Court Opinion

ID: 9380477
Source: CourtListenerOpinion
Date Created: 2023-03-19 14:07:39.072872+00
Date Added: 2024-06-11T17:17:25.181873
License: Public Domain

Supreme Court of Texas
                            ══════════
                             No. 20-0980
                            ══════════

   Wal-Mart Stores, Inc.; Wal-Mart Stores East, LP; Wal-Mart
    Louisiana, LLC; Sam’s East, Inc.; and Sam’s West, Inc.,
                              Petitioners,

                                    v.

Xerox State & Local Solutions, Inc. a/k/a, f/k/a ACS State & Local
                        Solutions, Inc.,
                              Respondent

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the Fifth District of Texas
   ═══════════════════════════════════════

                     Argued September 21, 2022

      JUSTICE DEVINE delivered the opinion of the Court.

      Justice Lehrmann did not participate in the decision.

      In this tort and breach-of-contract suit, several affiliated retailers
seek to recoup millions of dollars in disallowed reimbursements for
purchases   their   customers    made    under    the   federally   funded
Supplemental Nutrition Assistance Program (SNAP).            The retailers’
losses arose in connection with a lengthy outage in a third-party
contractor’s Electronic Benefit Transfer (EBT) system. As authorized
by federal regulations, the retailers permitted their SNAP customers to
make purchases during the system outage but held the EBT
transactions in abeyance for later submission and reimbursement.
When the EBT contractor subsequently declined reimbursement for
nearly 90,000 transactions, the retailers sued for damages under
negligence and negligent-misrepresentation theories and as third-party
beneficiaries under the EBT contractor’s agreements with state
agencies. The trial court rendered a take-nothing summary judgment
on the retailers’ claims, and the court of appeals affirmed.
      A central issue on appeal is whether the EBT contractor is
insulated from liability under a federal regulation authorizing retailers
to store and forward EBT transactions “at the retailer’s own choice and
liability.” We hold that this regulation does not insulate third-party
EBT contractors from liability to retailers.      The court of appeals’
contrary conclusion led to the erroneous affirmance of summary
judgment on some of the retailers’ losses and rendered the court’s
analysis faulty as to the retailers’ tort claims.       Accordingly, we
(1) reverse summary judgment as to the tort claims and remand those
claims to the court of appeals to consider the EBT contractor’s
alternative grounds for affirmance but (2) affirm summary judgment on
the breach-of-contract claims because the retailers have failed to
produce evidence of their status as third-party beneficiaries.
                            I. Background
                                A. SNAP
      Congress authorized SNAP “to safeguard the health and
well-being of the Nation’s population by raising levels of nutrition

                                    2
among low-income households.” 1 Subject to regulations promulgated by
the U.S. Department of Agriculture (USDA), 2 state agencies administer
the federally funded SNAP by distributing monthly benefits through an
EBT system that allows SNAP beneficiaries to purchase food at
authorized retailers with debit-like EBT cards. 3 State agencies may
contract with EBT contractors to perform services, including managing
the EBT cardholder authorization system to redeem SNAP benefits. 4
Retailers may similarly contract with third-party processors to operate
the processing system for routing EBT transactions to the appropriate
state authorization system. 5 Wal-Mart Stores, Inc.; Wal-Mart Stores
East, LP; Wal-Mart Louisiana, LLC; Sam’s East, Inc.; and Sam’s West,
Inc. (collectively, Wal-Mart) are authorized SNAP retailers who retained
First Data Corporation as their third-party processor. Xerox State &
Local Solutions, Inc. is the EBT contractor for sixteen states under
written contracts with state agencies in each of those states. 6 Xerox also

       1   7 U.S.C. § 2011.
       2   Id. § 2013(c).
       3 7 C.F.R. §§ 274.1(a), (b), .2(a). Although Part 274 has been amended
since the events giving rise to this litigation, the changes are not material to
the issues on appeal; accordingly, we cite to the current version of the
regulations for convenience.
       4   Id. § 271.2.
       5 Id. § 274.8(b)(10)(iv); see id. § 274.3(d) (distinguishing third-party
processors from the state agencies’ EBT contractors).
       6 Those states are Alabama, California, Georgia, Illinois, Iowa,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, New
Jersey, Ohio, Oklahoma, Pennsylvania, and Virginia.

                                       3
operates under a written contract with First Data but has no direct
contractual relationship with Wal-Mart.
      In a typical SNAP transaction, the customer uses a state-issued
EBT card at a retailer’s point-of-sale (POS) device and enters a personal
identification number (PIN). The POS device creates and transmits
transaction information to the retailer’s third-party processor.     The
third-party processor follows the EBT contractor’s specifications to
develop the transaction message and sends it to the EBT contractor’s
mini-switch.       The mini-switch receives the message and provides
intra- and interstate routing to state-agency databases within the EBT
contractor’s host system for processing. The databases hold the relevant
SNAP account information to process and authorize the EBT
transactions for approval or denial. The EBT system’s host computer
returns an electronic response through “the switch, to the third party
processors, to a store’s host computer or POS device.” 7
                               B. The Outage
      On a Saturday in October 2013, during peak retail-transaction
times, Xerox’s EBT system went offline for more than 10 hours when
Xerox suffered a power failure while performing unannounced, but
planned, maintenance at its Dallas data center.       SNAP regulations
provide that when EBT systems are inaccessible, state agencies must
“ensure that a manual purchase system is available for use.” 8 This
process uses manual vouchers and permits re-presentation of SNAP

      7   Id. § 274.2(g)(2).
      8   Id. § 274.8(d).

                                     4
transactions during subsequent months. 9 State agencies also “may opt
to allow retailers, at the retailer’s own choice and liability, to perform”
what the regulations call “store-and-forward transactions,” which allow
retailers the opportunity to electronically store EBT transactions and
then forward the transactions to the EBT contractor “one time within
24 hours of when the system again becomes available.” 10 Wal-Mart had
a system in place to use the latter option to “store and forward”
transactions when Xerox’s EBT system was inaccessible.
      Throughout the outage, Wal-Mart communicated with Xerox and
First Data. Early in the outage, some of Xerox’s systems came back
online, and Xerox considered “failing over” to its backup data center in
Pittsburgh but chose to stay with Dallas. At the height of the outage,
Xerox’s “state servers, which house the EBT programs, were not
operational, but the mini-switches, communicating between servers and
the third party processors, were operational.” During this brief opening
in the system, Wal-Mart forwarded stored EBT transactions, but Xerox’s
EBT system returned a “Code 19” response. The response description
for “Code 19” is “Re-enter Transaction,” which “requires the card holder
to re-enter his or her PIN number.”
      According to Xerox, Wal-Mart’s automated store-and-forward
system was designed such that First Data would “remap” a Code 19
response to a Code 05 “general denial” response before returning a

