Texas Deceptive Trade Practices Act: An Overview

The Texas Deceptive Trade Practices Act was designed to protect consumers from being cheated. Courts have followed the mandate of section 17.44 to liberally interpret the DTPA consistent with its stated purpose, which was 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.” Similar to what other states call Consumer law, the DTPA has been a powerful tool because it allows a consumer to recover their attorney’s fees.

What can be Brought Under the DTPA: Deceptive Practices and Misrepresentations

The DTPA penalizes a “laundry list” of 27 specific activities. A breach of warranty is also a DTPA violation. However, the DTPA does not create any new warranties or extend existing warranties.

Requirements for Bringing a Lawsuit Under the DTPA

1. Consumer

In order to use the DTPA, you need to be a statutorily defined “consumer”. A business consumer with assets of $25million or more (or controlled be an entity with assets of $25million or more) has no standing to bring suit under the DTPA.

2. In connection with a sale or lease

The DTPA protects consumers from “deceptive trade practices made in connection with the purchase or lease of any goods or services. The Texas Supreme Court characterized this scope as a limitation on the liability of parties along the distribution or production chain of a product and determined that the DTPA was not intended “to reach upstream manufacturers and suppliers when their misrepresentations are not communicated to the consumer” Nevertheless, the downstream seller found directly liable to the consumer may seek contribution if “the seller’s DTPA liability is caused or contributed to by the otherwise actionable misconduct of upstream manufacturers or suppliers”.

3. Causation

Producing cause is required in a DTPA action. Producing cause means that cause which, in a natural sequence, was a substantial factor in bringing about an injury, and without which the injury would not have occurred.

The DTPA also does not apply to:

1. A claim for bodily injury, death, or the infliction of mental anguish, except to the extent that mental anguish damages would otherwise be properly recoverable under the DTPA or the extend another statute permits recovery of DTPA damages;
2. A claim arising out of a written contract if the transaction at issue involves consideration by a consumer of more than $100,000, the consumer is represented by counsel of his own choice while negotiating the contract, and the contract does not involve the consumer’s residence;
3. A claim arising out of a transaction which involves consideration by the consumer of more than $500,000 and which does not involve the consumer’s residence.

Services

The DTPA does not apply to a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or a professional skill, unless the claim involves:

1. An express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion.
2. A failure to disclose information in order to fraudulently induce a consumer into a transaction.
3. An unconscionable action that cannot be characterized as advice, judgment, or opinion.
4. A breach of an express warranty that cannot be characterized as advice, judgment, or opinion.
5. An illegal promotion of an annuity contract subject to a salary reduction agreement.