Centerpoint Energy Resources Corp. v. Fernando Ramirez and Minerva Ramirez

Supreme Court of Texas

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No. 20-0354

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CenterPoint Energy Resources Corp.,

Petitioner,

v.

Fernando Ramirez and Minerva Ramirez,

Respondents

═══════════════════════════════════════

On Petition for Review from the

Court of Appeals for the Fourth District of Texas

═══════════════════════════════════════

Argued September 29, 2021

JUSTICE DEVINE delivered the opinion of the Court.

Justice Huddle and Justice Young did not participate in the

decision.

The issue of first impression in this personal-injury case is

whether a limitation of liability provision in a utility tariff approved by

state regulators bars the utility’s liability for damages suffered by a

residential customer’s houseguests. We hold that it does. The tariff

provides, without exception, that the utility “shall not be liable for any

damage or loss” in the limited circumstance where damage or loss is

“caused by the escape of gas from Consumer’s housepiping or

Consumer’s appliances.” 1 That is precisely how the houseguests were

injured, but the lower courts agreed with the houseguests that the

liability limitation is applicable only to any damage or loss sustained by

the utility’s customer. We hold that the liability limitation precludes

the houseguests’ negligence claims because (1) the tariff’s terms

expressly apply to “all consumers” and (2) the houseguests meet the

tariff’s special definition of that term. A tariff approved by a regulatory

body is not a “mere contract” and instead carries “the force and effect” of

law, at least as to those to whom the tariff applies. The houseguests are

bound by the tariff’s terms because, as consumers, the tariff applies to

them and, like any other law, neither assent nor actual knowledge is

required to enforce its terms as written. We therefore reverse and

render judgment that the tariff forecloses the houseguests’ ordinary

negligence claims against the utility.

I. Background

In December 2011, Adrian and Graciela Castillo purchased a new

home built by WestWind Homes d/b/a WestWind Development,

G.P.-Laredo. The home’s gas lines were installed by plumber Armando

Aguilar & Sons Contractor. After the City of Laredo issued a certificate

of occupancy certifying the home was habitable and built to code, the

Castillos moved into the residence. Shortly thereafter, CenterPoint

1 Emphasis added.

2

Energy Resources Corp. installed a gas meter outside the home and

initiated gas service.

Over the next three years, Graciela’s parents, Fernando and

Minerva Ramirez, were frequent visitors and guests at the home.

During these visits, the Ramirezes used the home’s gas services,

including for cooking and showering. In February 2015, while Fernando

was attempting to repair the Castillos’ electric clothes dryer, he

inadvertently opened the valve on an unused gas line behind the dryer.

Escaping gas accumulated to combustible levels and ignited, resulting

in an explosion that damaged the Castillos’ home and seriously injured

Fernando.

The Ramirezes sued the homebuilder, the plumber, and

CenterPoint for personal-injury damages under negligence and

gross-negligence theories. The Ramirezes alleged that all three

defendants had breached a duty to plug or seal the unused gas line. The

Ramirezes did not contend that the defendants’ equipment failed but,

rather, that the defendants failed to provide essential equipment.

The plumber settled, and the case proceeded to a jury trial against

the homebuilder and CenterPoint. After the close of the plaintiffs’

case-in-chief, the trial court directed a verdict for the homebuilder and

CenterPoint on the Ramirezes’ gross-negligence and

exemplary-damages claims. In response to three negligence

submissions, the jury found that only the defendants were at fault and

apportioned responsibility 60% to the homebuilder, 34% to CenterPoint,

3

and 6% to the plumber. 2 The jury awarded the Ramirezes more than

$6.9 million in actual damages.

CenterPoint moved for judgment notwithstanding the verdict

and, in the alternative, a new trial. The motion asserted a number of

grounds, including that the jury’s verdict was immaterial because

CenterPoint is entitled to judgment as a matter of law based on the

terms of its tariff, which was filed with and approved by state regulators.

CenterPoint asserted that, under the filed-rate doctrine, the tariff’s

terms, which generally limit the company’s liability for damages

resulting from gas usage after delivery to the meter, are (1) binding as

law, (2) presumed reasonable, and (3) applicable to the Ramirezes’

ordinary negligence claims.

The trial court denied CenterPoint’s motion and rendered

judgment on the verdict. Based on the jury’s

proportionate-responsibility findings, the trial court rendered judgment

that the homebuilder was jointly and severally liable for all of the

Ramirezes’ damages and CenterPoint was liable only for its

2 See TEX. CIV. PRAC. & REM. CODE § 33.003 (stating that a

proportionate-responsibility jury issue shall include a settling party if there is

sufficient evidence to submit a jury issue as to that party).

4

proportionate share of the damages. 3 While the case was on appeal, the

homebuilder settled with the Ramirezes. 4

The court of appeals affirmed the judgment against CenterPoint. 5

With respect to the main issue here, the court held that the provisions

in a utility’s tariff are enforceable only against the utility’s customers

and the Ramirezes were not CenterPoint’s customers, presumably

because they did not contract for the utility’s services. 6 The court

acknowledged that the tariff’s special definition of “Consumer,

Customer and Applicant” broadly defines the terms to mean “a person

or organization utilizing services or who wants to utilize services to

CENTERPOINT[.]” 7 Even so, the court held that the scope of the

defined term was narrowed to exclude houseguests like the Ramirezes

because (1) the tariff states that the terms “‘Consumer, Customer and

Applicant’ are used interchangeably” and (2) the terms “Consumer” and

“Customer” are used in select tariff provisions that would be “absurd” if

3See id. § 33.013(b)(1) (“[E]ach liable defendant is, in addition to the

defendant’s liability under Subsection (a), jointly and severally liable for the

damages recoverable by the claimant under Section 33.012 with respect to a

cause of action if: . . . the percentage of responsibility attributed to the

defendant with respect to a cause of action is greater than 50 percent[.]”).

4 No. 04-18-00103-CV, 2019 WL 3432103, at *1 (Tex. App.—San Antonio

July 31, 2019) (per curiam) (mem. op.).

