the Attorney General of Texas and the Commissioner of Insurance v. Farmers Insurance Exchange, Fire Insurance Exchange, Mid-Century Insurance Company of Texas, Texas Farmers Insurance Company, and Farmers Texas County Mutual Insurance Company

• Court: Court of Appeals of Texas
• Decided: August 29, 2013
• Docket: 03-11-00179-CV
• Status: Published

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-11-00179-CV

The Attorney General of Texas and The Commissioner of Insurance, Appellants

v.

Farmers Insurance Exchange, Fire Insurance Exchange, Mid-Century Insurance Company of Texas, Texas Farmers Insurance Company, and Farmers Texas County Mutual Insurance Company, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT NO. D-1-GN-11-000692, HONORABLE JOHN K. DIETZ, JUDGE PRESIDING

OPINION

This is an appeal involving public-information requests made to the

Texas Department of Insurance (TDI) for information filed with that agency by appellees

Farmers Insurance Exchange, Fire Insurance Exchange, Mid-Century Insurance Company of Texas,

Texas Farmers Insurance Company, and Farmers Texas County Mutual Insurance Company

(collectively “Appellee Insurers”). Based on our conclusion that the requested information was open

to public inspection without exception under the applicable version of the Insurance Code, we

reverse the district court’s judgment and render judgment in favor of appellants the Attorney General

of Texas and the Commissioner of Insurance (collectively “the State”).

Factual and procedural background

Appellee Insurers write residential property insurance and private passenger

automobile insurance in Texas. Their rates are regulated by the Insurance Code. See Tex. Ins. Code § 2251.001(1) (purposes); see generally id. § 2251.001–.253 (provisions of chapter 2251, titled

“Rates”). Under the Insurance Code’s ratemaking provisions, each insurer must file its rates and

other supporting information with TDI, but it may implement those filed rates immediately without

prior approval of TDI. See id. § 2251.101(a) (commonly referred to as “file and use”). Chapter 2251

specifies certain information that insurers must include with each rate filing, but it also authorizes

TDI to promulgate rules requiring additional information. See id. § 2251.101(a)–(b); see also

28 Tex. Admin. Code § 5.9332 (2013) (TDI, Filing Requirements). Under the version of the

Insurance Code applicable to this case, the insurer’s rate filings, and any supporting documents, are

“open to public inspection as of the date of the filing.” See Act of May 24, 2005, 79th Leg., R.S.,

ch. 727, § 2, sec. 2251.107, 2005 Tex. Gen. Laws 1752, 2138, amended by Act of May 28, 2011,

82d Leg., R.S., ch. 1146, § 2, sec. 2251.107, 2011 Tex. Gen. Laws 2950, 2957 (current version

codified at Tex. Ins. Code § 2251.107) (hereinafter cited as “Former Tex. Ins. Code § 2251.107”).

During 2008 and 2009, TDI received four open-records requests for rate-filing

information that had been submitted by Appellee Insurers under the Insurance Code file-and-use

provisions discussed above. Concluding that the Appellee Insurers’ proprietary interests might be

implicated, TDI notified them of the request and sought an opinion from the Attorney General as to

whether the Public Information Act (PIA) required it to produce the rate filings. See Tex. Gov’t

Code § 552.301 (PIA provision requiring governmental body that receives written request

for information it wishes to withhold to ask for decision from attorney general); see

generally id. §§ 552.001–.353 (provisions of PIA). The Appellee Insurers filed responses with

the Attorney General, claiming, among other things, that information responsive to the

requests was protected from disclosure under certain PIA exceptions to disclosure. See Tex. Gov’t

2 Code §§ 552.101–.153 (PIA exceptions to disclosure). The Attorney General, in turn, determined

that because former section 2251.107 of the Insurance Code specifically made rate filings public,

those rate filings could not be withheld under any of the PIA exceptions. See Tex. Att’y Gen.

