The House Committee on Business and Industry heard invited testimony concerning Interim Charge #2. This report is limited to the discussion regarding an overview of the Deceptive Trade Practices Act.
This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. This report is not a verbatim transcript of the hearing; it is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
Opening Remarks
- Next meeting 4-4-18 at 10:00 am
Review all existing law concerning consumer rights and protections, including but not limited to statutes that address deceptive practices, landlord/tenant agreements, and homeowner/contractor disputes. Determine whether the provisions offer adequate guidance and protections in disaster and recovery situations – Overview of Deceptive Trade Practices Act (DTPA).
George Christian, Texas Civil Justice League
- Most reforms made in the 85th Session brought DTPA back to the original intent
- Crafted to allow consumers to recoup costs associated with legal issues and disputes
- Applies to both individuals and businesses
- DTPA is now 45 years old
- Should consider updating DTPA to include online areas which were not originally contemplated in DTPA
- Should consider the effect of arbitration on DTPA
- Oliveira- requested more areas that DTPA should cover in today’s commerce
- Not sure who is selling a product online
- Remote servicing of computers and software
- Shine- how much coverage does DTPA have in the financial services area
- Understand that it doesn’t have much protection in the financial services
Joe Cruz, Texas Trial Lawyers Association
- Does not believe that financial services would be handled by DTPA
- Discussed personal experience working on the DTPA
- Gave a brief history of DTPA
- Modifications that have been made to the statute were intended to reduce the effectiveness of the Act
- Provision of the DTPA 17.46 B27 which makes taking advantage of people after a disaster an unlawful deceptive trade practice
- Should strengthen that aspect of the statute
- Should insert “goods and services” in place of “food, fuel, etc.”
- Oliveira- what areas are you seeing a gap in terms of disasters?
- No specific answer at present
- Will provide that information to the committee
- Suggest reviewing exemptions related to disaster victims
- Collier- you said DTPA is not as effective as it used to be, can you provide additional information?
- The Act is less effective now than when it was passed
- All of the amendments added have served to limit the effectiveness
- Has been made less effective for private consumers
- Will provide additional information
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Lee Parsley, Texans for Lawsuit Reform
- Discussed the trend of using DTPA for business to business litigation in 1990s
- Amendments were made to try to bring it back to consumer protection
- Should consider how attorneys act under DTPA
- Specifically, regarding fee split
- Encourages lawyers to solicit litigation
- Collier- discussed recovery of attorney’s fees, have there been that many instances of issues with solicitation based on fees?
- Many times, it is easy for an attorney unwittingly could fall into this, only a need to make clearer in the statute
- Oliveira- discussed an example of the raised issue related to fee splitting
- Clarification needed in the statute regarding fee structures on DTPA
Jim Davis, Office of the Attorney General (AG)
- Allowed to investigate issues or file lawsuit
- If in the lawsuit, AGs office can seek injunction, has power of restitution, and power to seek civil penalty
- Oliveira- where to the funds you collect go?
- All civil penalties collected go into a fund for the indigent
- AG does consider many factors before and after DTPA lawsuits
- Consider impact of lawsuit on public interests
- Frequently review policies to ensure effectiveness
- Texas is a leader in issues of consumer protections
- Oliveira- what is going on in the opioid issue?
- Do not have information on compounds
- There are investigations going on into pharmaceutical companies relating to misleading how addictive opioids are
- Relating to Harvey, complaints were addressed as fast as possible relating to exorbitant pricing
- Have filed lawsuits against the most egregious conduct
- Considering issues other than fuel sales, like hotel rates, water and food
- Some complaints are difficult to determine “necessity”
- Need to balance cost input increases for companies related to disasters or emergencies
- Mentioned that there are other acts aside from DTPA which are intended to protect consumers