      9   Id.
      10   Id. § 274.8(e)(1) (emphasis added).

                                        5
response code to Wal-Mart. 11      On receiving the “general denial”
response, Wal-Mart’s automated system removed the stored transaction
from the store-and-forward queue, meaning the Code 19 transactions
could no longer be re-presented to Xerox when its EBT system was back
up and running.     After realizing what was occurring—and within
15 minutes of the mini-switches coming online—First Data worked with
Xerox to “cut [its] links” to the mini-switches to prevent further Code 19
responses to Wal-Mart’s store-and-forward transactions.
      Toward the end of the outage, Xerox worked with First Data and
Wal-Mart to restore the EBT processing on a state-by-state basis.
During this operation, Wal-Mart’s automatic store-and-forward system
again submitted more transactions that were returned as Code 19
responses and remapped to “general denial” responses. Only later that
evening was Xerox’s EBT system fully restored.
      All   told,   Wal-Mart      stored   420,000     transactions    for
re-presentment following the outage. Of them, Xerox declined around
86,000 transactions, resulting in two categories of losses for Wal-Mart:
(1) 32,000 reimbursement claims that were denied because the
customers lacked sufficient benefits or used an improper PIN to
complete the transaction (NSF transactions or losses); and (2) 54,000
reimbursement claims that received Code 19 responses and were
refused even though the customers had sufficient SNAP benefits to cover

      11 Some Code 19 responses were also remapped to Code 94, which
means “try again.”

                                    6
the purchases (Code 19 transactions or losses). 12 Wal-Mart does not
dispute that federal regulations preclude it from recouping these losses,
worth around $4 million, from its customers, the states, or the federal
government, but it contends Xerox is responsible for the outage and may
be held liable for the ensuing losses.
                         C. Procedural History
       Seeking to recover those losses, Wal-Mart sued Xerox for
negligence, negligent misrepresentation, and breach of contract. 13
Xerox twice moved for summary judgment.             First, Xerox moved for
traditional summary judgment on all claims, arguing that, as a matter
of law, “Wal-Mart bears any and all loss it may have incurred” because
federal regulations provide that store-and-forward transactions are
undertaken “at the retailer’s own choice and liability.” 14 The trial court
granted that motion in part, rendering a take-nothing summary
judgment on the 32,000 NSF losses but leaving Wal-Mart’s claims for
the 54,000 Code 19 losses pending.
       Second, in a motion for traditional and no-evidence summary
judgment on the remaining claims, Xerox raised no-evidence challenges
to most elements of Wal-Mart’s claims and raised traditional grounds
that it was entitled to judgment as a matter of law because (1) Xerox

       12 In addition, Wal-Mart alleged damages resulting from “losses
associated with the carts of abandoned groceries and other items as a result of
the Outage.”
       13 Wal-Mart also asserted claims based on promissory estoppel and
breach of an implied-in-fact contract but has not challenged the court of
appeals’ affirmance of summary judgment on those claims.
       14   Id.

                                      7
had no duty to Wal-Mart; (2) Xerox made no false representations;
(3) Wal-Mart is not an intended third-party beneficiary of Xerox’s
contracts with the state agencies; and (4) select provisions in some of
Xerox’s contracts expressly disclaim third-party beneficiaries. Xerox
also raised a global traditional ground for summary judgment on the
basis that Wal-Mart is the “producing cause” of all damages through its
“remapping” of the Code 19 responses.
      In response, Wal-Mart argued that (1) Xerox owed it a
common-law duty because the damage resulting from the outage was
foreseeable   and   Xerox voluntarily undertook responsibility for
processing EBT transactions; (2) Xerox misrepresented that its system
was ready to receive transactions when it was not; and (3) Wal-Mart is
an intended beneficiary of certain indemnity provisions in Xerox’s
contracts with the state agencies. As to causation, Wal-Mart urged that
Xerox’s Code 19 responses were improper because (1) that code applies
only to face-to-face, not store-and-forward, EBT transactions; (2) PIN
security rules required Wal-Mart to remove the store-and-forward
transactions from the queue after receiving a Code 19 response; and
(3) even if Wal-Mart’s remapping contributed to causing the damages,
proportionate responsibility is a question for the jury.
      The trial court granted Xerox’s motion and rendered a final
take-nothing judgment against Wal-Mart.           The court of appeals
affirmed.
      The appeals court agreed with Xerox’s interpretation of the
federal regulation, finding it “clear in imposing liability on Wal-Mart for
the risks associated with its ‘store and forward’ transactions,” and

                                    8
affirmed summary judgment on the losses from the 32,000 NSF
transactions. 15      Relying on this holding, the court also affirmed
summary judgment on the negligence and negligent-misrepresentation
claims. 16 Finally, the appeals court affirmed summary judgment on
Wal-Mart’s breach-of-contract claims. 17 Although Wal-Mart had argued
that Xerox’s traditional summary judgment on the contract claims could
not be based on only contract excerpts, the court concluded that (1) the
relevant provisions disclaiming third-party beneficiaries were sufficient
to shift Xerox’s burden as a traditional summary-judgment movant;
(2) Wal-Mart did not identify any missing contract provisions that might
be relevant in response; and (3) Wal-Mart failed to raise a fact issue on
its third-party-beneficiary status because the contracts contained
specific provisions assigning liability for store-and-forward transactions
to the retailer and those provisions “prevail[ed] over the more general
indemnity provision.” 18
       Wal-Mart’s petition for review contends Xerox is not entitled to
summary judgment because (1) the federal SNAP regulation insulates
only the federal government, state agencies, and SNAP beneficiaries
from liability for losses on store-and-forward transactions; (2) excerpted
contract provisions disclaiming third-party beneficiaries are insufficient
on their own to shift a traditional summary-judgment movant’s burden;
and (3) Wal-Mart’s evidence was sufficient to raise fact issues defeating

       15   646 S.W.3d 546, 554-55 (Tex. App.—Dallas 2020).
       16   Id. at 555-57.
       17   Id. at 557-61.
       18   Id. at 558-61.

                                       9
summary judgment on its negligence, negligent-misrepresentation, and
breach-of-contract claims.          Xerox’s response asserts, as cross-points,
that the second summary judgment should be affirmed on the
independent ground that Wal-Mart’s “remapping” of the Code 19
responses was a “new and independent, or superseding, cause” of its
damages and that Wal-Mart waived any challenge to this alternative
ground for affirmance by failing to mention it in its merits brief.
                                   II. Discussion
       We review summary judgments de novo. 19 A party moving for
traditional summary judgment must prove that no genuine issue of
material fact exists and it is entitled to judgment as a matter of law. 20
In comparison, a properly filed no-evidence motion shifts the burden to
the nonmovant to present evidence raising a genuine issue of material
fact supporting each element contested in the motion. 21                  If the
nonmovant brings forth more than a scintilla of probative evidence to
raise a genuine issue of material fact, summary judgment is improper. 22
In determining whether a fact issue precludes summary judgment, “we
take as true all evidence favorable to the nonmovant, and we indulge
every reasonable inference and resolve any doubts in the nonmovant’s
favor.” 23

       19    Zive v. Sandberg, 644 S.W.3d 169, 173 (Tex. 2022).
       20    TEX. R. CIV. P. 166a(c).
       21 JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021)
(citing TEX. R. CIV. P. 166a(i)).
       22    Id.
       23    Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