5 628 S.W.3d 530, 533 (Tex. App.—San Antonio 2020).

6Id. at 536-39 (discussing Lone Star Caliper Co. v. Talty Water Supply

Corp., 102 S.W.3d 198, 200-03 (Tex. App.—Dallas 2003, pet. granted, judgm’t

vacated w.r.m.), and Henderson v. Cent. Power & Light Co., 977 S.W.2d 439,

447 (Tex. App.—Corpus Christi 1998, pet. denied)).

7 Id. at 536 (emphasis added) (quoting CenterPoint’s tariff).

5

applied to noncustomers. 8 From the court’s perspective,

interchangeable use means that “each term can be substituted wherever

any of the terms are used,” so any narrower use within the tariff

necessarily constrains the special definition to a narrower meaning

throughout the tariff. 9 The court did not define the term “customer”

except to state that the Ramirezes were not CenterPoint’s customers. 10

The court also noted that the Ramirezes were not residents or tenants

in the Castillos’ home but did not explain the significance of those facts

to the analysis. 11 The court posited, however, that it could not be the

case that anyone using gas services inside the home would be subject to

the tariff’s liability limitations. 12

After determining that the Ramirezes were not “consumers” as

that term is defined in the tariff because they were not CenterPoint’s

“customers,” the court held that the tariff’s liability limitations did not

apply to their negligence claims because a tariff can only govern the

relationship between a utility and its customers. 13 Applying this

categorical rule of nonapplicability, the court rejected CenterPoint’s

8 Id. at 536-37 (referring to the tariff’s “definition of ‘Consumer’s

Housepiping,’ the requirement that the consumer provide additional

information during the application process, and the required notice to the

customer by CenterPoint before the customer’s utility service can be

terminated”).

9 Id. at 537.

10 Id. at 536.

11 Id.

12 Id. at 537.

13 Id. at 537-39.

6

argument that, under the tariff’s plain language, the limitations on

liability extend to any damage or loss caused by gas after it leaves the

meter or escapes from the consumer’s housepiping, not just a customer’s

damage or loss. 14 The court also ruled adversely to CenterPoint on its

remaining issues challenging the submission of jury questions on

negligent-undertaking and negligence per se theories and the

sufficiency of the evidence to support the jury’s verdict. 15

CenterPoint filed a petition for review, which we granted to

address the enforceability of the limitation of liability provisions in the

natural gas provider’s tariff. On that point, we agree with CenterPoint

that, under the filed-rate doctrine, the liability limitation in Section 14

of the tariff plainly and expressly precludes the utility’s liability for the

Ramirezes’ damages and applies to them as “consumers” of the utility’s

gas services. Accordingly, we do not reach the other issues raised in

CenterPoint’s petition for review.

II. Discussion

A. CenterPoint’s Tariff

“Gas utilities are by definition monopolies in the areas they serve.

As a result, the normal forces of competition that regulate prices in a

free enterprise society do not operate.” 16 For that reason, “[p]ublic

agencies regulate utility rates, operations, and services as a substitute

for competition.” 17 Under the Gas Utility Regulatory Act, the Texas

14 Id.

15 Id. at 539-41.

16 TEX. UTIL. CODE § 101.002(b).

17 Id.

7

Railroad Commission is granted broad regulatory authority “to protect

the public interest inherent in the rates and services of gas utilities” and

“to establish a comprehensive and adequate regulatory system for gas

utilities to assure rates, operations, and services that are just and

reasonable to the consumers and to the utilities.” 18 To ensure utilities

provide “safe, adequate, efficient, and reasonable” services, 19 the

Railroad Commission can adopt reasonable rules, regulations,

specifications, and standards; examine and test equipment; address

complaints; ask the attorney general to apply for a court order to

prohibit or enjoin violations or require compliance with the commission’s

rules or orders; recover civil penalties for violations; and bring an action

for contempt of its lawful orders. 20

Under this statutory scheme and associated regulations, gas

utilities like CenterPoint are required to file a proposed tariff with the

Railroad Commission for review and approval. 21 “A tariff is a document

18Id. § 101.002(a); see id. § 104.001(a) (“The railroad commission is

vested with all the authority and power of this state to ensure compliance with

the obligations of gas utilities in this subtitle.”); R.R. Comm’n v. Tex. Coast

Utils. Coal., 357 S.W.3d 731, 740 (Tex. App.—Austin 2011) (examining the

Legislature’s “extraordinarily broad delegation of authority to the Commission

in regard to rate regulation”), aff’d, 423 S.W.3d 355 (Tex. 2014).

19 TEX. UTIL. CODE §§ 104.001(a), .251.

20 See id. §§ 104.256, 105.021–.024, 105.051, 121.201–.211, 121.302–

.310.

21Id. § 102.151 (“A gas utility shall file with each regulatory authority

schedules showing all rates . . . .”); 16 TEX. ADMIN. CODE § 7.315 (pertaining to

the filing and approval of tariffs with the Railroad Commission).

8

that lists a public utility’s services and the rates for those services.” 22

Tariffs may permissibly include provisions limiting a utility’s liability

for economic and personal-injury damages. 23 We have explained that “a

limitation on liability is an inherent part of the rate the utility charges

for its services” that allows regulated utilities to reduce costs for lower

rates to customers and reflects the reality that regulated entities are

“‘peculiarly the subject of state control.’” 24

Consistent with the regulatory scheme, CenterPoint filed, and the

Railroad Commission approved, the tariff that was in force when the

accident in this case occurred. 25 The tariff applies to “all Consumers”

“[u]nless otherwise expressly stated” and except “insofar as [the tariff’s

rules] are changed by or are in conflict with any statute of the State of

Texas, valid municipal ordinance, valid final order of any court or of the

Railroad Commission of Texas, or written contract executed by

Company.” In the event of a conflict any “such statute, ordinance, order

or contract shall control to the extent that it is applicable to the

Consumer(s) in question,” but “whenever possible, the[] rules shall be

22First Assembly of God, Inc. v. Tex. Utils. Elec. Co., 52 S.W.3d 482, 489

(Tex. App.—Dallas 2001, no pet.) (citation omitted); 16 TEX. ADMIN. CODE

§ 7.315(c) (listing required contents for gas utility’s filed tariff).

