Hyundai Motor Co. v. Alvarado

• Decision Date: 24 September 1998
• Docket Number: No. 95-0969,95-0969
• Parties: Prod.Liab.Rep. (CCH) P 15,273, 41 Tex. Sup. Ct. J. 947 HYUNDAI MOTOR COMPANY, Hyundai Motor America, Inc., and Port City Hyundai, Inc., Petitioners, v. Mario ALVARADO, et al., Respondents.
• Court: Texas Supreme Court

Page 1

974 S.W.2d 1

Prod.Liab.Rep. (CCH) P 15,273, 41 Tex. Sup. Ct. J. 947

HYUNDAI MOTOR COMPANY, Hyundai Motor America, Inc., and Port

City Hyundai, Inc., Petitioners, v. Mario ALVARADO, et al., Respondents.

No. 95-0969.

Supreme Court of Texas.

Argued Sept. 3, 1996.

Decided June 5, 1998.

Rehearing Overruled Sept. 24, 1998.

Ruth G. Malinas, San Antonio, David E. Keltner, Fort Worth, David M. Heibron, Leslie G. Landau, San Francisco, David M. Prichard, Thomas H. Crofts, San Antonio, Vincent S. Walkowiak, Dallas, Malcolm E. Wheeler, Denver, CO, for Petitioners.

Christa Brown, Austin, Rebecca E. Hamilton, Rockwall, Steve T. Hastings, Corpus Christi, for Respondents.

SPECTOR, Justice, delivered the opinion of the Court, in which GONZALEZ, BAKER, ABBOTT and HANKINSON, Justices, join.

Congress passed the National Traffic and Motor Vehicle Safety Act of 1966 "to reduce traffic accidents and deaths and injuries to persons resulting from traffic accidents." 15 U.S.C. § 1381 ¹ (recodified at 49 U.S.C. § 30101). The issue before us is whether the Act and its implementing regulations preempt common-law claims asserting that a vehicle's passenger restraint system was defectively designed because the manufacturer failed to install lap belts. The court of appeals concluded that these claims were not preempted. 908 S.W.2d 243. We hold that the claims were neither expressly nor impliedly preempted, and affirm the judgment of the court of appeals.

I. Background

Eighteen-year-old Mario Alvarado and his younger brother, Fidel, were passengers in a Hyundai Excel driven by Mario's classmate, Vince Reyes. The Excel's front seats were equipped with a two-point passive restraint system. A shoulder belt automatically moved into place across the passenger's chest when the vehicle's door closed, and there was a ramp seat and knee bolster to help prevent passengers from submarining under the dash in the event of a collision. This two-point assembly did not include a lap belt.

Mario was in the front passenger seat, and his brother was riding in the rear of the car. It was raining, and as Reyes attempted to pass another vehicle, the Excel skidded off the road and rolled over. Mario was wearing his seatbelt, but was ejected through the sunroof. As a result, he is paralyzed from the chest down. Fidel and Reyes incurred lesser injuries.

Mario and his parents sued Hyundai Motor Company, Hyundai Motor America, Inc., and Port City Hyundai, Inc. (Hyundai). ² They alleged that the Excel was defectively designed because it was not equipped with lap belts, that Hyundai failed to provide adequate warnings of the increased danger resulting from the lack of lap belts, and that Hyundai failed to give adequate instructions for the use of the vehicle's restraint system. They also alleged that Hyundai was negligent and grossly negligent based upon the same acts or omissions.

Hyundai moved for partial summary judgment, asserting that the Alvarados' claims based upon the lack of a lap belt were preempted by the Safety Act and its implementing regulations. The trial court granted the motion. The Alvarados then filed a notice of nonsuit and later refiled their case in a different county. In response, Hyundai requested that the first trial court modify its nonsuit order to provide that it was with prejudice to the claims adjudicated by the partial summary judgment, and the trial court did so.

The Alvarados appealed both the dismissal with prejudice and the merits of the partial summary judgment. Alvarado v. Hyundai Motor Co., 885 S.W.2d 167 (Tex.App.--San Antonio 1994), rev'd, 892 S.W.2d 853 (Tex.1995). The court of appeals concluded that the dismissal should not have been with prejudice and did not reach the preemption issues. Hyundai then sought review here. We held that a nonsuit sought after a trial court grants a partial summary judgment results in a dismissal with prejudice on the issues disposed of by the summary judgment, thus converting the partial summary judgment into a final, appealable judgment. Hyundai Motor Co. v. Alvarado, 892 S.W.2d at 855. We remanded the case to the court of appeals to allow it to consider the Alvarados' contention that their "no lap belt" claim was not preempted. Id. On remand, the court of appeals held that there was no express or implied preemption of claims and reversed the trial court's judgment. 908 S.W.2d at 253. We granted Hyundai's application for writ of error challenging these holdings.