                                         10
                    A. The Federal SNAP Regulation
      The primary dispute on appeal concerns the meaning and
applicability of Section 274.8(e)(1) of the SNAP regulations, which
served as the sole basis for the first summary judgment on Wal-Mart’s
NSF losses and undergirded the court of appeals’ disposition of
Wal-Mart’s      negligence     and    negligent-misrepresentation   claims.
Section 274.8(e)(1) provides:
      (e) Store-and-forward.         As an alternative to manual
      transactions:
      (1) State agencies may opt to allow retailers, at the
      retailer’s own choice and liability, to perform
      store-and-forward transactions when the EBT system
      cannot be accessed for any reason. The retailer may
      forward the transaction to the host one time within
      24 hours of when the system again becomes available.
      Should the 24-hour window cross into the beginning of a
      new benefit issuance period, retailers may draw against all
      available benefits in the account. 24
      The crux of the dispute between Wal-Mart and Xerox is whether
the regulation insulates an EBT contractor from liability to a retailer
under state common-law theories. Xerox argues that “at the retailer’s
own choice and liability” means Wal-Mart “bears any and all loss it may
have incurred on any ‘store-and-forward’ transaction as a matter of law”
and “assumes all liability for those transactions—no matter what.”
Wal-Mart contends that Section 274.8(e)(1) does not provide Xerox with
“blanket immunity . . . no matter what it did” and instead contemplates
the retailer assuming liability for losses only as against the

      24   7 C.F.R. § 274.8(e)(1) (emphasis added).

                                       11
governmental entities and program beneficiaries. In Wal-Mart’s view,
Xerox’s interpretation would result in federal preemption of state-law
claims without any apparent congressional intent to bar such claims.
       The parties have not identified, nor have we found, any authority
construing Section 274.8(e)(1) as it pertains to relieving EBT contractors
from liability for state-law claims.          When presented with a federal
question of first impression, we look to “how the U.S. Supreme Court
would decide the issue,” “often draw[ing] on the precedents of other
federal courts, or state courts, to determine the appropriate answer.” 25
In interpreting regulations, the U.S. Supreme Court uses the
“traditional tools” of construction and carefully considers “the text,
structure, history, and purpose of a regulation,” which “will resolve
many seeming ambiguities out of the box.” 26 Applying this approach,
we conclude that Section 274.8(e)(1) is not “genuinely ambiguous” 27 and
does not insulate an EBT contractor from state common-law liability.

       25   In re Morgan Stanley & Co., 293 S.W.3d 182, 189 (Tex. 2009).
       26 Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019). As we do, federal courts
interpret regulations by applying similar construction principles used to
interpret statutes. See Mitchell v. C.I.R., 775 F.3d 1243, 1249 (10th Cir. 2015)
(“In interpreting the relevant regulations, we apply the same rules we use to
interpret statutes.”); Patients Med. Ctr. v. Facility Ins. Corp., 623 S.W.3d 336,
341 (Tex. 2021) (“We interpret administrative rules using the same principles
we apply when construing statutes.”); see also In re Facebook, Inc., 625 S.W.3d
80, 87 (Tex. 2021) (noting that the U.S. Supreme Court has “stated principles
of statutory interpretation with which we agree”); In re Acad., Ltd., 625 S.W.3d
19, 25 (Tex. 2021) (“In analyzing federal statutes, we apply principles
substantially similar to those that govern our interpretation of Texas law.”).
       27   See Kisor, 139 S. Ct. at 2415.

                                         12
       Interpretation of the regulation begins with its text, which grants
permissive authority subject to two conditions precedent: a retailer may
perform store-and-forward transactions if (1) the state agency opts to
allow it and (2) the EBT system cannot be accessed for any reason. 28
The parties agree that both conditions precedent were satisfied here.
Accordingly, the regulations authorized Wal-Mart to exercise the option
to store and forward transactions at its own “liability.”
       The parties’ interpretive disagreement rests on the breadth of the
word “liability,” which generally refers to “[t]he quality, state, or
condition of being legally obligated or accountable; legal responsibility
to another or to society, enforceable by civil remedy or criminal
punishment.” 29       The parties agree that the scope of the retailer’s
“liability” for store-and-forward transactions applies such that the
retailer bears the risk in relation to the USDA, state agencies, and
SNAP beneficiaries.          But the term “liability” on its own does not
delineate whether the scope is limited to allocating the risk to the
retailer only as to those relationships or also extends beyond those
relationships to relieve third parties from liability to the retailer under
state law. 30

       28   7 C.F.R. § 274.8(e)(1).
       29   Liability, BLACK’S LAW DICTIONARY (11th ed. 2019) (emphasis added).
       30 See, e.g., Antonin Scalia & Bryan A. Garner, READING LAW: THE
INTERPRETATION OF LEGAL TEXTS 105-06 (2012) (noting that sometimes the
scope of a general term is unclear).

                                       13
      “Context is a primary determinant of meaning.” 31 In considering
the context, there is a presumption of consistent usage: “A word or
phrase is presumed to bear the same meaning throughout a text.” 32
Being “mindful” of that presumption, 33 we note that in another section
of the SNAP regulations, “liability” in the context of lost or stolen EBT
cards is allocated as follows: “Once a household reports that their EBT
card has been lost or stolen, the State agency shall assume liability for
benefits subsequently drawn from the account and replace any lost or
stolen benefits to the household.” 34       If the word “liability” bore the
breadth Xerox suggests, a state agency would be precluded from suing
to recover SNAP benefits from thieves and embezzlers, but such a
construction would be contrary to a fair reading of that provision. The
presumption of consistent usage indicates that “liability,” when used in
the SNAP regulations, does not necessarily preclude a party with
assigned “liability” from seeking recovery from at least some other
persons or entities under state common-law theories.
      The structure of the SNAP regulations also supports this reading,
especially considering how Subsections (d) and (e) of Section 274.8
relate to each other.           Subsection (e) describes store-and-forward
transactions “[a]s an alternative to manual transactions,” 35 which are

      31   Id. at 167.
      32   Id. at 170.
      33   See S.C. v. M.B., 650 S.W.3d 428, 445 (Tex. 2022).
      34   7 C.F.R. § 274.6(b)(2).
      35   Id. § 274.8(e).

                                       14
discussed in the immediately preceding Subsection (d). 36 But unlike the
regulation for store-and-forward transactions, the regulation governing
manual vouchers provides that the state agency “may accept liability for
manual purchases within a specified dollar limit” and “shall be strictly
liable for manual transactions that result in excess deductions from a
household’s account.” 37 “The Department,” on the other hand, “shall not
accept liability under any circumstances for the overissuance of benefits
due to the utilization of manual vouchers.” 38 Moreover, the opportunity
to re-present the manual vouchers and the amount to be debited is
limited and requires notice to the SNAP beneficiaries. 39 Reading these
subsections together and in context, as the “traditional tools” of
construction require, 40 the regulations allocate liability among the
USDA, state agencies, and retailers to protect the SNAP beneficiaries
when using back-up procedures—manual vouchers and store and
forward—during a system outage.            But the regulations related to
back-up procedures do not contemplate the liability of other parties, for
example, as between an EBT contractor and a retailer.

