Charvat v. Echostar Satellite Llc

• Decision Date: 30 December 2010
• Docket Number: No. 09–4525.,09–4525.
• Citation: 630 F.3d 459
• Parties: Philip J. CHARVAT, Plaintiff–Appellant,v.ECHOSTAR SATELLITE, LLC, Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

630 F.3d 459

52 Communications Reg. (P&F) 201

Philip J. CHARVAT, Plaintiff–Appellant,

v.ECHOSTAR SATELLITE, LLC, Defendant–Appellee.

No. 09–4525.

United States Court of Appeals, Sixth Circuit.

Argued: Dec. 8, 2010.Decided and Filed: Dec. 30, 2010.

ARGUED: John W. Ferron, Ferron & Associates, Columbus, Ohio, for Appellant.

Eric Larson Zalud, Benesch, Friedlander, Coplan & Aronoff LLP, Cleveland, Ohio, for Appellee. ON BRIEF: John W. Ferron, Lisa A. Wafer, Ferron & Associates, Columbus, Ohio, Jessica G. Fallon, Columbus, Ohio, for Appellant. Eric Larson Zalud, Benesch, Friedlander, Coplan & Aronoff LLP, Cleveland, Ohio, Benjamen E. Kern, Law Office of Benjamen E. Kern, LLC, Columbus, Ohio, for Appellee.Before: SUTTON and GRIFFIN, Circuit Judges; BERTELSMAN, District Judge.^*

OPINION

SUTTON, Circuit Judge.

Philip Charvat has not been shy in taking on the role of a private attorney general under the Telephone Consumer Protection Act. Since 1998, he has filed claims against at least twelve defendants in at least thirteen lawsuits under the Act. See Charvat v. GVN Mich., Inc., 561 F.3d 623 (6th Cir.2009); Charvat v. NMP, LLC, 703 F.Supp.2d 735 (S.D.Ohio 2010); State ex rel. Charvat v. Frye, 114 Ohio St.3d 76, 868 N.E.2d 270 (2007); Charvat v. Ryan, 111 Ohio St.3d 1490, 857 N.E.2d 1228 (2006) (table opinion); Charvat v. Dispatch Consumer Servs., Inc., 95 Ohio St.3d 505, 769 N.E.2d 829 (2002); Charvat v. GVN Mich., Inc., No. 09AP–1075, 2010 WL 2706163 (Ohio Ct.App. July 8, 2010); Charvat v. Credit Found. of Am., No. 08AP–477, 2008 WL 5381935 (Ohio Ct.App. Dec. 23, 2008); Charvat v. Farmers Ins. Columbus, Inc., 178 Ohio App.3d 118, 897 N.E.2d 167 (2008); Charvat v. Telelytics, LLC, No. 05AP–1279, 2006 WL 2574019 (2006); Charvat v. Crawford, 155 Ohio App.3d 161, 799 N.E.2d 661 (2003); Charvat v. Colo. Prime, Inc., No. 97APG09–1277, 1998 WL 634922 (Ohio Ct.App.1998); Charvat v. ATW, Inc., 127 Ohio App.3d 288, 712 N.E.2d 805 (1998); Charvat v. Cont'l Mortg. Servs., Inc., No. 99CVH12–10225, 2002 WL 1270183 (Ohio Ct. Com. Pl. June 1, 2000).

In his most recent lawsuit, Charvat sued EchoStar Satellite under the Act as well as under several regulations promulgated by the Federal Communications Commission (FCC) and Ohio law. The district court dismissed four of Charvat's claims and granted EchoStar's motion for summary judgment on the remaining claims. In considering Charvat's appeal, we invited the FCC, the agency that administers the Act, to express its views on several issues presented by the case. The FCC answered several questions, demurred on others and suggested we refer the matter to the agency under the doctrine of primary jurisdiction. For reasons elaborated below, we will refer the matter to the agency.

I.

EchoStar delivers DISH Network brand satellite television products. Between June 2004 and August 2007, Charvat received thirty calls from telemarketers attempting to sell DISH Network brand satellite television programming. Most of the calls consisted of pre-recorded messages. On several occasions, Charvat asked to be placed on the do-not-call list.

Charvat tracked the calls to several companies, including Dish TV Now, Inc., Marrik Dish Co., Marketing Guru, Inc. dba SatelliteSales.com, JSR Enterprises and Dish Pronto, Inc. All of the companies have signed retailer agreements with EchoStar, authorizing them to advertise, promote and solicit orders for DISH Network programming and to install and activate the equipment.

Claiming several violations per phone call, Charvat sued EchoStar for 307 violations of the Telephone Act and its accompanying regulations. He also brought claims under the Ohio consumer protection statute, Ohio Rev.Code Ann. § 1345.02, and Ohio common law. The district court dismissed several of the claims under the Telephone Act on the ground that Charvat could not recover damages for the first call, and it granted summary judgment on the remaining claims. Charvat appealed, challenging the court's disposition of his claims under the Telephone Act and the Ohio consumer protection statute.

