As we reported last August, SB 6, the Pandemic Liability Protection Act, is the target of federal court litigation seeking to strike down the Act’s retrospective application to March 13, 2020, the date Governor Abbott first declared the emergency. In order to resolve the challenge, the U.S. Fifth Circuit Court of Appeals asked the Texas Supreme Court to rule on the constitutionality of the statute, a request the Court accepted. TCJL subsequently filed an amicus brief in support of the law’s constitutionality.
The case, Luke Hogan, on behalf of himself and other individuals similarly situated v. Southern Methodist University, and other affiliated entities and individuals (No. 23-0565; April 6, 2024), arose from a breach of contract action brought by a student against SMU after the university shifted from in-person to remote instruction in the spring of 2020. A federal district court dismissed the lawsuit and upheld SB 6’s retroactive application. The Fifth Circuit reversed, holding that plaintiff stated a claim for breach based on a variety of materials promising “a one-of-a-kind experience through in-person collaboration and instruction.” With respect to the constitutionality of the retroactivity provision of SB 6, however, the Fifth Circuit declined to make an Erie guess and certified the question to SCOTX, which the Court accepted on July 20.
Our brief argued that SB 6 is constitutional under Art. I, § 16, Texas Constitution, because: (1) it serves a compelling public interest as evidenced by the Legislature’s factual findings (which are set out in the bill itself); (2) the “prior right” allegedly impaired by SB 6 is uncertain and hardly “settled”; and (3) the extent of the “impairment,” if any, is commensurate with the severity of the emergency and the absolute necessity of protecting Texans from crippling litigation on top of the economic and social disruption caused by the pandemic. Robinson v. Crown Cork & Seal Co., 335 S.W.3d 126, 146 (Tex. 2010).
In an opinion by Justice Blacklock, the Court agreed. Beginning with a detailed review of the historical context of Art. I, § 16, Justice Blacklock pointed out that whereas the 1869 Constitution explicitly barred legislation from retrospectively “depriving a party of any remedy fro the enforcement of a contract, which existed when the contract was made,” the 1876 Constitution removed this language in favor of a prohibition of retroactive laws. As to the meaning of “retroactive laws,” however, he reached further back to the 1849 case, DeCordova v. City of Galveston, 4 Tex. 470, in which the Court ruled that a “retroactive law” did not mean any law enacted by the Legislature that met the dictionary definition of “retroactive.” As Justice Blacklock put it, “DeCordova provides definitive evidence that the prevailing understanding in Texas’s founding era was that constitutional prohibitions on retroactive laws did not withdraw from the Legislature all power “to act on things that are past” (citing DeCordova at 475). The DeCordova court instead introduced an “intent” inquiry that would consider the context in which the Legislature acted. That court likewise introduced the “vested rights” standard, which SCOTX replaced in Robinson v. Crown Cork & Seal Co., 335 S.W.3d 126 (Tex. 2010) with the three-part test.
Under Robinson, “Hogan must show he had a reasonable and settled expectation that he could recover money damages from SMU if the government forcibly shut down the campus and gave the school only the option of completing Hogan’s degree requirement on the internet.” The Court concluded that he did not make this showing because “[a]ny expectation that a monetary judicial remedy would be available in those circumstances was entirely speculative and by no means settled. The Legislature does not exceed its authority by resolving lingering uncertainty about the viability of a speculative, untested theory of liability on which the common law already casts considerable doubt.” Here that “untested theory” was that the “impossibility doctrine,” which leaves a party of its obligations under a contract “if performance is rendered impossible by either an Act of God or an act of government,” both of which occurred in this case. Hogan’s claim, additionally, was made more uncertain by the speculative nature of the damages he sought (the difference between the value of an in-person education and that of an on-line education) and his acceptance of the on-line option.
Moving to the other Robinson factors, the Court had no difficulty concluding that when the Legislature enacted SB 6, it served an “overwhelming[ly]” strong and valid public interest, and that the statute, as Hogan had no substantive common law claim to begin with, simply affected the procedure by which his claim would be dismissed by a court.
The Court’s decision is undoubtedly correct. It also has the added benefit of fleshing out the Robinson test, particularly the second prong, which inquires whether alleged prior right impaired by the legislature is “reasonably settled.” We applaud the Court for vindicating the Legislature’s actions under the exigencies of the pandemic emergency.
