson contends that she raised a fact question about whether Crown Cork continued Mundet’s asbestos business for several months after acquiring it. The existence of this fact question, Robinson argues, prevents Crown Cork from showing that it is entitled to the Statute’s limitation of liability as a matter of law. Because Robinson’s evidence all relates to events before the 1966 merger of Mundet and Crown Cork and because selling products for only three months until a division is sold does not qualify as “continuing the asbestos related business” as contemplated by the statute, Robinson did not raise a fact question as to whether Crown Cork continued Mundet’s asbestos-related business after the merger, the court concludes. OPINION:Fowler, J.; before Hedges, C.J., and Fowler and Frost, J.J. DISSENT:Frost, J. “Because the Legislature has no police power to enact retroactive laws in violation of section 16, this court should not use a police-power analysis to determine whether the statute is unconstitutionally retroactive. Furthermore, the weight of precedent from the Texas Supreme Court and this court requires the use of the vested-rights analysis. Under this analysis, the statute in question destroys the vested rights of the appellant in this case and therefore violates section 16 of the Texas Bill of Rights, as applied. Because the court, using a police-power analysis, reaches the opposite conclusion, I respectfully dissent.”

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.