Robinson v. Crown Cork & Seal Co., Inc.

• Decision Date: 04 May 2006
• Docket Number: No. 14-04-00658-CV.,14-04-00658-CV.
• Citation: 251 S.W.3d 520
• Parties: Barbara ROBINSON, Individually and as Representative of the Estate of John Robinson, Deceased, Appellant, v. CROWN CORK & SEAL COMPANY, INC., Appellee.
• Court: Texas Court of Appeals

251 S.W.3d 520

Barbara ROBINSON, Individually and as Representative of the Estate of John Robinson, Deceased, Appellant, v. CROWN CORK & SEAL COMPANY, INC., Appellee.

No. 14-04-00658-CV.

Court of Appeals of Texas, Houston (14th Dist.).

May 4, 2006.

Rehearing Overruled July 20, 2006.

Deborah G. Hankinson, Elana S. Einhorn, Dallas, Jeffery Mundy, Austin, for appellant.

David Crump, Frank Harmon, Kimberly Rose Stuart, Houston, for appellee.

Panel consists of Chief Justice HEDGES and Justices FOWLER and FROST.

MAJORITY OPINION

WANDA McKEE FOWLER, Justice.

At its essence, this appeal requires us to consider the breadth of the Legislature's power to curtail individual rights. John and Barbara Robinson sued Crown Cork and others after discovering Mr. Robinson had developed mesothelioma from years of working with products containing asbestos. In the trial court, Crown Cork admitted liability; however, before the court entered judgment, the Legislature enacted — and made immediately effective—a law that would preclude any recovery by the Robinsons from Crown Cork.

The Legislature, concerned about the financial toll of asbestos suits, limited the liability of corporations that (1) had purchased companies manufacturing asbestos, but (2) did not continue in the asbestos business. By making the legislation effective immediately, the Legislature affected the Robinsons' suit. Crown Cork moved for summary judgment, arguing that the legislation exempted it from paying any damages to the Robinsons because the damages it had already paid to other plaintiffs exceeded the monetary cap contained in the legislation. The trial court agreed and granted summary judgment in favor of Crown Cork.

Mrs. Robinson¹ attacks the summary judgment on three grounds, two of which are constitutional in nature. First, Mrs. Robinson claims that the legislation is unconstitutionally retroactive as applied to her because it extinguished a vested right. Next, she claims that the law is unconstitutional because it is a special law, designed specifically to aid Crown Cork. Finally, she claims that Crown Cork failed to establish as a matter of law each element of its affirmative defense.

As to Mrs. Robinson's first issue, we agree that the legislation acted retroactively upon her claims. But we do not conclude that the legislation is unconstitutionally retroactive as applied to Mrs. Robinson because it was a "valid exercise of the police power by the Legislature to safeguard the public safety and welfare. ..." Barshop v. Medina County Underground Water Conservation Dist., 925 S.W.2d 618, 633-34 (Tex.1996).

Regarding Mrs. Robinson's second constitutional claim—that the statute is unconstitutional because it is a special law — we conclude the statute is not a special law. Clearly it was drafted to include Crown Cork within its scope, but it was not written to exclude companies similarly situated to Crown Cork. And, because it operates on a subject in which the public at large is interested, it affects all of the citizens of the State.

Finally, we hold that Crown Cork proved the elements of its affirmative defense as a matter of law. Consequently, we affirm the trial court's judgment. We explain below.

Factual Background

John Robinson joined the United States Navy in 1956, and served for approximately twenty years as a boiler tender on several Navy vessels. Mr. Robinson maintained boilers, pipes, steam lines, and other machinery and equipment insulated with asbestos products, including insulation products of Mundet Cork Corporation.

Crown Cork is a manufacturer and distributor of packaging products for consumer goods. In 1963, Crown Cork, then a New York corporation, was the nation's largest producer and seller of metal bottle caps, known in the industry as "crowns." Mundet also produced and sold crowns. Seeking to acquire the assets of Mundet's competing bottle cap division, in November of 1963, Crown Cork purchased the majority of Mundet stock. Approximately three months later, Mundet sold its insulation division.² Crown Cork continued to purchase Mundet stock until February of 1966, when the remaining assets of Mundet were transferred to Crown Cork by merger. In 1989, Crown Cork merged into a new Pennsylvania corporation of the same name.

Years later, John Robinson was diagnosed with mesothelioma. He and his wife, Barbara, sued Crown Cork, Mundet's successor, and others for damages caused by Mr. Robinson's exposure to asbestos. The Robinsons moved for partial summary judgment to establish Crown Cork's liability for the damages allegedly caused by Mundet's products. Crown Cork did not contest its liability for compensatory damages. The trial court granted the Robinsons' motion as to compensatory damages, but not as to punitive damages.

