Is Supplier Liable for Product Misrepresentations In Texas ?
The Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 650 (Tex. 1996) case involved Texas Deceptive Trade Practices Act ("DTPA") claims by homeowners against manufacturers of, and suppliers of raw material used in the manufacture of, polybutylene plumbing systems. See id. at 650.
At issue was whether the Legislature intended that upstream suppliers of raw material and component parts be liable under the DTPA when none of their misrepresentations reached consumers. See id. at 647.
The court found the upstream manufacturers and suppliers never directly marketed or promoted their product to the homeowners; therefore, any misrepresentations made with regard to their product were not made with the relevant consumer transactions, i.e., the purchase of the homes. See Amstadt, 919 S.W.2d at 650-652. Although one defendant marketed the plumbing system to homebuilders, this fell short of the nexus required for DTPA liability. See Amstadt, 919 S.W.2d at 651-52.
The court's analysis applies with equal force to allegations based on misrepresentations and unconscionable acts. See id. at 652.