Consumer Crusade v. Fairon and Associates

• Decision Date: 28 July 2005
• Docket Number: No. 05-CV-00853-PSF-MJW.,05-CV-00853-PSF-MJW.
• Citation: 379 F.Supp.2d 1132
• Parties: CONSUMER CRUSADE, INC., a Colorado corporation; Plaintiff, v. FAIRON AND ASSOCIATES, INC., a California corporation; Patrick Fairon, and its Officers and Directors. Defendants.
• Court: U.S. District Court — District of Colorado

379 F.Supp.2d 1132

CONSUMER CRUSADE, INC., a Colorado corporation; Plaintiff, v. FAIRON AND ASSOCIATES, INC., a California corporation; Patrick Fairon, and its Officers and Directors. Defendants.

No. 05-CV-00853-PSF-MJW.

United States District Court, D. Colorado.

July 28, 2005.

Agim M. Demirali, Demirali Law Firm, P.C., Denver, CO, for Plaintiff.

Douglas A. Turner, Esq., Golden, CO, for Defendants.

ORDER OF REMAND

FIGA, District Judge.

PROCEDURAL BACKGROUND

This matter was originally filed by Plaintiff Consumer Crusade, Inc., in Denver District Court on April 19, 2005 alleging two claims for relief under the Telephone Consumer Protection Act of 1991 ("TCPA"), 47 U.S.C. § 227. On May 9, 2005, Defendants Fairon and Associates, Inc. and Patrick Fairon (collectively, "Fairon") filed a motion to dismiss the case. On May 9, 2005, defendants filed a Notice of Removal asserting that the removal is based only on diversity of citizenship (Notice of Removal at 1).

After the case was removed, this Court ordered plaintiff to respond to the defendants Motion to Dismiss, requesting specifically that it address an order issued on March 28, 2005 by Chief Judge Babcock in US Fax Law Center, Inc. v. iHire, Inc., 362 F.Supp.2d 1248 (D.Colo.2005), a copy of which was attached to defendants' motion. On May 26, 2005, plaintiff timely filed its Response to Defendants Motion to Dismiss. On June 6, 2005, defendants filed their Reply Brief in support of their Motion to Dismiss. "Plaintiffs' Response to Defendants Reply to Motion to Dismiss," filed without leave of court on June 17, 2005, was stricken by Order of the Court on June 21, 2005.

Although plaintiff did not file a motion to remand this case to the state court, on June 24, 2005, this Court, sua sponte, entered its Order to Show Cause directing the parties to show cause within 14 days why this case should not be remanded to the Denver District Court pursuant to 28 U.S.C. § 1447(c), on the grounds that it was improvidently removed to the federal court. In the same order the Court directed the parties to confer and file, on or before July 8, 2005, a joint statement or separate statements as to whether this case must be remanded for lack of subject matter jurisdiction, or file a stipulated motion for remand.

In its show cause order, this Court noted that at least six federal circuit court panels had interpreted 47 U.S.C. § 227(b)(3) to mean that Congress conferred exclusive jurisdiction in state courts over TCPA private-right-of-action claims, that no circuit panel had taken a contrary view, and the Tenth Circuit had not addressed the issue. See Murphey v. Lanier, 204 F.3d 911, 915 (9th Cir.2000); Foxhall Realty Law Offices, Inc. v. Telecommunications Premium Services, Ltd., 156 F.3d 432, 434 (2d Cir.1998); ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 520 (3d Cir.1998); Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287, 1289 (11th Cir.1998); Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507, 513 (5th Cir.1997); Intl' Science & Tech. Inst., Inc. v. Inacom Communications, Inc., 106 F.3d 1146, 1152 (4th Cir.1997).

Plaintiff timely filed its response to the show cause order on July 8, 2005. Plaintiffs' response stated that despite the contemplation of cooperation referenced in the show cause order, "defendants' counsel has not attempted to confer." Plaintiffs' Response at 2. Plaintiffs' response further asserts that:

Because it is assumed that Defendants, for whatever reason, never intended to defend on the merits of this controversy, but rather sought only to have the case dismissed, it is not surprising that the have shown little interest in keeping the case alive. A failure to defend the removal, in effect, accomplishes the primary purpose of Defendants' motion, i.e. to have the case dismissed.

Id. Based on subsequent events, plaintiffs' accusatory tone was hardly justified and if any party was acting improperly by failing to confer, it appears to have been plaintiff through its counsel.

