84R10171 TSR-F
By: Davis of Harris H.B. No. 2898
A BILL TO BE ENTITLED
AN ACT
relating to certain procedures, civil penalties, and remedies under
the Deceptive Trade Practices-Consumer Protection Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 17.45(9) and (13), Business & Commerce
Code, are amended to read as follows:
(9) "Knowingly" means actual awareness, at the time of
the act or practice complained of, of the falsity, deception, or
misleading nature [unfairness] of the act or practice giving rise
to the consumer's claim or, in an action brought under Subdivision
(2) of Subsection (a) of Section 17.50, actual awareness of the act,
practice, condition, defect, or failure constituting the breach of
warranty, but actual awareness may be inferred where objective
manifestations indicate that a person acted with actual awareness.
(13) "Intentionally" means actual awareness, at the
time of the act or practice complained of, of the falsity,
deception, or misleading nature [unfairness] of the act or practice
giving rise to the consumer's claim [,] or the condition, defect, or
failure constituting a breach of warranty giving rise to the
consumer's claim, coupled with the specific intent that the
consumer act in detrimental reliance on the act, practice,
condition, defect, or failure [falsity or deception or in
detrimental ignorance of the unfairness]. Intention may be
inferred from objective manifestations that indicate that the
person acted intentionally or from facts showing that a defendant
acted with flagrant disregard of prudent and fair business
practices to the extent that the defendant should be treated as
having acted intentionally.
SECTION 2. Sections 17.47(a), (b), (c), and (d), Business &
Commerce Code, are amended to read as follows:
(a) Whenever the consumer protection division has reason to
believe that any person is engaging in, has engaged in, or is about
to engage in any act or practice declared to be unlawful by this
subchapter, and that proceedings would be in the public interest,
the division may bring an action in the name of the state against
the person to restrain by temporary restraining order, temporary
injunction, or permanent injunction the use of such [method,]
act[,] or practice.
Nothing herein shall require the consumer protection
division to notify such person that court action is or may be under
consideration, provided[. Provided], however, the consumer
protection division shall, at least seven days prior to instituting
such court action, contact such person to inform him [in general] of
the alleged unlawful conduct. [Cessation of unlawful conduct after
such prior contact shall not render such court action moot under any
circumstances, and such injunctive relief shall lie even if such
person has ceased such unlawful conduct after such prior contact.]
Such prior contact shall not be required if, in the opinion of the
consumer protection division, there is good cause to believe that
such person would evade service of process if prior contact were
made or that such person would destroy relevant records if prior
contact were made, or that such an emergency exists that immediate
and irreparable injury, loss, or damage would occur as a result of
such delay in obtaining a temporary restraining order.
(b) An action brought under Subsection (a) of this section
which alleges a claim to relief under this section may be commenced
in the district court of the county in which the person against whom
it is brought resides or[,] has his principal place of business[,
has done business,] or in the district court of the county where the
transaction occurred, or, on the consent of the parties, in a
district court of Travis County. An action brought under
Subsection (a) is subject to the procedural and evidentiary rules
applicable to any other civil action filed in a district court. The
court may issue temporary restraining orders, temporary or
permanent injunctions to restrain and prevent violations of this
subchapter and such injunctive relief shall be issued without bond.
(c) In addition to the request for a temporary restraining
order[,] or permanent injunction in a proceeding brought under
Subsection (a) of this section, the consumer protection division
may request[, and the trier of fact may award,] a civil penalty to
be paid to the state. If the consumer protection division requests
a civil penalty, the trier of fact shall determine the number of
violations that the person committed, whether the person acted
knowingly or intentionally, and the amount of economic harm caused
by the act or practice that is the subject of the proceeding. The
trier of fact may then award a civil penalty to be paid to the state
in an amount of:
(1) not more than $20,000 per violation, not to exceed
a total of the lesser of $50,000 or the amount of economic harm
caused by the act or practice that is the subject of the proceeding,
unless the person acted intentionally, in which case the trier of
fact may award a civil penalty in an amount of not more than the
greater of $250,000 or the amount of economic harm caused by the act
or practice that is the subject of the proceeding; and
(2) if the act or practice that is the subject of the
proceeding was calculated to acquire or deprive money or other
property from a consumer who was 65 years of age or older when the
act or practice occurred, an additional amount of not more than
$50,000 [$250,000].
(d) The court may make such additional orders or judgments
as are necessary to compensate identified [identifiable] persons
for actual damages or to restore money or property, real or
personal, that was [which may have been] acquired by means of any
unlawful act or practice. An award under this subsection [Damages]
may not include any damages incurred, or money or property
acquired, more than [beyond a point] two years prior to the
institution of the action by the consumer protection division.
Orders of the court may also include the appointment of a receiver
or a sequestration of assets if a person who has been ordered by a
court to make restitution, including by returning money or
property, under this section has failed to comply with the court's
order [do so] within three months after the order [to make
restitution] has become final and nonappealable.