II.

A word about jurisdiction is in order. The district court held that it had diversity jurisdiction over the case because the parties came from different States and because Charvat's 307 causes of action each requested between $500 and $1500 in damages, well over the $75,000 amount-in-controversy requirement. See 28 U.S.C. § 1332. That would make sense, save for another part of the court's decision. The court also held that Charvat could recover statutory damages only on a per-call basis, not on a per-violation basis, meaning Charvat could recover between $500 and $1500 for each of the 30 calls that violated federal or state law, not between $500 and $1500 for each of the 307 violations that allegedly occurred in the calls.

Although courts gauge jurisdiction over a complaint from the time of filing, St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938), the “[l]ack of the jurisdictional amount from the outset—although not recognized until later—is not a subsequent change that can be ignored.” GVN Mich., 561 F.3d at 628 (internal quotation marks and citation omitted) (affirming determination that Charvat did not satisfy amount-in-controversy requirement once district court determined he could recover on per-call rather than per-violation basis). At the time Charvat filed his complaint, he did not satisfy the amount-in-controversy requirement because the Act did not allow him to recover the amount he claimed. Id.; see also Jones v. Knox Exploration Corp., 2 F.3d 181, 183 (6th Cir.1993). In light of the district court's unchallenged per-call ruling, it was a “legal certainty” at the time Charvat filed his complaint that he could recover at most $45,000 (30x $1500) for the statutory and regulatory claims. See St. Paul Mercury Indem. Co., 303 U.S. at 289, 58 S.Ct. 586.

That is not the end of the matter. Charvat also requested “punitive damages” in connection with his common-law claims. And punitive damages may be aggregated with other damages to satisfy the amount-in-controversy requirement. Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 572–73 (6th Cir.2001). But as the party invoking federal jurisdiction, Charvat bore the burden of satisfying the requirements of federal jurisdiction, see Cleveland Hous. Renewal Project v. Deutsche Bank Trust Co., 621 F.3d 554, 559 (6th Cir.2010), including as here where punitive damages account for a significant portion of the amount-in-controversy requirement, LM Ins. Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 551 (7th Cir.2008). Under Ohio tort law, claimants may obtain punitive damages only when they have suffered actual harm and actual damages, see, e.g., Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638, 635 N.E.2d 331, 342 (1994), and “[t]he actions or omissions of [the] defendant demonstrate malice or aggravated or egregious fraud,” Ohio Rev.Code Ann. § 2315.21(C)(1). Charvat's pleadings leave it unclear whether he has “plausibl[y]” made sufficient allegations to satisfy these requirements with respect to his common law, as opposed to his statutory, claims. Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).

We need not resolve the point, however, because the district court had federal-question jurisdiction over the claims under the Telephone Act and pendent jurisdiction over the rest of the claims. See 28 U.S.C. § 1331; id. § 1367. In Dun–Rite Constr., Inc. v. Amazing Tickets, Inc., No. 04–3216, 2004 WL 3239533 (6th Cir. Dec.16, 2004), we realize, this court took a different view, as had several other courts of appeals at the time, see, e.g., Foxhall Realty Law Offices, Inc. v. Telecomm. Premium Servs., Ltd., 156 F.3d 432 (2d Cir.1998); Int'l Sci. & Tech. Inst., Inc. v. Inacom Commc'ns, Inc., 106 F.3d 1146 (4th Cir.1997). But Dun–Rite is an unpublished, unsigned order, and it (like the other courts of appeals decisions) predates the Supreme Court's decision in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).

Grable resolved a dispute then percolating in the courts of appeals over whether federal-question jurisdiction exists when the underlying statute does not contain a private right of action. The Court clarified that the existence of a private right of action in a federal statute, while sufficient to establish federal-question jurisdiction, is not indispensable. Instead, Grable explained, the issue turns on whether the state-law claim (1) depends on (2) a substantial federal issue (3) that is in dispute and whether (4) exercising jurisdiction would not disturb the congressionally approved balance of federal and state court jurisdiction. Id. at 314, 125 S.Ct. 2363.

The first three Grable factors favor jurisdiction. Charvat's claim depends on the interpretation of federal law, because it turns on a violation of a federal statute. The issue at hand, whether EchoStar violated several provisions of federal law, is substantial. See Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 700–01, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006); Mikulski v. Centerior Energy Corp., 501 F.3d 555, 570 (6th Cir.2007) (en banc). And the issue is disputed: Charvat says that EchoStar violated the Telephone Act, while EchoStar says it did not.

That leaves the fourth consideration, whether exercising jurisdiction comports with the roles of the state and federal courts in interpreting this statute. Strange as it may seem, this federal statute explicitly provides for a private right of action only in state court. Section 227(b)(3) says:

“A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State—

(A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation,

(B) an action to...