OR2009-18398; Tex. Att’y Gen. OR2009-01360; Tex. Att’y Gen. OR2008-05288; Tex. Att’y Gen.

OR2007-1222.

In response to these letter decisions, Appellee Insurers filed separate petitions in

Travis County District Court against the State, seeking, among other things, declaratory judgment

that their respective rate filings were protected from disclosure under PIA trade-secret exceptions.

See Tex. Gov’t Code §§ 552.110 (trade-secret exception), .3215 (declaratory judgment). After the

separate cases were consolidated into one cause, the parties filed cross motions for summary

judgment on the narrow issue of whether the PIA’s exceptions to disclosure apply to requests

for rate-filing information filed with TDI pursuant to chapter 2251 of the Insurance Code. The

district court granted Appellee Insurers’ motion and denied the State’s motion, holding that—

The information which is made open to public inspection under Tex. Ins. Code § 2251.107 is public information which is subject to the Public Information Act, Tex. Gov’t Code §§ 552.001, et seq.

Upon joint motion of the parties, the district court severed the claim resolved by the summary

judgment and made it a final judgment for purposes of appeal. It is from this judgment that the State

now appeals.1

1 Because we are presented with only the narrow issue of whether the information made open to public inspection under Texas Insurance Code section 2251.107 is subject to the provisions of the PIA, we express no comment as to whether or how the common law might limit disclosure of this information.

3 Standard of review

We review the district court’s summary judgment de novo. Valence Operating Co.

v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When, as here, both parties move for summary

judgment on an overlapping issue and the district court grants one motion and denies the other,

we review the summary-judgment evidence presented by both sides, determine the question

presented, and render the judgment that the district court should have rendered. Texas Workers’

Comp. Comm’n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex. 2004).

Discussion

In two issues on appeal, the State challenges the district court’s judgment that PIA

exceptions to disclosure apply to rate information filed under chapter 2251 of the Insurance Code.

Specifically, the State argues that under a plain-meaning review of former section 2251.107, the rate-

filing information filed under chapter 2251 of the Insurance Code is, without exception, open to

public inspection upon its filing with TDI. The Appellee Insurers, in turn, argue that the Attorney

General’s interpretation of former section 2251.107 is too narrow and fails to account for the

Legislature’s intent in enacting the PIA and former section 2251.107. Thus, we are presented with

an issue of statutory construction—i.e., did the Legislature intend that former section 2251.107’s

mandatory public-inspection requirement be limited by the PIA’s exceptions to disclosure. Our

resolution of this question turns on the interplay, if any, between former section 2251.107 of the

Insurance Code and the PIA:

Chapter 2251 rate-filing information: Former section 2251.107 of the Insurance Code

provides that “Each filing made, and any supporting information filed, under [Insurance Code

chapter 2251] is open to public inspection as of the date of the filing. See Former Tex. Ins. Code

4 § 2251.107. There is no dispute that requested rate-filings and supporting information filed by

Appellee Insurers with TDI were filed to comply with chapter 2251’s rate-filing requirements. As

such, they are open to public inspection under former section 2251.107.

The PIA and its exceptions to disclosure: The PIA guarantees access to “public

information.” See Tex. Gov’t Code § 552.021 (providing that public information “is available to the

public”). “Public information” is defined within the PIA as “information collected, assembled, or

maintained under a law or ordinance or in connection with the transaction of official business” by

or for a governmental body. Id. § 552.002(a). There is no dispute that the rate-filing information

filed by Appellee Insurers with TDI would fall under this definition of public information. And

public information, absent some other law making it confidential, is subject to public disclosure

under PIA section 552.021, unless it qualifies for one of the exceptions to disclosure provided in

subchapter C of the PIA, which “embrace the understanding that the public’s right to know is

tempered by the individual and other interests at stake in disclosing the information.” Texas Dep’t

of Pub. Safety v. Cox Tex. Newspapers, L.P., 343 S.W.3d 112, 114 (Tex. 2011); see Tex. Gov’t Code