SECTION 3. Section 17.60, Business & Commerce Code, is
amended to read as follows:
Sec. 17.60. REPORTS AND EXAMINATIONS. (a) Whenever the
consumer protection division has reason to believe that a person is
engaging in, has engaged in, or is about to engage in any act or
practice declared to be unlawful by this subchapter, or when it
reasonably believes it to be in the public interest to conduct an
investigation to ascertain whether any person is engaging in, has
engaged in, or is about to engage in any such act or practice, an
authorized member of the division may:
(1) serve a directive that states the alleged
violation and:
(A) requires [require] the person to file with
the division, on the prescribed forms, a statement or report in
writing, under oath or otherwise, as to all the facts and
circumstances concerning the alleged violation [and such other data
and information as the consumer protection division deems
necessary];
(B) requires the person to submit to an
examination [(2) examine] under oath about the [any person in
connection with this] alleged violation; or
(C) requires the person to produce for inspection
[(3) examine any] merchandise or samples [sample] of merchandise
relating to the alleged violation [deemed necessary and proper];
and
(2) [(4)] pursuant to an order of the appropriate
court, impound any sample of merchandise that is produced in
accordance with this subchapter and retain it in the possession of
the division until the completion of all proceedings in connection
with which the merchandise is produced.
(b) Unless authorized by a court order, the consumer
protection division may not require a person to comply with a
directive for action under Subsection (a)(1) before the 31st day
after the date the person is served the directive.
(c) Before the 31st day after the date a person is served a
directive for action under Subsection (a)(1), the person may file a
petition, stating good cause, to extend the period in which the
person must comply with the directive or to modify or set aside the
directive. The petition may be filed in the district court in the
county where the person resides, if the person is an individual, or
where the person's principal place of business in this state is
located, if the person is not an individual, or a district court of
Travis County. The period in which a person may file the petition
may be extended by a court order or by a written agreement between
the person and the consumer protection division.
(d) An action brought under Subsection (c) to modify or set
aside a directive is subject to the procedural and evidentiary
rules applicable to any other civil action filed in a district
court.
(e) A person who files a petition as provided by Subsection
(c) shall comply with the directive as ordered by the court.
SECTION 4. Section 17.61, Business & Commerce Code, is
amended by amending Subsections (b), (c), and (g) and adding
Subsection (g-1) to read as follows:
(b) Each demand shall:
(1) state the statute and section under which the
alleged violation is being investigated, and the [general] subject
matter of the investigation;
(2) describe the class or classes of documentary
material to be produced with reasonable specificity so as to fairly
indicate the material demanded;
(3) prescribe a return date not later than the 30th day
after the demand has been served within which the documentary
material is to be produced, unless an extended return date is
authorized by a court order; and
(4) identify the persons authorized by the consumer
protection division to whom the documentary material is to be made
available for inspection and copying.
(c) A civil investigative demand may not contain any [a]
requirement, including a requirement for the [or] disclosure of
documentary material, which would not be discoverable under the
Texas Rules of Civil Procedure in a civil action brought by the
consumer protection division under this subchapter.
(g) At any time before the return date specified in the
demand, or within 30 [20] days after the demand has been served,
whichever period is longer [shorter], a petition to extend the
return date for, or to modify or set aside any aspect of the demand,
stating good cause, may be filed in the district court in the county
where the party who is served with the demand resides [parties
reside], or, on consent of the parties, a district court of Travis
County. The period in which a person may file the petition may be
extended by a court order or by a written agreement between the
person and the consumer protection division. A person who files a
petition under this subsection shall comply with the demand as
ordered by the court.
(g-1) A petition to modify or set aside any aspect of the
demand is subject to the procedural and evidentiary rules
applicable to any other civil action filed in a district court.
SECTION 5. (a) The changes in law made by this Act to
Sections 17.45 and 17.47, Business & Commerce Code, apply only to a
violation of the Deceptive Trade Practices-Consumer Protection Act
that occurs on or after the effective date of this Act. A violation
of the Deceptive Trade Practices-Consumer Protection Act that
occurs before the effective date of this Act is governed by the law
in effect on the date the violation occurred, and the former law is
continued in effect for that purpose. For purposes of this
subsection, a violation occurs before the effective date of this
Act if any element of the violation occurs before that date.
(b) The changes in law made by this Act to Sections 17.60 and
17.61, Business & Commerce Code, apply only to a directive served
under Section 17.60, Business & Commerce Code, and a civil
investigative demand served under Section 17.61, Business &
Commerce Code, on or after the effective date of this Act. A
directive or civil demand served before the effective date of this
Act is governed by the law in effect on the date the directive or
demand was served, and the former law is continued in effect for
that purpose.
SECTION 6. This Act takes effect September 1, 2015.