Court Opinion

ID: 8210151
Source: CourtListenerOpinion
Date Created: 2022-09-29 00:00:30.205904+00
Date Added: 2024-06-11T16:41:47.781470
License: Public Domain

Case: 21-20145     Document: 00516487923         Page: 1     Date Filed: 09/28/2022

              United States Court of Appeals
                   for the Fifth Circuit                                United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                                                       September 28, 2022
                                  No. 21-20145                            Lyle W. Cayce
                                Summary Calendar                               Clerk

   Fire Protection Service, Incorporated,

                                                           Plaintiff—Appellant,

                                       versus

   Survitec Survival Products, Incorporated,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 4:19-CV-2162

   Before Southwick, Oldham, and Wilson, Circuit Judges.
   Per Curiam:*
          Fire Protection Service, Inc. sued Survitec Survival Products, Inc.,
   alleging that Survitec’s decision to terminate its open-ended oral agreement
   with Fire Protection without good cause or notice violated the Fair Practices
   of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act.

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-20145      Document: 00516487923            Page: 2    Date Filed: 09/28/2022

                                      No. 21-20145

   Act of May 27, 2011, 82d Leg., R.S., ch. 1039, §§ 1-5, 2011 Tex. Gen.
   Laws 2646-59. In relevant part, the Act prohibits equipment suppliers like
   Survitec from ending dealer agreements without good cause and notice, and
   it requires those suppliers to buy back unsold inventory from dealers like Fire
   Protection when they do so. See Tex. Bus. & Com. Code §§ 57.202,
   57.204, 57.355(a).
          After removing the case to federal court based on the diversity of the
   parties, Survitec asserted that the Act violated the Texas Constitution’s
   prohibition on “retroactive law[s].” See Tex. Const. art. I, § 16 (“No bill
   of attainder, ex post facto law, retroactive law, or any law impairing the
   obligation of contracts, shall be made.”). The district court agreed with
   Survitec and granted Survitec’s Federal Rule of Civil Procedure 52(c)
   motion for judgment on partial findings.            It held that the Act was
   unconstitutional because it retroactively amended the oral agreement
   between the parties; therefore, Fire Protection could not maintain the suit.
          Fire Protection appealed, raising two issues: (1) whether the district
   court erred in granting Survitec’s Rule 52(c) motion based on its
   determination that the retroactivity clause of the Texas Constitution
   precluded application of the Act to the agreement between Survitec and Fire
   Protection; and (2) whether the district court erred in finding that Fire
   Protection did not present evidence that Survitec refused to buy back its
   inventory after terminating the dealer agreement.
          We review a district court’s legal conclusions de novo. Samson v.
   Apollo Res., Inc., 242 F.3d 629, 633 (5th Cir. 2001). A movant is entitled to a
   judgment on partial findings “[i]f a party has been fully heard on an issue
   during a nonjury trial and the court finds against the party on that issue . . . .”
   Fed. R. Civ. P. 52(c). Because our resolution of Fire Protection’s first
   issue is dispositive of this appeal, we do not address its second issue.

                                           2
Case: 21-20145      Document: 00516487923           Page: 3   Date Filed: 09/28/2022

                                     No. 21-20145

          Texas law governs in this diversity suit, and to determine Texas law,
   we look first to the final decisions of the Supreme Court of Texas. Austin v.
   Kroger Tex. L.P., 746 F.3d 191, 196 (5th Cir. 2014) (per curiam), certified
   question answered, 465 S.W.3d 193 (Tex. 2015). “When no decision gives
   enough guidance, rather than make an Erie guess at the answer, we
   sometimes ask the Supreme Court of Texas to answer the question for us”—
   something we did in this case. Fire Protection Servs., Inc. v. Survitec Survival
   Prod., 18 F.4th 802, 805 (5th Cir. 2021), certified question answered, No. 21-
   1088, 2022 WL 1815046 (Tex. June 3, 2022), reh’g denied (Sept. 2, 2022).
   Specifically, we asked: “Does the application of the Texas Dealers Act to the
   parties’ agreement violate the retroactivity clause in article I, section 16 of
   the Texas Constitution?” Id.
          The Supreme Court of Texas accepted our certification and answered
   that the application of the Act in this case did not violate the constitutional
   prohibition against retroactive laws in article I, section 16 of the Texas
   Constitution. Fire Protection Servs., 2022 WL 1815046, at *1. Based on the
   guidance provided by the Supreme Court of Texas, the district court erred in
   concluding otherwise and in granting Survitec’s Rule 52(c) motion.
   Accordingly, we REVERSE the district court’s judgment on partial findings
   and REMAND for further proceedings consistent with the foregoing.
                                          REVERSED AND REMANDED.

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