Texas SB140: A Nuclear Minefield for Marketers

Texas Senate Bill 140 (SB140), signed into law by Governor Greg Abbott on June 20, 2025, represents one of the most significant expansions of state-level telemarketing regulation in recent years. Taking effect on September 1, 2025, this amendment to the Texas Business & Commerce Code fundamentally transforms the landscape for businesses engaging in telephone solicitation and telemarketing activities directed at Texas consumers.

State-level telemarketing statutes structured along the lines of the federal Telephone Consumer Protection Act (TCPA) are often referred to "Mini-TCPA" laws. However, SB140’s expansive private enforcement mechanisms, enhanced damage awards, expanded definitions, and express serial litigation authorization transforms the law into an even more potent litigation juggernaut than its federal counterpart.

Key Statutory Amendments of Texas SB140

Expanded Definition of Telephone Communications: The most fundamental change introduced by SB140 is the expansion of regulated communications beyond traditional voice calls. Section 302.001 of the Texas Business & Commerce Code now incorporates the definition of "telephone call" from Section 304.002, which includes: (i) traditional voice calls made by automated telephone dialing systems; (ii) fax transmissions; (iii) text messages, graphic messages, and images sent to mobile numbers; and (iv) any other electronic transmission intended to solicit consumer purchases or services.

Similarly, the definition of "telephone solicitation" has been broadened to encompass "a telephone call or other transmission, including a transmission of a text or graphic message or of an image, initiated by a seller or salesperson to induce a person to purchase, rent, claim, or receive an item." This expansion brings SMS, MMS, and other digital marketing communications within the full scope of Texas telemarketing regulation.

Liberal Construction Mandate: SB140 strengthens the legislative directive for liberal construction of telemarketing laws. Both Chapters 302 and 304 now explicitly state that they "shall be liberally construed and applied to promote [their] underlying purpose to protect persons and the public against false, misleading, or deceptive practices in the telephone solicitation business." This interpretive guidance signals legislative intent to favor consumer protection over narrow technical defenses in enforcement proceedings.

Serial Litigation Authorization: In drafting Texas SB140, legislators gifted serial TCPA litigators with language clarifying that "the fact that a claimant has recovered under a private action arising from a violation of this chapter more than once may not limit recovery in a future legal proceeding in any manner." In other words, this provision explicitly authorizes serial lawsuits by the same plaintiff against the same or different defendants for similar violations, removing any potential res judicata or claim preclusion defenses.

Creation of Private Rights of Action Under the DTPA: One of the more impactful aspects of SB140 is the creation of new private enforcement mechanisms through integration with the Texas Deceptive Trade Practices and Consumer Protection Act (DTPA). The legislation adds Sections 304.2581 and 305.054, which declare that violations of telemarketing chapters constitute "false, misleading, or deceptive act[s] or practice[s] under Subchapter E, Chapter 17." As discussed below, this allows consumers to pursue telemarketing violations using the DTPA's enhanced damage provisions and procedural advantages.

Enhanced Damage Awards: Under the DTPA framework now available for telemarketing violations, consumers can recover:

1. Economic Damages: Full compensatory damages for actual losses incurred.
2. Mental Anguish Damages: Available when defendant's conduct is found to be "knowing" or "intentional."
3. Treble Damages: Up to three times economic damages when conduct is "knowing," or up to three times both economic damages and mental anguish damages when conduct is "intentional."
4. Attorney's Fees and Costs: The DTPA authorizes a mandatory award to prevailing plaintiffs, making litigation economically viable for smaller claims.

The DTPA defines "knowingly" as "actual awareness" of the falsity or deceptiveness of the practice, while "intentionally" requires both actual awareness and "specific intent that the consumer act in detrimental reliance." These standards create a tiered liability structure where more egregious conduct triggers exponentially higher damage exposure.

Enforcement Against Core Telemarketing Violations: Texas SB140's integration with the DTPA creates private enforcement mechanisms for violations that previously could only be pursued by state authorities, including:

- Call Time Restrictions: Violations of Texas's requirement that telemarketing calls occur only between 9:00 AM and 9:00 PM on weekdays and Saturdays, and between 12:00 PM and 9:00 PM on Sundays.

- Registration Failures: Lack of required telemarketer registration certificates.

- Opt-Out Request Violations: Failure to honor consumer requests to cease calling.

- Prohibited Technology: Unauthorized deployment of automatic dialing announcing devices (ADADs).

Expanded ADAD Definition and Liability: Texas has long regulated automatic dialing announcing devices under more restrictive standards than federal TCPA interpretation. SB140 significantly amplifies the enforcement potential against ADAD use by making violations actionable under the DTPA.

The Texas ADAD statute contains potentially broader language than the federal TCPA. While federal courts have generally required that automatic telephone dialing systems use random or sequential number generators to both store and produce numbers, the Texas statute's language may be read to cover systems that merely store numbers to be called, even without random generation capabilities, a structural difference that could expose companies to liability in the Lone Star State even when their technology would not violate federal TCPA standards.

