640 F.3d 72 (3rd Cir. 2011), 09-3532, Landsman & Funk PC v. Skinder-Strauss Associates
|Docket Nº:||09-3532, 09-3793, 09-3105.|
|Citation:||640 F.3d 72|
|Opinion Judge:||RENDELL, Circuit Judge.|
|Party Name:||LANDSMAN & FUNK PC, and all others similarly situated, Appellant in 09-3105 v. SKINDER-STRAUSS ASSOCIATES, a New Jersey Partnership Goodrich Management Corp, on behalf of itself and all others similarly situated, Appellant in 09-3532 v. Afgo Mechanical Services Inc Goodrich Management Corp, on behalf of itself and all others similarly situated v. F|
|Attorney:||Aytan Y. Bellin, Esq., [Argued], Bellin & Associates, White Plains, NY, for Appellants. Michael R. McDonald, Esq., [Argued], Damian V. Santomauro, Esq., Gibbons, Newark, NJ, for Appellee, Skinder Strauss Associates, a New Jersey Partnership. Louis A. Bove, I, Esq., Jay M. Green, Esq., [Argued], B...|
|Judge Panel:||Before: McKEE, Chief Judge, RENDELL and GARTH, Circuit Judges. McKEE, C.J., concurring: GARTH, Circuit Judge, dissenting:|
|Case Date:||April 04, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
Argued May 26, 2010.
This consolidated appeal encompasses three class actions brought in the District Court for the District of New Jersey under the Telephone Consumer Protection Act (" TCPA" ), 47 U.S.C. § 227(b). The TCPA is a unique federal statute that provides a private right of action for recipients of unsolicited facsimiles, as well as statutory damages of $500 per " violation." The plaintiffs in these suits alleged that each respective defendant sent over 10,000 unsolicited fax advertisements to plaintiffs at their New York or New Jersey offices, and to thousands of others throughout the country, in violation of the TCPA.1 The plaintiffs in each case requested more than $5 million in damages for themselves and the members of the classes they represented. All three cases were dismissed by the District Courts on the grounds that plaintiffs' claims did not fulfill the requirements of diversity jurisdiction.2 Although the District Courts' specific reasons for dismissal varied slightly, a common question arises in our review of each of the cases: whether, notwithstanding our ruling in ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir.1998), that private TCPA claims do not present a federal question, the federal courts can exercise diversity jurisdiction over private suits brought under the TCPA. On appeal, appellees contend that the three District Courts that ruled on the issue of jurisdiction erred because none held— as they should have— that there can be no diversity jurisdiction
over claims under the TCPA.3 Because this argument, if adopted, would be dispositive of all three cases— in that dismissal would be appropriate in each case if it is correct— we address this issue before considering other issues raised as to the propriety of the District Courts' rulings in each case.
In ErieNet, we held that Congress intended to divest federal courts of federal question jurisdiction over individual TCPA claims. We are now called upon to decide whether our reasoning in ErieNet extends to diversity jurisdiction. That is, did Congress intend that these actions should be maintained exclusively in state courts such that federal courts cannot exercise diversity jurisdiction over them? We hold here that Congress did not intend for exclusive state court jurisdiction. The TCPA does not strip federal courts of diversity jurisdiction over actions brought under § 227(b)(3). Given our ruling that each District Court has jurisdiction over its respective plaintiffs' private TCPA class action claims pursuant to 28 U.S.C. § 1332(d), we also must address the Courts' class certification determinations, as discussed more fully below.