       36   Id. § 274.8(d).
       37   Id. § 274.8(d)(4), (5).
       38   Id. § 274.8(d)(4).
       39   Id. § 274.8(d)(1)–(3).
       40See Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019); see also Food & Drug
Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000) (“The
meaning—or ambiguity—of certain words or phrases may only become evident
when placed in context.”); Cadena Comercial USA Corp. v. Tex. Alcoholic
Beverage Comm’n, 518 S.W.3d 318, 326 (Tex. 2017) (noting that we consider
provisions within the context of the entire framework and construe text “as a
whole” not in “isolation”).

                                      15
       Finally, reading “liability” as limited to describing the allocation
of risk among the federal government, state agencies, SNAP
beneficiaries, and the entity being assigned “liability”—here, the
retailer—is consistent with the history and purpose of the regulation.
In 1992, the USDA recognized in the preamble to its regulations that
“there must be a back-up system available for use whenever any
component of the EBT system malfunctions” because “[i]t is essential
that households have a means to purchase food when any part of the
system is unavailable.” 41 The USDA noted that the “greatest concern”
of commenters was “the liability associated with back-up transactions
and when re-presentation against a household’s future benefits may
take place.” 42 At that time, the USDA continued with “requir[ing] that
liability for overdraws resulting from manual transactions rest[s] with
the State agency.” 43 But the USDA provided that the agency “can pass
this liability on to other parties through negotiations as appropriate for
its circumstances.” 44

       41 Standards for Approval and Operation of Food Stamp Electronic
Benefit Transfer Systems, 57 Fed. Reg. 11213, 11247 (Apr. 1, 1992); see
Antonin Scalia & Bryan A. Garner, READING LAW: THE INTERPRETATION OF
LEGAL TEXTS 218 (2012) (noting that although prefatory materials like a
preamble “cannot give words and phrases of the dispositive text itself a
meaning that they cannot bear,” they are “appropriate guide[s] to meaning”
and “ought to be considered along with all other factors in determining whether
the instrument is clear”).
       42Standards for Approval and Operation of Food Stamp Electronic
Benefit Transfer Systems, 57 Fed. Reg. at 11247.
       43   Id.
       44   Id.

                                      16
       In 2001, the USDA presented store and forward as an alternative
“preferable to manual vouchers for some retailers who do not wish to
spend time obtaining telephone authorization for the transaction when
the system is down.” 45 In the proposed rule, the USDA would allow
retailers to use store and forward for those “who elect to assume liability
for these transactions,” with one opportunity to forward the transaction
within 24 hours “to protect against applying the transaction to future
months’ benefits.” 46 In 2005, the USDA authorized store and forward in
an interim rule, noting and addressing commenters’ concerns that
store-and-forward procedures provide a “potential for fraud” and
overdrafts. 47
       The regulatory history and concerns raised during the adoption
process evince overarching objectives of the store-and-forward process:
(1) to ensure SNAP beneficiaries can purchase food with their SNAP
benefits during outages, (2) to provide a more efficient method for
retailers when manual vouchers might not be feasible so they are
encouraged to participate in SNAP during outages, and (3) to protect the
public fisc and SNAP beneficiaries from increased potential liability or
unexpected or fraudulent withdrawals from SNAP accounts. Neither
the promulgation process nor the regulation’s text indicates regulatory

       45Food Stamp Program, Regulatory Review: Standards for Approval
and Operation of Food Stamp Electronic Benefit Transfer (EBT) Systems, 66
Fed. Reg. 36495, 36500 (proposed July 12, 2001).
       46   Id. at 36500-01.
       47Food Stamp Program, Regulatory Review: Standards for Approval
and Operation of Food Stamp Electronic Benefit Transfer (EBT) Systems, 70
Fed. Reg. 18263, 18268-69 (Apr. 11, 2005).

                                    17
concern     about   allocating   liability   between    retailers   and   EBT
contractors.
       Separately and collectively, the federal regulation’s text,
structure, history, and purpose point in the same direction:
Section 274.8(e)(1) does not insulate EBT contractors from liability to
retailers under state common-law claims. Xerox’s contrary reasoning,
on the other hand, would allow an EBT contractor to escape
independently negotiated contractual obligations with a retailer and
avoid liability not only for its negligent conduct but also for intentional
torts related to store-and-forward losses. If EBT contractors are not
incentivized to minimize the risks of outages, retailers might be more
likely to turn away SNAP customers during outages, limiting their
options to purchase food. Such a construction runs counter to regulatory
objectives. 48

       48  Xerox nevertheless argues that a 2015 USDA letter to Wal-Mart
supports its construction of the regulation. In 2015, nearly two years after the
outage at issue here, Wal-Mart experienced losses in connection with a similar
EBT system outage and asked the USDA to provide an adjustment for denied
store-and-forward transactions. The USDA denied the request, noting that
when SNAP recipients have insufficient funds or use invalid PINs, “the retailer
must be willing [to] accept the loss of funds.” Xerox asserts that this letter
reflects the agency’s construction of Section 274.8(e)(1) as insulating EBT
contractors from liability to retailers and that the agency’s construction is
entitled to deference. We cannot agree with Xerox’s characterization of the
letter, which only involves Wal-Mart’s attempt to recover from the USDA. The
letter does not—in any way, shape, or form—address an EBT contractor’s
liability under Section 274.8(e)(1). Even if it could be so construed, “a court
should not afford Auer deference [to an agency’s interpretation of its
regulations] unless the regulation is genuinely ambiguous,” Kisor v. Wilkie,
139 S. Ct. 2400, 2415 (2019), and this regulation is not.

                                      18
       Moreover,      by   concluding       that   Section 274.8(e)(1)    barred
Wal-Mart’s contract and tort claims for the NSF losses, the court of
appeals effectively held that the federal regulation preempted those
common-law claims. 49 But there is a “presumption against preemption”
because “respect for the States as ‘independent sovereigns in our federal
system’ leads us to assume that ‘Congress does not cavalierly pre-empt
state-law causes of action.’” 50 The presumption “does not rely on the
absence of federal regulation” and instructs that federal law should not
be read to preempt state law “‘unless that was the clear and manifest
purpose of Congress.’” 51 The parties have not identified, nor have we
found, a clear and manifest purpose of Congress intending to preempt
such state common-law claims. Thus, even if Xerox had provided a
plausible alternative construction given the regulation’s text, structure,
history, and purpose and even if the regulation were ambiguous, we

       49   See 646 S.W.3d 546, 554-55 (Tex. App.—Dallas 2020).
       50 Wyeth v. Levine, 555 U.S. 555, 565 n.3 (2009) (quoting Medtronic, Inc.
v. Lohr, 518 U.S. 470, 485 (1996)).
       51Id. at 565 & n.3 (quoting Medtronic, 518 U.S. at 485). We have noted
that a “doctrinal dispute” exists as to whether the presumption applies when
a statute contains an express preemption clause. See In re Facebook, Inc., 625
S.W.3d 80, 88 n.5 (Tex. 2021) (collecting cases). As in In re Facebook, we need
not resolve this doctrinal dispute. See id. We have found no SNAP Act
provision expressly preempting these types of state common-law claims,
although at least one court has concluded that provisions of the SNAP Act
unrelated to this case expressly preempt other types of state law. See Barry v.
Corrigan, 79 F. Supp. 3d 712, 750 (E.D. Mich. 2015) (“Sections 2014(b) and
2020(e)(5) of the SNAP Act expressly preempt state eligibility requirements
that exceed the federal eligibility requirements.”), aff’d sub nom. Barry v. Lyon,
834 F.3d 706, 718 n.5 (6th Cir. 2016) (noting that the “district court also found
that preemption principles provided a second, independent basis for finding
Michigan’s law and policy invalid” without addressing this alternative ground).

