Wal-Mart Stores, Inc. v. Forte

497 S.W.3d 460, 59 Tex. Sup. Ct. J. 905, 2016 Tex. LEXIS 387, 2016 WL 2985018
CourtTexas Supreme Court
DecidedMay 20, 2016
DocketNO. 15-0146
StatusPublished
Cited by16 cases

This text of 497 S.W.3d 460 (Wal-Mart Stores, Inc. v. Forte) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wal-Mart Stores, Inc. v. Forte, 497 S.W.3d 460, 59 Tex. Sup. Ct. J. 905, 2016 Tex. LEXIS 387, 2016 WL 2985018 (Tex. 2016).

Opinions

CHIEF JUSTICE HECHT

delivered the opinion of the Court,

in which JUSTICE GREEN, JUSTICE JOHNSON, JUSTICE GUZMAN, and. JUSTICE BROWN joined.

The State of Texas as amicus curiae argues that the certified questions now before us from the United States Court of Appeals for the Fifth Circuit are premised on an incorrect understanding of Texas law. Our dilemma is whether to address the premise of the questions when the parties have not done so, or answer questions that are hypothetical if the State is right. We choose the latter course.

The Texas Optometry Act1 prohibits commercial retailers of ophthalmic goods from attempting to control the practice of optometry.2 Section 351.603(b) of the Act authorizes the Texas Optometry Board, which administers the Act,3 and the Attorney General to sue a violator for “a civil penalty not to exceed $1,000 for each day of a violation”.4 Section 351.605 provides that “[a] person injured as a result of a violation ... is entitled to the remedies in ... Section 351.603(b)”.5 The Fifth Circuit asks6 whether such civil penalties, when sought by a private person, are exemplary damages limited by Chapter 41 of the Texas Civil Practice and Remedies Code.7 [462]*462While the certified questions assume, perhaps incorrectly, that the Act authorizes recovery of civil penalties by a private person, rather than only by the Board or the Attorney General, we nevertheless answer in the affirmative.

In 1992, Wal-Mart Stores, Inc. (‘Wal-Mart”) began operating “Vision Centers” in its Texas retail stores, selling a variety of ophthalmic goods, such as spectacle lenses, frames, and contact lenses. Wal-Mart leased office space near the Vision Centers to optometrists. A typical lease required the optometrist to keep the office open at least 45 hours per week or pay $200 per day in liquidated damages.

The Act provides that “[a] manufacturer, wholesaler, or retailer of ophthalmic goods may not directly or indirectly ... control or attempt to control the professional judgment, manner of practice, or practice of an optometrist”.8 This specifically includes “setting or attempting to influence the ... office hours of an optometrist”.9 The Attorney General and the Board may enforce this prohibition by a suit for in-junctive relief, a civil penalty not to exceed $1,000 per day, and attorney fees.10 A person injured by a violation “is entitled to” the same relief11 as well as damages.12 A violation is also actionable under the Texas Deceptive Trade Practices-Consumer Protection Act13 and is a misdemeanor punishable, for each day of violation, by a fine from $100 to $1,000, confinement in the county jail from two to six months, or both.14 Suffice it to say that the Act is serious about preventing control of optometrists.

In 1995, the Board advised Wal-Mart that its minimum office-hour requirement violated the Act. Wal-Mart dropped the requirement and changed its lease form, allowing an optometrist lessee to insert daily hours of operation and providing that it would “retain no control whatsoever over the manner and means by which the [optometrist] performs his/her work.” In the Board’s view, these changes were not sufficient to comply with the Act. In 1998, the Board published a newsletter in which it opined that any commercial lease merely referencing an optometrist’s hours violated [463]*463the Act. And in 2003, the Board notified Wal-Mart that it was violating' the Act simply by informing optometrists that customers were requesting longer business hours.

In 2007, four Texas optometrists—Doris Forte, Bridget Leesang, David Wiggins, and John Boldan (“the Optometrists”)—all with post-1995 Wal-Mart leases, sued Wal-Mart in federal district court.15 The Optometrists offered evidence that during lease negotiations, Wal-Mart had instructed them what hours they should include in the lease to obtain approval;16 that they believed those hours were enforceable; and that they were pressured to work longer .hours. But the Optometrists also testified that the hours they included in their leases were appropriate and acceptable to them. Wal-Mart presented evidence that the office hours stated in leases were not enforced, could be changed by the Optometrists at any time, and allowed Wal-Mart to inform customers when optometrists would be available. There was no evidence that including office hours in the leases injured customers.

The district court instructed the jury that the Optometrists “do not claim that they have suffered any physical or economic damages [and] only seek to recover civil penalties.” The jury awarded the Optometrists $3,953,000 in civil penalties— $1,000 for every day the Optometrists had operated under the leases, the maximum penalty allowed by the Act. The jury also awarded the Optometrists $763,854 in attorney fees. Post-verdict, the court ordered a remittitur, which the Optometrists accepted, reducing the civil penalty to $400 per day, totaling $1,396,400.

On appeal, Wal-Mart contended that its conduct did not violate the Act. The Fifth Circuit rejected this argument.17 Wal-Mart also argued that the Optometrists’ suit was for “damages” within the meaning of Chapter 41 of the Civil Practice and Remedies Code,18 that the penalties awarded the Optometrists were exemplary damages as defined by that statute,19 and therefore that the penalties could not be awarded absent a recovery of “damages other than nominal damages”.20 The Fifth Circuit agreed at first,21 but on rehearing noted that we had not decided the issue,22 and certified the following two questions to this Court:

1. Whether an action for a “civil penalty” under the Texas Optometry Act is an “action in which a claimant seeks damages relating to a cause of action” within the meaning of Chapter 41 of the ■Texas Civil Practice and Remedies Code. In other words, are civil penalties awarded under Tex. Occ.Code § 351.605 “damages” as that term is used in Tex. Civ. Prac. & Rem.Code § 41.002(a).
2, If civil penalties awarded under the Texas Optometry Act are “damages” as that term is used in Tex. Civ. Prac. & [464]*464Rem.Code § 41.002(a), whether they are “exemplary damages” such that Tex. Civ. Prac. & Rem.Code § 41.004(a) precludes their recovery in any case where a plaintiff does not receive damages other than nominal damages.23

As usual, the Circuit added: “We disclaim any intention or desire that the Supreme Court of Texas confíne its reply to the precise form or scope of the questions certified.”24

We accepted the certification.25

The State of Texas as amicus curiae argues that Section 351.605 of the Act does not authorize a private suit for penalties.

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Cite This Page — Counsel Stack

Bluebook (online)
497 S.W.3d 460, 59 Tex. Sup. Ct. J. 905, 2016 Tex. LEXIS 387, 2016 WL 2985018, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wal-mart-stores-inc-v-forte-tex-2016.