Consumer Law Flashcards
DTPA
DTPA shall be liberally construed to protect consumers and generally may not be waived
Waiver
void unless: signed in writing; consumer not in disparate bargaining position; and represented by legal counsel
Consumer is Proper Party P
An entity who seeks or acquires by purchase or lease any goods or services except that the term does not include a business consumer that has assets of $25M+ or that is owned or controlled by entity with assets of $25+
• Truly free services not subject to DTPA but purchaser is broadly defined and consumer does not have to be the same 1 who pays
• Must do more than merely seek or acquire goods or services. Goods or services must be sought or acquired by “purchase or lease”
• Goods include real estate (excl $ and intangibles) / services include insurance (excl pure loan)
Entities Exempt from the DTPA
Business Consumers: included; if business consumers (not individual people) with assets of $25M+ are excluded; non-business consumers are incl regardless f assets
• D has burden to prove business consumer exception as affirmative defense
Statutory Exemptions 1995 Exemptions:
Professional Services: Essence of the professional service must be service (not profession) specific
• Lawyers, Dr, Acct, Arch, engineers exempt BUT exceptions to exemption: (1) express misrep of material fact; (2) fail to disclose info; (3) unconscionable act; or (4) breach of express warranty that cannot be characterized as advice, judgment, or opinion
Personal Injury Claims unless part of general damages section of DTPA (econ and emo damages for mental anguish arising out of personal injury recoverable) or in a tie-in provision
Large Transactions
• If over $100K then exemption; need a signed writing and consumer must be represented by an attorney (n/a to a residence)
• Transactions over $500K, DTPA n/a
Who can be sued? In connection with requirement
No privity required for DTPA but transactions must form the basis of the complaint and you may sue anyone who violates the act
“in connection with” requirement—Remote Parties
—Immediate parties” dealt with the consumer (always in connection w/) / “remote parties”—like manu (must be in connection w/consumer’s transaction. Did misrep directly reach the consumer? If yes, then in connection w/)
Claims under the Act
4 separate but cumulative claims with only 1 recovery: (1) use or employment by any person of a false, misleading, or deceptive act or practice specifically enumerated and relied on by consumer to their detriment; (2) breach of an express or implied warranty; (3) any unconscionable action or course of action by any person; or (4) use or employment by any person of an act or practice of Insurance Code
Laundry List: DTPA includes a list of more than 30 acts (general misreps; misrep about legal rights, and failure to disclose)
• Reliance required—by a consumer to their detriment
• No requirement of culpable mental state
• Any misrep is actionable unless it is a “mere” puff or opinion or a vague generalization
• PER n/a
Unconscionable
objective standard / grossly unfair / separate but cumulative, determined at the time of the transaction no definition
Breach of Warranty
Both an independent basis for a cause of action and vehicle to bring an otherwise existing claim
DTPA doesn’t create warranties; warranty must exist and be established outside the DTPA. Reach is actionable by a consumer through the DTPA. May be disclaimed.
Any warranty (express or implied) under UCC may form basis. No implied warranty against remote manu (not “in connection w/”)
Implied Warranty of Suitability in Commercial Leaseholds (may be waived) / Implied Warranty of Good and Workmanlike Performance in Service Ks (CAN’T WAIVE) / No Implied Warranty for Professional Service / Workmanlike may be waived but Habitability generally can’t be waived
Defenses to Breach of Warranty
Broad “as-is” clause / mediation or arbitration (either party can compel)
Pre-Suit notice required (unless filed as a counterclaim) must give 60 days before filing suit w/ amount of damages and description of what did wrong. Abatement until notice is given
Action under DTPA must be commenced within 2 years from when consumer knew or should have known of the act or practice. Date of injury is date from when should have known.
Remedies (Producing; General; Knowingly; Intentionally; Equity; Attorney Fees; Tie-in)
Producing Clause: lowest causation standard; NOT prox cause (‘substantial factor” in bringing about the injury)
“as is” may negate, no reliance—not a waiver of act
General Damages Standard: Economic Damages (all pecuniary interests)
Knowingly: Mental Anguish (higher standard of proof) and up to 3x’s economic damages
Intentionally: up to 3x’s mental anguish damages and econ damage—knowledge plus intent
IN AN APPROPRIATE CASE CONSUMER MAY ALSO RECOVER EQUITABLE AND INJUNCTIVE RELIEF
Attorney Fees: Award to prevailing consumer is mandatory, amount is discretionary. Award must be in a $ amount and an hourly basis
Ds’ Attny Fees: groundless or bad faith or harassment then D gets reasonable and necessary atty fees—hourly $ amount
Actual Damages: All damages recoverable at common law
Tie-In Statutes: If a DTPA is brought through a tie-in statutes, consumer recovers actual damages (up to 3x if knowingly)
Federal Debt Collections Act (FDCA) / Liability
FDCPA applies to someone collecting a consumer debt for another
Applies to attorneys who regularly collects debts
Liability: May be enforced through private cause of action (1 year SoL) or administratively
• Actual damages and statutory damages not to exceed $1K and attny fees (bad faith and harassment purpose)
FDCA Prohibited Comms w/Debtor
can’t call before 8am or 9pm
debt collector may not communicate with consumer if debt collector knows attorney reps consumer
once collector knows employer prohibits calls, can’t call at work
may not communicate w/anyone other consumer but may contact 3rd parties but only to get location info about the consumer
in initial comm or w/in 5 days must tell consumer he has 30 days to dispute debt—must stop all comms until debt is verified
No harassment or abuse / false or misleading reps/ unfair or unconscionable practices
State Debt Collection (TDCA) (defining debt collector; Prohibitions; Enforcement; Tie-in)
Debt Collector: Anyone (incl lawyer or creditor) collecting a consumer debt is subject to the state law
Prohibitions: Exclusive list—threats of arrest or violence, legal action, garnishment of wages, threat to take exempt property/using profanity, annoying phone calls, not disclosing caller’s name/attempting to collect unauthorized amounts/misleading names, misrep what will happen, any false representation or deceptive means
Enforcement: Actual damages and/or injunctive relief / attorney’s fees / minimum recovery: entitled to not less than $100/violation (generally no punitive)
A TIE-IN to DTPA
Tie-In Statutes
Another state statute that ties into the DTPA. Not insurance because DTPA itself brings in the insurance code.
If a DTPA claim is based on a tie-in statute then damage standard is actual damages and up to 3xs if knowingly
• 3 separate claims: (1) tie-in statute by itself; (2) DTPA statute by itself; (3) DTPA tie-in
Insurance
Misrep and Discrim: DTPA for insurance co
Scope: Includes all persons (not just consumers)
• Unfair methods of competition and deception — protects insurance company from anti-competitive practices
• Misreps and false advertising of policy Ks — protects misreps by agent or co
• Defamation — prohibits a co from defaming a competitor
• Deceptive name, word, symbol, device, or slogan — prohibits trading off another’s name
• Misrep of insurance police—terms or existence
