Accounting Outsourcing v. Verizon Wireless Pers., CIV.A. 03-161-D-M3, CIV.A. 03-169-D-M3, CIV.A. 03-173-D, CIV.A. 03-208-D, CIV.A. 03-198-D, CIV.A. 03-358-D, CIV.A. 03-406-D, CIV.A. 03-421-D, CIV.A. 03-468-D.

• Decision Date: 04 September 2003
• Docket Number: No. CIV.A. 03-161-D-M3, CIV.A. 03-169-D-M3, CIV.A. 03-173-D, CIV.A. 03-208-D, CIV.A. 03-198-D, CIV.A. 03-358-D, CIV.A. 03-406-D, CIV.A. 03-421-D, CIV.A. 03-468-D.,CIV.A. 03-161-D-M3, CIV.A. 03-169-D-M3, CIV.A. 03-173-D, CIV.A. 03-208-D, CIV.A. 03-198-D, CIV.A. 03-358-D, CIV.A. 03-406-D, CIV.A. 03-421-D, CIV.A. 03-468-D.
• Citation: 294 F.Supp.2d 834
• Parties: ACCOUNTING OUTSOURCING, LLC, et al v. VERIZON WIRELESS PERSONAL COMMUNICATIONS, LP, etc. Accounting Outsourcing, LLC, et al v. Kappa Publishing Group, Inc., et al Dominion Motor Cars, Individually, etc. v. Satellink Paging (of Georgia), LLC, etc. Accounting Outsourcing, LLC., et al v. Computers Across America, Inc. Da Jo Nel's, Inc. v. Computers Across America, Inc. Accounting Outsourcing, LLC, et al v. Rawlings Insurance Company Beaulieau Plantation, Inc., et al v. Vacation Showroom, et al Beaulieau Plantation, Inc., et al v. Textron Financial Corporation Display South, Inc. v. Perry Johnson
• Court: U.S. District Court — Middle District of Louisiana

294 F.Supp.2d 834

ACCOUNTING OUTSOURCING, LLC, et al v. VERIZON WIRELESS PERSONAL COMMUNICATIONS, LP, etc.

Accounting Outsourcing, LLC, et al v. Kappa Publishing Group, Inc., et al

Dominion Motor Cars, Individually, etc. v. Satellink Paging (of Georgia), LLC, etc.

Accounting Outsourcing, LLC., et al v. Computers Across America, Inc.

Da Jo Nel's, Inc. v. Computers Across America, Inc.

Accounting Outsourcing, LLC, et al v. Rawlings Insurance Company

Beaulieau Plantation, Inc., et al v. Vacation Showroom, et al

Beaulieau Plantation, Inc., et al v. Textron Financial Corporation

Display South, Inc. v. Perry Johnson

No. CIV.A. 03-161-D-M3, CIV.A. 03-169-D-M3, CIV.A. 03-173-D, CIV.A. 03-208-D, CIV.A. 03-198-D, CIV.A. 03-358-D, CIV.A. 03-406-D, CIV.A. 03-421-D, CIV.A. 03-468-D.

United States District Court, M.D. Louisiana.

September 4, 2003.

Keith D. Jones, Jones, Aaron & Smith, Philip Bohrer, Bohrer Law Firm, Gary P. Koederitz, Koederitz Law Firm, L.L.C., Stephen Todd Hoover, Hoover Law Firm, Baton Rouge, LA, for plaintiff/consolidated plaintiffs.

Michael W. McKay, Michael D. Lutgring, McKay, Williamson, Lutgring & Cochran, Baton Rouge, LA, Stephen Paul Strohschein, Dan E. West, McGlinchey Stafford PLLC, George J. Krueger, Franklin C. Love, Philadelphia, PA, Bracewell & Patterson, LLP, Houston, TX, Gerald A. Melchiode, Scott James Bradley, Galloway, Johnson, Tompkins, Burr & Smith, New Orleans, LA, for defendants.

Brett P. Furr, Elisabeth Quinn Zelden, Taylor, Porter, Brooks & Phillips, Stephen Paul Strohschein, Dan E. West, McGlinchey Stafford PLLC, Kirk A. Patrick, III, Heather A. Cross, Holly Jeanne Quick, Crawford Lewis, PLLC, Scott Cameron Barney, Chaffe, McCall, Phillips, Toler & Sarpy, Baton Rouge, LA, George J. Krueger, Franklin C. Love, Blank Rome, LLP, Philadelphia, PA, Alex J. Peragine, Peragine & Neill, L.L.C., Covington, LA, Gerald A. Melchiode, Scott James Bradley, Galloway, Johnson, Tompkins, Burr & Smith, John Francis Olinde, Chaffe, McCall, Phillips, Toler & Sarpy, Robin B. Cheatham, Michael Needham Mire, Adams & Reese, LLP, New Orleans, LA, Joseph C. Chautin, III, Hardy, Carey & Chautin, Metairie, LA, Mark Allen Balkin, Hardy, Carey & Chautin, LLP, Metairie, LA, for consolidated defendants.

RULING

BRADY, District Judge.

This matter is before the court on plaintiffs' motions to remand.¹ The court has carefully considered the United States Magistrate Judge Docia L. Dalby's Report and Recommendation dated July 1, 2003 (doc. 51) and her Report and Recommendation dated July 26, 2003 (doc. 66). This court has also read the objections to the first Magistrate's Report and carefully researched the law applicable to this action.

Introduction

As stated by the Magistrate Judge in her report, these consolidated claims present two jurisdictional issues of first impression.² The first issue is whether federal courts should have diversity jurisdiction to hear cases brought under the Telephone Consumer Protection Act of 1991 ("TCPA") or whether Congress intended TCPA claims to be brought exclusively in state court. The second issue is whether, given diversity jurisdiction over state law claims, a federal court can exercise supplemental jurisdiction over a TCPA claim. The second issue becomes moot if federal courts have diversity jurisdiction to hear TCPA claims, as supplemental jurisdiction is no longer needed.