                                       19
would construe the regulation consistent with the presumption against
preemption.
          We therefore conclude that the court of appeals erred in
construing Section 274.8(e)(1) to insulate Xerox from liability for the
32,000 NSF losses. We reverse the court of appeals’ judgment on those
losses.
               B. Negligence and Negligent Misrepresentation
          Relying on its construction of Section 274.8(e)(1), the court of
appeals also affirmed summary judgment on Wal-Mart’s negligence and
negligent-misrepresentation claims.            But the court’s erroneous
construction of Section 274.8(e)(1) rendered its analysis faulty as to
these tort claims.
          To support its negligence claim, Wal-Mart asserts that a duty
exists under common-law theories, either by applying what we have
called the “Phillips factors” or based on Xerox’s voluntary undertaking
of services. 52 The court of appeals concluded that Xerox had no duty
because Section 274.8(e)(1) places “the risk of using ‘store and forward’
transactions . . . on Wal-Mart.” 53 Although a background regulatory
framework may be considered in a Phillips-factor analysis, 54 the court

          Elephant Ins. Co. v. Kenyon, 644 S.W.3d 137, 149-52 (Tex. 2022)
          52

(describing the Phillips-factor inquiry and discussing the requirements for a
voluntary-undertaking theory).
          See 646 S.W.3d 546, 557 (Tex. App.—Dallas 2020). In the court of
          53

appeals, Wal-Mart also relied on contractual and regulatory sources for the
existence of a duty, which the court rejected. Id. at 556-57. Because Wal-Mart
does not rely on those theories here, we do not opine on their respective merits.
         See, e.g., Mission Petroleum Carriers, Inc. v. Solomon, 106 S.W.3d
          54

705, 714-15 (Tex. 2003) (declining to impose a duty after “[a]pplying the

                                       20
erred by relying on an improper interpretation of Section 274.8(e)(1)
without weighing the Phillips factors or considering Wal-Mart’s
voluntary-undertaking theory.
       Wal-Mart’s negligent-misrepresentation claim primarily rests on
alleged representations that Xerox’s EBT system was ready to receive
transactions when it was not. Wal-Mart argues that, based on these
representations, it submitted the transactions before the EBT system
could process them, which resulted in Xerox returning a Code 19
response and prevented Wal-Mart from re-presenting those transactions
when the system was eventually operational.             The court of appeals
noted, however, that “[a]ll of Xerox’s alleged ‘misrepresentations’
occurred as part of attempts to restore the system” and “Wal-Mart seeks
to isolate very specific steps in the day-long process of restoring the
system and label these as ‘misrepresentations.’” 55            Relying on its
interpretation of Section 274.8(e)(1) that “the risk of using ‘store and

Phillips risk/utility factors” because, in part, the “comprehensive statutory and
regulatory scheme” reduces the risk of harm).
       55 646 S.W.3d at 556. The negligent-misrepresentation elements are:
(1) the defendant made a representation in the course of its business or in a
transaction in which it has a pecuniary interest; (2) the representation
conveyed “false information” for the guidance of others in their business;
(3) the defendant did not exercise reasonable care or competence in obtaining
or communicating the information; and (4) the plaintiff suffers pecuniary loss
by justifiably relying on the representation. JPMorgan Chase Bank, N.A. v.
Orca Assets G.P., 546 S.W.3d 648, 653-54 (Tex. 2018). Xerox raised a
no-evidence challenge to each element except the first and also a traditional
summary-judgment ground that Xerox did not make any false representations
as a matter of law, relying on testimony from a Wal-Mart employee who was
on the phone with First Data and Xerox throughout the outage. Wal-Mart’s
employee testified he did not recall anyone saying, “Okay. Submit them all.
Now’s the time to send over all the transactions.”

                                       21
forward’ transactions was on the retailer, Wal-Mart,” the court of
appeals then held that “the ‘misrepresentations’ identified by Wal-Mart
were not negligent misrepresentations that would subject Xerox to
liability.” 56
        Because the court relied on an erroneous construction of
Section 274.8(e)(1) in affirming summary judgment on Wal-Mart’s
negligence and negligent-misrepresentation claims, we reverse that
portion of the court’s judgment and remand those claims to the court of
appeals for reconsideration in light of this opinion.
                  C. Superseding Cause and Waiver
        Among the alternative grounds for affirmance, Xerox argues in
its merits brief that (1) the second summary judgment may be affirmed
on the global “superseding” cause ground 57 that Wal-Mart’s vendor,
First Data, had remapped the Code 19 responses to general-denial codes
and (2) Wal-Mart waived its right to seek reversal of the judgment
because it did not address causation in its merits brief in this Court.
Because this causation ground was briefed in but not considered by the
court of appeals, Wal-Mart could raise the issue in a reply brief “[t]o
obtain a remand to the court of appeals” or “to request that the Supreme

        56646 S.W.3d at 556. The precise basis for the court of appeals’ holding
is unclear as the court did not identify the element of Wal-Mart’s
negligent-misrepresentation claim on which it affirmed the trial court’s
no-evidence summary judgment. However, the court’s erroneous interpretation
of Section 274.8(e)(1) prominently supported its conclusion that the identified
misrepresentations “were not negligent misrepresentations that would subject
Xerox to liability.” Id.
         In its motion for traditional and no-evidence summary judgment,
        57

Xerox referred to this ground as a “producing cause” but in its merits briefing
now refers to it as a “new and independent, or superseding, cause.”

                                      22
Court consider such issues or points.” 58 While we have discretion to take
up the causation issue, we adhere to our usual practice of remanding to
the appeals court to consider the unaddressed issues. 59
       We now turn to the breach-of-contract claim, which the court of
appeals     disposed   of   without    relying   on    its   construction   of
Section 274.8(e)(1).
            D. Breach of Contract: Third-Party Beneficiary
       Generally, the contractual benefits and burdens belong solely to
the contracting parties, but a qualifying third-party beneficiary may sue
for damages caused by the breach of the contract. 60 To establish its
third-party-beneficiary status, the plaintiff must demonstrate that the
contracting parties intended to secure a benefit to it and contracted

       58See TEX. R. APP. P. 53.4 (authorizing this Court to either remand or
consider issues briefed in “but not decided by” the court of appeals). After
describing Xerox’s causation argument but did not address it other than to note
in a cursory sentence that Wal-Mart had “ignore[d]” it. 646 S.W.3d 546,
553-54, 56 (Tex. App.—Dallas 2020).
       59See Tex. Comm’n on Env’t Quality v. Maverick County, 642 S.W.3d
537, 550-51 (Tex. 2022) (“[O]rdinarily a case will be remanded to the court of
appeals for further proceedings when we reverse the judgment of the appeals
court and the reversal necessitates consideration of issues raised in but not
addressed by that court.” (quoting State v. Ninety Thousand Two Hundred
Thirty-Five Dollars & No Cents in U.S. Currency ($90,235), 390 S.W.3d 289,
294 (Tex. 2013))).
       60First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017). Although none
of the contracts at issue involved the state of Texas, we apply Texas law
because Wal-Mart agrees it “is appropriate [to do so] when there is no
difference between Texas law and competing jurisdictions on the basic points
of law necessary for this appeal.” See El Paso Mktg., L.P. v. Wolf Hollow I,
L.P., 383 S.W.3d 138, 144 n.26 (Tex. 2012) (presuming the laws of other states
are the same as Texas law when the parties have not pointed to any material
difference).

