Redman Homes, Inc. v. Ivy
| Decision Date | 11 May 1995 |
| Docket Number | No. 08-94-00016-CV,08-94-00016-CV |
| Parties | REDMAN HOMES, INC., Appellant, v. Jimmy D. IVY and Ida Earlene Ivy, Appellees. |
| Court | Texas Court of Appeals |
Cecil Kuhne, Crenshaw, Dupree & Milam, Lubbock, Joe C. Nagy, Crenshaw, Dupree & Milam, L.L.P., Lubbock, for appellant.
Abner Burnett, Burnett & Burnett, Inc., Odessa, for appellees.
Before BARAJAS, C.J., and McCLURE and CHEW, JJ.
Redman Homes appeals a $122,702.78 judgment in favor of Appellees for breaches of implied warranties and for deceptive trade practices in connection with Appellees' mobile home, which Appellant manufactured. The jury found for Appellees on both claims and assessed damages at $79,000, which, together with attorney's fees and pre-judgment interest, resulted in the judgment amount. We affirm in part, reverse in part, and remand this cause to the trial court for a new trial to determine the damages incurred by Appellees.
Appellant manufactures mobile homes. In March of 1988, Appellees purchased a mobile home manufactured by Appellant and located it in Gaines County, Texas, using it as their residence. In January of 1989, the mobile home and all its contents were destroyed by fire. Appellees sued Appellant, claiming that defective wiring installed in the home by Appellant was the cause of the fire.
Appellees' first amended original petition alleges breaches of the implied warranties of merchantability and fitness for a particular purpose. The petition also alleges violations of the Deceptive Trade Practices-Consumer Protection Act (DTPA), TEX.BUS. & COM.CODE ANN. §§ 17.41-17.63 (Vernon 1987 and Supp.1995).
Appellant attacks the judgment of the trial court in eight points of error. In its first two points of error, Appellant argues that Appellees' claims are preempted by the National Manufactured Home Construction and Safety Standards Act (NMHCSSA), 42 U.S.C.A. §§ 5401-5426 (West 1983 and Supp.1994).
The doctrine of federal preemption is rooted in the supremacy clause of Article VI of the United States Constitution, which provides that the laws of the United States "shall be supreme Law of the Land; ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." Cipollone v. Liggett Group, Inc., 505 U.S. 504, ----, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407 (1992); Moore v. Brunswick, 889 S.W.2d 246, 247 (Tex.1994). Thus, since McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 427, 4 L.Ed. 579 (1819), it has been settled that state law that conflicts with federal law is "without effect." Cipollone v. Liggett Group, Inc., 505 U.S. at ----, 112 S.Ct. at 2617 (1992). Preemption analysis begins with the presumption that the historic police powers of the States are not to be superseded by federal legislation "unless that is the clear and manifest purpose of Congress." Id. (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947)). Accordingly, the "ultimate touchstone" of preemption analysis is congressional intent. Id.; Moore v. Brunswick, 889 S.W.2d at 247.
Federal law may supersede state law in one of several different ways. First, Congress may plainly express its preemptive intent in the text of a federal statute. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381-83, 112 S.Ct. 2031, 2036, 119 L.Ed.2d 157 (1992); Moore v. Brunswick, 889 S.W.2d at 247. Second, preemption may be presumed if federal legislation "so thoroughly occupies a legislative field as to make reasonable the inference that Congress left no room for the States to supplement it." Cipollone v. Liggett Group, Inc., 505 U.S. at ----, 112 S.Ct. at 2617 (internal quotations omitted). Finally, state law is preempted to the extent it actually conflicts with federal law. Id.; Moore v. Brunswick, 889 S.W.2d at 248. State law conflicts with federal law when it is impossible to comply with both, Hillsborough County v. Automated Medical Lab., Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985); Moore v. Brunswick, 889 S.W.2d at 248, or when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, Capital Cities Cable, Inc., v. Crisp, 467 U.S. 691, 699, 104 S.Ct. 2694, 2700, 81 L.Ed.2d 580 (1984); Eli Lilly and Co. v. Marshall, 850 S.W.2d 155 (Tex.1993). Significantly, federal regulations can preempt state law just as completely as federal statutes. Hillsborough County v. Automated Medical Lab., Inc., 471 U.S. at 713, 105 S.Ct. at 2375; Macmillan v. Redman Homes, Inc., 818 S.W.2d 87 (Tex.App.--San Antonio 1991, writ denied).