Defendants did not file a response by July 8, 2005. Rather, on July 11, 2005, they filed a motion for extension of time to respond to the show cause order through July 21, 2005. Defendants explained in their motion that they never received the Courts' Order to Show Cause, which, having been sent on June 24, 2005, was one of the first documents to be sent to defendants' counsel pursuant to the electronic filing system implemented in this district commencing June 20, 2005, and pursuant to which copies are sent only via electronic mail and not by paper. Thus, an undetermined CM/ECF "glitch" may have caused the Courts' order not to have been transmitted to defendants' counsel. The Court granted the requested extension.

Defendants' counsel apparently learned of the show cause order only after it received plaintiffs' July 8 response. In other words, it was not defendants' counsel whose recalcitrance prevented the parties from conferring, as suggested by plaintiffs' response, but rather it appears that plaintiffs' counsel, despite having received the Courts' show cause order made no effort to contact defendants' counsel. Otherwise, defendants' counsel would have known of the show cause order. The Court was not putting counsel on notice that they might be contacted by the other side; it was directing that such a conference occur.

Be that as it may, plaintiff asserts in its response that this case should not be remanded as there is a basis for federal jurisdiction under 28 U.S.C. § 1332, admitted diversity of citizenship between plaintiff and the defendants, and it is alleged that the amount in controversy exceeds $75,000. Alternatively, plaintiff urges that at a minimum this case should not be dismissed for lack of jurisdiction, but rather remanded to the state court.

Defendants filed their response to the show cause order on July 21, 2005, also arguing that despite the rulings of the six circuit panels, this case may proceed in federal court because there is jurisdiction under 28 U.S.C. § 1332 based on diversity of citizenship. In order to determine this issue, it is necessary to set forth plaintiffs' claims and the context in which they are brought.

PLAINTIFF'S CLAIMS

Consumer Crusade, a Colorado citizen, alleges that it is the assignee of 142 individual claims arising out of its assignors' receipt of unsolicited faxes from Fairon, California citizens, in violation of the TCPA. Complaint, ¶¶ 1, 2, 13; Notice of Removal at 2. The TCPA provides, in pertinent part, that: "It shall be unlawful for any person within the United States ... to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement ...." 47 U.S.C. § 227(b)(1)(C).

Although the TCPA is a federal statute, Congress provided that private rights of action to enforce the statute shall be brought in state courts. Thus, subsection (3) of 47 U.S.C. § 227(b) provides:

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). By contrast, claims brought by the attorneys general of the states in a parens patriae capacity may be brought only in federal court. 47 U.S.C. § 227(f)(2).

JURISDICTION UNDER TCPA

As noted above, several circuits have interpreted 47 U.S.C. § 227(b)(3) to mean that Congress conferred exclusive jurisdiction in state courts over TCPA private-right-of-action claims. These courts have found that federal courts are without original jurisdiction under 28 U.S.C. § 1331 to hear private actions brought under the TCPA, as the statute did not create a civil action arising under the laws of the United States.

None of the parties to this case take issue with those holdings. Rather, they argue, this court has jurisdiction to hear this case under 28 U.S.C. § 1332 because there is diversity of citizenship between the parties to this particular case. The parties cite to several district court decisions permitting removed TCPA cases to proceed in federal Court based on the presence of diversity jurisdiction. See Kopff v. World Research Group, LLC, 298 F.Supp.2d 50, 55 (D.D.C.2003); Accounting Outsourcing, LLC v. Verizon Wireless Personal Communications, LP, 294 F.Supp.2d 834, 840 (M.D.La.2003); Kinder v. Citibank, 2000 WL 1409762 *3-4 (S.D.Cal., Sept.14, 2000). (In US Fax Law Center, supra, the question of diversity jurisdiction under the TCPA apparently was not directly posed.)

Defendant has called to the attention of this Court a recent decision dismissing a TCPA claim filed directly in federal court, holding that there is no jurisdiction over such claims based on diversity under 28 U.S.C. § 1332. Gottlieb v. Carnival Corp., 367 F.Supp.2d 301, 307-09 (E.D.N.Y.2005).

As there are no Tenth Circuit decisions on point, and apparently no decisions from district courts within the circuit, this Court conducts its own analysis of the question of whether this case must be remanded.

ANALYSIS

Because this case arrived in this Court pursuant to the removal statute, this Court begins its analysis with the statutory provisions. As noted, defendants removed this action to this federal district court asserting removal was based on diversity of citizenship (Notice of Removal at 1-2).

Title 28 U.S.C. § 1441(a) provides, in...