§§ 552.101–.153 (subchapter C exceptions). For example and of relevance here, a trade secret is

excepted from PIA disclosure. See Tex. Gov’t Code § 552.110. But these exceptions, including

the trade-secret exception, apply only to information made available by the PIA. See id. §§ 101–.115

(providing “Information is excepted from the requirements of Section 552.021 if . . . .” or similar

language); York v. Texas Guar. Student Loan Corp., No. 03-12-00309-CV, __S.W.3d__, 2013 WL

4056182 at *6–7 (Tex. App.—Austin Aug. 8, 2013, no pet. h.) (noting that PIA exceptions to

disclosure apply only where the right of public access was created by the PIA).

5 We review issues of statutory construction de novo. See Texas Lottery Comm’n

v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010); State v. Shumake, 199 S.W.3d

279, 284 (Tex. 2006). Our primary objective in statutory construction is to give effect to the

Legislature’s intent. Combs v. Roark Amusement & Vending, L.P., __S.W.3d__, No. 11–0261, 2013

WL 855737, at * 2 (Tex. Mar. 8, 2013); Shumake, 199 S.W.3d at 284. We seek that intent “first

and foremost” in the statutory text. Lexington Ins. Co. v. Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006);

see Roark, 2013 WL 855737 at *2 (noting that “the truest manifestation of what lawmakers intended

is what they enacted”). “Where text is clear, text is determinative of that intent.” Entergy Gulf

States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009) (op. on reh’g) (citing Shumake,

199 S.W.3d at 284; Alex Sheshunoff Mgmt. Servs. v. Johnson, 209 S.W.3d 644, 651–52 (Tex. 2006));

We give such statutes their plain meaning without resort to rules of construction or extrinsic aids.

DeQueen, 325 S.W.3d at 635, 637 (branding reliance on rules of construction or extrinsic aids as

improper because “when a statute’s language is clear and unambiguous, it is inappropriate to resort

to rules of construction or extrinsic aids to construe the language” (quoting City of Rockwall

v. Hughes, 246 S.W.3d 621, 626 (Tex. 2008)). Only when statutory text is susceptible to more

than one reasonable interpretation is it appropriate to look beyond its language for assistance in

determining legislative intent. See Roark, 2013 WL 855737 at *2; In re Smith, 333 S.W.3d 582, 586

(Tex. 2011).

We agree with the State that under a plain-meaning review of the relevant statutes,

the rate-filing information at issue in this case is open to public inspection under the Insurance Code

without regard to the disclosure exceptions provided by the PIA. Former section 2251.107

specifically, clearly, and unequivocally makes this so:

6 Each filing made, and any supporting information filed, under [Insurance Code chapter 2251] is open to public inspection as of the date of the filing.

See Former Tex. Ins. Code § 2251.107. The statute does not refer to the PIA or incorporate any of

its procedures or exceptions. See id. It does not describe any exceptions, nor suggest that there

are any. See id. And it does not contemplate any intermediate process between the filing of the

rate information and the rate filing being open to public inspection. See id. In fact, by specifically

requiring that rate filings be “open to public inspection,” see id., as opposed to the PIA’s requirement

that public information be “available to the public,” see Tex. Gov’t Code § 552.021, the text of

former section 2251.107 suggests that the access to the rate-filing information is unrestricted. See

Webster’s Third New Int’l Dictionary 1579 (2002) (defining “open” as “completely free from

concealment: exposed to general or particular perception or knowledge”); see also id. at 150

(defining “available” as “accessible” or “may be obtained”). Likewise, the PIA exceptions, by their

own terms, limit their application to information made public by the PIA and do not authorize

withholding information that is made public by other law. See York, 2013 WL 4056182 at *6–7.

