Court Opinion

ID: 9857638
Source: CourtListenerOpinion
Date Created: 2023-09-24 15:50:13.259015+00
Date Added: 2024-06-11T09:52:17.111917
License: Public Domain

Justice OWEN,
joined by Justice HECHT, dissenting.
Until September 1999, the Texas Pawnshop Act provided: “A pawnbroker shall replace pledged goods that are lost or damaged while in the pawnbroker’s possession with like kind merchandise. The replacement is subject to approval by the” Consumer Credit Commissioner, with a right to judicial review of the Commissioner’s decision.1 Because the Court holds that the Act does not require Bennett to exhaust her administrative remedies before bringing suit in a court, I respectfully dissent.
I would hold, however, that one aspect of this regulatory scheme violates the right to a jury trial found in Article I, Section 15 of the Texas Constitution. The right to judicial review of the Commissioner’s decision would be conducted under a substantial evidence rather than a de novo standard. This infirmity does not render the entire exhaustion scheme unconstitutional. A claimant is still required to pursue his or her claim with the Commissioner before seeking judicial review, under a de novo standard, of whether the replacement goods were a reasonable replacement of the lost or damaged items. I would accordingly reverse the judgment of the court of appeals and direct the trial court to dismiss or to abate this case pending exhaustion of administrative remedies.
I
The threshold issue in this case is the proper interpretation of section 371.167(a) of a former version of the Texas Pawnshop Act. Whether the Act required exhaustion of remedies is a question of statutory construction. When interpreting a statute, we begin with the words of the statute and give them their ordinary meaning. See In re Bay Area Citizens Against Lawsuit Abuse, 982 S.W.2d 371, 380 (Tex.1998).
Section 371.167 provided that a pawnbroker “shall replace” lost or damaged goods with like-kind merchandise, with this replacement “subject to” the Commissioner’s approval.2 The word “shall” indicates that this remedy — replacement of the goods — is intended to apply in all instances in which a pawnbroker has lost or damaged the pledged goods. This provi*20sion does not permit someone who has pawned their possessions to demand money in lieu of the lost goods. The Court’s statement that “the language of section 371.167(a) does not expressly limit a pled-gor’s remedy to a like-kind replacement,” 35 S.W.3d at 17, rings hollow in the face of the plain meaning of the words the Legislature chose to use.
The Act also provided for judicial review of the Commissioner’s decision: “A party in interest aggrieved by a final decision of the commissioner is entitled to judicial review.” Tex. Fin.Code § 14.301. Because the Act expressly provided for judicial review, it cannot be read to allow a person who pawned goods to bypass the Commissioner and initiate suit directly, as the Court holds.
The Court relies upon the 76th Legislature’s amendment of section 371.167(a) to conclude that the 75th Legislature did not intend to require exhaustion of remedies when it enacted former section 371.167(a). 35 S.W.3d at 17. First, “‘the views of a subsequent [Legislature] form a hazardous basis for inferring the intent of an earlier one.’ ” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 520, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (citation omitted). They are therefore accorded little weight. See Ervin v. State, 991 S.W.2d 804, 816 (Tex.Crim.App.1999) (“Although we have held that subsequent enactments by the Legislature may be some evidence of their intent in a prior version of the statute, we nevertheless give little weight to those subsequent enactments in interpreting the prior law.”). Second, the 1999 amendment to section 371.167(a) expressly requires exhaustion of remedies. It says, “the pled-gor must exhaust his administrative remedy with respect to the lost or damaged pledged goods before seeking a remedy in court.” Tex. Fin.Code § 371.167(a). Then and only then may the pledgor seek a remedy in court. See id.
Based on the terms of the Act as it existed when Barnett made her claim, I would hold that former section 371.167(a) imposed an exhaustion requirement.
II
Having concluded that Bennett was not required to exhaust her remedies under the Act before filing suit, the Court considers whether the Commissioner nevertheless has primary jurisdiction. But the doctrine of primary jurisdiction is inapposite. In United States v. Western Pacific Railroad Co., the United States Supreme Court succinctly explained the difference between primary jurisdiction and exhaustion of remedies:
The doctrine of primary jurisdiction, like the rule requiring exhaustion of administrative remedies, is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties. ‘Exhaustion’ applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course. ‘Primary jurisdiction’ on the other hand, applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.
United States v. Western Pac. R.R. Co., 352 U.S. 59, 63-64, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956) (citing General Am. Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422, 433, 60 S.Ct. 325, 84 L.Ed. 361 (1940)). This is an exhaustion of remedies case, and because Bennett must exhaust her administrative remedies before seeking judicial relief allowed by the Act, Bennett’s claim is not originally cognizable in the courts.