II. Statutory overview

Congress enacted the National Traffic and Motor Vehicle Safety Act of 1966 in response to the accelerating spiral of deaths and injuries resulting from unsafely designed vehicles. See S.REP. NO. 89-1301, reprinted in 1966 U.S.C.C.A.N. 2709, 2709-10; H.R.REP. NO. 89-1776, at 10-11 (1966); John F. McCauley, Note, Cipollone & Myrick : Deflating the Airbag Preemption Defense, 30 IND. L.REV. 827, 829 (1997). The Act's explicit purpose is "to reduce traffic accidents and deaths and injuries to persons resulting from traffic accidents." 15 U.S.C. § 1381 (recodified at 49 U.S.C. § 30101). To accomplish that purpose, Congress empowered the Secretary of Transportation to adopt motor vehicle safety standards. Id. § 1392(a) (recodified at 49 U.S.C. § 30111(a)). While the standards must be "reasonable, practicable and appropriate," id. § 1392(f)(3) (recodified at 49 U.S.C. § 30111(b)(3)), Congress intended that "safety shall be the overriding consideration in the issuance of standards." S.REP. NO. 89-1301, reprinted in 1966 U.S.C.C.A.N. at 2714 (emphasis added); see 15 U.S.C. § 1392(a) (recodified at 49 U.S.C. § 30111(a)) ("The Secretary shall establish by order appropriate Federal motor vehicle safety standards ... [that are] practicable, shall meet the need for motor vehicle safety, and shall be stated in objective terms.") (emphasis added).

The Safety Act has an express preemption clause that provides:

Whenever a Federal motor vehicle safety standard established under this title is in effect, no State or political subdivision of a State shall have any authority either to establish, or to continue in effect, with respect to any motor vehicle or item of motor vehicle equipment any safety standard applicable to the same aspect of performance of such vehicle or item of equipment which is not identical to the Federal standard. Nothing in this section shall be construed as preventing any State from enforcing any safety standard which is identical to a Federal safety standard.

15 U.S.C. § 1392(d) (recodified at 49 U.S.C. § 30103(b)). It also has a savings clause providing that "[c]ompliance with any Federal motor vehicle safety standard issued under this title does not exempt any person from any liability under common law." 15 U.S.C. § 1397(k) (recodified at 49 U.S.C. § 30103(e)).

The standards the Secretary adopts under the Safety Act are, fundamentally, performance requirements, not design requirements. See id. § 1392(a) (recodified at 49 U.S.C. § 30111(a)) (requiring that standards shall "be stated in objective terms"); Perry v. Mercedes Benz of N. Am., Inc., 957 F.2d 1257, 1260 (5th Cir.1992); Hernandez-Gomez v. Leonardo, 185 Ariz. 509, 917 P.2d 238, 244 (1996). The legislative history of the Safety Act makes that fact clear [T]he new and revised standards are expected to be performance standards, specifying the required minimum safe performance of vehicles but not the manner in which the manufacturer is to achieve the specified performance.

....

The Secretary would thus be concerned with the measurable performance of a braking system, but not its design details.

S.REP. NO. 89-1301, reprinted in 1966 U.S.C.C.A.N. at 2714.

The Secretary has adopted Safety Standard 208, which establishes crash protection performance requirements, expressed in terms of forces exerted on anthropomorphic test dummies, for passenger restraint systems. See 49 C.F.R. § 571.208 (1988). ³ For cars built between September 1, 1987 and September 1, 1988, ⁴ Standard 208 provides several options for compliance. Three of those options specifically condition the applicable performance standard upon the particular type of restraint system that is used. See 49 C.F.R. § 571.208, S4.1.2.1, S4.1.2.2, S4.1.2.3.

Hyundai elected to comply with what is, in effect, a fourth option, S4.5.3. S4.5.3 allows a manufacturer to use an automatic seatbelt "to meet the crash protection requirements of any option under S4. and in place of any seat belt assembly otherwise required by that option." 49 C.F.R. § 571.208, S4.5.3. Hyundai claims that it complied with the crash protection requirements of S4.1.2.2. This option establishes criteria for frontal crashes, but not for rollovers, the type of accident that injured the Alvarados. Id. § 571.208, S4.1.2.2. The question we must resolve is whether the Safety Act and the regulations under it preempt common-law damage claims if the manufacturer chooses an option permitted by the federal regulations. ⁵

III. Preemption

Under the Supremacy Clause of the United States Constitution, the laws of the United States are "the supreme Law of the Land; ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. CONST. art. VI, cl. 2. A state law is preempted and "without effect" if it conflicts with federal law. Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 68 L.Ed.2d 576 (1981). A federal law may expressly preempt state law. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). Additionally, preemption may be implied if the scope of the statute indicates that Congress intended federal law to occupy the field exclusively or when state law actually conflicts with federal law. Freightliner Corp. v. Myrick, 514 U.S. 280, 287, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995) (citing English v. General Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990)); see also Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d 246,...