23See Sw. Elec. Power Co v. Grant, 73 S.W.3d 211, 219-22 (Tex. 2002)

(examining a tariff provision limiting liability for personal-injury damages);

Hous. Lighting & Power Co. v. Auchan USA, Inc., 995 S.W.2d 668, 672-75 (Tex.

1999) (examining a tariff provision limiting liability for economic damages).

24Grant, 73 S.W.3d at 217; Auchan, 995 S.W.2d at 674-75 (quoting Cole

v. Pac. Tel. & Tel. Co., 246 P.2d 686, 688 (Cal. Dist. Ct. App. 1952)).

25 See 16 TEX. ADMIN. CODE § 7.315(e). The court of appeals took

judicial notice of the tariff’s terms because it has the force and effect of a law.

628 S.W.3d 530, 536 (Tex. App.—San Antonio 2020).

9

construed harmoniously with such laws, contracts, ordinances, and

orders.” The tariff specifies that the terms “‘Consumer, Customer and

Applicant’ are used interchangeably” and broadly defined to “mean a

person or organization utilizing services or who wants to utilize services

to CENTERPOINT[.]” 26

CenterPoint asserts that the Ramirezes qualify as “consumers” as

that term is defined in the tariff because (1) the undisputed evidence

establishes they were “utilizing” CenterPoint’s gas services and (2) the

tariff does not limit the breadth of its reach to those who have paid or

contracted for the services being utilized. CenterPoint asserts that, as

“consumers,” the Ramirezes would be subject to all of the tariff’s

provisions, including its provisions limiting the utility’s liability, even

absent a contractual relationship. CenterPoint faults the court of

appeals for applying a definition at odds with the tariff’s defined terms

and notes that the court’s narrow construction would make the tariff

inapplicable to cohabitants such as spouses, children, roommates, and

tenants who are utilizing CenterPoint’s services to the same extent as

the utility’s direct customer. In CenterPoint’s view, the tariff’s special

definition reflects regulatory acknowledgment that, after delivery,

CenterPoint has no ability to limit gas use or consumption exclusively

to the bill payer.

Even so, CenterPoint asserts that the Ramirezes’ status as a

“consumer” is irrelevant because the pertinent liability limitations apply

without regard to the plaintiffs’ status. CenterPoint cites two tariff

26 Emphasis added.

10

provisions as barring the Ramirezes’ negligence claims for damages,

losses, or injuries caused by gas usage after the point of delivery,

whether they are “consumers” under the tariff’s definition or not.

First, the tariff assigns consumers the responsibility for

“installing and maintaining Consumer’s housepiping,” meaning “[a]ll

pipe and attached fittings which convey gas from the outlet side of the

meter to the Consumer’s connection for gas appliances.” Then, in

express terms, the tariff releases CenterPoint from all liability—

without exception—in a narrow circumstance:

14. ESCAPING GAS

. . . Company shall not be liable for any damage or

loss caused by the escape of gas from Consumer’s

housepiping or Consumer’s appliances. 27

As CenterPoint notes, the release in Section 14 extends to “any” damage

or loss emanating from a specific source—the consumer’s housepiping or

appliances. Although Section 2a of the tariff provides that “[u]nless

otherwise expressly stated, these rules apply to all consumers . . . ,”

CenterPoint points out that Section 14 does not include language

limiting its scope to damages or losses incurred by anyone in particular.

For this reason, CenterPoint maintains that the liability limitation’s

applicability depends only on the source of the damages and Section 14

categorically bars all damages claims falling within its express terms.

The second limitation of liability more broadly precludes the

utility’s liability after gas leaves the “point of delivery,” meaning “[t]he

27 Emphasis added.

11

point where the gas is measured for delivery into Consumer’s

housepiping”:

17. NON-LIABILITY

....

(b) Company shall not be liable for any damage or

injury resulting from gas or its use after such gas

leaves the point of delivery other than damage

caused by the Company [1] in the manner of

installation of the service lines, [2] in the manner in

which such service lines are repaired by the

Company, and [3] in the negligence of the Company

in maintaining its meter loop. All other risks after

the gas left [sic] the point of delivery shall be assumed

by the Consumer, his agents, servants, employees, or

other persons. 28

Section 17, unlike Section 14, divides responsibility for risks between

the utility and others, including but not limited to consumers. Unlike

Section 14, however, the liability limitation in Section 17 is subject to

three specific exceptions. The parties dispute the applicability of only

the third exception—negligent maintenance of the meter loop—under

the evidence adduced at trial.

Citing the filed-rate doctrine, CenterPoint contends the tariff

provisions are presumptively reasonable and enforceable as a bar to the

Ramirezes’ negligence claims because they are “consumers” as that term

is defined in the tariff and subject to all of its terms including the

limitations of liability in Sections 14 and 17. Additionally, CenterPoint

28 Emphasis added.

12

argues that the liability limits in Sections 14 and 17 expressly and

plainly foreclose the Ramirezes’ negligence claims against the utility

regardless of their status as consumers.

B. Filed-Rate Doctrine

The filed-rate doctrine applies here because state law has created

a regulatory agency and a statutory scheme under which the regulator

determines reasonable rates for the utility services CenterPoint

provides. 29 Under the filed-rate doctrine, a tariff filed with and

approved by a regulatory agency in accordance with the statutory

scheme is presumed reasonable unless a litigant proves otherwise. 30

Once approved, “regulated utilities cannot vary a tariff's terms with

individual customers, discriminate in providing services, or charge rates

other than those properly filed with the appropriate regulatory

authority.” 31 An approved tariff carries the binding force and effect of

29 Grant, 73 S.W.3d at 216.

30 Id.

31 Id. at 217. The Texas Legislature has codified the filed-rate doctrine

in various provisions of the Gas Utility Regulatory Act. See, e.g., TEX. UTIL

CODE §§ 104.003 (“The regulatory authority shall ensure that each rate a gas

utility or two or more gas utilities jointly make, demand, or receive is just and

reasonable. A rate may not be unreasonably preferential, prejudicial, or

discriminatory but must be sufficient, equitable, and consistent in application

to each class of consumer.”), .005(a) (“A gas utility may not directly or indirectly

charge, demand, collect, or receive from a person a greater or lesser

compensation for a service provided or to be provided by the utility than the

compensation prescribed by the applicable schedule of rates filed under Section

102.151.”).