*21III
Bennett contends that if the Act requires her to exhaust administrative remedies, it would be unconstitutional because it would violate the open courts provision found in Article I, Section IB of the Texas Constitution and also because it would deprive her of the right to trial by jury found in Article I, Section 15. I first consider the open courts challenge.
The open courts provision means that: (1) courts must be operating and available; (2) the Legislature cannot hamper access to the courts through unreasonable financial barriers; and (3) meaningful remedies must be afforded “ ‘so that the Legislature may not abrogate the right to assert a well-established common-law cause of action unless the reason for its action outweighs the litigants’ constitutional right of redress.’ ” Texas Workers’ Compensation Comm’n v. Garcia, 893 S.W.2d 504, 520 (Tex.1995) (quoting Trinity River Auth. v. URS Consultants, Inc., 889 S.W.2d 259, 261 (Tex.1994)). Bennett claims that requiring administrative exhaustion under this Act would violate the third aspect of the open courts provision by abrogating her common-law remedies. Under an open courts analysis, however, courts look to whether, judged as a whole, the remedy provided adequately substitutes for a common-law remedy. See Garcia, 893 S.W.2d at 523.
The established common-law cause of action implicated here is conversion. In an action for conversion, a successful plaintiff is entitled to money damages equivalent to the fair market value of the property converted. See United Mobile Networks, L.P. v. Deaton, 939 S.W.2d 146, 147-48 (Tex.1997). Because the Commissioner has authority only to approve like-kind replacements and not money damages, Bennett argues, an exhaustion requirement would derogate her common-law cause of action.
But there can be reasonable substitutions for or restrictions on common-law causes of action. In Garcia, the Court recognized that “legislative action withdrawing common-law remedies for well-established common-law causes of action for injuries to one’s ‘lands, goods, person, or reputation’ ” is permissible “when it is reasonable in substituting other remedies.” Garcia, 893 S.W.2d at 520-21. We have observed generally that “[t]he Open Courts provision of the Texas Constitution does not permit a well-established common-law cause of action to be restricted by statute in a way that is unreasonable or arbitrary in view of the statute’s purpose.” Earle v. Ratliff, 998 S.W.2d 882, 889 (Tex. 1999) (citing Diaz v. Westphal, 941 S.W.2d 96, 100 (Tex.1997)).
Limiting recovery of pawned goods to like-kind replacement is reasonable given the nature of the pawnshop transaction. In such a transaction, a person pledges “a single item of goods with a pawnbroker as security for a loan of money.” Tex. Fin. Code § 371.003(8). If the loan is not repaid according to its terms, the pawnbroker may keep or sell the goods. See id. § 371.169. If, on the other hand, the loan is properly repaid, then the goods are returned to the pledgor. See id. § 371.165. Thus, where the loan is repaid but the goods are not available because they are lost or damaged, limiting recovery to like-kind goods represents a reasonable legislative attempt to restore a plaintiff as close as possible to the position he or she would otherwise have occupied at the conclusion of the transaction. It is reasonable for the Legislature to conclude that an individual paying off a pawnshop loan is entitled to the very goods pawned or to a like-kind replacement.
The limitation of the remedy to like-kind replacement is also a reasonable way to promote efficient settlements of these disputes. Under the Act, a plaintiff is entitled to a like-kind replacement without having to show fault on the part of the pawnshop. In return for this certainty, the plaintiff is limited to the remedy of replacement of the goods. The Court upheld an analogous administrative scheme *22in Garcia. Garcia, 893 S.W.2d at 521. There, the quid pro quo was swift and certain recovery for injured workers, without requii'ing them to prove negligence, in exchange for more limited benefits than actual damages recoverable at common law. We held that the remedies available under the Workers Compensation Act, although substantially different from those available under the common law, were an adequate substitute for the purposes of the open courts guarantee. See id. Here, the statutory benefit of a like-kind replacement of goods is not “so inadequate as to run afoul of the open courts doctrine.” Id.
IV
Bennett’s position that the Act violates her right to a jury trial under Article I, Section 15 of the Texas Constitution, however, has merit. Although the Act provides for judicial review of the Commissioner’s decision, it does not expressly state the scope of that review. See Tex. Fin.Code § 14.301. Under the Texas Administrative Procedure Act, if a statutory scheme does not specify the scope of review, it is deemed to be a substantial evidence review, precluding jury determination of disputed factual issues. See Tex. Gov’t Code § 2001.174. Thus, under the Administrative Procedure Act, Bennett would not receive a jury trial on issues substantially similar to actions tried to a jury at the time the Texas Constitution of 1876 was adopted. See Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 450 (Tex.1993).