After considering the parties' briefs and the scant case law available on the subject, the Magistrate Judge concluded that federal courts should not have diversity jurisdiction over claims brought under the TCPA.³ With regard to the second issue, however, the Magistrate Judge concluded that federal courts should have supplemental jurisdiction over a TCPA claim when the parties bring state court claims pursuant to diversity jurisdiction.⁴

Having carefully reviewing this matter, this court finds that federal courts are not precluded from hearing TCPA claims when the parties are diverse. 28 U.S.C. § 1332 is an independent grant of jurisdiction designed to prevent discrimination against out-of-state defendants. This important and elemental basis of diversity jurisdiction does not disappear when the claim is brought under the TCPA. Accordingly, this court will not consider the second issue because supplemental jurisdiction over a TCPA claim is not needed if the claim is already properly before a federal court pursuant to § 1332.

Background

These matters are substantially identical, with the exception of No. 03-198, which differs only in that the plaintiffs in that action have not asserted any state law claims in conjunction with the claim brought under the TCPA.

Each class action petition alleges that the named defendants sent plaintiffs unsolicited fax advertisements in violation of the TCPA.⁵ The federal statute provides that a person may bring an action based on such a violation to recover for actual monetary loss or to receive $500 in damages for each such violation, whichever is greater.⁶ Plaintiffs contend they are entitled to recovery of $500 or actual damages, whichever is greater, for each fax transmission. They additionally allege wilful or knowing violations and seek statutory trebling of the awards, pursuant to 47 U.S.C. § 227(b)(3). In the cases with state law claims, plaintiffs allege that the faxes violated Louisiana's counterpart to the TCPA, La. R.S. 51:1745, et seq., and seek injunctive relief, damages, costs, and attorneys' fees.

The defendants removed these actions to federal court on the basis of diversity jurisdiction and, in the cases with parallel state law claims, on the basis of both diversity and supplemental jurisdiction. Plaintiffs timely moved to remand for lack of subject matter jurisdiction over the TCPA claims. In addition, plaintiffs contend that the court should abstain from considering any parallel state law claims brought based on diversity for three reasons: in deference to the Congressional intent in enacting the TCPA, to avoid splitting the suits between two different fora, and on the basis of Colorado River abstention.

Analysis

I Diversity Jurisdiction over TCPA Claims

As the Magistrate's Report makes explicit, the relevant case law on this subject is minimal, at best. The jurisdictional provision of the TCPA is unilluminating and states only that a person or entity may, if otherwise permitted by the laws or rules of court of a state, bring an action in an appropriate court of that state.⁷ As a starting point, this court will discuss how that jurisdictional provision has been interpreted in the case law thus far.

Six United States Circuit Courts of Appeal, including the Fifth Circuit, have interpreted the jurisdictional provision of the TCPA to mean that Congress intended to refer private litigants under the TCPA to state court, and to preclude federal question jurisdiction, pursuant to 28 U.S.C. § 1331, over such consumer suits.⁸ Although the circuit court opinions often refer to state courts having "exclusive" jurisdiction over TCPA claims, none of the courts were called upon to address, nor did they address, whether TCPA claims could be heard in federal court pursuant to diversity jurisdiction.

Lacking any direct precedent, this court has found persuasive other district court decisions on this exact issue, as well as Supreme Court interpretation of jurisdictionally similar federal statutes. In 2000, the United States District Court for the Southern District of California issued an unpublished opinion in which the plaintiff, in a motion to remand, urged the court to extend the holding in Murphey v. Lanier to claims brought under diversity jurisdiction.⁹ The district court refused to do so, stating, "[n]othing in the Ninth Circuit's analysis suggests that the TCPA precludes district courts from hearing private TCPA claims where some other independent basis for federal jurisdiction exists, such as diversity of citizenship or supplemental jurisdiction."¹⁰ The court further explained its reasoning, stating that "Plaintiff's interpretation of the TCPA would create the anomalous result that state law claims based on unlawful telephone calls could be brought in federal court, while federal TCPA claims based on those same calls could be heard only in state court."¹¹

This court finds the reasoning in Kinder persuasive. The Kinder court pointed out that state law claims based on the same facts and circumstances as those encompassing a TCPA claim could properly be brought in federal court if the parties were diverse and the requisite amount in controversy was satisfied pursuant to § 1332. This fact alone is reason enough to decline to extend the holding of the circuit court cases discussed above. One of the main reasons the TCPA was interpreted by the circuit courts to exclude federal question jurisdiction was because state courts provide a more appropriate forum for small value claims and plaintiffs appearing on their own behalf.¹² However, if the exact same claims, brought pursuant to state law, may be litigated in federal court based on diversity of the parties, it makes little sense to preclude a TCPA claim.

The next district court to discuss whether Congress intended for TCPA claims to be brought in federal court pursuant to diversity jurisdiction was the United States District Court for the District of South Carolina. In Biggerstaff v. Voice Power Telecommunications, the court ultimately held that it did not have diversity jurisdiction because of an insufficient amount in controversy on the TCPA claim by each member of the putative class.¹³ However, in discussing the possibility of diversity jurisdiction, the court responded to the plaintiff's urging to extend Inacom to preclude federal TCPA claims based on § 1332 jurisdiction as well as claims based on § 1331.¹⁴ In Inacom, the Fourth Circuit reasoned that § 1331, as a general jurisdictional statute, should yield to § 227(b)(3) of the TCPA, a specific jurisdictional statute.¹⁵ The Biggerstaff court...