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Consumer Law
South Texas College of Law Houston
Steiner, Mark E.

Not in outline; new from powerpoints
Already incorporated into my outline
First hour:
                1. Debt insurance federal and state
                2. insurance
-one will not test on DTPA (consumer protection laws)
-will not get rest of test until an hour passes. 
-Rest will be cummulative. RCLA, arbitration, DTPA, overview. Couple of longer questions for an hour. Then some shorter ones. 6 10 minute questions. 
1/3 bar like essays
1/3 short answer
1/3 long answer
Midterm- two bar questions (tie in and dtpa)
Final- begins with two bar question. (Insurance and ??)
Consumer law according to examiners includes
Learn 4 templates
o              Standard Plain Vanilla DTPA
        o              Texas Debt Collection Act
        o              Texas Insurance Code
        o              Tie-in Statute/DTPA
Chapter 1:
Section 1: Introduction
1)        John Hill- Page 1- Economics of consumer cases usually were not profitable for attorneys to take. Common law remedies were inadequate. Winner now gets mandatory attorney’s fees. When originally started it was treble the damages. Now it is additional damages. The originators of DTPA were hoping businesses would be proactive in changing their deceptive practices. Affected consumers, and plaintiffs attorneys to bring these suits.  Defense attorneys are more likely to settle. 
a)       Policy-DTPA is designed to prevent fraud, deception and misrepresentation in the marketplace. 
2)       Defining Consumer ‘ 17.45
a)       consumer means an individual, partnership, corporation, this state or a subdivision or agency of this state who seeks or acquires by purchase or lease and goods or services except that the term does not include a business consumer that has assets of $25 million or more or that is owned or controlled by a corporation or entity with assets of $25 million or more.
b)       17.45- Consumer
i)         must seek or acquire
ii)       by purchase or lease AND
iii)      any goods or services
3)       DTPA Elements
a)       Π is consumer
b)       D violates acts under 17.50
c)       Δ acts were producing cause of consumer’s damages
a.       Examples
-Ex. is a fire alarm a good or service? Possibly a mixed question. It doesn’t matter because both a good or service can be brought under DTPA, but under warranty, it must be a good.
-if a question mentions a business having assets of a certain amount, mention the business consumer exception. Business consumers must have assets under $25 million to bring a cause of action under DTPA.
4)       17.50: DTPA Causes of Action
a)       Laundry list-false, misleading, or deceptive act or practice that is (a) specifically enumerated in statute, 17.47 (laundry list) and (b) relied on by a consumer to the consumer’s detriment
b)       breach of an express or implied warranty (COA on its own)
c)       any unconscionable action or course of action by any person (not a COA on its own) (Unconscionability is a sword here rather than a shield as in Contract law)
d)       violation of insurance Code sec 21.21 (now recodified) (no incentive to bring this because damages are either the same or less).
5)        Truth in Lending Act- TILA (15 USC ‘ 1601 et seq.)
a)       Requires clear disclosure of interest rates and other credit terms (Afinance charges@)
b)       But doesn’t regulate rates themselves
c)       Right of rescission (cooling off period) for certain transactions
d)       Thought was that consumers would know the cost they were getting into and the ability to go to another bank when you know the actual amount B gives consumer more power
e)       Regulation Z: Federal Reserve Board’s administrative regulations that implement TILA
f)        15 USC ‘ 1640 Civil Liability
i)         Actual Damages
ii)       Attorney’s fees
iii)      Statutory penalty
(1)     Twice the amount of the finance charge
(2)     25% of total amount of monthly payments shall not be less than 100 or more than 1000
(3)     credit transaction and not under open end credit plan that is secured by real property or a dwelling not less than 200 or greater than 2000
Statutory Penalty
–          (2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transactcion,
–          (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $100 nor greater than $1,000, or
–          (iii) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $200 or greater than $2,000;
6)       Koons Buick v. Nigh-
a)       FACTS: here P was awarded around $25k under (i) as opposed to $1k. 
b)       Does the limitation at the end of subsection (ii) apply to subsection (i)? Why does it matter?
i)         Clause (i) allows twice the actual damages, or Clause (i) allows twice the actual damages capped at $1000 
c)       ISSUE: When can you look beyond the language?
i)         When there’s Ambiguity
ii)       In Texas you can look at legislative history if ambiguous or not B but we would prefer the plain language rule
d)       ISSUE: Why use Aall available sources@ here?
i)         Because language violates common sense
e)       Issue: Is the correct interpretation of the language and whether it modifies section (ii) alone or section (i) as well? Financial institutions wanted to resolve this issue. 5 opinions. 
i)         Ginsberg majority- (ii) still covers (i) and the $1k cap applies to recoveries under clause (i). She says it is ambiguous, and this allows her to look at other things such as the legislative history. Statutory interpretation is a holistic endeavour. Assumes the legislature would not have made a large change without making some note of this. By adding clause (iii), Congress sought to provide increased recovery when a TILA violation occurs in the context of a loan secured by real property. 