13

law until suspended or set aside and, while in effect, defines the terms

under which the utility’s services are provided. 32

Because competitive forces are absent from the regulatory

environs, 33 public utilities have no power to increase rates for all

customers based on losses and risks specific to an individual or a class

of customers. 34 A public utility “cannot pick and choose its customers

on the basis of the potential liability” 35 or “accurately estimate its

exposure to damages” 36 or “efficiently insure against risks” because they

are required to take all comers at fixed rates. 37 Accordingly, the

regulatory body’s rate-making authority encompasses the power to limit

liability as an inherent part of the rate the utility charges for its

32 See Grant, 73 S.W.3d at 217; see also Trammell v. W. Union Tel. Co.,

57 Cal. App. 3d 538, 550 (1976) (“[I]t is the PUC, empowered by the

Legislature, and not the parties to the transaction, which by approving the

tariff fixed the terms and conditions upon which a telegram message is sent.

The law, not a contract between the parties, prescribes the classifications, rates

and liabilities attendant thereon.”).

33TEX. UTIL. CODE § 101.002(b) (recognizing that, due to governmental

regulation of gas utilities, “the normal forces of competition that regulate

prices in a free enterprise society do not operate”); Grant, 73 S.W.3d at 215

(observing that then-extant regulatory authority governing electric utilities

was “a substitute for competitive forces”).

34 Grant, 73 S.W.3d at 221.

35 Hous. Lighting & Power Co. v. Auchan USA, Inc., 995 S.W.2d 668,

674 (Tex. 1999) (noting that a utility must provide nondiscriminatory service

to all customers within its area).

36 Grant, 73 S.W.3d at 217.

37 Id.

14

services. 38 We have held that tariff provisions limiting the types of

damages for which a utility will be liable should be enforced as written

and that claims for damages other than those provided by the tariff will

be foreclosed. 39 Such provisions, whether limiting liability for economic

losses or personal-injury damages, are presumptively reasonable. 40

In Southwestern Electric Power Co. v. Grant, we held, as a matter

of first impression, that a provision in a tariff limiting an electric utility’s

liability for personal-injury damages was reasonable as a matter of law

and enforceable against a customer’s ordinary negligence claim. 41 In so

holding, we observed that the limitation was narrowly drawn in that it

applied to a specific set of circumstances and did not broadly immunize

the utility from personal-injury claims arising from its negligence. 42 By

way of example, we noted that “the tariff provision would not shield [the

utility] from liability if an employee, in the performance of his or her

duties, injures a person while driving to a job.” 43 The tariff did not

violate public policy, we said, “because it [did] not purport to relieve [the

38Id.; see Sw. Sugar & Molasses Co. v. River Terminals Corp., 360 U.S.

411, 417-18 (1959) (declining to strike down an exculpatory provision in an

approved tariff that relieved a towboat owner of liability for its own negligence

in towing barges because tariff provisions limiting liability are part and parcel

of the rates charged and the regulator may have had a sound basis for

approving such a clause).

39 Auchan, 995 S.W.2d at 672.

40 Grant, 73 S.W.3d at 222; Auchan, 995 S.W.2d at 675.

41 Grant, 73 S.W.3d at 214.

42 Id. at 220.

43 Id.

15

utility] from liability under all conceivable circumstances.” 44 Moreover,

the provision expressly provided a remedy for damages caused by the

utility’s gross negligence or willful misconduct. 45

Our conclusion that a tariff can limit a utility’s liability for

personal-injury damages was further informed by factors we had

previously considered in upholding a tariff limiting liability for economic

damages. 46 We noted that many of the same factors that supported the

reasonableness of a limitation on economic damages also applied in

personal-injury cases. 47 Among the most significant were that (1) a

regulated utility’s inability to raise rates for incurred liability “could

have a direct detrimental effect on its finances”; (2) the requirement of

nondiscriminatory service means the utility cannot refuse service to

customers who have a greater potential for suffering losses; and

(3) extensive regulation of the utility industry afforded consumers

protection through regulations providing remedies to consumers and

penalizing utilities for unsafe or inadequate service. 48

Although Grant involved an electric utility rather than a gas

utility, the same factors apply in this context. 49 Once rates are set, the

44 Id.

45 Id.

46 Id. at 220-21.

47 Id.

48 Id.

49 In 1999, the Legislature deregulated the electricity-generation

market and permitted certain electricity providers to compete for customers.

The tariff at issue in Grant was governed by the pre-1999 regulatory scheme.

Id. at 216.

16

utility has no power to vary those rates to account for catastrophic loss

and potential financial distress. Absent liability limitations, utility

customers would be subjected to higher utility rates for essential

services, and the financial stability of service providers would be

imperiled. 50 Our regulatory scheme protects the public’s strong interest

in the financial integrity and effective functioning of public utilities that

provide critical services.

The Ramirezes do not challenge the tariff’s validity or the

Railroad Commission’s authority to approve the liability limitations

contained therein. Nor do they contend that the relevant liability

limitations are unreasonable. 51 Rather, they assert that the tariff’s

provisions cannot be construed as binding on a litigant who lacked a

contractual relationship with the utility. Alternatively, if the tariff’s

provisions can be so construed, the Ramirezes argue that the release of

liability conflicts with a local building ordinance that requires open gas

valves to be plugged “gas tight” before gas to a dwelling is turned on.

