Court Opinion

ID: 9683381
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:27:47.034919+00
Date Added: 2024-06-11T18:17:47.483417
License: Public Domain

AKIN, Justice,
dissenting.
I cannot agree that the Deceptive Trade Practices Act, Tex.Bus. & Comm.Code Ann., §§ 17.41 to 17.63 (Vernon Supp.1977) was intended to apply to an isolated transaction where the seller was not engaged in the business of selling the goods in question. Instead, the Deceptive Trade Practices Act, in my opinion, applies only to an individual or business organization which, in the ordinary course of business, sells or leases goods or services to consumers. Accordingly, I must respectfully dissent.
The majority opinion relies primarily on the broad language of § 17.46(a) which makes unlawful “[fjalse, misleading, or deceptive acts or practices in the conduct of any trade or commerce.” To support their conclusion that the act applies to sellers who are not in the business of selling, they point to § 17.45(6) which defines “trade” and “commerce” broadly so as to include an isolated sale between individuals, neither of whom are engaged in the business of buying and selling goods or services. The majority construes properly the crucial § 17.-46(c) of the act specifically pertaining to the legislative intent as to what constitutes false, misleading and deceptive acts under § 17.46(a) but refuses to apply it. Indeed, the majority’s decision renders meaningless the requirement that we must look to § 17.46(c) which states:
It is the intent of the legislature that in construing Subsection (a) of the section . the courts to the extent possible will be guided by Subsection (b) of this section and the interpretations given by the Federal Trade Commissions and the federal courts to section 5(a)(1) of the Federal Trade Commission Act [15 U.S. C.A. 45(a)(1).] [Emphasis added]
As I read this language, false, misleading and deceptive acts do not come within the ambit of § 17.46(a) unless they come within § 17.46(b) and unless such acts have been held to be unfair and deceptive acts under § 5(a)(1) of the Federal Trade Commission Act. I cannot accept the majority’s conclusion that the fact situation in this case falls within § 17.46(a) because the terms “trade” and “commerce” in § 17.45(6) are broadly defined while those terms as used in the Federal Trade Commission Act are to bring the federal act within the Interstate Commerce Clause. The majority then erroneously concludes that since the definition of “trade” and “commerce” is used differently in the federal act, the legislature had no intent to limit the scope of our act to federal decisions determining what deceptive acts are unlawful under § 5(a)(1) of the federal act.
Neither can I agree that the specific acts in § 17.46(b) are merely “illustrative exam-*373pies of ‘false, misleading or deceptive practices’.” Instead, we should look first to § 17.46(b) and then to the federal decisions. Section 17.46(b) enumerates twenty specific false, misleading or deceptive acts, some of which require scienter. Since the factual situation in our case does not fall within the ambit of any specific subdivision of § 17.-46(b), we should, according to the legislative mandate, look to the interpretation given to § 5(a)(1) of the Federal Trade Commission Act, by the federal courts to determine what acts are deceptive trade practices under § 17.46(a).
Section 5(a)(1) is set forth in 15 U.S.C.A. § 45(a)(1) (1964) as follows:
Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful. [Emphasis added]
The purpose of the federal act prohibiting deceptive trade practices has been held to be the protection of the public rather than the punishment of the wrongdoer. Federal Trade Commission v. Cinderella Career & Finishing School, Inc., 131 U.S.App.D.C. 331, 404 F.2d 1308, 1313 (1968); Regina Corporation v. Federal Trade Commission, 322 F.2d 765, 768 (3rd Cir. 1963); Gimbel Bros., Inc. v. Federal Trade Commission, 116 F.2d 578, 579 (2nd Cir. 1941); Progress Tailoring Co. v. Federal Trade Commission, 153 F.2d 103,105 (7th Cir. 1946). Thus, the United States Supreme Court has held that § 5(a)(1) of the Federal Deceptive Trade Practices Act does not provide a remedy to private persons for private wrongs and that the “interest of the public” is not satisfied by a showing that purchasers have been deceived. Federal Trade Commission v. Klesner, 280 U.S. 19, 25-26, 50 S.Ct. 1, 3-4, 74 L.Ed. 138, 141-42 (1929). The Klesner court further held that the public interest must be specific and substantial to justify a complaint under § 5(a)(1) and that no private suit could be brought to stop the unfair conduct because the loss to individuals is too small to warrant such an action. Id. at 25-27, 50 S.Ct. at 3.
