Agricultural Producers and the Texas Deceptive Trade Practices Act

Monday, February 25, 2008
Contributed by: Audie Sciumbato

Consumer frustration can arise for many reasons, but it is probably most often caused by dissatisfaction with warranties or product quality. Almost everyone that participates in marketplace commerce will eventually have a bad experience with an unjust warranty or faulty product. The same is true for agricultural producers. Farmers, ranchers, and dairymen buying agricultural inputs are just as susceptible to unscrupulous behavior as an urbanite buying a television. Most consumers, agricultural or not, take these bad experiences in stride, writing them off as inevitable results of today's fast-paced commerce. It is important to remember, though, that a consumer owning a farm or ranch that purchases seed, fertilizer, cattle, or pesticides is still purchasing consumer goods and is therefore protected under Texas law.1

The Texas Deceptive Trade Practices Act (DTPA) was enacted in 1973 to protect consumers who purchase or lease goods or services.2 Before the DTPA was passed, aggrieved Texas consumers were limited to bringing suit for fraud, misrepresentation, or breach of contract. However, hiring an attorney to sue a wrongdoer often was not cost effective since awards were limited to the actual harm suffered. In those days, a consumer who filed suit could pay easily more in attorney's fees than he or she was awarded in damages after a successful day in court. The DTPA can change that scenario by providing attorney's fees to the consumer who wins a lawsuit and, in some cases, treble damages (three times the consumer's actual loss) and compensation for mental anguish.

The DTPA can be used after a seller takes some prohibited action, acts in an "unconscionable"3 way, or breaches a warranty.4 The so-called "laundry list" of violations is a variety of false, misleading, or deceptive acts and is set out in section 17.46 of the Texas Business and Commerce Code. To maintain a lawsuit under the DTPA, a consumer must show that he or she meets the statutory definition of "consumer, " that the defendant has committed an offense under the DTPA, and that the defendant's actions caused the consumer's damage.5 However, the DTPA has its limitations, and while all private consumers are protected, business consumers with assets totaling more than $25 million are specifically excluded. 6 That provision may eliminate some agricultural producers because of valuable equipment, land, and improvements.7 It should also be noted that the DTPA does not apply to services requiring professional judgment, such as opinions given by consultants.8 These limitations mean that some consumers may still be limited to tort law or other provisions of the Texas Business and Commerce Code when seeking satisfaction.

Remember, agricultural producers are consumers just like everyone else. The DTPA was enacted for the benefit of almost all consumers, and it can provide a powerful defense to loss through deception. Texas producers who feel like someone has taken advantage of them in a consumer transaction or that a product is not performing as promised should know that they are not without recourse and remember the protections provided by the DTPA.

1Hedley Feedlot, Inc. v. Weatherly Trust, 855 S.W.2d 826 (Tex. App.--Amarillo 1993, writ denied) (holding that a purchaser of cattle and feeding services from a feedlot was a "consumer" under the DTPA); Hennessey v. Skinner, 698 S.W.2d 382 (Tex. App.--Houston [14th Dist.] 1985, no writ) (holding that the purchase of cattle to be raised commercially is covered by the DTPA); Chavez v. Murrel's Welding Works, Inc. 585 S.W.2d 787, 789 (Tex. Civ. App.--San Antonio 1979, no writ) (stating that "consumer goods" includes goods purchased to be used for agricultural purposes).

2The Texas Deceptive Trade Practices Act may be found in Chapter 17 of the Texas Business and Commerce Code.

3"Unconscionable" actions are defined by Section 17.45 of the Texas Business and Commerce Code as actions or practices that unfairly take advantage of a consumer's lack of knowledge, ability, experience, or capacity.

4Willoughby v. Ciba-Geigy Corp., 601 S.W.2d 385 (Tex. Civ. App.--Beaumont 1979, writ ref'd n.r.e.) (finding an implied warranty of merchantability and fitness for use where herbicide was intended to control grass weeds while not harming corn crop).

5Texas Business and Commerce Code sec. 17.45(4) defines a consumer as one "who seeks or acquires, by purchase or lease, any goods or services..."

6Texas Business and Commerce Code sec. 17.45(10) defines a "business consumer" as an individual, partnership, or corporation who seeks or acquires by purchase or lease, any goods or services for commercial or business use.

7According to the National Agricultural Statistics Service's 2002 Census of Agriculture, the average land, building, and machinery asset value for Texas farms was approximately $479,000.

8Texas Business and Commerce Code sec. 17.49(c) exempts the DTPA from damage claims based on a professional service based on advice, judgment, opinion, or a similar professional skill.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.