50 See Hous. Lighting & Power Co. v. Auchan USA, Inc., 995 S.W.2d 668,

675 (Tex. 1999) (“The public interest in protecting the financial integrity of

public utilities is another basis for concluding that tariff provisions such as the

one at issue in this case are not unreasonable when applied to claims for

ordinary negligence.”); see also Grant, 73 S.W.3d at 221 (observing that “a

utility's liability exposure could have a direct detrimental effect on its

finances”).

51 Unlike the tariff in Grant, the liability limits in CenterPoint’s tariff

do not expressly except gross negligence or willful misconduct, but no such

claims are at issue here, and we are not asked to consider the enforceability of

the tariff’s liability limitations in such circumstances. See Auchan, 995 S.W.2d

at 675 (expressing no opinion as to whether a tariff may limit liability for gross

negligence or willful misconduct because the plaintiff had abandoned its

gross-negligence claim).

17

The Ramirezes take the position that this asserted conflict renders the

tariff’s liability limitations inoperative under the tariff’s directive

pertaining to conflicts with other law. Finally, the Ramirezes argue the

Open Courts Provision in the Texas Constitution precludes enforcement

of the tariff’s limitations of liability.

We hold that the Ramirezes come within the tariff’s broad

definition of a “consumer” and Section 14 plainly bars their negligence

claims. Accordingly, we do not reach the question of Section 17’s

applicability or determine whether either liability limitation applies

without regard to the Ramirezes “consumer” status.

1. The Ramirezes are “Consumers” under the Tariff

The tariff broadly defines the terms “Consumer, Customer and

Applicant” as applying to “a person or organization utilizing services or

who wants to utilize services to CenterPoint Energy Entex.” 52 The tariff

does not define the word “utilizing,” and no technical meaning is

indicated or asserted by the parties. Commonly understood, “utilize”

simply means to “make use of,” 53 “to put to use,” 54 and to “make practical

and effective use of.” 55 The trial testimony reflects that the Ramirezes

52 Emphasis added.

WEBSTER’S NEW COLLEGIATE DICTIONARY (1980); WEBSTER’S THIRD

53

NEW INTERNATIONAL DICTIONARY (2002).

WEBSTER’S NEW WORLD COLLEGE DICTIONARY (5th ed. 2016);

54

WEBSTER’S NEW UNIVERSAL UNABRIDGED DICTIONARY (1996).

55 NEW OXFORD AMERICAN DICTIONARY (3d ed. 2010).

18

actively made use of the gas services CenterPoint provided to the

Castillo residence.

Mrs. Ramirez testified that, as the Castillos’ houseguest, she used

hot water from gas water heaters to wash dishes and clean clothes and

occasionally cooked meals on the gas stove. Mr. Ramirez similarly

testified that he ate meals prepared by his wife, who would cook in the

Castillos’ kitchen using the gas stove. He also conceded that he took

gas-heated showers. In routinely cooking, cleaning, eating, and

bathing—even on a temporary basis—the Ramirezes made use of the

gas services CenterPoint provided and, accordingly, were “consumers”

under the tariff’s definition of the term.

The court of appeals concluded otherwise, but the analysis is

somewhat hazy. We discern two possible rationales for the court’s

refusal to apply the tariff’s definition as written: (1) “the Ramirezes were

visiting the Castillos and were not residents or tenants of their home” 56

and (2) “the tariff provides the terms consumer, customer, and applicant

are used interchangeably,” which necessarily means that “each term can

be substituted wherever any of the terms are used,” yet “the tariff

contains various references to these terms where extending the term to

non-customers would be absurd.” 57 Neither of these rationales supports

the conclusion that the definition the tariff provides is actually narrower

than it purports to be.

56 628 S.W.3d 530, 536 (Tex. App.—San Antonio 2020).

57 Id. at 537.

19

The first rationale engrafts textually unsupportable constraints.

The tariff does not limit the term “consumer” to residents, tenants, or

even those who have paid or contracted for services. While residents

and tenants fall within the broad definition, so too do visitors making

active use of the gas services, as the Ramirezes were. The tariff does not

specify a class of consumers that would exclude the Ramirezes, but

instead encompasses all persons “utilizing” CenterPoint’s services.

The court’s second rationale effectively writes out the tariff’s

definition and substitutes the ordinary meaning of the word “customer”

based on an asserted absurdity that would purportedly ensue from

applying the definition the tariff supplies. 58 The court of appeals pointed

to “the definition of ‘Consumer’s Housepiping,’ the requirement that the

consumer provide additional information during the application process,

and the required notice to the customer by CenterPoint before the

customer’s utility service can be terminated” as provisions that could not

reasonably be applied to noncustomers. 59 From this conclusion, the

court deduced that the tariff’s stated definition does not mean what it

plainly says. 60 The court’s analysis proves too much.

Isolated provisions in the tariff would, as a practical matter, apply

only to those who are CenterPoint’s customers or applicants as opposed

58The ordinary meaning of “customer” is “a person who purchases goods

or services from another; buyer; patron . . . a person one has to deal with.”

WEBSTER’S NEW UNIVERSAL UNABRIDGED DICTIONARY (1996). Consistent

with part of the tariff’s definition, an “applicant” is “a person who applies for

or requests something.” Id.

59 628 S.W.3d at 537.

60 Id.

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to those who are simply “utilizing” CenterPoint’s services. But applying

the tariff’s definition produces no absurdity in these contexts because

none of the cited uses is inconsistent with the supplied definition.

Rather, each such use is subsumed within that definition and either

reasonably applies to a subclass of covered persons or could reasonably

extend to noncustomers. 61 Incidental use of defined terms in a narrower

fashion does not mean that, contrary to their otherwise expansive

definition, the terms actually carry a narrower meaning throughout the

tariff. 62

It would be useless—and unnecessary—for the tariff to provide a

specific definition if the terms were intended to carry only their ordinary

meanings. And it would be useless—and unnecessary—to make the

tariff applicable to “consumers” if the tariff was intended only to bind

“customers” and “applicants” as those terms are ordinarily understood.