When a part of a statutory scheme is unconstitutional, a court should sever out the unconstitutional aspects and save the balance of the scheme if “other provisions or applications of the statute ... can be given effect without the invalid provision or application.” Tex. Gov’t Code § 311.032; see also Commission for Lawyer Discipline v. Benton, 980 S.W.2d 425, 441 (Tex.1998) (“The unconstitutionality of one part of a statute does not require us to invalidate the entire statute unless the unconstitutional provision is not separable from the remainder.”); Association of Texas Prof'l Educators v. Kirby, 788 S.W.2d 827, 830 (Tex.1990) (“The test for sever-ability in the absence of an express sever-ability clause is one of legislative intent.”). This rule reflects the “case law’s reminder that ‘[i]n the construction of statutes, if it can be lawfully done, it is the duty of the court to construe a statute so as to render it valid.’ ” Rose v. Doctors Hosp., 801 S.W.2d 841, 844 (Tex.1990) (quoting Sharber v. Florence, 131 Tex. 341, 115 S.W.2d 604, 606 (1938)). Even if part of a statute is unconstitutional, “the same act, having received the sanction of all branches of the Legislature ... may contain other useful and salutary provisions.... It would be inconsistent with all just principles of constitutional law to adjudge these enactments void because they are associated in the same act, but not connected with or dependent on others which are unconstitutional.” State v. Laredo Ice Co., 96 Tex. 461, 73 S.W. 951, 953 (1903).
In Rose v. Doctors Hospital, the Court restated the test for severability:
“When, therefore, a part of a statute is unconstitutional, that fact does not authorize the courts to declare the remainder void also, unless all the provisions are connected in subject-matter, dependent on each other, operating together for the same purpose, or otherwise so connected in meaning that it cannot be presumed the legislature would have passed the one without the other. The constitutional and unconstitutional provisions may even be contained in the same section, and yet be perfectly distinct and separable, so that the first may stand though the last fall. The point is not whether they are contained in the same section, for the distribution into sections is purely artificial; but whether they are essentially and inseparably connected in substance. If, when the unconstitutional portion is stricken out, that which remains is complete in itself, and capable of being executed in accordance with the *23apparent legislative intent, wholly independent of that which was rejected, it must stand.”
Rose, 801 S.W.2d at 844 (quotingWestern Union Tel. Co. v. State, 62 Tex. 680, 684 (1884)).
Here, the remaining provisions of the Pawnshop Act are not so connected with the substantial evidence standard of review as to foreclose the presumption that the Legislature would have passed the Pawnshop Act without that standard of review. It is the silence of the Pawn Shop Act coupled with the APA’s default provision, found in section 2001.174 of the Government Code, that runs afoul of a constitutional right to a jury trial. If the default provision of section 2001.174 of the Government Code is rejected as unconstitutional as applied to claims like Bennett’s, a constitutionally viable statutory scheme remains.
Section 14.01 of the Finance Code authorized judicial review, and the Texas Constitution requires a jury trial. Thus, de novo review is “authorized by law for the decision in a contested case” within the meaning of section 2001.173 of the Government Code. Tex. Gov’t Code § 2001.173. That review includes the opportunity to have a jury determination. See Tex. Gov’t Code § 2001.173(b) (“On demand, a party to a trial de novo review may have a jury determination of each issue of fact on which a jury determination could be obtained in other civil suits in this state.”).
The fact that the issue the jury would decide is whether the replacement goods were a reasonable replacement rather than whether money damages are owed for conversion satisfies the jury trial requirement in Article I, Section 16 of the Texas Constitution. The relevant issue under the Pawnshop Act’s modified cause of action is decided by a jury. See Garcia, 893 S.W.2d at 527 (holding that legislation altering or restricting a cause of action does not implicate the right to jury trial as long as the relevant issues under the modified cause of action are decided by a jury).
I would not render section 371.167(a) a nullity as the Court has done.
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In summary, I would hold that the Pawnshop Act as enacted before the September 1999 amendment imposed an exhaustion requirement. Because Bennett failed to exhaust her administrative remedies, she cannot pursue a judicial remedy. I would therefore reverse the court of appeals’ judgment, and direct the trial court to reinstate its order of dismissal or to abate this matter pending exhaustion of remedies.

. See Act of June 19, 1997, 75th Leg., R.S., ch. 1008 § 1, 1997 Tex. Gen. Laws 3091, 3554; amended by Act of June 19, 1999, 76 th Leg., R.S., ch. 1399 § 7, 1999 Tex. Gen. Laws 4724, 4726.

. See Act of June 19, 1997, 75 th Leg., R.S., ch. 1008 § 1, 1997 Tex. Gen. Laws 3554 (amended 1999).