Major changes were made in the Deceptive Trade Practices-Consumer Protection Act, (commonly called the DTPA) in the last session of the legislature. These changes go into effect for any cause of action based on the DTPA that accrues after September 1, 1995, and any lawsuit filed under the DTPA after September 1, 1996, regardless of when the cause of action accrued. This article will discuss some of those changes.
Elimination of Most Damages. The biggest change in the DTPA was the major restriction of the kinds of damages for which a plaintiff may recover. Prior law allowed a successful DTPA plaintiff to recover any type of actual damage available at common law. In other words, DTPA claims were treated like any other claim as far as types of recoverable damages were concerned.
Now, however, most regular damages have been eliminated. Section 17.50(b)(1) limits the DTPA plaintiff to economic damages only. The definition of "economic damages" specifically does not include damages for physical pain and mental anguish, loss of consortium, disfigurement, physical impairment, and loss of companionship or loss of society. Mental anguish damages are eliminated unless the plaintiff proves that the defendant's conduct was committed "knowingly," which is defined as actual awareness at the time of the transaction of the falsity or of the unfair deceptive nature of the act or practice.
Trebling. The former DTPA allowed the jury to treble all damages if the defendant's conduct was committed knowingly. Three changes to the former rules were made.
First, there is no longer any automatic trebling of the first $1,000 of damages.
Second, if the plaintiff proves the defendant's conduct was committed knowingly, then the jury can treble the economic damages, but not mental anguish damages, if it so chooses. This trebling is not automatic. The jury can award not more than three times the amount of economic damages. They do not have to award anything.
Third, if the plaintiff proves the defendant's conduct was committed "intentionally," then the jury may award not more than three times the amount of damages for mental anguish and economic damages. "Intentionally" means knowing conduct plus a specific intent that the consumer relies on the deception to the consumer's detriment.
Defenses: No Detrimental Reliance. Many specific types of deceptive trade practices are listed in Section 17.46, the so-called "laundry list" of the DTPA. Before, if a plaintiff proved that a defendant violated one of the sections on the "list" (e.g., selling used goods as new ones), the plaintiff won. Now, the plaintiff must also prove that there was reliance on the deception to the plaintiff's detriment before there can be recovery.
Defenses: Tender of Settlement. Under the prior act, the defendant had sixty days after receiving a DTPA Notice Letter to make a bona fide settlement offer. If they made such an offer, the defendant could limit the plaintiff's recovery if the offer was substantially the same as the award of the jury.
Under the new Act, a defendant gets three chances to limit a plaintiff's recovery. The defendant still has the sixty days after the Notice Letter to make an Offer of Settlement, but the defendant also has a new ninety-day window beginning on the date defendant's answer is filed, unless mediation is compelled. And any party may now compel mediation by filing a motion to compel mediation not later than the 90th day after the date of service. If there is mediation, the defendant has a twenty-day window after mediation to make the Offer of Settlement. If the judge finds that the Offer of Settlement is substantially the same or greater than the damages found by the jury, the plaintiff gets the lesser of the amount of the offer or the damages found by the jury and the plaintiff's attorney's fees are recoverable only for fees incurred as of the date of the offer.
Defenses: Transactions not covered. First, businesses with more than $25,000,000 in assets may not bring a DTPA action.
Second, the DTPA does not apply to transactions involving more than $100,000 if the consumer is represented by a lawyer not provided or suggested by the defendant and the transaction does not involve the consumer's residence.
Third, the DTPA does not apply to transactions over $500,000, whether the consumer has a lawyer or not, unless the transaction involves the consumer's residence.
Fourth, claims arising from the rendering of professional services are exempted. However, the exemption does not apply to ( a) express misrepresentations of a material fact, (b) breaches of express warranties, or (c) an unconscionable course of action that cannot be characterized as advice, judgment or opinion. The exemption also does not apply to "the failure to disclose information concerning goods or services that was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed."
Waivers. Section 17.42 on Waivers was modified. Waiving the DTPA is possible, but difficult. The waiver must be (1) in writing, (2) signed by the consumer, (3) who is not in "a significantly disparate bargaining position, and (4) who is represented by an attorney not selected or suggested by the defendant. Requirements as to type, size and wording of the waiver are also set forth.
Written by Donald Ray Burger, Attorney at Law
Last Revised: May 12, 1996