Because it is possible to do so, we must construe the tariff to give effect

61For example, a person “utilizing” gas services could reasonably be

responsible for “installing and maintaining Consumer’s housepiping” even

though such person is not the utility’s customer, like a resident, tenant, or

homeowner. It is not absurd for the tariff’s definition of “consumer” to

encompass such a noncustomer. Likewise, the requirement that a “consumer”

provide information during the application process invokes the second portion

of the tariff’s definition, referring to a person “who wants to utilize services,”

meaning only a prospective customer. Here, too, there is nothing unreasonable

about extending the defined term “consumer” to such a noncustomer. Nor does

the requirement that notice be given to a “customer” before terminating utility

services alter the tariff’s definition because the narrower use is not repugnant

to it. The fact that a narrower meaning might apply in some instances does

not mean that it applies in all instances.

See FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d

62

59, 64 (Tex. 2014) (construing contract language).

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to all of its terms so that none is rendered meaningless. 63 The court of

appeals erred in construing the term “consumer” as bearing the ordinary

meaning of the term “customer” because doing so renders the former

surplusage and nullifies the tariff’s stated definition.

Because the evidence conclusively establishes that the Ramirezes

actually utilized CenterPoint’s services, they are “consumers” even

though they neither paid nor contracted for those services and generally

would not be considered to be CenterPoint’s customers under the

ordinary meaning of that term. Rather than giving rise to an absurdity,

the breadth of the tariff’s definition accords with a practical

understanding that a gas utility’s rate-regulated services may be

“utilized” by someone other than the person whose name is on the utility

bill.

2. Section 14’s Limitation of Liability Applies

The Ramirezes’ injuries fall within the express scope of the

limitation of liability in Section 14 because it is undisputed that the gas

leak at the Castillo residence occurred after the point of delivery from a

leak in the housepiping at the unused connections for gas appliances in

the laundry room. The Ramirezes nonetheless argue that Section 14

cannot be applied as written because Texas law provides that a tariff

governs only the relationship between the utility and a customer, as that

63See TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68, 74 (Tex.

2016) (construing “the statute as a whole [and] giving effect to each provision

so that none is rendered meaningless or mere surplusage”); J.M. Davidson,

Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (“[W]e must examine and

consider the entire writing in an effort to harmonize and give effect to all the

provisions of the contract so that none will be rendered meaningless.”).

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term is commonly understood. The court of appeals agreed. Although

acknowledging that this Court had not directly addressed the issue, the

appeals court cited statements in our precedent to the effect that a tariff

governs the relationship between a utility and its customers and

prohibits customers from suing the utility over issues the tariff’s terms

govern. 64 The court also relied on opinions from two sister courts, Lone

Star Caliper Co. v. Talty Water Supply Corp. 65 and Henderson v. Central

Power & Light Co., 66 both of which declined to enforce tariffs against

noncustomers. 67

The court of appeals erred in treating the tariff as if it were a

private contract between CenterPoint and its customers. A public

utility’s tariff has “the force and effect of law” and is not “a mere

contract.” 68 By approving the tariff, the regulatory agency—not the

parties to the transaction—fixed the terms and conditions under which

the utility’s services are provided. 69 “The law, not a contract between

64628 S.W.3d 530, 537 (Tex. App.—San Antonio 2020) (referring to Sw.

Elec. Power Co v. Grant, 73 S.W.3d 211, 217, 222 (Tex. 2002), and City of

Richardson v. Oncor Elec. Delivery Co. LLC, 539 S.W.3d 252, 254 (Tex. 2018)).

65102 S.W.3d 198, 202-03 (Tex. App.—Dallas 2003, pet. granted,

judgm’t vacated w.r.m.).

66 977 S.W.2d 439, 447 (Tex. App.—Corpus Christi 1998, pet. denied).

67 628 S.W.3d 530, 537-39 (Tex. App.—San Antonio 2020).

68Grant, 73 S.W.3d at 217, 222; see, e.g., W. Union Tel. Co. v. Esteve

Bros. & Co., 256 U.S. 566, 572 (1921) (explaining that an approved tariff

governs the utility’s services “not as . . . a matter of contract, . . . but [as] a

matter of law”); City of Richardson, 539 S.W.3d at 263.

69W. Union, 256 U.S. at 571; Trammell v. W. Union Tel. Co., 57 Cal.

App. 3d 538, 550 (1976).

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the parties, prescribes the classifications, rates and liabilities attendant

thereon,” 70 and it is axiomatic that laws apply to those who fall within

their ambit regardless of assent or even knowledge. 71 Accordingly, the

absence of either knowledge or consent on the Ramirezes’ part does not

preclude enforcement of the tariff according to its plain terms. 72

The court of appeals misread our precedent as imposing such a

constraint. While it is accurate to say that we have held that a tariff is

binding on a customer, we have never held that it is not binding on a

noncustomer notwithstanding tariff language that makes it so. The

cases of this Court that were referenced in the court of appeals’ opinion

involved the tort claims of customers, and our statements to the effect

that a tariff governs the relationship and liability between a utility and

a customer are but a truism, not a rule of limitation.

The court of appeals’ opinions in Lone Star Caliper and

Henderson might be distinguishable on the terms of the tariffs at issue

there except for the breadth of the language used in those opinions. That

is arguably the case in Henderson, in which the tariff expressly limited

the indemnity and release clause to the “customer” and did not provide

a special definition of that term. 73 But rather than relying solely on the

70 Trammell, 57 Cal. App. 3d at 550 (emphasis added).

71 W. Union, 256 U.S. at 569, 571-73.

72 Id. at 572.

73 977 S.W.2d 439, 447 (Tex. App.—Corpus Christi 1998, pet. denied)

(holding that the plaintiffs were “consumers” for purposes of the Texas

Deceptive Trade Practices Act but not “customers” of electricity to which the

tariff’s release and indemnity provision applied under the ordinary meaning of

that term).

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ordinary meaning of the tariff’s terms, the court’s opinion, as written,

could be construed more expansively. Lone Star Caliper also seems to

apply an absolute rule of nonenforceability under a contract theory of

enforcement. 74 To the extent those cases conflict with our decision

today, we disapprove them.

