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I don’t know when or how it became commonplace for litigants to believe they should recover “treble damages” in virtually every situation where they believe they have been wronged by another. It is not unusual to hear litigants threaten to sue and “get treble damages!” I have even heard lawyers ask about the possibility for recovering treble damages for defending a lawsuit. It reminds me of the old threats that “I’ll take this all the way to the Supreme Court!”
Truth is, outside of certain claims based on federal law that most of the population will never encounter – e.g., patent infringement, Clayton Antitrust Act, RICO – there is only one type of case under Texas law that provides for treble damages and, then, only a small subset of those cases are eligible for imposition of treble damages. The Texas Deceptive Trade Practices Act (DTPA) (Tex. Bus. & Comm. Code §§ 17.41 – 17.63) provides that a plaintiff can recover “additional damages” of up to three times the amount of economic damages if the defendant acted knowingly or intentionally and three times the mental anguish damages if the defendant acted intentionally. Tex. Bus. & Comm. Code § 17.50(b)(1).
Very generally, the DTPA was designed to protect consumers from unscrupulous businesses that induce detrimental reliance on misleading representations and practices but where it is difficult or impossible to prove fraud because fraud requires proof that the representation was made knowing it was false. The DTPA provides a remedy for certain misrepresentations whether the person making the representation knew it was false or not. Section 17.46(b) provides a laundry list of types of false representations that violate the DTPA whether or not the representation was made with knowledge that it was false. The DTPA also provides remedies for breach of warranties, unconscionable conduct, and a number of tie-in statutes such as violations of the Texas Insurance Code.
Even where a plaintiff can successfully make out claim under the DTPA, he is still not entitled to treble damages unless he can also demonstrate the defendant acted knowingly or intentionally. A “knowing” violation is shown where the defendant, at the time of the act or practice, acted with actual awareness of the falsity, deception, or unfairness of the act or practice. Tex. Bus. & Comm. Code § 17.45(9). An “intentional” violation is shown where the defendant acts (1) with actual awareness of the falsity, deception, or unfairness of the act or practice and (2) with the specific intent that the consumer act in detrimental reliance on the falsity or deception or in detrimental ignorance of the unfairness. Tex. Bus. & Comm. Code § 17.45(13). But an award of treble damages is not automatic even if the plaintiff demonstrates a knowing or intentional violation of the DTPA. The jury still has discretion as to how much to award in additional damages “up to three times” the amount of economic damages for a knowing violation and three times the economic and mental anguish damages for an intentional violation.
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