Robinson v. Crown Cork & Seal Co. Inc
| Decision Date | 22 October 2010 |
| Docket Number | No. 06-0714,06-0714 |
| Court | Texas Supreme Court |
| Parties | Barbara Robinson, Individually and as Representative of the Estate of John Robinson, Deceased, Petitioner, v. Crown Cork & Seal Company, Inc., Individually and as Successor to Mundet Cork Corporation, Respondent |
Justice Wainwright, joined by Justice Johnson, dissenting.
The Legislature enacted Chapter 149 of the Civil Practice and Remedies Code to protect businesses, which acquired other entities, from financial disaster based solely upon the acquired entities' past, discontinued manufacture of asbestos products. The statute limits the liability of the acquiring business, which had not engaged in the asbestos business, to the fair market value of the acquired entity at the time of the acquisition. Through Chapter 149, the Legislature balances limitations on asbestos-related recoveries against protecting the assets and employees of businesses who did not cause the illness, while leaving intact the entirety of potential liability and damages proven against companies that were involved in the asbestos business and are, perhaps, moreculpable. The Court's holding that the legislation is unconstitutional prevents the Legislature from addressing an injustice arising from a crisis that caused dozens of bankruptcies and the loss of thousands of jobs in this state and throughout the country due to asbestos-related litigation. See, e.g., Jonathan Orszag, The Impact of Asbestos Liabilities on Workers in Bankrupt Firms, Remarks at the Asbestos Litigation Symposium at the South Texas College of Law in Houston, Tex. (Mar. 7, 2003), in 44 S. Tex. L. Rev. 1077, 1078-80 (2003) ().
The Court's new balancing test reaches the wrong result. By holding that an unliquidated claim with "substantial basis in fact" is entitled to constitutional protection, it ignores an important principle. _S.W.3d_. The constitutional retroactivity doctrine does not protect an asserted entitlement to property one does not own, and until a final judgment in a case, we do not know whether the claim will be vindicated or refuted. The Court's reasoning that the right to file a claim is protected by the retroactivity doctrine because, at least in part, the claim is well founded with a "substantial basis in fact" springing from a "mature tort" with " more predictable" recovery, is a troubling proposition. _S.W.3d_. It is unclear what that means, but it suggests that the constitutional retroactivity protection is dependent on the perceived strength of a claim. The likelihood of success in litigation is dependent on a myriad of factors that make such predictions difficult at best. We have held that an unliquidated personal injury claim is not a protected property interest, and the contingent recovery from one should not be either.
While Justice Medina, who writes separately, and I disagree on the result, we agree that the Court should not abandon vested rights jurisprudence in favor of a new and uncertain approach. The analysis in the Court's opinion is contrary to both the clear rule among the federal courts of appeals that have addressed the issue and the majority rule among our courts of appeals. The Court could rely on traditional police power jurisprudence in which, even if the Robinsons had a vested right in their unliquidated cause of action, courts consider whether the Legislature's action was justified by its constitutionally recognized police power to act in the interest of the health and welfare of Texas. Indeed, the Court's new balancing test for retroactivity analysis is similar to the police power balancing test I expound under existing law, but is newly incorporated into the retroactivity doctrine. For all these reasons, I respectfully dissent.
John Robinson served in the Navy for twenty years, and during that time he was exposed to steam pipes and boiler doors coated with insulation containing asbestos. Some of the insulation and other products were marked with a "big M," the trademark used by Mundet Cork Corporation. In August 2002, Robinson was diagnosed with mesothelioma. He claims the disease occurred as a result of his exposure to asbestos in, among others, insulation products produced by Mundet.
Crown Cork itself has never been in the business of mining, manufacturing, installing, selling, distributing, removing, or otherwise making asbestos or any asbestos-containing product. However, on November 7, 1963, Crown Cork's predecessor entered into an agreement to purchase the majority of Mundet's stock after the majority shareholder died and offered the shares for sale. Crown Cork paid approximately $7 million for the stock, a majority interest in the company.