The Appellee Insurers make several arguments that we find incompatible with

the statutory text. First, they argue that because the rate-filing information is undisputably “public

information” under the PIA, see Tex. Gov’t Code § 552.002, “it is a fortiori public information

subject to the PIA” and its exceptions. In other words, they contend that former section 2251.107

does nothing more than to establish that the rate filings are public information. Appellee Insurers’

interpretation here renders former section 2251.107 redundant at best and meaningless at worst

because, even in the absence of former section 2251.107, the rate-filing information would qualify

as “public information” under the PIA as it is “information that is collected . . . by a governmental

7 body.” See id. (defining “public information”). In other words, former section 2251.107 would

have no reason to exist if it serves only to make the rate filings public information under the

PIA because the PIA already does that. In contrast, a plain-meaning interpretation of former

section 2251.107—i.e., that the rate-filing information is open to public inspection as of the date it

is filed—not only gives effect to the words the Legislature enacted but it also avoids making this

provision of the Insurance Code redundant or meaningless. See In re Estate of Nash, 220 S.W.3d

914, 918 (Tex. 2007) (noting that courts “should avoid, when possible, treating statutory language

as surplusage”); Larry Koch, Inc. v. Texas Natural Res. Conservation Comm’n, 52 S.W.3d 833, 838

(Tex. App.—Austin 2001, pet. denied) (“We will avoid a construction that creates a redundancy or

renders a provision meaningless.”).

The plain-meaning interpretation likewise refutes Appellee Insurers’ argument that

the PIA exceptions necessarily apply to all “public information.” Former section 2251.107 makes

no reference to any exceptions or intermediate process in the rate-filing information being open to

public inspection, and the use of the “open” itself suggests that there are to be no restrictions to that

public inspection. But more importantly, Appellee Insurers’ assertion that PIA exceptions apply

to all “public information,” is not correct. As discussed above, the PIA exceptions are explicitly

addressed solely to the right of public access created by PIA section 552.021. See Tex. Gov’t Code

§§ 552.101–.115 (providing “Information is excepted from the requirements of Section 552.021 if

. . . .” or similar language). They do not, in other words, apply to public-access or disclosure

requirements created or imposed by other law. See York, 2013 WL 4056182 at *6–7 (noting that PIA

exceptions to disclosure apply only where the right of public access was created by the PIA). Thus

for example, as we recently decided in York, the PIA exceptions to disclosure do not operate against

8 the Open Meetings Act’s requirement that open-meeting minutes be made available to the public

on request. See id.; see also Tex. Gov’t Code § 551.022 (providing that “[t]he minutes and tape

recordings of an open meeting are public records and shall be available for public inspection”).

Finally, PIA section 552.006 emphasizes that the PIA “does not authorize the withholding of public

information or limit the availability of public information to the public, except as expressly provided

by this chapter.” Tex. Gov’t Code § 552.106 (emphasis added). Nothing in the text of the PIA

exceptions provides or authorizes withholding or limiting access to public information where the

claimed right of access is based on law other than PIA section 552.021.

The Appellee Insurers also urge us to consider and give overriding weight to

section 2251.107’s legislative history. Specifically, harkening back to their argument that all public

information is necessarily subject to the PIA and its exceptions, they emphasize that when the

predecessor statute to former section 2251.107 was first enacted in 1991, its title labeled the rate-

filing information as “public information.” See Act of May 27, 1991, 72d Leg., R.S., ch. 242, § 2.15,

1991 Tex. Gen. Laws 939, 961. Likewise, Appellee Insurers note that when the Legislature created

the new regulatory scheme for property and casualty insurance in 2003, it added a provision that

maintained the confidentiality of confidential information reviewed by the Public Insurance Counsel

and a provision that the insurers’ credit-scoring models were not subject to the PIA. See Act of

June 2, 2003, 78th Leg., R.S., ch. 206, § 6.11, 2003 Tex. Gen. Laws 907, 931. They also point to

failed efforts in 2003 to add language that would have made the PIA expressly inapplicable to certain

rate filings; specifically a failed amendment that would have provided that PIA exceptions to

disclosure did not apply to rate filing information, see H. J. of Tex., 78th Leg., R.S., 3545 (2003),

and another failed amendment that would have required the Commissioner to publish on TDI’s

9 website “an exact copy of [a carrier]’s entire rate filing,” see id. at 3525. Finally, the Appellee

Insurers offer the Legislature’s 2011 change to former section 2251.107, which specifically makes

the rate-filing information of Insurance Code chapter 2251 subject to the PIA and its exceptions:

Each filing made, and any supporting information filed, under this chapter is public information subject to Chapter 552, Government Code [the PIA], including any applicable exception from required disclosure under that chapter.

