One of the issues that arises in litigation involving the Texas Deceptive Trade Practices-Consumer Protection Act (“DTPA”) is what is the statute of limitations for other statutory claims that allow a violation of a particular statute (for example, see Texas Finance Code Sec. 392.404(a)) to be a deceptive trade practice and allowable as a DTPA claim also. These types of claims are tie-in claims that allow a plaintiff to use the DTPA and its lower causation standard to file a lawsuit and recover damages. One of the questions that arise initially is whether the two-year statute of limitations of the DTPA applies or does another statute of limitations apply based on the underlying nature of the other statutory claim? Fortunately, the United States District Court in Vine v. PLS Fin. Servs., 2018 U.S. Dist, LEXIS 7019 (W.D. Tex. 2018) provides a good framework for this issue and an excellent analysis of what it means to be a “consumer” under the DTPA.
The operative facts in Vine occurred in 2012 and the lawsuit was filed in 2015. The loan brokers were given post-dated checks and allegedly assured the Plaintiffs that the checks would not be cashed and took possession of the checks solely to verify financial information. Needless to say, the loan brokers cashed the checks, the checks bounced and then the loan brokers turned the Plaintiffs over to the District Attorney’s office for prosecution. Not surprising, Plaintiffs filed a lawsuit alleging violations of the DTPA, fraud, violations of Sections 392 and 393 of the Texas Finance Code and malicious prosecution. Defendant Loan Brokers filed a motion for summary judgment on the claims brought by borrowers who defaulted on the payday loans alleging among other things that the claims were barred by the the two-year statute of limitations under the DTPA.
The District Court granted summary judgment on the specific statutory DTPA claims because they were time-barred. However, the claims under the Texas Finance Code that tied-in to the DTPA required a different analysis. As a general rule, when a statutory claim arises under a Texas statute and then the express language of that statute, such as the Finance Code, states that a violation of the Texas Finance Code is also a violation of the DTPA, a party must analyze whether the two-year DTPA limitation period applies. In Vine, the Court looked at the claims under Texas Finance Code Section 392 and determined that the two-year statute of limitations applied because there was no limitations period specifically stated in Texas Finance Code Section 392.The Court, following precedent from other courts, held that when statutes that do not have a specific limitations are tied into the DTPA, the two-year limitations period is the applicable default limitations. Vine v. PLS Fin. Servs., 2018 U.S. Dist, LEXIS 7019 *25-26 (W.D. Tex. 2018).
However, the claims under Texas Finance Code Section 393 were not barred because even though they were plead as a tie-in to the DTPA, Texas Finance Code Section 393 had its own specific four-year limitations period. When a specific statute with its own limitations is enacted, it controls over the general statute of limitations on the same subject. Vine v. PLS Fin. Servs., 2018 U.S. Dist, LEXIS 7019 *26-27 (W.D. Tex. 2018). As a result, Plaintiff’s claims under Texas Finance Code Section 393 were not barred because the limitations period in Texas Finance Code Section 393 was passed legislatively after the enactment of the DTPA. Therefore, Courts must assume that “Congress passed each subsequent law with full knowledge of the existing legal landscape.” Vine v. PLS Fin. Servs., 2018 U.S. Dist, LEXIS 7019 (W.D. Tex. 2018), citing, In re Nw. Airlines Corp., 483 F.3d 160, 169 (2d Cir. 2007) (citing Miles v. Apex Marine Corp., 498 U.S. 19, 32, 111 S. Ct. 317, 112 L. Ed. 2d 275 (1990)). Accordingly, the Court denied the motion for summary judgment on the Texas Finance Code Section 393 claim based on alleged limitations.
Tie-in claims under the DTPA are not utilized as much as they should be in my opinion. However, when they are used, both parties should look at the specific limitations period applicable to other statutory claims brought through the DTPA. As a side note, the Vine case should also be reviewed for Judge Martinez’ excellent analysis of incidental services and standing under the DTPA to determine if a person is a consumer and can bring a DTPA claim. The opinions in this blog are solely the author’s and all comments, replies or suggestions can be sent to email@example.com.