Companies operating in Texas have seen a notable increase in demand letters and civil claims citing Section 302.302(a) of the Texas Business and Commerce Code, which carries a civil penalty of up to $5,000 per violation. What began as an argument advanced by the plaintiff’s bar has expanded further: pro se claimants, meaning individuals filing without an attorney, are now citing the same authority to demand the same penalty. The question that no court has yet answered on the merits is whether private parties can collect it at all.
The statute’s structure raises serious doubt that they can.
Section 302.302 contains a tiered penalty provision. The first tier, in subsection (a), states that a person who violates the chapter is subject to a civil penalty of not more than $5,000 per violation.1 No enforcing party is identified. Plaintiff’s attorneys, and now pro se litigants, read that silence as authorization. But the section does not end there. Subsection (b) specifies that a violator of a prior court injunction is liable to “this state” for up to $25,000 per violation, and subsection (c) identifies the attorney general as the party authorized to bring that action.2 Read as a complete provision, the section is organized around state enforcement, not private recovery.
The legislature placed the private right of action elsewhere. Section 302.303 routes private enforcement through the Texas Deceptive Trade Practices Act, providing consumers a path to recover between $500 and $1,500 per unlawful call.3 That provision exists for a reason. If Section 302.302(a) already made $5,000 per call available to private plaintiffs, Section 302.303 would serve no purpose. Texas courts apply a principle against reading statutory provisions as redundant, and when the legislature creates an express private remedy in one section, the absence of equivalent language in an adjacent penalty provision is a meaningful choice, not an oversight.
The legislative history supports this reading as well. Chapter 302 traces to the Texas Telemarketing Disclosure and Privacy Act, enacted in 2001.4 The 2007 recodification that produced the current version of the statute was explicitly described as nonsubstantive, a reorganization of existing law rather than a change to it.5 A nonsubstantive reorganization cannot be the source of a new $5,000-per-call private cause of action that had no basis in the predecessor statute.
The argument on the other side rests on a growing line of default judgments, not on any court’s analysis of the statute. Beginning with Thompson v. Dealer Renewal Services in 2021,6 federal courts across Texas have awarded private plaintiffs the $5,000-per-call penalty in cases where the defendant never appeared. That line now includes Thomas v. Zenith Solar in 2022,7 multiple cases involving plaintiff Gerald Busbee in 2024,8 and at least two cases brought by Justin Tatum, a pro se litigant who has filed repeatedly in the Eastern District of Texas, most recently obtaining a $170,000 award in July 2025 for 34 calls.9 In each instance, the defendant failed to appear and no one argued the other side.
The concern is not just that these defaults exist. It is that courts are beginning to treat them as establishing settled law. In the July 2025 Tatum decision, the district court described the award of $5,000-per-call penalties to private plaintiffs as something “courts routinely” do, citing the prior defaults as supporting authority.10 That characterization illustrates how a chain of uncontested outcomes can harden into apparent precedent without any court ever examining whether the statute actually permits the result.
A default judgment is not a ruling on the merits. When a defendant fails to appear, the court accepts the plaintiff’s factual allegations as true and awards the relief requested, without analyzing the legal theory behind it. That is the procedural function a default judgment serves. It cannot stand for the proposition that a court examined the statute and concluded that it permits private recovery, because no such examination occurred. Citing one default judgment as precedent for the next, and then describing the accumulation as “routine,” does not transform uncontested awards into legal authority.
The structural argument against a $5,000 private penalty under Section 302.302(a) is intact and has never been addressed on the merits by any court. The better reading of the statute reserves that penalty for state enforcement and limits private plaintiffs to the remedy the legislature expressly created for them in Section 302.303. That argument remains available to any defendant who actually appears and presents it.
1. Tex. Bus. & Com. Code § 302.302(a).
2. Tex. Bus. & Com. Code §§ 302.302(b)-(c).
3. Tex. Bus. & Com. Code § 302.303 (incorporating Tex. Bus. & Com. Code § 17.50 et seq.); see also S.B. 140, 89th Leg., R.S. (Tex. 2025) (effective Sept. 1, 2025).
4. Acts 2001, 77th Leg., R.S., ch. 506 (H.B. 472) (creating the Texas Telemarketing Disclosure and Privacy Act).
5. Acts 2007, 80th Leg., R.S., ch. 885 (H.B. 2278), sec. 2.01, eff. April 1, 2009 (nonsubstantive revision of statutes relating to business and commerce).
6. Thompson v. Dealer Renewal Servs., No. 4:21-cv-0467-P, 2021 WL 5416605 (N.D. Tex. Nov. 18, 2021) (default judgment).
7. Thomas v. Zenith Solar, LLC, No. MO22CV00047DCRCG, 2022 WL 17813168 (W.D. Tex. Aug. 1, 2022) (default judgment).
8. Barack v. Bankroll Capital, Inc., No. 4:23-cv-00615-O (N.D. Tex. 2024) (default judgment); Busbee v. ServiceToday!, No. 4:24-cv-00364, 2024 WL 4428989 (N.D. Tex. Oct. 4, 2024) (default judgment).
9. Tatum v. DBoss Funding, LLC, No. 6:23-cv-00565, 2024 WL 5098503 (E.D. Tex. Nov. 13, 2024) (default judgment); Tatum v. New York Tribeca Grp. LLC, No. 6:25-cv-00103, 2025 WL 1864961 (E.D. Tex. July 7, 2025) (default judgment) (pro se plaintiff; $170,000 awarded for 34 calls).
10. Tatum v. New York Tribeca Grp. LLC, 2025 WL 1864961, at *5 (stating “courts routinely award statutory damages under both the TCPA and TBCC based on the same unwanted telephone calls or texts” and citing prior default judgments as authority).