Mci Sales and Service, Inc. v. Hinton

• Decision Date: 10 September 2008
• Docket Number: No. 10-06-00256-CV.,10-06-00256-CV.
• Citation: 272 S.W.3d 17
• Parties: MCI SALES AND SERVICE, INC., f/k/a Hausman Bus Sales, Inc., and Motor Coach Industries Mexico, S.A. de C.V., f/k/a Dina Autobuses, S.A. de C.V., Appellants, v. James HINTON, Individually and as Representative of The Estate of Dolores Hinton, Deceased, et al., Appellee.
• Court: Texas Court of Appeals

272 S.W.3d 17

MCI SALES AND SERVICE, INC., f/k/a Hausman Bus Sales, Inc., and Motor Coach Industries Mexico, S.A. de C.V., f/k/a Dina Autobuses, S.A. de C.V., Appellants, v. James HINTON, Individually and as Representative of The Estate of Dolores Hinton, Deceased, et al., Appellee.

No. 10-06-00256-CV.

Court of Appeals of Texas, Waco.

September 10, 2008.

Rehearing Overruled December 9, 2008.

Thomas C. Wright, Wright Brown & Close LLP, Daryl G. Dursum, Adams & Reese LLP, Houston, John C. Dacus, Hartline Dacus Barger Dreyer & Kern, Dallas, Jim Dunnam, Dunnam & Dunnam LLP, Waco, Darrell L. Barger, Barger & Moss LLP, Corpus Christi, for appellants.

Andrew L. Kerr, Strasburger & Price LLP, San Antonio, Stephen E. Harrison, Campbell Cherry Harrison Davis & Dove, David C. Alford, Alford & Gassaway PC, Waco, Thomas K. Brown, Fisher Boyd Brown Boudreaux & Huguenard, Houston, Timothy M. Sulak, Morris Craven & Sulak LLP, Austin, Jack R. Crews, Baird Crews Schiller & Whitaker PC, Temple, for appellee.

Before Chief Justice GRAY, Justice VANCE, and Justice REYNA.

OPINION

BILL VANCE, Justice.

The appeal of this products liability case primarily raises issues of federal preemption, legal sufficiency of the evidence, and proportionate responsibility. Finding that the trial court abused its discretion by not asking the jury to find the bus driver's or his employer's proportionate responsibility as settling parties, we will reverse and remand.

I. Background

This "crashworthiness" case arises from an accident involving a "motor coach" passenger bus near Waco on February 14, 2003. The passengers had boarded a bus chartered by Central Texas Trails and driven by Johnny Cummings to take them from Temple to Dallas. As the bus headed north on Interstate 35 (I-35), the weather conditions were overcast with reduced visibility due to fog, haze, and heavy rain. As the bus crested a hill just south of Waco, Cummings saw cars stopped ahead because a prior accident had caused northbound I-35 to be shut down. Instead of trying to stop in time to avoid hitting the stopped traffic ahead, Cummings steered to the left and drove the bus across the earthen median into the southbound lanes of I-35. The bus slammed head-on into a large SUV, instantly killing two of its occupants. The impact caused the bus to spin counterclockwise, tip over on its right side, and slide to a stop over the ditch between southbound I-35 and the west access road. Five passengers on the bus were killed, and many were injured.

The bus occupants and their relatives— many of whom are the Plaintiffs below and the Appellees here—made claims against the bankruptcy estates of the bus owner— Central Texas Trails, Inc., Central Texas Bus Lines, Inc., and Kincannon Enterprises (collectively Central Texas)—and Cummings, a Central Texas employee. The liability insurance carrier for Central Texas and Cummings paid its $5 million in policy limits into the registry of the bankruptcy court to be held and distributed among those who had asserted claims against Central Texas and Cummings in accordance with the bankruptcy court's "Apportionment Plan" and "Litigation Plan."

The Plaintiffs then sued MCI Sales and Service Inc. and Motor Coach Industries Mexico, S.A. de C.V. (MCI), alleging that the bus was defectively designed and unreasonably dangerous because it was not equipped with three-point passenger seatbelts or with laminated glass passenger windows.¹ The case went to trial against only MCI, which had imported, assembled, and sold the bus to Central Texas. The trial court rejected MCI's attempts to join Central Texas and Cummings as responsible third parties and also refused to submit a question to the jury asking if they were liable as responsible third parties or settling parties for a proportionate liability determination. A jury found MCI liable and awarded approximately $17 million in damages to the Plaintiffs.