Act of May 28, 2011, 82d Leg., R.S., ch. 1146, § 2, sec. 2251.107, 2011 Tex. Gen. Laws 2950,

2957 (codified at Tex. Ins. Code § 2251.107(a)). They suggest that this change was the Legislature’s

response to the Attorney-General letter opinions and district court judgment underlying this case.

They assert, in fact, that the Legislature’s 2011 change to section 2251.107 “ratified” the

district court’s decision in this case. But even if we were to accept Appellee Insurers’ interpretation

of this legislative history as correct, the supreme court has made it clear that we may not look to

extrinsic aids such as legislative history unless the plain language of the statute is ambiguous. See

Molinet v. Kimbrell, 356 S.W.3d 407, 414 (Tex. 2011) (noting that “the Legislature expresses

its intent by the words it enacts and declares to be the law,” not legislative history); Entergy,

282 S.W.3d at 443 (responding to suggestion that it consider legislative history by explaining that

“we have been clear that we do not resort to such extrinsic aids unless the plain language is

ambiguous”). And as set forth above, former section 2251.107 clearly and unambiguously makes

rate-filing information open to public inspection as of the date of filing. See Former Tex. Ins. Code

§ 2251.107. While we are not unsympathetic to the trade-secret concerns expressed by Appellee

Insurers, we are not inclined to exceed our authority as an intermediate appellate court by looking

behind the clear text of this provision.

10 Finally, the Appellee Insurers urge us to consider the consequences of our

interpretation of former section 2251.107 from a constitutional standpoint. See Tex. Gov’t Code

§ 311.023(5) (allowing courts to consider “consequences of a particular construction” in construing

a statute); State v. Hodges, 92 S.W.3d 489, 494 (Tex. 2002) (noting that statutory construction

allows courts to consider consequences of particular construction). First, they argue that interpreting

former section 2251.107 to preclude application of PIA exceptions violates the Texas Constitution’s

separation-of-powers doctrine. See Tex. Const. art. II, § 1 (limiting government branch’s ability

to interfere with other branches of government). Specifically, Appellee Insurers contend that our

interpretation allows the Insurance Commissioner to determine what will be and what will not

be public information despite the fact that the Legislature did not delegate that authority to the

Insurance Commissioner. We do not agree that this is the effect here. The Insurance Code tasks the

Commissioner with deciding what additional information TDI requires for insurers’ rate filings. See

Tex. Ins. Code § 2251.101. It is the Legislature’s text, however, that clearly makes the rate-filing

information open to public inspection. See id. As such, there has been no improper delegation of

Legislative authority. See Texas Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454,

465–70) (Tex. 1997) (discussing delegation of Legislative authority in context of separation-of-

powers doctrine).

In their second constitutional argument, Appellee Insurers contend that our

interpretation of former section 2251.107 violates the takings clause of the U.S. and

Texas constitutions by making Appellee Insurers’ trade secrets publicly available without the due-

process protections afforded by the PIA. See U.S. Const. amend. V (“nor shall private property be

taken for public use, without just compensation”); Tex. Const. art. I, § 17 (“[n]o person’s property

11 shall be taken, damaged, or destroyed for or applied to public use without adequate compensation

being made”). We disagree. Even if we assume that Appellee Insurers could establish that the State

intentionally performed certain acts that resulted in a “taking” of property for public use, see General

Servs. Comm’n v. Little–Tex Insulation Co., 39 S.W.3d 591, 598 (Tex. 2001) (elements of takings

claim), that taking would only be unconstitutional if it remained uncompensated, see Williamson

Cnty. Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 194 (1985) (“The Fifth Amendment

does not proscribe the taking of property; it proscribes taking without just compensation.”). Here,

because Appellee Insurers have not asserted any claims, we cannot know whether they could

establish a takings claim or whether, if established, that taking would remain uncompensated. We

do know, however, that Texas has a compensation process for governmental takings. See State v.

