Everett v. Tk-Taito, L.L.C.

• Decision Date: 03 November 2005
• Docket Number: No. 2-04-181-CV.,2-04-181-CV.
• Parties: Pete EVERETT and Marcella Everett, Individually and on behalf of Others Similiarly Situated, Appellants, v. TK-TAITO, L.L.C., Takata Seat Belts, Inc., American Isuzu Motors, Inc., Isuzu Motors of America, Inc., and Nissan North America, Inc., Appellees.
• Court: Texas Supreme Court

178 S.W.3d 844

Pete EVERETT and Marcella Everett, Individually and on behalf of Others Similiarly Situated, Appellants, v. TK-TAITO, L.L.C., Takata Seat Belts, Inc., American Isuzu Motors, Inc., Isuzu Motors of America, Inc., and Nissan North America, Inc., Appellees.

No. 2-04-181-CV.

Court of Appeals of Texas, Fort Worth.

November 3, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

The Branch Law Firm, and Turner W. Branch, Albuquerque, NM, Dottie Murphy, Wichita Falls, Law Office of Stephen Gardner, PC, and Stephen Gardner, for Appellants.

Hartline, Dacus, Barger, Dreyer & Kern, L.L.P., and Jeffrey J. Cox, Dallas, and Carpenter & Lipps LLP, and Michael H. Carpenter, Colombus, OH, for Takata Seat Belts, Inc. and TK-Taito, L.L.C.

Hartline, Dacus, Barger, Dreyer & Kern, L.L.P., and Kurt C. Kern, and David P. Stone, Dallas, for Isuzu Motors of America, Inc.

Sedgwick, Detert, Moran & Arnold LLP, and E. Paul Cauley, Jr., Dallas, for Nissan North America, Inc.

PANEL A: CAYCE, C.J.; HOLMAN and WALKER, JJ.

OPINION

SUE WALKER, Justice.

I. INTRODUCTION

The sole issue we address in this appeal is whether Appellants Pete and Marcella Everett alleged an injury sufficient to establish their standing to assert certain causes of action on their own behalf and on behalf of "[a]ll persons who own a vehicle equipped with TK-52 Buckles ... that is registered in Texas, except those persons who have made claims against any defendant for personal injury damages allegedly arising out of seatbelt malfunction" or whether, as asserted by the defendant Appellees,¹ the Everetts lack standing individually and as class representatives because they have suffered no injury that is redressable through their pleaded claims. The trial court granted Appellees' motions to dismiss the statewide class action lawsuit after determining that the Everetts lacked standing because they had not alleged an injury in fact. Because no allegations exist that the TK-52 seat belt buckles in Marcella's 1991 Isuzu Rodeo or in Pete's 1994 Nissan pickup have malfunctioned, because Pete does not seek to recover personal injury damages that he allegedly suffered from a TK-52 seat belt, and because neither Marcella nor Pete has alleged an economic injury that is redressable through their pleaded claims, we hold that the trial court did not err by dismissing the Everetts' claims for lack of standing. Consequently, we will affirm the trial court's judgment.

II. FACTUAL AND PROCEDURAL BACKGROUND

The Everetts sued the defendants based on the production and sale of defective TK-52 buckles, ultimately alleging causes of action for breach of warranty, fraudulent concealment, violations of the Texas Deceptive Trade Practices Act ("DTPA"), constructive trust, money had and received, and exemplary damages. The Everetts pleaded that their vehicles, a 1994 Nissan pickup owned by Pete and a 1991 Isuzu Rodeo owned by Marcella, came factory-equipped with TK-52 buckles.² Although Pete alleges that he was physically injured by a defective Takata seat belt buckle,³ he specifically does not seek damages in this suit for those physical injuries. According to the pleadings, Marcella's seat belt buckles have not failed or caused her physical injury.

The Everetts alleged that Takata supplies the TK-52 buckles to its manufacturer customers and that Takata knew as early as the pre-production phase of the TK-52 buckles that the buckles—by virtue of a defective design—were susceptible to partial engagement, leaving the seat belt user essentially unrestrained. The Everetts pleaded that after a Honda Accord crash test documented the TK-52's partial engagement problem, Takata admitted a design defect existed and represented that it had developed a corrective countermeasure that would be incorporated into future TK-52 buckles. Several recalls issued concerning the defective buckles, but the Everetts maintain that not all of the defective buckles were recalled and that a substantial number of the buckles with identical defective internal design remain in use today, presenting an unreasonable risk of harm to users by virtue of the buckles' propensity to partially engage. The Everetts, on their own behalf and as class representatives, alleged economic injury damages, arguing that purchasers of vehicles fitted with the TK-52 buckles did not receive the benefit of the bargain that they made in the purchase of their vehicles and will suffer $500 per vehicle cost-of-replacement damages.