We hold that the tariff’s liability limitation in Section 14 is

enforceable against the Ramirezes’ negligence claims. This result

derives not only from the tariff’s plain language but also accords with

our precedent and the economic reality that public utilities do not

operate in the same environment as unregulated businesses. In

Auchan, we observed that

“a public utility, being strictly regulated in all operations

with considerable curtailment of its rights and privileges

shall likewise be regulated and limited as to its liabilities.

In consideration of its being peculiarly the subject of state

control, ‘its liability is and should be defined and limited.’

There is nothing harsh or inequitable in upholding such a

limitation of liability when it is thus considered that the

rates as fixed by the Commission are established with the

rule of limitation in mind.” 75

As a regulated entity, CenterPoint has no ability to limit who may use

its services and no control over who a paying customer allows to use its

services—whether it is the customer’s roommate, significant other, or a

74 102 S.W.3d 198, 202-03 (Tex. App.—Dallas 2003, pet. granted,

judgm’t vacated w.r.m.) (“In order to enforce the terms of the tariff against

Lone Star, Talty must first establish that Lone Star is one of its customers.

This is an essential element of the affirmative defense.”).

75 Hous. Lighting & Power Co. v. Auchan USA, Inc., 995 S.W.2d 668,

674-75 (Tex. 1999) (quoting Cole v. Pac. Tel. & Tel. Co., 246 P.2d 686, 688 (Cal.

Dist. Ct. App. 1952)).

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hundred guests at a party. As we explained in Grant, tariff provisions

limiting a utility’s liability enable utilities to provide vital services in an

effective, consistent, nondiscriminatory, and cost-efficient manner. 76

Without a limitation of liability, the potential for substantial damages

awards either threatens the financial integrity of the utility or must be

passed on with regulatory approval to all rate payers. Those

consequences ensue whether the tort claims come from the bill payer or

the bill payer’s cohabitants and guests.

Other jurisdictions have similarly concluded that a tariff’s

liability limitations may extend to noncustomers because tariffs have

the force and effect of law and liability limitations are an inherent part

of the filed rate. 77 While some courts have held that limitations of

7673 S.W.3d 211, 217, 221-22 (Tex. 2002); see L.A. Cellular Tel. Co. v.

Superior Ct. of L.A. Cnty., 76 Cal. Rptr. 2d 894, 897 (Cal. Ct. App. 1998)

(enforcing a tariff to preclude personal-injury claims and recognizing the

existence of “an equitable trade-off—the power to regulate rates and to set

them below the amount an unregulated provider might otherwise charge

requires a concomitant limitation on liability”).

77 See Leo v. Nationstar Mortg. LLC, 964 F.3d 213, 217 & n.4 (3d Cir.

2020) (holding that the filed-rate doctrine applied even though the party suing

did not pay the premium on the underlying tariff); Patel v. Specialized Loan

Servicing, LLC, 904 F.3d 1314, 1322 (11th Cir. 2018) (“An important, though

heretofore overlooked, corollary of the nondiscrimination and nonjusticiability

principles is that the filed-rate doctrine’s applicability does not turn on

whether the plaintiff is a rate-payer. . . . Even non-customers, for instance,

cannot directly challenge a filed rate.”); U.S. Airways, Inc. v. Qwest Corp., 361

P.3d 942, 946-49 (Ariz. Ct. App. 2015) (holding that a tariff’s limitation of

liability extended to a noncustomer’s claims), aff’d in relevant part &

depublished in nonrelevant part, 385 P.3d 412 (Ariz. 2016) (per curiam); Colich

& Sons v. Pac. Bell, 244 Cal. Rptr. 714, 718 (Ct. App. 1988) (holding that a

tariff’s limitation of liability provision is binding on the public generally

because such a provision is an inherent part of the utility’s established rates

and has the force and effect of law); Trammell v. W. Union Tel. Co., 57 Cal.

26

liability are not enforceable as to noncustomers or as to personal-injury

claims of customers, those cases are distinguishable because they

involve different tariff language, 78 challenges to the scope of regulatory

authority, 79 or an explicit repudiation of the precedent of this Court. 80

App. 3d 538, 551, 553 (1976) (“As the tariff and the limitation of liability

provisions have the force and effect of law, they are binding on the public

generally and necessarily on the recipient of the telegram.”); cf. Rothstein v.

Balboa Ins. Co., 794 F.3d 256, 259 (2d Cir. 2015) (“[A] claim challenging a

regulator-approved rate is subject to the filed rate doctrine whether or not the

rate is passed through an intermediary. The claim is therefore barred if it

would undermine the regulator’s rate-setting authority . . . .”).

78 See Marriott Corp. v. Chesapeake & Potomac Tel. Co., 723 A.2d 454,

461 (Md. Ct. Spec. App. 1998) (“Reading Tariff No. 201 narrowly, as we must,

we are convinced that the Tariff applies only to C & P’s direct customers.”);

Vendola v. S. Bell Tel. & Tel. Co., 474 So. 2d 275, 278 (Fla. Dist. Ct. App. 1985)

(“The tariff will not yield to the construction contended for by Southern Bell.”);

Abel Holding Co., Inc. v. Am. Dist. Tel. Co., 371 A.2d 111, 114-15 (N.J. Sup. Ct.

App. Div. 1977) (“[W]here, as here, the plain language of the limitation of

liability clause does not specifically apply to the situation involved, it will not

be construed or applied so as to limit the right of one not a party to the contract

to recover against one who is a party to the contract for the latter’s tortious

conduct.”).

79 Tyus v. Indianapolis Power & Light Co., 134 N.E.3d 389, 406-08 (Ind.

Ct. App. 2019) (holding that a tariff limiting liability for personal injuries to

noncustomers was ultra vires and void because the legislature did not give, or

intend to give, the regulatory agency the power to shield a public utility from

liability caused by the utility’s negligence to noncustomers), transfer denied,

160 N.E.3d 512 (Ind. 2020).

80See Pub. Serv. Comm’n v. Mo. Gas Energy, 388 S.W.3d 221, 231 & n.8

(Mo. Ct. App. 2012) (expressly disagreeing with Grant and other states in

holding that the Missouri Public Service Commission could not “abrogate a

customer’s right to sue a public utility company for negligence involving

personal injury or property damage”).