While the Robinsons' suit was pending, the Texas Legislature passed House Bill 4; House Bill 4 included a new affirmative defense limiting the liability of successor corporations for asbestos-related claims. See Act of June 2, 2003, 78th Leg., R.S., ch. 204, 2003 Tex. Gen. Laws 847. Section 17 of House Bill 4 directly impacted the Robinsons' suit. That section provides that certain successor corporations of asbestos manufacturers may limit their total asbestos liability to the total gross asset value of the predecessor company at the time of the merger or consolidation. Id. § 17.01. The only section of House Bill 4 made immediately effective upon its passage by two-thirds of each house of the Legislature was Section 17; it became effective on June 11, 2003. See Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 23.02(b), 2003 Tex. Gen. Laws 898, 899. In addition, the only section made retroactive to all cases pending on its effective date was, again, Section 17. See Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 17.02(2), 2003 Tex. Gen. Laws 895. Section 17 is codified at Chapter 149 of the Texas Civil Practice & Remedies Code, entitled "Limitations in Civil Actions of Liabilities Relating to Certain Mergers or Consolidations." See TEX. CIV. PRAC. & REM.CODE ANN. §§ 149.001.006. Throughout the remainder of the opinion we will refer to Section 17 as "the Statute."

The stated purpose of the Statute is to limit cumulative "successor asbestos-related liabilities"³ in Texas. A successor corporation is liable for asbestos claims⁴ only up to the total gross assets of the transferor corporation from whom it received the asbestos-related liabilities; total gross assets are determined as of the time of the merger or consolidation. See id. § 149.003(a); see also id. §§ 149.001(4) (defining "successor" as "a corporation that assumes or incurs, or has assumed or incurred, successor asbestos-related liabilities"); 149.001(5) (defining "transferor" as "a corporation from which successor asbestos-related liabilities are or were assumed or incurred").⁵ A successor corporation is not responsible for successor asbestos-related liabilities that exceed this limitation. Id. § 149.003(a). Additionally, the Statute provides that, if a transferor corporation had assumed or incurred successor asbestos-related liabilities from a prior merger or consolidation with a transferor, then the fair market value of the total assets of the first transferor shall be used to determine the successor corporation's liability. Id. § 149.003(b). To the fullest extent permissible, Texas law applies to successor asbestos-related liabilities. See id. § 149.006 ("The courts in this state shall apply, to the fullest extent permissible under the United States Constitution, this state's substantive law, including the limitation under this chapter, to the issue of successor asbestos-related liabilities.").

As noted previously, after the Statute became effective, Crown Cork moved for summary judgment. Crown Cork argued that it had already paid successor asbestos claims in excess of Mundet's total gross assets, and therefore, it had no further liability in any asbestos case.⁶ The trial court granted the motion and severed the Robinsons' claims against Crown Cork from those against the other defendants. This appeal followed.

Robinson's Issues

On appeal, Mrs. Robinson raises three issues, contending the trial court erred in granting Crown Cork's motion for summary judgment because (1) the Statute violates the Texas Constitution's prohibition on retroactive laws, (2) the Statute violates the Texas Constitution's prohibition on special laws, and (3) Crown Cork failed to establish as a matter of law each element of the Statute.

I. The Statute Does Not Violate the Texas Constitution's Prohibition on Retroactive Laws.

In her first issue, Mrs. Robinson contends the Statute violates Article I, section 16 of the Texas Constitution. That section provides as follows: "No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made." TEX. CONST. art I, § 16. Mrs. Robinson does not contend section 16 bans all retroactive laws. Instead, she argues vested rights cannot be extinguished retroactively; she maintains that an accrued cause of action is a vested right and thus not retroactively extinguishable. She asserts that her accrued tort claims were vested before the Statute became effective and therefore could not be extinguished by subsequently enacted legislation. Yet, she argues, the Statute completely eliminated the accrued tort claims against Crown Cork in contravention of section 16.⁷

We do not find the law on vested rights to be as consistent and lucid as Mrs. Robinson claims. For this reason, as we explain below, we choose not to employ a vested-rights analysis to assess the Statute's constitutionality. Instead, we conclude that we may look to the police power of the Legislature to find authority for the Statute's enactment and for its validation—in spite of its retroactivity. The Legislature may exercise its police power to balance competing individual and societal interests and to enact legislatio...