                                      23
directly for its benefit; in other words, the contracting parties “must
have intended to grant the third party the right to be a ‘claimant’ in the
event of a breach.” 61 The controlling factor is whether sufficiently clear
and unequivocal language demonstrates such intent. 62
      As a threshold matter, the parties disagree about Xerox’s
obligation to submit the subject contracts in their entirety to satisfy its
burden on traditional summary judgment to establish that Wal-Mart is
not a third-party beneficiary.       We hold that submitting the entire
contract was not necessary to shift the burden to Wal-Mart to identify
other contract language, if any, that is necessary to explain, complete,
or contextualize the passages Xerox relied on to support its motion.
Wal-Mart also argues that, even if the burden shifted, excerpts of
contractual indemnity provisions that it produced in the trial court raise
a genuine fact issue on its third-party-beneficiary status. We disagree
on this count as well.
              1. Traditional Summary-Judgment Burden
      When a defendant moves for traditional summary judgment on a
plaintiff’s claim—as Xerox did here—it must demonstrate that “there is
no genuine issue as to any material fact” and that it is “entitled to
judgment as a matter of law.” 63 If the movant meets that burden, the
burden shifts to the nonmovant to present evidence raising a fact issue,
but the burden does not shift if the movant does not satisfy its initial

      61   First Bank, 519 S.W.3d at 102.
      62   Id. at 103.
      63 TEX. R. CIV. P. 166a(c); Amedisys, Inc. v. Kingwood Home Health
Care, LLC, 437 S.W.3d 507, 511 (Tex. 2014).

                                      24
burden. 64 Summary-judgment motions must stand or fall on their own
merits, and the nonmovant has no burden unless the movant
conclusively establishes its cause of action or defense. 65
      As the traditional summary-judgment movant seeking to
conclusively negate Wal-Mart’s status as a third-party beneficiary,
Xerox bore the burden of establishing that the contracting parties either
did not “intend[] to secure a benefit” to Wal-Mart or did not “enter[] into
the contract directly” for Wal-Mart’s benefit. 66 Xerox provided excerpts
from its contracts with state agencies in six states 67 that expressly
disclaimed third-party beneficiaries with language such as “[t]here are
no third party beneficiaries to this Contract” or “[n]othing contained in
this Contract shall give to or allow any claim or right of action
whatsoever by any other third person.” 68
      In reviewing third-party-beneficiary disclaimers, we have given
great weight to the expression of the contracting parties’ intent not to
create third-party beneficiaries. 69 But we also have considered other
provisions within the contract to determine whether they could be

      64   Amedisys, 437 S.W.3d at 511.
      65   Id. at 511-12.
      66 First Bank, 519 S.W.3d at 103 (quoting Stine v. Stewart, 80 S.W.3d
586, 589 (Tex. 2002)).
      67 Those states are          California,   Georgia,   Iowa,   Louisiana,
Massachusetts, and Mississippi.
      68 On appeal, Wal-Mart neither discusses any variation in the language
of the six contracts nor contests that the excerpts expressly disclaim
third-party beneficiaries.
      69 See MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647,
651-52 (Tex. 1999).

                                      25
harmonized with or were rendered “wholly meaningless” by the
disclaimer. 70 And we have often stated that contract provisions must be
interpreted in the context of the entire contract. 71          In those cases,
however, the parties had provided the entire contracts, and we
interpreted the contracts in light of the entire evidentiary record. But
we have never held that excerpted contract provisions disclaiming
third-party beneficiaries lack meaning or are ambiguous for want of the
entire contract.       Indeed, an express disavowal of third-party
beneficiaries is often clear on its own, even without the remainder of the
contract. 72

       70 See id. at 652. We have not decided whether express disclaimers are
dispositive and irrebuttable proof regardless of other provisions, but we note
that at least one prominent contract treatise appears to have taken that view.
See 9 John E. Murray, CORBIN ON CONTRACTS § 44.4 (rev. ed. 2007) (“Where
parties expressly deny any intention of conferring rights upon a third party . . .
the critical question of whether they intended to benefit the third party is
resolved.”).
       71See, e.g., First Bank, 519 S.W.3d at 102 (“To determine whether the
contracting parties intended to directly benefit a third party and entered into
the contract for that purpose, courts must look solely to the contract’s
language, construed as a whole.”); Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex.
2011) (“When discerning the contracting parties’ intent [to directly benefit a
third party], courts must examine the entire agreement and give effect to each
provision so that none is rendered meaningless.”); Stine, 80 S.W.3d at 589 (“To
determine the parties’ intent, courts must examine the entire agreement when
interpreting a contract and give effect to all the contract’s provisions so that
none are rendered meaningless.”); MCI Telecomms., 995 S.W.2d at 652 (“When
interpreting a contract, we examine the entire agreement in an effort to
harmonize and give effect to all provisions of the contract so that none will be
meaningless.”).
       72 See First Bank, 519 S.W.3d at 103 (noting that “a contract may
expressly provide that the parties do not intend to create a third-party
beneficiary” and that we have concluded that a contract did not create

                                       26
      Creating a bright-line rule that summary judgment on a contract
claim may be avoided unless the movant attaches the entire contract to
the motion has superficial appeal but would give rise to needless
impracticalities and difficulties. For example, determining what the
“entire” agreement is becomes complicated when other documents are
incorporated by reference. It is also not uncommon for contracts to
contain potentially sensitive, yet irrelevant, information. To require the
movant to always attach an entire contract despite an express
disclaimer like the ones here would unduly burden the movant and,
more importantly, the trial court with unnecessary disputes about
“completeness” and the need for confidentiality orders. Any benefits
inuring from a bright-line rule are grossly outweighed by the burdens
that it would impose. Accordingly, we decline to adopt such a rule.
      We instead hold that an express disclaimer provision, even if
presented only in excerpted form, is sufficient, if not rebutted, to
establish the movant’s entitlement to summary judgment. That is, such
evidence, when attached to a summary-judgment motion, shifts the
burden to the nonmovant to produce evidence raising a genuine fact
issue as to third-party-beneficiary status in light of the express

third-party beneficiaries when it “expressly disclaimed any intent to create
third-party beneficiaries” notwithstanding that “the contract prohibited one
party from interfering with third parties’ ‘existing prior rights’”); MCI
Telecomms., 995 S.W.2d at 651 (noting that “the unambiguous language” of a
particular contract provision “indicates that [the contracting parties]
specifically intended not to secure a direct benefit to . . . any other
nonsignatory”).

