I. Introduction
Welcome back!
This is the third in a series of articles about Indiana’s Unfair, Deceptive, and Abusive Practices (“UDAP”) statute, the Indiana Deceptive Consumer Sales Act, or DCSA. In Part One, I explained what the DCSA is and the sort of cases that fall under the law. In Part Two, I talked about how the DCSA dispute-resolution process works, including pre-suit notices, invitations to cure, and private civil suits.
In this, Part Three, we’re talking about holes and gaps in the DCSA, as well as some unresolved questions about the law. This is going to be a more academic discussion of the law, for the benefit of those who are especially curious—including other lawyers.
II. Holes in DCSA Coverage
Indiana’s Deceptive Consumer Sales Act covers a huge variety of consumer transactions. Remember its fundamental definition of “consumer transaction”: “”Consumer transaction” means a sale, lease, assignment, award by chance, or other disposition of an item of personal property, real property, a service, or an intangible, . . . with or without an extension of credit, to a person for purposes that are primarily personal, familial, charitable, agricultural, or household, or a solicitation to supply any of these things.” Ind. Code § 24-5-0.5-2(a)(1).
You might think, then, that there would be no meaningful holes in DCSA coverage. Pretty much any business-to-consumer wrongdoing would be within its scope. You’d be wrong: the DCSA defines its coverage very broadly, but what it gives with one hand it takes away with the other. The taking away happens in a different section: the private right of action, Ind. Code § 24-5-0.5-4(a).
It works like this: the DCSA starts off saying “every consumer transaction is covered, and everything you think of as a consumer transaction is one.” That’s the definition in § 2. But then the DCSA says “you can only bring a suit if it’s specifically authorized by the private right of action.” That’s in the “limitation” section, § 5(b). And then you look at the private right of action, in § 4(a), and you see that, in a little paragraph at the bottom, it says “This subsection does not apply to” a list of types of suits. “This subsection,” § 4(a), is the private right of action. So any type of suit listed in the unnumbered paragraph at the bottom of § 4(a) is right out. No go. Carved out of the law. Because, remember, rights and remedies are two sides of the same coin: it does you absolutely no good to know that a particular scam is prohibited by the DCSA if there’s no way to enforce it.
(I think it is wrong of the state legislature to structure the law this way: that is, with a broad definition of coverage and then a narrower right to sue. It would be clearer and better—basically more politically honest—to have the scope of a law set out in its coverage, and then have a congruent enforcement mechanism, as opposed to having prima facie coverage broader than the enforcement mechanism such that the coverage turns out to be illusory.
If you want to see another, rather galling instance of this give-and-take, you can look at Indiana’s Right to Farm Act, Ind. Code § 32-30-6-9, which says “unreasonably annoying things are nuisances” but then “farms aren’t nuisances unless they’ve changed operations” and then—two levels of carveout—“the following changes aren’t changes.” Really what the legislature means is “we’re willing to tolerate farm nuisances”—and that’s a political judgment that is theirs to make. But it’s silly (foolish, or just flat-out dishonest) to enact that judgment by saying “farm nuisances aren’t nuisances at all.” Denying reality, like that time the Indiana legislature tried to define pi to equal three. But I digress.)
Back to the DCSA: what are the big carve outs?
A. Real Estate
This is the big one. The DCSA says “This subsection [the private right of action] does not apply to a consumer transaction in real property, including a claim or action involving a construction defect (as defined in IC 32-27-3-1(5)) brought against a construction professional (as defined in IC 32-27-3-1(4)), except for purchases of time shares and camping club memberships.” Ind. Code § 24-5-0.5-4(a).
That’s bizarre at first glance, of course, because the definition of “consumer transaction” in Ind. Code § 24-5-0.5-2 does specifically include “real property.” But then you see in § 4(c) that the attorney general is allowed to bring real property actions under the DCSA. Really, then, the state just doesn’t want private individuals bringing DCSA cases about real property.
So what is a “transaction in real property”?
The statute explicitly says it includes construction defect cases. That’s OK: the carve-out for construction defect cases doesn’t make for that big of a gap, because Indiana has that construction defect statute in the cross-reference, and that statute has a private right of action (albeit with its own presuit and administrative requirements). So you can still remedy construction frauds, you just have to use a different law.
But what else counts? Really, the Indiana courts have not given much thought to what counts as a transaction in real property. I would argue that it just means land or house sales. Leases seem to be something different, and home improvement contracts, too.
But it seems Indiana courts think a lease is a transaction in real property, at least based on the cursory mention in Rainbow Realty Grp., Inc. v. Carter, 131 N.E.3d 168, 178 (Ind. 2019), and that a home improvement contract is not a transaction in real property, based on the lack of mention of the real property exception in Hoosier Contractors, LLC v. Gardner, 212 N.E.3d 1234 (Ind. 2023).
