AUSTIN – The Texas Supreme
Court recently ruled that a group of optometrists suing Wal-Mart over workday
requirements were not entitled to civil penalties.
original $1.4 million judgment, awarded by a lower-court jury and reduced from
an initial $4 million payout, was rescinded.
At the center of
the case was the issue of whether individuals in Texas are allowed to sue a
company and collect civil penalties if the company breaches or ignores state
The suit contended
that Wal-Mart pressured optometrists working out of rented spaces in their
stores to keep specific hours, an action that is against the Texas Optometry
Act. The act is meant to keep companies from affecting the practice of
optometry and can carry fines of up to $1,000 per day, which are handed out by
the optometry board.
wholesaler, or retailer of ophthalmic goods may not directly or indirectly . .
. control or attempt to control the professional judgment, manner of practice,
or practice of an optometrist,” the act reads.
The initial award
was granted based on the $1,000-per-day civil fine.
state called on Wal-Mart to change its practices in 1995 to allow optometrists to
set their own standard hours, which the retail chain agreed to.
“In 2003, the
Board notified Wal-Mart that it was violating the Act simply by informing optometrists
that customers were requesting longer business hours,” court documents state.
optometrists, all with post-1995 leases, sued Wal-Mart in 2007, and won in federal
district court – a decision that Wal-Mart quickly appealed.
But the lower
court had an important question it had not fully resolved: whether the
plaintiffs actually were entitled to the civil penalty-based judgment for
Chapter 41 of the Texas Civil Practice and Remedies Code, the supreme court
decided last week that they were not.
definition of “Exemplary damages” was used in the court’s opinion.
“Any damages awarded as a penalty or by way of punishment but not for
compensatory purposes. Exemplary damages are neither economic nor noneconomic
damages. Exemplary damages include punitive damages.”
government entities joined the state in arguing against the decision to award
the optometrists the civil penalties, saying the decision could affect their
agencies’ regulatory powers and ability to enforce civil fines.
41 to governmental penalty actions would contravene legislative intent and
nullify a wide range of statutes—some enacted at the same time or after Chapter
41—that allow governmental actors to seek civil penalties,” an amicus
brief filed on behalf of the state said.
An amicus filed
by Texas Local Government, Texas Local Government Organizations and Texas Local
Government officials made a similar argument.
are concerned that this Court’s opinion…could have the unintended consequence
of limiting the government’s ability to recover civil penalties,” the brief
states. “They have already seen litigants attempting to use the Fifth Circuit
panel’s now-withdrawn opinion to support that argument.”