The defendants filed answers and numerous motions, including motions to dismiss for want of jurisdiction. Following a nonevidentiary hearing, the trial court dismissed the Everetts' claims, stating that the Everetts "lack standing to pursue this action because they have not alleged that they have an `injury in fact.'"⁴ The Everetts appeal from this dismissal judgment.

III. STANDARD OF REVIEW

Subject matter jurisdiction is essential to the authority of a court to decide a case. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex.1993). Standing is implicit in the concept of subject matter jurisdiction. Id. Whether a party has standing to maintain a suit is a question of law. Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002); In re A.J.L., 108 S.W.3d 414, 419 (Tex.App.-Fort Worth 2003, pet. denied). To have standing, the pleader bears the burden of alleging facts that affirmatively demonstrate the court's jurisdiction to hear the cause. Tex. Ass'n of Bus., 852 S.W.2d at 446. However, the pleader need not preview their case on the merits simply to establish jurisdiction. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554-55 (Tex.2000). In reviewing a standing ruling, an appellate court construes the petition in favor of the pleader. Id.; Tex. Ass'n of Bus., 852 S.W.2d at 446.

IV. COMMON LAW STANDING AND STATUTORY STANDING

Standing to sue may be predicated upon either statutory or common law authority. See, e.g., Williams v. Lara, 52 S.W.3d 171, 178-79 (Tex.2001); Inman, 121 S.W.3d at 869. The common law standing rules apply except where standing is statutorily conferred. Hunt v. Bass, 664 S.W.2d 323, 324 (Tex.1984); see also Williams, 52 S.W.3d at 178; In re Sullivan, 157 S.W.3d 911, 915-16 (Tex.App.-Houston [14th Dist.] 2005, orig. proceeding) (discussing separate "statutory standing criteria"). To establish common law standing, a plaintiff must show "a distinct injury to the plaintiff and `a real controversy between the parties, which ... will be actually determined by the judicial declaration sought.'" Brown v. Todd, 53 S.W.3d 297, 305 (Tex.2001). In conferring statutory standing, however, the legislature may by statute exempt litigants from proof of the "special injury" required to establish common law standing. See, e.g., Tex. Ass'n of Bus., 852 S.W.2d at 472 (Dogget, J. Concurring and dissenting) (providing examples—including the Texas Declaratory Judgments Act—of statutory standing granted in the absence of a personal damage, i.e., an injury in fact). When standing has been statutorily conferred, the statute itself serves as the proper framework for a standing analysis. Inman, 121 S.W.3d at 869. The plaintiff must allege and show how he has been injured or wronged within the parameters of the language used in the statute. Scott v. Bd. of Adjustment, 405 S.W.2d 55, 56 (Tex.1966).

V. THE PARTIES' POSITIONS

The Everetts argue that they alleged an injury in fact—an economic injury—by pleading that their TK-52 buckles are defective, are not effective restraints, pose serious safety risks, and have caused them concrete economic damages in the form of loss of the benefit of their bargain in purchasing their vehicles and the prospective cost of replacing the defective buckles. The defendants claim that the trial court correctly determined that the Everetts lacked standing because the Everetts have suffered no injury in fact. In addition, the Takata defendants argue that the Everetts lack standing because their suit is a de facto Federal Safety Act enforcement action.⁵ Isuzu separately argues that the Everetts have failed to allege any failure in any Isuzu product because the seat belts in Marcella's Isuzu Rodeo have not manifested any defect; thus, the Everetts do not have standing to pursue any cause of action against Isuzu.

VI. THE EVERETTS PLEADED AN UNMANIFESTED DEFECT

The Everetts' live pleading, their second amended original petition, seeks recovery of economic damages—loss of benefit of the bargain and cost of replacement damages—for the "defective" seat belt buckles installed in their vehicles. They pleaded that the TK-52 buckles "all have the same manufacturing defect," which is "inherent in the design of the buckle, in that it may only partially engage under ordinary usage conditions" and "may release during a collision."⁶ They further alleged that deviation from manufacturing specifications "increases the propensity for TK-52 Buckles to engage only partially." According to the Everetts, consumers complained to the National Highway Traffic Safety Administration about the "inherently defective design of the TK-52 Buckles and its propensity to partially engage in actual use," but the defendants mischaracterized these complaints as related to chipped ABS plastic release buttons. Takata allegedly has known that under a variety of actual use conditions "partial engagement can occur."

The Everetts do not plead that the TK-52 buckles in their vehicles have ever partially engaged when they attempted to latch them nor do they plead that the buckles have provided them with insufficient restraint or have come unlatched while they were driving. They likewise do not plead that in an accident or under stress the buckles will inevitably fail. Thus, they have pleaded that an unmanifested defect—a propensity to partially latch and to thereby provide insufficient restraint—exists within the TK-52 buckles in their vehicles....