Under existing Texas regulations, ADADs must comply with specific operational requirements including obtaining permits from the Public Utility Commission of Texas, providing required caller identification within 30 seconds, and implementing proper disconnection protocols. SB140's integration of these requirements into the DTPA framework means that technical compliance failures can now trigger treble damages and attorney fee awards, dramatically increasing the cost of non-compliance.

Penalties and Enforcement Mechanisms of Texas SB140

Escalated Penalty Structure: Texas telemarketing violations now carry some of the most severe penalty structures in the nation. The existing state penalty range of $500 to $5,000 per violation can be combined with federal TCPA penalties of up to $1,500 per call, creating potential exposure of $6,500 per violative communication. When pursued under the DTPA framework, these base penalties become subject to trebling, potentially resulting in awards exceeding $19,000 per call in cases of intentional violations.

Vicarious Liability Expansion: Recent Texas court decisions have established that businesses can be held liable for their telemarketing vendors' compliance failures, even when the business itself does not directly make calls. In Salaiz v. VSC Operations, a court held that a product provider could face liability for its third-party telemarketer's failure to register in Texas, applying basic agency principles to find the principal responsible for the agent's regulatory violations. This precedent, combined with SB140's enhanced penalties, creates significant risk for businesses using third-party call centers or lead generation services.

Comparative Analysis with Federal TCPA

Scope Differences: While the federal TCPA requires "prior express written consent" for marketing calls using automatic telephone dialing systems, Texas now regulates a broader range of communications and technologies. The state's potentially more expansive ADAD definition could capture systems that would not qualify as an ATDS under federal law.

Additionally, Texas maintains stricter call-time restrictions than federal law, prohibiting marketing calls before 9:00 AM and after 9:00 PM, compared to the federal window of 8:00 AM to 9:00 PM. Sunday calling is further restricted in Texas to the hours between 12:00 PM and 9:00 PM.

Enforcement Mechanism Distinctions: TCPA enforcement relies primarily on Federal Communications Commission (FCC) administrative proceedings and private litigation, with statutory damages ranging from $500 to $1,500 per violation. Texas now offers administrative enforcement, private litigation under original telemarketing statutes with penalties up to $5,000 per violation and enhanced private litigation under DTPA integration with treble damages and mandatory attorney fees. This multi-layered enforcement structure creates redundant liability exposure where single violations can trigger multiple penalty assessments.

Strategic Implications for Marketers

Texas Senate Bill 140 represents a watershed moment in state telemarketing regulation, creating one of the most plaintiff-friendly enforcement regimes in the nation. The legislation's integration of telemarketing violations with the DTPA's enhanced damage provisions, combined with explicit authorization for serial litigation, fundamentally alters the risk-reward calculus for businesses engaging in telephone solicitation activities.

Compliance Infrastructure Requirements: SB140 necessitates comprehensive compliance programs addressing multiple regulatory layers:

1. Technology Audits: Businesses must evaluate whether their dialing systems fall within Texas ADAD definitions and ensure proper permitting and operational compliance.
2. Registration Verification: Companies must verify that all entities making calls on their behalf maintain current Texas telemarketer registrations.
3. Consent Documentation: Enhanced penalties make robust consent documentation and retention protocols essential for defending against serial litigation.
4. Vendor Management: Principals must implement oversight mechanisms to ensure third-party vendors comply with Texas-specific requirements.

Litigation Risk Assessment: The toxic combination of serial litigation authorization and mandatory attorney fees creates an environment highly favorable to serial litigants and the attorneys who represent them. Businesses should anticipate a dramatic expansion of the already significant litigation volume from Texas-based professional plaintiffs, who can now pursue multiple claims against the same defendant for different calls or against different defendants for similar practices.

Is Texas Worth the Risk?

Even before the passage of SB140, Texas was a top state for TCPA litigation, but the risk was equivalent to marketing in other high-risk states like Florida and California. However, SB140’s toxic combination of enhanced penalties, attorney fee shifting, and serial litigation authorization creates asymmetric risk where single compliance failures can generate disproportionate liability exposure.

In other words, come September, what was once an ordinary minefield will become a nuclear minefield, where the slightest misstep can result in massive disaster. For some companies, this may necessitate a fundamental strategic reassessment. They may need to consider whether Texas-specific compliance costs, including enhanced technology, training, and legal review requirements, justify continued telemarketing operations in the state. Alternative marketing channels may become more cost-effective when regulatory compliance costs and litigation risk are factored into return-on-investment calculations.

The ultimate impact of SB140 will depend significantly on how Texas courts interpret its liberal construction mandate and how aggressively plaintiffs exploit its enhanced enforcement mechanisms. However, the legislation's clear intent to prioritize consumer protection over business operational convenience suggests that conservative compliance approaches and defensive litigation strategies will be essential for businesses choosing to maintain telemarketing operations in Texas.