Fire Prot. Serv. v. Survitec Survival Prods., 112221 FED5, 21-20145

Docket Nº21-20145
Opinion JudgeJennifer Walker Elrod, Circuit Judge
Party NameFire Protection Service, Incorporated, Plaintiff-Appellant, v. Survitec Survival Products, Incorporated, Defendant-Appellee.
Judge PanelBefore Elrod, Oldham, and Wilson, Circuit Judges.
Case DateNovember 22, 2021
CourtUnited States Courts of Appeals, United States Court of Appeals (5th Circuit)

Fire Protection Service, Incorporated, Plaintiff-Appellant,

v.

Survitec Survival Products, Incorporated, Defendant-Appellee.

No. 21-20145

United States Court of Appeals, Fifth Circuit

November 22, 2021

Appeal from the United States District Court for the Southern District of Texas USDC No. 4:19-CV-2162

Before Elrod, Oldham, and Wilson, Circuit Judges.

Jennifer Walker Elrod, Circuit Judge

Fire Protection Service, Inc. filed an unopposed motion to certify a state-law question to the Supreme Court of Texas. Because this case presents a determinative and novel question of Texas law, we GRANT the motion and certify the question.

I.

The facts of this case are fairly straightforward. Survitec Survival Products, Inc. makes life rafts. Survitec had an open-ended oral agreement with Fire Protection to sell Survitec's life rafts. After they made that

1

agreement, the Texas Legislature passed the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act ("the Texas Dealers Act" or "the Act"). Act of May 27, 2011, 82d Leg., R.S., ch. 1039, §§ 1-5, 2011 Tex. Gen. Laws 2646-59. The Act (among other things) prohibits equipment suppliers like Survitec from ending dealer agreements without good cause and notice, and it requires those suppliers to buy back unsold inventory from dealers like Fire Protection when they do so. See Tex. Bus. & Com. Code §§ 57.202, 57.204, 57.355(a). Survitec later ended its relationship with Fire Protection without notice and without explaining why.

Fire Protection sued Survitec, alleging it violated these provisions of the Act. Survitec removed the case to federal court, then responded that the Act violates the Texas Constitution's prohibition on "retroactive law[s]." See Tex. Const. art. I, § 16 ("No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made."). The district court agreed with Survitec and held that the Act was unconstitutional to the extent it retroactively amended the oral agreement between the two parties. Fire Protection appealed.

II.

When a case presents a question of Texas law, we look to the decisions of the Supreme Court of Texas for the answer. When no decision gives enough guidance, rather than make an Erie guess at the answer, we sometimes ask the Supreme Court of Texas to answer the question for us. Austin v. Kroger Tex. L.P., 746 F.3d 191, 196 (5th Cir. 2014). The Texas Constitution gives that court the power to do so, Tex. Const. art. V, § 3-c(a), so long as the case presents "determinative questions of Texas law" not already answered by the Court's precedent, Tex.R.App.P. 58.1. On our end, we consider three factors before certifying a question:

2 (1) the closeness of the question and the existence of sufficient sources of state law;

(2) the degree to which considerations of comity are relevant in light of the particular issue and case to be decided; and

(3) practical limitations of the certification process: significant delay and possible inability to frame the issue so as to produce a helpful response on the part of the state court.

Silguero v. CSL Plasma, Inc., 907 F.3d 323, 332 (5th Cir. 2018). Each favors certification here.

Whether the Act (as applied to the preexisting oral agreement) violates the Texas Constitution's retroactivity clause is a close call. The retroactivity clause has been part of the state's constitution for "as long as the State of Texas has been the State of Texas." City of Fort Worth v. Rylie, 602 S.W.3d 459, 460 (Tex. 2020). It has its roots in the Declaration of Rights in the Constitution of the Republic of Texas: "No retrospective or ex post facto law, or laws impairing the obligations of contracts shall be made." Repub. Tex. Const. of 1836, Dec. of Rights § 16. And it has been featured in the Bill of Rights in each of the state's constitutions since. See Robinson v. Crown Cork & Seal Co., Inc., 335 S.W.3d...

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