Again, here, the availability of landlord-tenant law for some of the issues in Rainbow Realty means the carve-out isn’t absolutely ruinous.
Indeed, I suspect that Indiana courts think of the DCSA as a gap-filler. Reading the caselaw, it seems the general rule is that where there’s an alternative, subject-specific law on point, the DCSA claim is going to be disallowed, even if the DCSA by its own terms ought to apply.
B. FDCPA
The DCSA in § 4(a) prohibits private actions based on the deceptive act “described in section 3(b)(20).” Follow up that reference and you find that’s the “anything that violates the FDCPA” provision. (FDCPA is the federal Fair Debt Collection Practices Act, which I write about elsewhere on the site.) So the DCSA doesn’t incorporate the FDCPA and doesn’t provide a parallel state cause of action for FDCPA violations. (At least not for private individuals. As with the real-estate carve out, the attorney general has no such limitation.)
That isn’t a huge deal for two reasons.
First, the FDCPA is a federal law, but Indiana courts have concurrent jurisdiction with the federal courts over federal law. In other words, you can bring an FDCPA suit in an Indiana state court anyway. You don’t need a parallel state cause of action. (There are potential practical issues with removal and standing, but that is beyond the scope of this article.)
Second—and this is purely hypothetical—you could use the DCSA to prosecute the same conduct underlying the FDCPA violation, except without mentioning the FDCPA or Ind. Code § 24-5-0.5-3(b)(20) at all. That strategy would look like this: § 3(a) prohibits bad acts; FDCPA violations are violations because they are, in Congress’ judgment, bad acts; so the same acts that are the FDCPA violations are DCSA violations under § 3(a).
Full disclosure, I think Indiana courts would hate that argument. This goes back to that gap-filling idea. Indiana courts don’t like to allow DCSA claims where there are more specific alternatives; and they probably really wouldn’t like to have a plaintiff use § 3(a) to bootstrap a § 3(b) violation past the guardrails in § 4(a). But it works from a first-principles standpoint, and until someone tests it, we’ll never know.
C. TCPA
The last set of carveouts are opaque at first glance. “This subsection also does not apply to a violation of IC 24-4.7, IC 24-5-12, IC 24-5-14, or IC 24-5-14.5.” Ind. Code § 24-5-0.5-4(a). It’s like, OK, great. What are those?
If you trace all the references, you find that all the sections in that list have to do with telephones: spam calls, caller ID spoofs, autodiallers, and the like. In other words, they’re state-law provisions that overlap substantially with the federal TCPA—the Telephone Consumer Protection Act, 47 USC § 227.
The TCPA is to spam calls what the FDCPA is to debt collection: a major federal consumer-protection law with a private right of action.
Starting to see the pattern? Indiana doesn’t want individuals suing under the DCSA who could sue under the FDCPA; it also doesn’t want individuals suing under the DCSA who could sue under the TCPA.
The DCSA is once again positioned as a gap-filler. It’s the catchall for those consumer protections that aren’t set out elsewhere. Even though the DCSA is written broadly, such that it overlaps with other consumer protection laws, in practice it can’t be used to double-up.
(As an aside, I think courts’ general hostility to multiple parallel/overlapping causes of action is a relic from ye olden dayes before modern civil procedure. You used to have to specify a cause of action and proceed under just one; now, multiple and alternative theories are allowed. Rules against double recovery mean it doesn’t matter if you prove two theories or only one. “One set of facts producing one injury creates one claim for relief, no matter how many laws the deeds violate.” N.A.A.C.P. v. Am. Fam. Mut. Ins. Co., 978 F.2d 287, 292 (7th Cir. 1992). But that hasn’t really caught on.)
III. Conclusion
In sum, the DCSA is narrower than it first appears. It can’t be used for real estate transactions, and it can’t be used where federal consumer protection law applies. To the extent that the carve-outs in the DCSA match the scope of the other, subject-specific laws, there aren’t any gaps, and so the field is effectively covered.
But, practically, it’s troublesome to navigate those gaps, and, theoretically, there’s not a good reason to go around carving up the statute.
The lesson is to be mindful of which consumer protection statutes apply to a given case, to select the most specific one where possible, and not to rely on the DCSA for everything that, on the surface, seems to be within its scope. Nonetheless it remains one of the most powerful laws in the Indiana consumer protection toolkit.
As always, you should call Indianapolis consumer protection attorney Andy Stautz if you have questions about how the law works, or how a lawyer might be able to help you fight fraud, beat a scam, or fix a bad deal.