18 F.4th 802
5th Cir.2021Background:
- Survitec Survival Products (manufacturer) had an open-ended oral dealer agreement with Fire Protection Service to sell Survitec life rafts.
- In 2011 Texas enacted the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act (Texas Dealers Act), which requires notice and good cause before terminating dealer agreements and mandates buyback of unsold inventory.
- Survitec terminated the dealer relationship without notice or explanation; Fire Protection sued alleging violations of the Act.
- Survitec removed the case to federal court and contended the Act, as applied to the preexisting oral agreement, violates the Texas Constitution’s ban on retroactive laws (art. I, § 16).
- The district court held the Act unconstitutional as applied; Fire Protection appealed, then filed an unopposed motion asking the Fifth Circuit to certify the dispositive Texas-law question to the Supreme Court of Texas.
- The Fifth Circuit granted the motion and certified the single determinative question instead of resolving the retroactivity issue itself.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether applying the Texas Dealers Act to the parties’ preexisting oral dealer agreement violates the Texas Constitution’s retroactivity clause | Fire Protection: The Act validly applies to protect dealers; application is not constitutionally prohibited (preserves expectations and legislative authority) | Survitec: The Act is retroactive as applied and impairs vested contractual rights, violating art. I, § 16 | Fifth Circuit did not decide merits; certified the question to the Supreme Court of Texas for authoritative resolution |
| Whether certification to the Texas Supreme Court is appropriate | Fire Protection: Unopposed certification is proper because the issue is novel, determinative, and lacks controlling state precedent | (No opposition) | Court granted certification after finding the question close, important to comity, and not practically limited by delay or framing issues |
Key Cases Cited
- Robinson v. Crown Cork & Seal Co., Inc., 335 S.W.3d 126 (Tex. 2010) (adopted multi-factor test for evaluating unconstitutional retroactivity and warned against bright-line rules)
- Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212 (Tex. 2002) (recognized that not all statutes with retroactive effect are constitutionally prohibited)
- Tex. Water Rights Comm’n v. Wright, 464 S.W.2d 642 (Tex. 1971) (statutes often change existing conditions and may have retroactive effects)
- City of Fort Worth v. Rylie, 602 S.W.3d 459 (Tex. 2020) (discussed historical origins and long-standing presence of the retroactivity clause in Texas constitutions)
- DeCordova v. City of Galveston, 4 Tex. 470 (Tex. 1849) (early formulation tying retroactive-prohibition to protection of vested rights)
- Silguero v. CSL Plasma, Inc., 907 F.3d 323 (5th Cir. 2018) (sets out factors Fifth Circuit considers before certifying state-law questions)
- Austin v. Kroger Tex. L.P., 746 F.3d 191 (5th Cir. 2014) (discusses certification practice and reliance on state supreme court decisions)