Burlington Northern v. Poole Chemical Co., Inc.
| Decision Date | 28 July 2005 |
| Docket Number | No. 04-11217.,04-11217. |
| Citation | 419 F.3d 355 |
| Parties | BURLINGTON NORTHERN & SANTA FE RAILWAY COMPANY, Plaintiff, v. POOLE CHEMICAL COMPANY, INC., Defendant-Third Party Plaintiff-Appellant, v. Skinner Tank Company; et al., Third Party Defendants, Skinner Tank Company, Third Party Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard Clark Harrist (argued), Thornton, Summers, Biechlin, Dunham & Brown, San Antonio, TX, for Poole Chemical Co., Inc.
Richey Gene Strange (argued), Cotton, Bledsoe, Tighe & Dawson, Midland, TX, for Skinner Tank Co.
Appeal from the United States District Court for the Northern District of Texas.
Before WIENER, DeMOSS, and PRADO, Circuit Judges.
This appeal requires the court to decide whether § 9658 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) preempts the Texas statute of repose in a lawsuit involving a buyer's products liability claim. After considering that issue, the court concludes that § 9658 does not preempt the Texas statute of repose and affirms the judgment of the district court.
Appellant Poole Chemical Company (Poole) operates an agricultural blending facility near Slanton, Texas. Appellee Skinner Tank Company (Skinner) manufactures and sells storage tanks. Skinner manufactured two large above-ground storage tanks and sold them to Poole on October 28, 1988.
On January 29, 2003, one of the tanks ruptured. The rupture released several hundred thousand gallons of chemicals onto Poole's property and an adjacent railroad right-of-way. Poole and the Slanton fire department initiated emergency response services; Poole reclaimed some of the spilled chemicals. Plaintiff Burlington Northern & Santa Fe Railway Company (the "railroad company") conducted an emergency clean-up and restoration of its right-of-way at a cost of $2.1 million. On March 4, 2004, the railroad company sued Poole under CERCLA for the cost of the clean-up.
Having learned that it had no insurance to cover the cost of the accident, Poole filed a third-party complaint against three defendants, one of which was Skinner, on April 19, 2004. Poole brought various state law claims against Skinner, alleging that the tank Skinner sold it was defective.
Skinner moved for summary judgment based on Texas's 15-year statute of repose for products liability claims against manufacturers. Skinner argued that Poole's claims were barred because Poole did not file its complaint within 15 years of the sale of the tank. Poole responded with various arguments about why the statute of repose did not apply to its claims. The district court thoroughly analyzed each of Poole's arguments and determined that the statute barred each of Poole's claims. The district court entered judgment in Skinner's favor and certified the judgment as final as to Poole and Skinner. Poole challenges the district court's summary judgment in this appeal. This court reviews the judgment de novo.1
Section 16.012 of the Texas Civil Practice and Remedies Code establishes a 15-year statute of repose for products liability cases. That section provides that "a claimant must commence a products liability action against a manufacturer or seller of a product before the end of 15 years after the date of the sale of the product by the defendant."2 Here, the date of the sale of the allegedly defective product was October 28, 1988; Poole filed its lawsuit on April 19, 2004, more than 15 years after the date of the sale. Thus, if § 16.012 applies, Poole's claim is barred.
The current version of § 16.012 applies to actions filed on or after July 1, 2003.3 That version became effective on September 1, 2003—seven months after the chemical spill occurred and one month and 28 days before the fifteenth anniversary of the sale of the Skinner tanks to Poole.4 Because the 15-year repose period affects claims that arose from events that occurred before the law came into effect, it is a retroactive law.5 Poole maintains that § 16.012 cannot be applied retroactively because there is no clear legislative intent for retroactive application.