                                    27
disclaimer. 73      We acknowledge that, in the context of an alleged
third-party-beneficiary relationship, the movant is often the party with
better access to the original contract. 74 But the nonmovant is not bereft
of tools to protect itself from summary judgment. Our rules provide that
the nonmovant may seek a continuance to obtain discovery, should it be
needed, to respond to a summary-judgment motion. 75 As a result, the
nonmovant can supplement the record with other provisions or the
entire contract as necessary to provide a more complete picture. As the
nonmovant, Wal-Mart had this opportunity and took advantage of it by
submitting other provisions providing for indemnification.
                     2. Third-Party-Beneficiary Status
       Having        concluded     that     Xerox   satisfied   its   traditional
summary-judgment burden on the six contracts with express
disclaimers of third-party beneficiaries, we now consider whether
Wal-Mart’s evidence of other contract provisions providing for
indemnification raised a genuine issue of material fact when the burden
shifted. 76 Wal-Mart relied on the same type of evidence to defeat Xerox’s

       73 Cf. Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d
507, 517 (Tex. 2014) (describing how “prima facie evidence” could shift
summary-judgment burden); Kerlin v. Arias, 274 S.W.3d 666, 668 (Tex. 2008)
(holding that the summary-judgment movant presented “prima facie evidence”
to support judgment as a matter of law and that certain additional details need
not be proved until nonmovants raised a fact question).
       74  Cf. Paragon Sales Co. v. N.H. Ins. Co., 774 S.W.2d 659, 661 (Tex.
1989) (“In a situation such as the case at bar, a third party beneficiary is even
less likely than the insured to have access to the original documents.”).
        See TEX. R. CIV. P. 166a(g); Tenneco Inc. v. Enter. Prods. Co., 925
       75

S.W.2d 640, 647 (Tex. 1996).
       76   See TEX. R. CIV. P. 166a(c).

                                           28
no-evidence challenge for the other ten state contracts that did not have
express disclaimers. 77        We conclude that the indemnity provisions
Wal-Mart relied on are no evidence that the contracting parties intended
to benefit a retailer using store and forward under federal regulations. 78
       Although a contract need not “expressly” name an intended
third-party beneficiary, 79 a contract that fails to identify any “specific,
limited group of individuals” to which the consenting parties owed an
obligation does not create any third-party beneficiaries. 80          Xerox’s
contracts with the state agencies do not specifically name Wal-Mart (or
any other authorized SNAP retailer) as an intended beneficiary.

       77  In its traditional summary-judgment motion, Xerox provided
affidavit testimony from Joseph Froderman, its vice president of payment
services and product delivery, regarding the contracting parties’ intent with
respect to all sixteen contracts:
       My understanding of the contracts between the States and
       [Xerox] is that they are not entered with the intent that any of
       the 200,000 retailers throughout the United States would be
       able to enforce them. I do not believe that either the States or
       [Xerox] would enter a contract subjecting the parties to
       contractual liability of such magnitude.
Wal-Mart argues that this extrinsic evidence is irrelevant because it does not
reference the contents of the contracts and because extrinsic evidence is only
admissible where a contract is ambiguous or unavailable. Because we conclude
that Wal-Mart did not produce any evidence of its third-party-beneficiary
status, we need not consider whether the affidavit testimony was sufficient to
satisfy Xerox’s traditional summary-judgment burden as to the contracts
without express disclaimers.
       78   See 7 C.F.R. § 274.8(e).
        See Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., Inc.,
       79

236 S.W.3d 190, 195 (Tex. 2007).
       80   First Bank v. Brumitt, 519 S.W.3d 95, 103 (Tex. 2017).

                                        29
Instead, the contractual provisions before us generally refer to (1) a
merchant “participant,” as defined by the National Automated Clearing
House Association’s (NACHA’s) Quest Rules, which are standards for
the distribution of SNAP benefits under the Quest service mark
governing electronic benefits, or (2) a retailer performing certain
functions. Wal-Mart identifies two categories of evidence addressing
these general references that purportedly raise a fact issue on its
third-party-beneficiary status. 81
       First, Xerox’s contracts with state agencies in thirteen of the
sixteen states incorporate the Quest Rules, 82 which were included in the
summary-judgment record. Wal-Mart points to a general indemnity
provision at the end of the Quest Rules in Section 10.3:
       Each Processor . . . shall indemnify and hold harmless each
       other Participant against any and all claims, losses, costs,
       damages, liabilities or expenses (including reasonable
       attorneys’ fees) that are incurred as a result of a
       Transaction or attempted Transaction and that arise out
       of:
       a. The Authorization or denial of Authorization of a
       Transaction by such Processor . . . ;

       81 These contracts are not typical private contracts but are, instead,
contracts with state agencies implementing a federal program. See Astra USA,
Inc. v. Santa Clara County, 563 U.S. 110, 118 (2011) (noting that “[t]he
distinction between an intention to benefit a third party and an intention that
the third party should have the right to enforce that intention is emphasized
where the promisee is a governmental entity” (quoting 9 John E. Murray,
CORBIN ON CONTRACTS § 45.6 (rev. ed. 2007))). Given our disposition and the
arguments presented, however, we do not address this potential distinction.
       82Those states are Alabama, California, Georgia, Iowa, Maine,
Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio,
Pennsylvania, and Virginia.

                                      30
       b. Malfunction of or failure to operate the . . . system for
       processing and routing Transactions (unless such
       malfunction was caused by the party claiming
       indemnification);
       c. Unauthorized access being obtained to the systems
       utilized to process, route and authorize Transactions from
       any point in such system that is under the ownership or
       control of such Processor;
       d. The failure of the Processor to comply, as to any
       Transaction, with any Applicable Law;
       e. The negligence or fraudulent conduct of the Processor;
       f. The failure of the Processor to comply with these Rules;
       and
       g. The Completion by the Processor of any Transaction
       denied by, or on behalf of, an Issuer.
The Quest Rules define “Participant” to include a “Merchant” “that has
entered into an agreement to participate in the routing and processing
of Transactions and servicing of Cardholders or NACHA.” On appeal,
the parties do not contest Xerox’s status as a “Processor” or Wal-Mart’s
status as a “Merchant” “Participant” for the contracts that incorporated
the Quest Rules.
       Wal-Mart claims that this general indemnity provision—
specifically   Subsections (b)   and    (e)   regarding   malfunction   and
negligence—is at least some evidence of its third-party-beneficiary
status. 83 Xerox responds that a more specific provision in the Quest

       83 As support, Wal-Mart cites Paragon Sales Co. v. New Hampshire
Insurance Co., 774 S.W.2d 659, 661 (Tex. 1989) (holding that evidence of an
indemnity agreement is some evidence to confer standing as a third-party
beneficiary). We assume without deciding that the general indemnity

                                       31
Rules governs over the general indemnity provision and demonstrates
that a retailer using store and forward is not an intended third-party
beneficiary to the contract. To that end, Section 3 of the Quest Rules
provides: “Each Acquirer and its respective Merchants shall bear the
risk of denial, for any reason, of a Store and Forward Food Stamp
Transaction or Manual Food Stamp Transaction for which Telephone
Authorization was not received.”
       In construing contracts, we look to the plain language as the
written expression of the parties’ intent. 84         Consistent with our
long-established precedent that provisions should be considered
together and harmonized, when possible, so that none will be rendered
meaningless, “a specific contract provision controls over a general
one.” 85
       Wal-Mart argues there is no tension between the two provisions
if Section 3 is construed to bear the same meaning as the federal
regulation Section 274.8(e)(1), which does not allocate the risk between
a retailer and an EBT contractor. But Section 3’s language is markedly
different. Unlike the federal regulation’s “at the retailer’s own choice
and liability” language, Section 3 modifies “denial” with “for any reason”

provision in Section 10.3 would, on its own, be some evidence of
third-party-beneficiary status for a nonsignatory “Participant.”
       84Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882,
888 (Tex. 2019).
       85   Id. at 889.