In addition to the requirement of a substantial public interest as a condition precedent to the applicability of § 5(a)(1) of the Federal Trade Commission Act, federal courts have also limited application of the act to unfair acts of traders in the affected commerce. Thus,«where defendants were not engaged in any way in the manufacture, sale, or distribution of cooking utensils of any sort but instead were solely engaged in the sale and distribution of pamphlets, the Third Circuit Court of Appeals held that § 5(a)(1) was limited to acts or practices in the particular business affected by the unfair trade offenses. Scientific Mfg. Co. v. Federal Trade Commission, 124 F.2d 640 (3rd Cir. 1941). That court concluded, therefore, that the Federal Trade Commission could not enjoin a defendant from disseminating false and misleading information concerning cooking utensils since the defendants were not interested in the cooking utensil business. The rationale of that case is that a person must be engaged in the business of selling the particular goods or services before the act can be applicable.
Since § 17.46(a) of our act is almost identical with respect to deceptive trade practices as that in § 5(a)(1) of the federal act, and, since the legislature in § 17.46(c) has explicitly directed Texas courts to be governed by federal decisions construing § 5(a)(1) of the federal act, I would hold that § 17.46(a) does not apply where the transaction, as here, is a sale by a seller, who is not engaged in the ordinary course of the business of selling that particular product to the public, but rather is an isolated sale between individuals. In my view, no public interest of the people of this state will be served by making a person who sells secondhand goods previously purchased for his own use liable for treble damages for an innocent misrepresentation. I see no logical reason to treat a one-time seller the same as those who are in the business of selling goods or services to the public, particularly with respect to treble damages and attorney’s fees. I do not, however, see the need for a legislative amendment to relieve the harshness of the majority’s holding since the legislature intended for state *374courts to follow federal decisions interpreting the Federal Trade Commission Act which limits the application of the act to situations where there is a substantial public interest involved. Apparently, since our state act gives an individual a private right of action for deceptive trade practices where the federal act does not, the legislature intended, by the grant of this private remedy, to further implement the act’s enforcement for the benefit of the public, similar to the Federal Anti-Trust Act. Certainly, applying the act here, as the majority would do, in no way effectuates the public interest.
The Supreme Court of Washington in a well-reasoned opinion, Lightfoot v. MacDonald, 86 Wash.2d 331, 544 P.2d 88 (1976), held that the purpose of the similarly worded Washington Consumer Protection Act was to protect the public from practices injurious to consumers and was not intended to provide an additional remedy for private wrongs which do not affect the public generally. Id. at 89. In reaching this conclusion, that court relied on an identical provision in their statute to our § 17.46(c) and, accordingly, looked to federal decisions interpreting § 5(aXl) of the Federal Trade Commissions Act to determine whether the deceptive act was within the ambit of their statute. Thus, a breach of contract affecting only the parties to the contract whether that breach results from negligence or intent, is not an act affecting the public interest. In accord with the Supreme Court of Washington, I would hold that the Texas Consumer Protection Act is likewise limited to those sellers who are engaged in the business of selling goods and services to the public and does not extend to a seller not so engaged such as the defendant here.
Finally, it has long been held in this state that it is the function of courts to determine the intent of the legislature from the circumstances of its enactment and that intent will prevail even when it apparently seems to conflict with the literal meaning. Smith v. Smith, 519 S.W.2d 152, 154 (Tex.Civ.App.—Dallas 1975, writ ref’d) (per Guit-tard, C. J.). In this well-reasoned opinion, our Chief Justice, after reviewing cases so holding since 1846, stated:
In each of the cited examples, broad statutory language, if interpreted literally, would have covered the particular facts of the case, but the court looked beyond the literal meaning of the words and determined that the true legislative intent was more restricted.
See also Crosland v. Texas Employment Commission, 550 S.W.2d 314 (Tex.Civ.App.—Dallas 1977, writ ref’d n. r. e.); Sanders Corp. v. Haves, 541 S.W.2d 262 (Tex.Civ.App.—Dallas 1976, no writ). Similarly, here, in my view, the very purpose of the Consumer Protection Act is to protect the public generally rather than to address private wrongs where no public interest is affected. Consequently, even if the legislature had not made its intent explicit in § 17.46(c), I would hold under these authorities, that the Consumer Protection Act does not include isolated sales by an individual not engaged in the business of selling such items so as to avoid a bizarre and harsh result which obviously was not intended by our legislature. Since the trial court found against the plaintiff as to common law fraud, I would reverse the judgment of the trial court and render judgment here for the defendant.