Opinions

Walmart included some terms in its leases with on-site optometrists relating to what hours the optometrists would be open. A group of those optometrists brought suit in federal court, alleging that this degree of control violated the Texas Optometry Act, which says that a retailer may not control the "manner of practice" of optometrists, specifically defining that prohibition to extend to "setting or attempting to influence ... office hours of an optometrist." Tex. Occ. Code §351.408. By statute, a person injured by a violation of this provision can sue for a civil penalty, not to exceed $1000 per day. The plaintiffs sought civil penalties; they did not seek other monetary relief.

The federal district court found a violation and awarded the four plaintiffs a total of $3.95 million in civil penalties, plus attorney's fees. The Fifth Circuit analyzed, and agreed with, the district court's reasoning that this is a violation of the statute. That aspect of the case has not been certified to the Texas Supreme Court.

The certified question involves Walmart's argument that this civil penalty violated Chapter 41 of the Texas Civil Practice and Remedies Code, which restricts exemplary damages to situations where a plaintiff also proves some other measure of actual damages.

As the Fifth Circuit's opinion explains the issue, this presents two discrete questions of statutory construction: (1) is a private civil penalty under this statute a form of "damages relating to a cause of action" that would fit within Chapter 41? and, if so, (2) are these civil penalties a form of "exemplary" damages that can only be awarded as a supplement to some more conventional damages remedy?

While the case has been pending in the Texas Supreme Court, a group of local government officials has filed an amicus brief asking the Court to clarify, regardless of how it disposes of these private claims, that the sort of civil penalties a local government might seek are not covered by Chapter 41.