PPG Industries, Inc. v. JMB/Houston Centers Partners Ltd. Partnership
54 U.C.C. Rep. Serv. 2d (West) 166, 146 S.W.3d 79, 47 Tex. Sup. Ct. J. 822 (2004)
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Rule of Law:
Claims brought under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) are generally not assignable from an aggrieved consumer to another party. This is because assignment would frustrate the statute's primary purpose of encouraging consumers to bring their own claims, and the personal and punitive nature of DTPA claims makes them unsuitable for transfer as mere property.
Facts:
- PPG Industries, Inc. manufactured and installed 'Twindows' glass window units in the One Houston Center skyscraper, which was completed in 1978 and originally owned by Houston Center Corporation (HCC).
- By July 1982, a significant number of Twindows were failing, showing fogging and discoloration.
- Between 1982 and 1985, PPG replaced approximately one-fourth of the building's windows at HCC's request pursuant to a contractual warranty.
- In 1989, HCC negotiated the sale of the building to JMB/Houston Centers Partners. During its due diligence, JMB learned about the prior window issues.
- When JMB inquired with PPG about any remaining warranties on the windows, PPG replied that all had expired.
- JMB purchased the building 'as is' from HCC in December 1989.
- In the sale agreement, HCC assigned all warranties relating to the building to JMB.
- In 1991, extensive new problems with the remaining original Twindows appeared.
Procedural Posture:
- JMB sued PPG in a Texas trial court, asserting claims for breach of warranty and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA).
- A jury found in favor of JMB on all claims.
- The trial court entered a judgment for JMB for over $17 million, which included damages trebled under the DTPA, plus attorney's fees.
- PPG, as appellant, appealed the judgment to the court of appeals.
- The court of appeals affirmed the trial court's judgment, holding that DTPA claims were assignable.
- The Supreme Court of Texas granted PPG's petition for review to resolve a conflict among the courts of appeals on the issue of DTPA claim assignability.
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Issue:
Are claims for damages under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) generally assignable?
Opinions:
Majority - Justice Brister
No. DTPA claims generally cannot be assigned by an aggrieved consumer to someone else. Allowing assignment of DTPA claims would defeat the statute's primary purpose, which is to encourage individual consumers who were actually deceived to bring such claims themselves. The court's reasoning rests on several grounds. First, the DTPA is silent on assignability, whereas the Uniform Commercial Code (UCC) expressly allows warranty assignments, suggesting a deliberate legislative omission. Second, allowing assignment would frustrate the legislative intent to limit claims to 'consumers' and could lead to parties excluded from the DTPA (like large corporations) suing by purchasing claims. Third, DTPA claims are personal and punitive, not purely remedial and property-based like warranty claims; they involve damages for mental anguish and penalties intended for the aggrieved party, not a third-party assignee. Finally, allowing assignments could distort the litigation process by encouraging collusion and misdirecting lawsuits away from the most culpable parties.
Concurring-in-part-and-dissenting-in-part - Justice O'Neill
Yes. The assignment in this case should have been upheld because JMB's DTPA breach-of-warranty claim is essentially a property-damage claim, which has long been freely assignable. Invalidating this assignment does not further the DTPA's purposes and is inconsistent with common-law principles. The public policy concerns that have led courts to prohibit assignments in other contexts—such as skewing the trial process, promoting collusion, or requiring parties to take unnatural positions—are absent here, as the party who owns the defective product is the one bringing the suit. The DTPA's enhanced damages have a remedial purpose, not just a punitive one, similar to federal antitrust statutes where claims are assignable. While I concur in the judgment that JMB cannot recover under the DTPA, it is for a different reason: the original owner, HCC, lost its 'consumer' status under a 1983 amendment to the DTPA and therefore had no valid claim to assign in the first place.
Analysis:
This decision resolves a conflict among Texas appellate courts by establishing a clear, general rule that DTPA claims are not assignable. It reinforces the distinction between personal, punitive statutory claims and property-based, remedial claims like breach of warranty. By prohibiting the assignment of DTPA claims, the court prevents the rise of a commercial market for such claims, which could exploit consumers and lead to distorted litigation. The ruling ensures that the DTPA's powerful remedies, like treble damages, are reserved for the actual victims of deceptive practices, preserving the statute's intended focus on protecting individual consumers rather than just addressing defective products.
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