After the trial but before the final judgment was signed, and under the bankruptcy court's Litigation Plan, a special judge conducted a private hearing in which Cummings was found negligent and findings were made allocating the insurance proceeds among the claimants. After the bankruptcy court approved the findings, MCI moved the state trial court for settlement credits for the sums paid to the Plaintiffs from the bankruptcy proceeding. Rather than crediting MCI for those sums, the trial court entered a final judgment totaling just over $17 million but reciting that it has been "partially satisfied" as to each Plaintiff in the exact amount each received on their claims in the bankruptcy proceeding. MCI appeals, raising eight issues.

II. Federal Preemption

We begin with MCI's third issue, which asserts that the Plaintiffs' state common-law defective design claims regarding seatbelts and laminated windows are impliedly preempted by federal law. The jury found that there was a design defect in the bus at the time it left MCI's possession because it did not have passenger safety belts and because laminated glass was not used in the side passenger windows.

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. If a state law conflicts with federal law, it is preempted and has no effect. 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. Cipollone v. Liggett Group, Inc., 505 U.S 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). Additionally, federal law or regulations may impliedly preempt state law or regulations if the statute's scope indicates that Congress intended federal law or regulations to occupy the field exclusively or if state law actually conflicts with federal law or regulations. Myrick, 514 U.S. at 287, 115 S.Ct. 1483; Moore v. Brunswick Bowling & Billiards Corp., 889 S.W.2d 246, 247-48 (Tex.1994). State law presents an actual conflict with federal law when: (1) it is impossible for a private party to comply with both state and federal requirements; or (2) state law obstructs accomplishing and executing Congress' full purposes and objectives. See Myrick, 514 U.S. at 287, 115 S.Ct. 1483 (citing English [v. General Elec. Co.], 496 U.S. [72] at 79, 110 S.Ct. 2270 [110 L.Ed.2d 65 (1990)] and Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941)).

The United States Supreme Court limits the preemption doctrine by presuming that Congress did not intend to displace state law. See Maryland, 451 U.S. at 746, 101 S.Ct. 2114, 68 L.Ed.2d 576; Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977). Historically, states have exercised primary authority in matters involving their citizens' public health and safety. Medtronic, Inc. v. Lohr, 518 U.S. 470, 475, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Thus, this presumption is nowhere stronger than under circumstances in which the states are exercising that authority. See Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 718-19, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985). Common-law actions based upon negligence and products liability involve the state's power to regulate health and safety matters. See Moore, 889 S.W.2d at 249. Accordingly, the party urging preemption has the difficult burden of overcoming the presumption against preemption. See Silkwood v. Kerr[-]McGee Corp., 464 U.S. 238, 255, 104 S.Ct. 615, 78 L.Ed.2d 443 (1984) (stating that the party urging preemption has the burden of proof).

Great Dane Trailers, Inc. v. Estate of Wells, 52 S.W.3d 737, 743 (Tex.2001); see also Sprietsma v. Mercury Marine, 537 U.S. 51, 64-65, 123 S.Ct. 518, 527, 154 L.Ed.2d 466 (2002); Turoff v. McCaslin, 222 S.W.3d 664, 668 (Tex.App.-Waco 2007, no pet.).

MCI argues that the seatbelt and laminated-window design defect claims are impliedly preempted because they conflict with federal motor vehicle regulations. The Texas Supreme Court has on at least two occasions summarized the history of the National Traffic and Motor Vehicle Safety Act, the statutory source for those regulations. See Great Dane, 52 S.W.3d at 742; Hyundai Motor Co. v. Alvarado, 974 S.W.2d 1, 3-4 (Tex.1998). We quote from Great Dane:

In 1966, Congress enacted the Safety Act, implemented under the National Highway Traffic Safety Administration's authority. The Safety 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 this purpose, Congress empowered the Secretary of Transportation to adopt motor vehicle safety standards. 15 U.S.C. § 1392(a) (recodified at 49 U.S.C. § 30111(a)). These standards must be "reasonable, practicable and appropriate." See 15 U.S.C. § 1392(f)(3) (recodified at 49 U.S.C. § 30111(b)(3)). Additionally, the standards must meet the need for motor vehicle safety and be stated in objective terms. See 15 U.S.C. § 1392(a) (recodified at 49 U.S.C. § 30111(a)). The standards the Secretary adopts under the Safety Act are, fundamentally, performance requirements, not design requirements. See Perry v. Mercedes Benz, Inc., 957 F.2d 1257, 1260 (5th Cir.1992). In fact, the Safety Act's legislative history states:

[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 ... system but not its design details.

S. REP. No. 89-1301, at 4 (1966), reprinted in 1966 U.S.C.C.A.N. 2709, 2712.

Great Dane, 52 S.W.3d at 742 (footnote omitted).

A. Seatbelts

MCI contends that the Plaintiffs' seatbelt claims are impliedly preempted by FMVSS 208, the federal regulation applicable to safety systems for buses, and by NHTSA's rejections...