Under Texas law, an "act will not be applied retrospectively unless it appears by fair implication from the language used that it was the intent of the Legislature to make it applicable to both past and future transactions."6 Here, the plain language of § 16.012 demonstrates that the Texas legislature intended for the 15-year repose period to apply retroactively. The provision provides that a claim for a defective product must be brought before the end of 15 years after the date of the sale.7 Moreover, the legislature specifically provided that the repose period applies to "an action filed on or after July 1, 2003."8 Had the Texas legislature intended for § 16.012 to apply only prospectively, the legislature would have provided that the 15-year repose period applies to actions that "accrued" on or after July 1, 2003. Thus, the Texas legislature intended for the statute of repose to apply retroactively.
Poole maintains that retroactive application of § 16.012 would violate the Texas constitution's prohibition against retroactive laws. In general, the Texas constitution prohibits retroactive laws.9 Texas courts, however, have indicated that laws affecting a remedy are not unconstitutionally retroactive under the Texas constitution unless the remedy is entirely taken away.10 The Texas legislature can restrict the time for filing a claim without violating the retroactivity provision of the Texas constitution so long as "it affords a reasonable time or fair opportunity to preserve a claimant's rights under the former law, or if the amendment does not bar all remedy."11
Section 16.012 does not bar all remedy, but rather shortens the time for filing suit on a claim. Whereas the Texas legislature had not previously specified a time for filing suit for a defective product against a manufacturer, it did so when it amended § 16.012. Here, the tank ruptured approximately seven months before § 16.012 became effective and almost two months before the expiration of fifteen years following the sale of the Skinner tanks. As result, Poole had nine months (from the January 29, 2003 rupture of the tank until the October 28, 2003 fifteenth anniversary of the sale of the tanks) to file its third-party complaint against Skinner—and at least one month and 28 days following the September 1, 2003 effective date of the amendment to § 16.012. Poole thus had a reasonable amount of time in which to file its third-party complaint, constituting a fair opportunity to preserve its rights against Skinner under the former Texas law.12 If Poole believed that a defective tank caused the accident, it did not need to wait until it was sued by the railroad company, or until it realized it had no insurance, to file its lawsuit against Skinner. Accordingly, retroactive application of § 16.012 does not violate the Texas constitution's general prohibition against retroactive laws.
Poole also argues that retroactive application violates the Texas constitution's open courts provision because it prevents Poole from pursuing what it characterizes as accrued, vested causes of action. Poole argues that applying § 16.012 to its causes of action cuts short the otherwise applicable two-year limitations period by 15 months and thus takes away its remedy.13
The Texas open courts provision states that "[a]ll courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law."14 This provision "does not create any new right, but is a declaration of a general fundamental principle that for such wrongs as are recognized by the law of the land, the [Texas] courts shall be open and afford a remedy."15 A plaintiff who claims that a law violates the Texas open courts provision can prevail by showing that "the restriction is unreasonable or arbitrary when balanced against the purpose and basis of the statute."16 In Texas, a statute is presumed to be constitutional.17 Thus, Poole has the burden of showing that § 16.012 is unconstitutional.18
Here, Poole cannot meet his burden because Texas courts have determined that the 15-year repose period for defective products is "reasonably related to the legitimate state purpose of protecting manufacturers and sellers from stale claims."19 Additionally, "Texas courts have repeatedly held that statutes of repose do not violate the open courts provisions of the Texas Constitution."20 In order for common law causes of action like Poole's claims to be protected by the Texas constitution, the claims "must be a vested right or something more than a mere expectancy based upon an anticipated continuance of existing law."21 In Texas, a "party has no vested right to a cause of action" because neither the federal constitution nor the Texas constitution "forbids the abolition of common-law rights to attain a permissible legislative objective."22 Thus, prior to September 1, 2003, Poole had nothing more than an expectation based on an anticipated continuance of existing law, an expectation that is not protected by the Texas constitution.23 Consequently, retroactive application of § 16.012 does not violate the open courts provision of the Texas constitution.
Finally, Poole contends that § 9658 of CERCLA preempts § 16.012, superimposing a rule of discovery on the commencement of the running of § 16.012's period of repose. Poole thus maintains that under § 9658, the 15-year period of repose did not begin to run until January 29, 2003, when the tank ruptured.
Section 9658 provides that in state law causes...
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