First enacted in 1973 and last amended in 1995, the Texas Deceptive Trade Practices – Consumer Protection Act (DTPA) was created to “protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection.” Tex. Bus. & Com. Code Ann. §§ 17.44(a). While the amendments have not changed since 1995, interpretation of the act continues to evolve.
Consumer Status
Consumer status is one of the key issues being challenged and refined in the court system. A plaintiff must quality as a consumer according to the statutes outlined in the DTPA, which means that the party “seeks or acquires, by purchase or lease, goods or services and those goods or services must form the basis of the complaint.” See id. § 17.45(4).
Several court cases have examined and further defined whether a plaintiff qualifies as a consumer. In one case, a company requested a financial review without actually making a purchase. Upon appeal, the Texas Supreme Court affirmed that the transaction itself is central to determining consumer status; the consumer status was defined not by an actual purchase but by the plaintiff’s relationship to the business transaction. See Arthur Andersen & Co., v. Perry Equipment Corp., 945 S.W.2d 812 (Tex. 1997). In Kennedy v. Sale, the Texas Supreme Court determined that “as long as the consumer is the beneficiary of goods or services,” the plaintiff does not actually have to purchase or lease the goods or services. Consumer status depends on whether or not “the purchased goods or services are an objective of the transaction or merely incidental to it.” Kennedy v. Sale, 689 S.W.2d 890 (Tex. 1985) (citing Amstadt v. United States Brass Corp., 919 S.W.2d 644, 650 (Tex. 1996)).
Goods and Services
Another consideration of the DTPA is whether or not a transaction actually includes goods or services. In the case of Sells v. Six Flags Over Texas, Inc., for example, when patrons of the park alleged injury from a particular ride at the park and sought protection via the DTPA, counsel for Six Flags argued that the plaintiffs were not actually consumers because they did not “seek or acquire, by purchase or lease, any goods or services.” Admission tickets according to Six Flags were a form of “revocable license.” The court disagreed, stating that the plaintiffs were consumers, a ruling which required the company to follow through on promises it made to its consumers about the safety of the rides within the park. By purchasing admission tickets, the plaintiffs qualified as consumers and deserved consumer protection under the DTPA. See Sells v. Six Flags over Texas, Inc., 1997 WL 527320, at *4-5 (N.D. Tex. Aug. 14, 1997); See also Galveston County Fair & Rodeo, Inc. v. Kauffman, 910 S.W.2d 129, 137 (Tex. App.--El Paso 1995, writ denied)). See also Bussee v. Pacific Cattle Feeding Fund # 1, Ltd., 896 S.W.2d 807, 813 (Tex.App.--Texarkana 1995, writ denied).
Deception
Also important to DTPA claims is the interaction between the plaintiff and defendant. In order to qualify as a consumer, the plaintiff must prove that the defendant deliberately acted in a “false, misleading, or deceptive” way, directly leading to the plaintiff’s losses. The plaintiff must also prove that those losses warrant relief from the defendant. See Amstadt v. United States Brass Corp., 919 S.W.2d 644, 650 (Tex. 1996).
Contractual Obligations
Because the DTPA defines consumer status based on the party’s relationship to the transaction, privity of contract, the ability for a third party to enforce or benefit from a contract, is not a requirement to establish a plaintiff as a DTPA consumer.
In another case, a woman brought her car to a car dealer to assess its trade-in value. Without an agreement or contract, the dealer sold the car to a third party, and the original owner of the car sued. The Austin Court of Appeals determined that she qualified as a DTPA consumer because of her expectation to buy a new car based on the trade-in value of the car she brought in. See Apple Imports v. Koole, 945 S.W.2d at 898.
Cause of Action
Understanding how and when a plaintiff qualifies as a consumer under the DTPA is only one aspect of DTPA claims. Also relevant is the cause of action, defined in separate sections of Chapter 17. Laundry list claims, for example, define what exactly qualifies as “false, misleading, or deceptive acts.” Defined in Section 17.46(b), the laundry list ranges from unconscionable actions to insurance code violations. Unlike many legal situations, the plaintiff is not required to prove the defendant’s ill intent or even the plaintiff’s reliance on the alleged deceptive or misrepresented information. See Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 479 (Tex. 1995).
Section 17.46(b)(23) focuses on the failure to disclose information as a basis for DTPA claims. According to that section, the plaintiff must prove the following: the defendant did not disclose information relevant to services provided the plaintiff; the defendant knew of the relevant information while working with the plaintiff; the defendant did not disclose information so that the plaintiff would agree to the transaction; the plaintiff would not have agreed to the transaction if the information had been fully disclosed.
In the case of Gillespie v. Century Products, Co., the plaintiff claimed that their infant had been killed in a car accident because the maker of the car seat had not provided adequate warnings about the potential hazards of the seat. However, because the parents had not followed the instructions that were provided, the court could not definitively determine whether the warnings were inadequate and the direct cause of the child’s death. See Gillespie v. Century Products, Co., 936 S.W.2d at 52; See also Union Pump Co. v. Allbritton, 898 S.W.2d 773, 775 (Tex. 1995).
Another cause of action under DTPA is the use of false, misleading, or deceptive acts or practices, usually confined only to parties in a contract. (Section 17.46(b)(12)). In the case of First American Title Insurance Co. of Texas v. Willard, a homeowner sued First American for failing to inform the buyer of a gas line easement across the property. At trial, the title company acknowledged its mistake. However, because the contract was between the lender and the title company instead of the buyer and the title company, the court ruled that the title insurance company did not owe damages to the buyer. See First American Title Insurance Co. of Texas v. Willard, 949 S.W.2d 342 (Tex. App.--Tyler 1997, writ denied).
Exceptions
While the cause of action in the title insurance case focused on contractual agreements, a breach of contract is not in itself a cause of action because it is may not be part of the DTPA. Several court cases affirm that a contractual violation does not fall under DTPA protection unless the breach of contract is tortious. See Stewart Title Guaranty Co. v. Aiello, 941 S.W.2d 68 (Tex. 1997); See Crawford v. Ace Sign, Inc., 917 S.W.2d 12 (Tex. 1996).
Another exception to DTPA protection is medical claims. Because they are covered under the Medical Liability and Insurance Improvement Act (MLIIA), medical claims are not included in Chapter 17: “Notwithstanding any other law, no provisions of Sections 17.41-17.63, Business & Commerce Code [the DTPA], shall apply to physicians or health care providers as defined in Section 1.03(3) of this Act, with respect to claims for damages for personal injury or death resulting, or alleged to have resulted, from negligence on the part of any physician or health care provider.” In the case of Drury v. Baptist Memorial Hospital System, for example, a plaintiff received blood during a transfusion that she had not banked. Her DTPA claims were denied, however, because of the MLIIA. See Drury v. Baptist Memorial Hospital System, 933 S.W.2d 668 (Tex. App.--San Antonio 1996, writ denied).
Timeframe
When filing a claim under the DTPA, the plaintiff must provide written notice to a defendant at least sixty days in advance, according to section 17.505. Similarly, a defendant has sixty days to make a settlement offer after receiving notice of a DTPA claim as outlined in section 17.505(c). An additional time constraint for DPTA claims is a two-year statute of limitations, which begins when “the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice.” DTPA § 17.565.
The goal of the DTPA is to help ensure that consumers are not taken advantage of. However, the Texas Deceptive Trade Practices Act is a complex statute that requires competent legal representation. It is prudent to seek the advice of a business or consumer lawyer should you need to defend or prosecute a DTPA claim.
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