We have jurisdiction under 28 U.S.C. § 1291 to review the District Courts' orders dismissing these cases for lack of subject matter jurisdiction. We exercise plenary review of a district court's § 12(b)(1) dismissal for lack of jurisdiction and a district court's § 12(b)(6) dismissal for failure to state a claim. McGovern v. City of Phila., 554 F.3d 114, 115 (3d Cir.2009); Anjelino v. N.Y. Times Co., 200 F.3d 73, 87 (3d Cir.1999). We also exercise plenary review of a district court's resulting jurisdictional determination. Umland v. PLANCO Fin. Serv., 542 F.3d 59, 63 (3d Cir.2008). We review a decision to certify or deny a class for abuse of discretion. Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 136 (3d Cir.2000) (citing In re Prudential Ins. Co. of Am. Sales Practice Litig., 148 F.3d 283, 299 (3d Cir.1998)).
The TCPA, which was passed in 1991 as part of an amendment to the Communications Act of 1934, declares it unlawful under federal law " to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement," unless certain statutory exceptions apply. 47 U.S.C. § 227(b)(1)(C). It contains distinct provisions for private parties on the one hand, and state attorneys general on the other, to enforce this prohibition by litigation. § 227(b)(3), (f). Section 227(b)(3), entitled " Private right of action," provides that:
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 recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or
(C) both such actions.
If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.
47 U.S.C. § 227(b)(3). Thus, this private right of action allows a person, " if otherwise permitted by the laws or rules of court of a State, [to] bring in an appropriate court of that State" a private action for damages or injunctive relief, and entitles a successful plaintiff to recover damages of at least $500 per unsolicited fax. Another provision, whereby state attorneys general can bring civil actions for damages and injunctive relief, provides that the federal courts " shall have exclusive jurisdiction" over all such actions. § 227(f)(1), (2). It also provides that the TCPA does not prevent state officials from bringing similar actions in state court or otherwise exercising their powers under state law. § 227(f)(5), (6).
In enacting this legislation, Congress explained that it sought " to facilitate interstate commerce by restricting certain uses of facsimile ( [f]ax) machines and automatic dialers." S.Rep. No. 102-178, at 1 (1991), reprinted in 1991 U.S.S.C.A.N. 1968, 1968. It noted that " unsolicited calls placed to fax machines ... often impose a cost on the called party (fax messages require the called party to pay for the paper used ...)." Id. at 1969. In addition, a so-called " junk fax" " occupies the recipient's facsimile machine so that it is unavailable for legitimate business messages while processing and printing the junk fax." H.R.Rep. No. 102-317, at 10 (1991). Congress also noted the need for federal regulation to fill the gaps between individual states' regulatory efforts, since " [s]tates do not have the jurisdiction to protect their citizens against those who use [automated dialing] machines to place interstate telephone calls." S.Rep. No. 102-178, at 5. That is, although " [m]any States have passed laws that seek to regulate telemarketing," " telemarketers can easily avoid the restrictions of State law, simply by locating their phone centers out of state." H.R.Rep. No. 102-317, at 9-1. This history suggests that Congress intended both to " fill the gaps" in state regulation and to give consumers the right to file TCPA actions in state court. The TCPA, and its private right of action, were thus designed to put " teeth" into state regulation, rather than to establish a distinctly federal policy. Essentially, Congress " sought to put the TCPA on the same footing as state law ..., supplementing state law where there were perceived jurisdictional gaps." Gottlieb v. Carnival Corp., 436 F.3d 335, 342 (2d Cir.2006).
In introducing the bill, its sponsor, Senator Ernest Hollings, described the private right of action as follows:
The ... bill contains a private right-of-action provision that will make it easier for consumers to recover damages from receiving these computerized calls. The provision would allow consumers to bring an action in State court against any entity that violates the bill. The bill does not, because of constitutional constraints, dictate to the States which court in each State shall be the proper venue for such an action, as this is a matter for State legislators to determine. Nevertheless, it is my hope that States will make it as easy as possible for consumers to bring such actions, preferably in small claims court. The consumer outrage at receiving these calls is clear. Unless Congress makes it easier for consumers to obtain damages from those who violate this bill, these abuses will undoubtedly continue.
Small claims court or a similar court would allow the consumer to appear before
the court without an attorney. The amount of damages in this legislation is set to be...
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