Mundet ceased manufacturing insulation products prior to Crown Cork's acquisition of Mundet, but continued to hold insulation products in stock until early 1964, when a third-party entity purchased the assets of Mundet's insulation division, including its inventory, contracts, raw materials, and accounts receivables. On January 4, 1966, Mundet statutorily merged with Crown Cork's predecessor, and in 1989 Crown Cork was reincorporated in Pennsylvania.1
After he had been diagnosed with mesothelioma, Mr. Robinson and his wife filed suit in 2002 against Crown Cork and twenty other defendants for damages caused by Mr. Robinson's exposure to asbestos-containing products. The Robinsons sought to hold each defendant jointly and severally liable. On November 25, 2002, the Robinsons filed a motion for partial summary judgment to establish Crown Cork's liability for actual damages as Mundet's successor. Crown Cork did not contest its successor liability for compensatory damages, and on July 16, 2003 the trial court granted the Robinsons' motion, holding that Crown Cork "is liable and bears responsibility for the compensatory damages, if any, awarded to Plaintiffs that are attributable to the conduct, products, or torts of its predecessor Mundet Cork Corporation."
House Bill 4, a bill drafted to comprehensively address perceived crises in medical malpractice, asbestos, and other litigation issues in Texas, was introduced in the Texas House of Representatives on February 17, 2003, without any provision regarding successor asbestos liability. Tex. H.B. 4, 78th Leg., R.S. (2003). Its purpose was to operate as a "comprehensive civil justicereform bill intended to address and correct problems that currently impair the fairness and efficiency of our court system." House Comm. on Civil Practices, Bill Analysis, Tex. H.B. 4, 78th Leg., R.S. at 1 (2003).
In late March 2003, more than 100 amendments were submitted to the Bill, including Article 17, the asbestos successor-liability article. The article was debated on the floor of the House on March 25, 2003 and passed the House three days later. Both the House and Senate held hearings on the bill as a whole. In an April 30, 2003 meeting of the Senate State Affairs Committee, Senator Ratliff, the committee chair, introduced hearings on the Senate Substitute to House Bill 4. He described Article 17 as follows:
Article 17, limitations in civil actions of liabilities relating to certain mergers or consolidations. This, members, is the Crown Cork and Seal asbestos issue. What we have put in this bill is what i understand to be an agreed arrangement between all of the parties in this—in this matter.
Hearings on the Proposed Senate Substitute for H.B. 4 Before the S. Comm. on State Affairs, 78th Leg., R.S. (Apr. 30, 2003) (Statement of Sen. Bill Ratliff, Chairman, S. Comm. on State Affairs). The act passed the Senate on May 16, 2003; the House accepted the Conference Committee compromise bill on June 1, 2003; both adopted corrections on June 2, 2003; and the bill was signed into law by the Governor on June 11, 2003. Act of June 2, 2003, 78th Leg., R.S., ch. 204, 2003 Tex. Gen. Laws 847, 899 ). With a twothirds vote in both chambers, the bill took effect immediately and was made retroactive to all cases "pending on that effective date and in which the trial, or any new trial or retrial following motion, appeal, or otherwise, begins on or after that effective date."2 Id. § 17.02(2), 2003 Tex. Gen. Laws at 895; see also Tex. Const. art. III, § 39 ().
The act limits the "cumulative successor asbestos-related liabilities" "incurred by a corporation as a result of or in connection with a merger or consolidation... with or into another corporation or that are related in any way to asbestos claims based on the exercise of control or the ownership of stock of the corporation before the merger or consolidation that occurred" prior to May 13, 1968. Tex. Civ. Prac. & Rem. Code §§ 149.001-.003.3 The asbestos liabilities of successor corporations "are limited to the fair market value of the total gross assets of the transferor determined as of the time of the merger or consolidation," id. § 149.003(a), and adjusted for inflation at a simple interest rate of the prime rate plus one percent, id. § 149.005(a). An "asbestos claim" is "any claim, wherever or whenever made, for damages, losses, indemnification, contribution, or other relief arising out of, based on, or in any way related to asbestos, including" property damage caused byasbestos, the health effects of asbestos exposure, or any claim made by...
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