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3. No Conflict with Local Ordinances

In the alternative, the Ramirezes contend that the tariff cannot

be enforced as written because it must yield to a conflicting local

building code ordinance applicable to “turning gas on.” The ordinance

adopts and incorporates the International Residential Code, which

mandates that “[b]efore any system of piping is put in service or

concealed, it shall be tested to ensure that it is gas tight”; “[d]uring the

process of turning gas on into a system of new gas piping, the entire

system shall be inspected to determine that there are no open fittings or

ends and that all valves at unused outlets are closed and plugged or

capped”; and subject to certain exceptions, “[g]as outlets that do not

connect to appliances shall be capped gas tight.” 81

The local ordinance does not conflict with the tariff’s limitation of

liability. 82 Even if the ordinance created a private cause of action, which

81 See City of Laredo, Tex., Code of Ordinances §§ 7-1, 7-7. 25-3, 25-6

(adopting the International Residential Code) (1985) (available at

https://library.municode.com/TX/laredo/codes/code_of_ordinances?nodeId=PTI

ICOOR_CH7BUBURE); INT’L RESIDENTIAL CODE §§ G2415.13, G2415.17,

G2417.6.2.

82 Cf. Del Carmen Canas v. CenterPoint Energy Res. Corp., 418 S.W.3d

312, 315-16, 323 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (Frost, C.J.,

concurring in part) (holding that enforcement of the limitation of liability in

Section 14 of CenterPoint’s tariff did not conflict with, or relieve CenterPoint

of the obligation to comply with, federal regulations imposing a duty to provide

natural gas that is readily detectible to a person with a normal sense of smell);

id. at 333-34 (Christopher, J., concurring in part) (explaining that none of the

federal regulations the plaintiff relied on conflicted with the limitation of

liability provision in Section 14 and, to the extent the regulations imposed a

duty, the tariff did not relieve CenterPoint of its obligation to comply with the

regulatory scheme, which remained enforceable through statutory remedies

and enforcement mechanisms that afford protection to the public).

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CenterPoint disputes, that cause of action would not give rise to a

conflict. A liability limitation only comes into play if the utility could be

liable for violating some duty or obligation imposed by law or contract.

An ordinance imposing a duty is not inconsistent with a tariff provision

limiting liability for damages; to the contrary, they are correlated with

one another. Both can be given effect even though the result is a bar to

any liability flowing from breach of any duty the ordinance imposes. 83

4. No Open Courts Violation

Nor does enforcement of the tariff violate the Texas Constitution’s

mandate that “[a]ll courts shall be open, and every person for an injury

done him, in his lands, goods, person or reputation, shall have remedy

by due course of law.” 84 This provision “includes at least three separate

constitutional guarantees: 1) courts must actually be operating and

available; 2) the Legislature cannot impede access to the courts through

unreasonable financial barriers, and 3) meaningful remedies must be

afforded.” 85 The Ramirezes’ cursory open-courts argument suggests

that enforcement of the tariff’s provisions limiting liability would

83 Cf. BCCA Appeal Grp., Inc. v. City of Hous., 496 S.W.3d 1, 7 (Tex.

2016) (“[A] general law and a city ordinance will not be held repugnant to each

other if any other reasonable construction leaving both in effect can be

reached.”). We also note that the local building ordinances include their own

enforcement mechanism for the public’s protection that are unaffected by any

limitation of CenterPoint’s liability in a private cause of action. See City of

Laredo, Tex., Code of Ordinances § 1-6 (governing general penalties and

continuing violations) (1985) (available at https://library.municode.com/TX/

laredo/codes/code_of_ordinances?nodeId=PTIICOOR_CH7BUBURE).

84 TEX. CONST. art. I, § 13.

85Trinity River Auth. v. URS Consultants, Inc.-Tex., 889 S.W.2d 259,

261 (Tex. 1994).

29

contravene the third guarantee, which precludes the Legislature from

“abrogat[ing] the right to assert a well-established common law cause of

action unless the reason for [the Legislature’s] action outweighs the

litigants’ constitutional right of redress.” 86 A litigant challenging

legislative action on open-courts grounds must show that (1) “the

litigant has a cognizable common law cause of action that is being

restricted” and (2) “the restriction is unreasonable or arbitrary when

balanced against the purpose and basis of the statute.” 87

Assuming the open-courts provision is implicated here,

enforcement of the limitation of liability in Section 14 does not infringe

the Ramirezes’ constitutional rights. The tariff does not withdraw all

remedies or avenues of redress 88 or make a remedy by due course of law

contingent on an impossible condition. 89 Section 14 of the tariff is

narrow, does not (and did not) preclude the Ramirezes from seeking a

remedy as against other parties for their indivisible injuries, and for the

reasons articulated above, is not unreasonable or arbitrary when

balanced against its purposes.

86Id. (quoting Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440,

448 (Tex. 1993)).

87 Id. at 262.

88 See Travelers Indem. Co. v. Fuller, 892 S.W.2d 848, 853 (Tex. 1995)

(recognizing that the open-courts provision generally “restricts the

legislature’s ability to withdraw all legal remedies from one having a cause of

action well established and well defined in the common law”).

89See Nelson v. Krusen, 678 S.W.2d 918, 921-23 (Tex. 1984) (discussing

circumstances under which impossible conditions preclude meaningful access

to the courts and holding that, as applied, an Insurance Code provision

establishing a two-year limitations period for medical maltreatment violated

the open-courts provision).

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III. Conclusion

CenterPoint is entitled to judgment as a matter of law because

(1) the limitation of liability in its filed and approved tariff is reasonable,

enforceable, and binding under the filed-rate doctrine and (2) the tariff

plainly bars the utility’s liability for ordinary negligence as alleged by

the plaintiffs in this case. We therefore reverse the court of appeals’

contrary judgment and render judgment for CenterPoint.

John P. Devine

Justice

OPINION DELIVERED: February 11, 2022

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