Holland, 221 S.W.3d 639, 643 (Tex. 2007) (“[S]overeign immunity does not shield the State from

a claim based upon a taking under Article I, section 17 of the Texas Constitution, known as the

“takings clause.”); Steele v. City of Houston, 603 S.W.2d 786, 791 (Tex. 1980) (“The Constitution

itself is the authorization for compensation for the destruction of property and is a waiver of

governmental immunity for the taking, damaging or destruction of property for public use.”).

Accordingly, our interpretation of former section 2251.107 would not, on this record, violate the

takings clause. See Williamson Cnty., 473 U.S. at 194 (“If the government has provided an adequate

process for obtaining compensation, and if resort to that process ‘yields just compensation,’ then the

property owner ‘has no claim against the Government’ for a taking.” (quoting Ruckelshaus v.

Monsanto Co., 467 U.S. 986, 1013 (1984))).

Although we have rejected certain of Appellee Insurers’ arguments, we do

acknowledge that they raise an important policy question regarding the need for trade-secret

12 protection. For example, Appellee Insurers contend that the PIA and not the Insurance Code should

shape this State’s policy regarding the protection of trade secrets. They also argue that Insurance

Code section 2251.106, which maintains the confidentiality of information requested by the Public

Insurance Counsel, indicates that at least some information associated with Insurance Code

chapter 2251 must be confidential. See Tex. Ins. Code § 2251.106. Finally, they point out that

insurers must file the rate-filing information with TDI under chapter 2251 or risk having their

rates disapproved. These policy arguments, however, are better directed to the Legislature than the

courts.2 And in fact, considering the changes to the Insurance Code in 2011, the Legislature appears

to have addressed these concerns. Nevertheless, on the record before us and given the plain language

of former section 2251.107, we must conclude that Appellee Insurers’ arguments would ultimately

require this Court to go against the applicable statute and infer that the Legislature did not mean to

make rate-filings open to public inspection as of the date of filing, but instead meant to limit the rate-

filings’ disclosure depending on any available PIA exceptions, despite clear statutory language

allowing for open public inspection. As an intermediate appellate court, we follow the instruction

of the supreme court that we interpret statutes under a plain-meaning review and that we do not

resort to rules of construction or extrinsic aids to construe clear and unambiguous language:

[W]e must take statutes as we find them and first and primarily seek the Legislature’s intent in its language. Courts are not responsible for omissions in legislation, but we are responsible for a true and fair interpretation of the law as it is written. Additionally, “[i]t is at least theoretically possible that legislators—like judges or anyone else—may make a mistake.” Even when it appears the Legislature may have made a mistake, courts are not empowered to “fix” the mistake by disregarding direct and clear statutory language that does not create an absurdity.

2 And to the extent that these arguments reference common-law protections from disclosure as opposed to the statutory PIA exceptions, these issues, again, are not before us here.

13 DeQueen, 325 S.W.3d at 637–38 (internal citations omitted). Here, the clear and unambiguous text

of former section 2251.107 requires that rate filings be open to public inspection on the date they

are filed. See id. Accordingly, we sustain the State’s issues on appeal.

CONCLUSION

Having sustained the State’s issues on appeal, we reverse the judgment of the

district court and render judgment that the information made open to public inspection under

Texas Insurance Code section 2251.107 is not subject to the PIA.

__________________________________________ Jeff Rose, Justice

Before Chief Justice Jones, Justices Pemberton and Rose

Reversed and Rendered

Filed: August 29, 2013