The NMHCSSA and the administrative regulations promulgated under its authority establish construction and safety standards for mobile homes and many of their component parts, including the electrical wiring at issue in the instant case. See 42 U.S.C.A. § 5403(a) (West 1983) (); 24 C.F.R. §§ 3280.801-3280.816 (1994) (code sections comprising "Subpart I--Electrical Systems").
The NMHCSSA expressly preempts certain state law. The section of the act entitled "Supremacy of Federal standards" reads:
Whenever a Federal manufactured home construction and safety standard established under this chapter is in effect, no State or political subdivision of a State shall have any authority either to establish, or to continue in effect ... any standard regarding construction or safety applicable to the same aspect of performance of [a] manufactured home which is not identical to the Federal manufactured home construction and safety standard.
42 U.S.C.A. § 5403(d) (West 1983). The scope of this provision is deliberately limited. By its terms, Section 5403(d) preempts only state construction and safety standards, which necessarily implies that state standards unrelated to construction and safety are not preempted. Further, it preempts only those state construction and safety standards that differ from federal standards, which leads to the logical inference that identical state standards, though they concern construction and safety, are not preempted. Further still, the NMHCSSA makes clear that it does not preempt state standards with respect to attributes for which there is no corresponding federal standard. Id. at § 5422(a). 1
A section of the administrative regulations promulgated pursuant to the NMHCSSA reveals a different axis by which the Act's preemptive scope is limited and illuminates the States' permissible regulatory role. A code provision entitled "Preemption and reciprocity" reads in part:
A State may establish or continue in force consumer protections, such as warranty or warranty performance requirements, which respond to individual consumer complaints and so do not constitute systems of enforcement of the Federal standards....
24 C.F.R. § 3282.11(c) (1994).
Appellant asserts that the foregoing provisions preempt Appellees' claims in their entirety. Given the limited preemptive scope of the NMHCSSA, its assertion raises two issues. First, is a lawsuit in state court that alleges breaches of implied warranties and DTPA violations an attempt to enforce a construction or safety standard? 2 Second, if it is, do the particular claims Appellees pled attempt to enforce standards that differ from the federal standards?
The United States Supreme Court recently addressed a similar preemption issue in American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995), in which the class-action plaintiffs claimed that by reducing the utility of frequent flier mileage credits, i.e., by increasing the credits required to earn free travel, the defendant breached a contract and violated Illinois's Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act). At issue in Wolens was the Airline Deregulation Act of 1978 (ADA), Pub.L.No. 95-504, 92 Stat. 1705, (codified as amended largely in scattered sections of 49 U.S.C.A. (West Supp.1994)), which deregulated domestic air transport and barred states from "enacting or enforcing any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier." 49 U.S.C.A. App. § 1305(a)(1) (West Supp.1994). American argued that the plaintiffs' claims were barred by the ADA.
The Supreme Court discerned the preemptive scope of the provision by distinguishing between state-imposed and self- or party-imposed obligations, holding only the former preempted. American Airlines, Inc. v. Wolens, 513 U.S. at ----, 115 S.Ct. at 823-24. The Court reasoned that self-imposed obligations, such as those embodied in a contract to which one agrees, are "privately ordered obligations" that do not constitute state enactment or enforcement as the statute requires, even when one of the parties seeks to invoke the power of state courts to enforce the contract. American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. at 824. The Court therefore held the plaintiffs' contract claims not preempted by federal law and allowed them to proceed. Id. In contrast, the Court found the plaintiffs' Consumer Fraud Act claims to be based on state-imposed norms, which provided the requisite state action to fall within the preemptive scope of the ADA. American Airlines, Inc. v. Wolens, 513 U.S. at ----, 115 S.Ct. at 823-24.
Interestingly, the Court was careful to avoid identifying the norms imposed by the Illinois Consumer Fraud Act, and did not actually state that the Act imposed such norms. The Court apparently held the claims preempted as a prophylactic measure, finding that the Consumer Fraud Act "serves as a means to guide and police the marketing practices of the airlines" and that the "potential for intrusive regulation ... [is] inherent in state...
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