                                      32
without qualification. 86 The plain meaning of “for any reason” would
include an EBT contractor’s negligence or the malfunction of its system.
       Despite any tension between Sections 3 and 10.3, we may still
give the provisions “their plain meaning and enforce them without
rendering either provision entirely superfluous.” 87 For example:
       Note that the general/specific canon does not mean that the
       existence of a contradictory specific provision voids the
       general provision. Only its application to cases covered by
       the specific provision is suspended; it continues to govern
       all other cases. So if a lease provides in one clause that
       water is provided, and in another it provides that the
       tenant is responsible for all utilities, the tenant will still be
       liable to pay for all utilities other than water. 88
Construing Sections 3 and 10.3 together to enforce them without
rendering either provision entirely superfluous, we interpret Section 3
as carving out retailers utilizing store-and-forward transactions as an
exception from the general indemnity contained in Section 10.3 for the

       86  The federal regulation also includes the phrase “for any reason.” In
contrast to Section 3, however, the regulatory phrase “for any reason” modifies
“when the EBT system cannot be accessed” as a condition precedent for
retailers “to perform store-and-forward transactions.” 7 C.F.R. § 274.8(e)(1)
(“State agencies may opt to allow retailers, at the retailer’s own choice and
liability, to perform store-and-forward transactions when the EBT system
cannot be accessed for any reason.”).
       87G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 531
(Tex. 2015).
       88   Antonin Scalia & Bryan A. Garner, READING LAW: THE
INTERPRETATION OF LEGAL TEXTS 184 (2012); see El Paso Field Servs., L.P. v.
MasTec N. Am., Inc., 389 S.W.3d 802, 814 (Tex. 2012) (Guzman, J., dissenting)
(collecting authorities and noting that “[t]o harmonize conflicting [contract]
provisions, we treat narrow provisions as exceptions to general provisions”).

                                      33
denial of those transactions. 89 So when read together with Section 3,
Section 10.3 is no evidence that the contracting parties intended to grant
a retailer using store-and-forward transactions the right to be a
claimant. 90
       Second, Wal-Mart argues that Xerox’s contracts with the state
agencies required Xerox to indemnify retailers for a state-specific
amount during “[s]tand-in processing” and that this indemnification is
evidence that Xerox and the states intended to benefit retailers like
Wal-Mart.       In its response to Xerox’s second motion for summary
judgment, Wal-Mart described “stand-in processing” as when the EBT
contractor guarantees that, during unplanned system unavailability,
retailers may authorize EBT transactions up to an amount specified by
the state by using emergency manual vouchers without requiring
advance authorization. 91
       As evidence of this contractual indemnification obligation for
retailers during stand-in processing, Wal-Mart provided excerpts from
various states’ requests for proposals (RFPs) to provide EBT services

       89 This interpretation is also supported by the canon: “In harmonizing
[contract] provisions, terms stated earlier in an agreement must be favored
over subsequent terms.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).
       90   See First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017).
       91In another motion during the trial court proceedings, Wal-Mart noted
that “[e]mergency vouchers, also known as stand-in processing,” involve a
process where the transactions are “recorded at the point of sale on paper
vouchers.” SNAP regulations provide for stand-in processing by authorizing
that “the State agency, in consultation with authorized retailers and with the
mutual agreement of the State agency’s vendor, if any, may accept liability for
manual purchases within a specified dollar limit.” 7 C.F.R. § 274.8(d)(4).

                                        34
and Xerox’s responses to those RFPs. 92 For example, Xerox’s response
to Louisiana’s RFP states that when Xerox “authorizes a transaction
while in stand-in processing mode and there are insufficient funds
available to cover the purchase,” Xerox “compensates the retailer for the
amount of the deficiency up to the $50.00 threshold,” which provides
“the retailer with protection from loss” and acts as an “incentive for their
participation in the EBT program.”           Wal-Mart also references an
internal email that Xerox’s vice president of card-products management
sent during the outage. With a subject line of “Xerox stand-in vouchers,”
the email states: “Many of our EBT states have a contractual
requirement for us to stand-in for $25-$40/transaction during system
outages that are our fault. This would qualify. We have not been
broadcasting it at all but if retailers are using [stand-in vouchers], then
we will have some liability.”
       This evidence, however, concerns a retailer using emergency
manual vouchers during stand-in processing, and it is undisputed that
Wal-Mart used only store-and-forward transactions during the outage,
not manual vouchers.        In fact, Wal-Mart’s corporate representative
testified that manual vouchers are a “process which we no longer do,”
and Wal-Mart’s expert explained that “[i]t is not practical to support
manual      vouchers   in   a   high   volume,    multi-lane    supermarket

       92 Wal-Mart included in the summary-judgment record an EBT RFP
Guidance handbook from the USDA that states, “The contract usually consists
of the RFP, the winning proposal, final negotiations that modify either the RFP
or the proposal, and other documents.”

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environment where speed of checkout is critical.” 93               Once again,
Wal-Mart’s evidence does not raise a fact issue on whether the
contracting    parties    intended    to    grant   a   retailer   using    only
store-and-forward transactions the right to be a claimant.
       We therefore conclude that the court of appeals did not err in
affirming summary judgment on Wal-Mart’s breach-of-contract claim
because (1) Xerox established as to six contracts that Wal-Mart was not
a third-party beneficiary; (2) Wal-Mart did not produce evidence raising
a genuine issue of material fact when the burden shifted; and (3) as to
the other ten contracts, Wal-Mart failed to produce evidence raising a
fact issue in response to Xerox’s no-evidence challenge.
                               III. Conclusion
       For the reasons stated, we affirm the court of appeals’ judgment
on Wal-Mart’s breach-of-contract claim, reverse the judgment on the
losses from the NSF transactions and on Wal-Mart’s tort claims, and
remand the case to the court of appeals for further proceedings.

                                            John P. Devine
                                            Justice

OPINION DELIVERED: March 17, 2023

       93 Xerox asserted in its briefing that because of Wal-Mart’s expert
testimony, manual vouchers are “a moot topic for this case.” At oral argument
Xerox’s counsel stated, “The other indemnity provisions . . . are from provisions
in bid documents . . . relating to manual transactions, which of course are not
part of this case. Wal-Mart was never going to do that[.]” Wal-Mart did not
contest or respond to these statements.

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