(1)     Arguing by the absence of things. Scalia tears this a new one by referencing Sherlock Holmes and the dog that didn’t bark. I somehow miss this reference. 
ii)       Stevens Concurrence- finds it to be an absurd result. He believes Congress made a mistake. This is a scrivener’s error. Interpret the statute the way it was meant to be interpreted. Scalia shits on this too. He thinks if there is a scrivener’s error, then the scrivener should fix it (rewrite the law).
iii)      Kennedy Concurrence- text is ambiguous so we can look at extrinsic evidence. Kennedy probably holds the record for concurrences. 
iv)     Thomas concurrence- this is ambiguous so you must look to extrinsic sources even though he would normally adhere to the plain language rule
v)       Scalia Dissent- (ii) no longer covers (i). Wants to look at plain language, not legislative history. Legislative history comes from committee reports that are written by staffers. 
f)        Plain language rule(Texas does not follow the plain language rule)- determine meaning of statute by its plain meaning. Two exceptions:
i)         there is an ambiguity or
ii)       absurd results
Texas Gov’t Code §311.023
Statute Construction Aids. In construing a statute, whether or not the statute is considered ambiguous on its face, a court my aconsider among other matters the:
1.       object sought to be attained
2.       circumstances under which the statute was anacted;
3.       legislative history
4.       common law or former stutory… (remainder on SLIDE)
“Liberally Construed”
§17.44 Construction Application
                (a) This subchapter shall be liberally construed and applied …
–          Plaintiff is a consumer
–          Defendant committed proscribed acts under §17.50
–          Defendant’s acts were producing cause of consumer’s damages
Consumer Status:
–          Must “seek or acquire”
–          By “purchase or lease”
–          “Goods or services”
7)       PROBLEM-Person goes to fitness club, gets a free fitness test and busts that ass. Machine is not safe for beginners. Does she have a DTPA claim? 
a)       She is seeking, services, with capacity to purchase or lease. Raises a fact question as to whether P is a consumer.
Section 2: Proper Party Plaintiff-Seek or Acquire:
1)       Martin v. Lou Poliquin (no transfer of valuable consideration is required for consumer status)
a)       Procedure- must go en banc to overrule a case. Need a majority. One panel cannot overrule another panel. Must go en banc to overrule a panel. Prior case Bancroft is overruled. In Bancroft, no consumer status becaus

ely. Her son tried to slide under the closing door while playing. He was subsequently killed.
b)       Issue- was the son a consumer?
c)       HELD: Court said that he did acquire the garage door and the benefits they provided. 
i)         Court: Although her son did not enter into a contractual relationship with Defendants, he acquired the garage door opener and the benefits it provided. He was an “intended beneficiary.”
ii)       Also bought for his safety because automatic garage doors are harder to break into and he was often home alone
d)       Referred to Birchfield- baby blinded in hospital and parents purchased services but the baby acquired
e)       How does court define acquire?
i)         Purchased for his benefit, regular use, and installed in his home
ii)       Dictionary acquire = gain possession
iii)      Acquired = Intended Beneficiary, Establishes the standard of acquired in the definition of consumer. Acquire- defined by context, to gain possession. He is a user, it was for his benefit. 
f)        Was he a consumer? Yes, requires a purchase, not status as purchaser. 
g)       Direct contractual privity between an individual and the defendant is not a consideration in determining an individual’s status as a consumer under the DTPA. 
h)       Important facts from wellborn:
i)         He used it
ii)       Mom got it with his use in mind. 
i)         Notes: Is employee who used a defective tool on the job a DTPA consumer?
i)         Consumer is using it, but it had been for company’s benefit. Look at whether anyone else used the tool. Better that employee had been there longer than tool and had said that he needed that specific tool. 
ii)       Does tenant acquire the roof? That landlord paid for roof does not matter. 
4)       BAD CASE-Exxon v. Dunn: (car battery changed afterward a/c did not work never paid or fixed)
a)       Court says he lost in regards to AC because he did not pay for the AC work
b)       According to the court what is this case about?
i)         AC & Court was looking for consideration
c)       This case could have been decided on failure of proof not on failure of consideration (connection b/w battery and ac)
i)         Court got the law wrong on consideration but Exxon would still win according to Steiner on proof
5)       Notes: Birchfield v. Texarkana Memorial Hospital B
a)       FACTS: baby blinded by being given oxygen tent improperly. About whether a hospitalized child was a consumer in a hospital though the parents paid the bills. Cites Kennedy, the consumer does not have to be the one who pays for the goods or services. 
b)       Issue is whether infant was DTPA consumer. 
c)       Birchfield 2 prong test
i)         Π must have sought or acquired goods or services by purchase or lease and
ii)       The goods or services purchased or leased must form the basis of the complaint
6)       Problem 2: stopped and filling gas man checked her oil and did not shut hood which flew up in her face
a)       Station would say that she did not purchase anything
b)       Π said that the consideration was good will and she acquired
c)       If she used full service and paid then you know you have consideration
d)       Does not need DTPA can use plain negligence
Goods or Services:’ 17.45
1)       Goods means tangible chattels or real property purchased or leased for use
2)       Services means work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods.