Gottlieb v. Carnival Corp.

• Decision Date: 21 July 2009
• Docket Number: No. 04 Civ. 4202 (ILG).,04 Civ. 4202 (ILG).
• Citation: 635 F.Supp.2d 213
• Parties: Sherman GOTTLIEB, Plaintiff, v. CARNIVAL CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of New York

635 F.Supp.2d 213

Sherman GOTTLIEB, Plaintiff, v. CARNIVAL CORPORATION, Defendant.

No. 04 Civ. 4202 (ILG).

United States District Court, E.D. New York.

July 21, 2009.

Andre K. Cizmarik, Anthony J. Viola, Edwards Angell Palmer & Dodge LLP, New York, NY, for Plaintiff.

Joseph J. Saltarelli, Hunton & Williams LLP, New York, NY, for Defendant.

MEMORANDUM AND ORDER

GLASSER, Senior District Judge:

The plaintiff and the defendant move for reconsideration of the Court's Memorandum and Order dated February 5, 2009, see Gottlieb v. Carnival Corp., 595 F.Supp.2d 212 (E.D.N.Y.2009) (the "2009 Order"), pursuant to Rule 6.3 of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York.¹ Reconsideration of an order is appropriate "to correct a clear error or prevent a manifest injustice." Virgin Atlantic Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992). "The standard for granting such a motion is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.1995). The decision to grant or deny this motion is within the sound discretion of this Court. See McCarthy v. Manson, 714 F.2d 234, 237 (2d Cir.1983).

1. Plaintiff's Telephone Consumer Protection Act claim

The Telephone Consumer Protection Act of 1991 ("TCPA"), Pub.L. No. 102-243, declares it "unlawful for any person within the United States ... to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party ... [and] to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine...." The term "unsolicited advertisement" is defined as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission." The TCPA requires the Federal Communications Commission ("FCC") to "prescribe regulations to implement the requirements of this subsection" and permits the FCC to make exemptions only to the prohibition against telephone calls using an artificial or prerecorded voice.

The FCC nevertheless created an exemption to the prohibition of unsolicited fax advertisements by way of an ipse dixit in a "Report and Order" published in 1992 entitled In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 7 F.C.C.R. 8752 (1992) ("1992 Report and Order"). In footnote 87 of that Report and Order, the FCC stated that:

[i]n banning telephone facsimile advertisements, the TCPA leaves the Commission without discretion to create exemptions from or limit the effects of the prohibition; thus, such transmissions are banned in our rules as they are in the TCPA. We note, however, that facsimile transmission from persons or entities who have an established business relationship with the recipient can be deemed to be invited or permitted by the recipient. See para. 34, supra.

Id. at 8784 n. 87.² The FCC defines an established business relationship ("EBR") as:

a prior existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.

47 C.F.R. § 64.1200(f)(4) (as cited in the 1992 Report and Order, 7 F.C.C.R. at 8793).

In November 2004, plaintiff Sherman Gottlieb brought a cause of action pursuant to the TCPA against defendant Carnival Corporation ("Carnival") and alleged that, between 2000 and 2003, Carnival had faxed him approximately 1000 unsolicited cruise advertisement fliers. After discovery was conducted, Gottlieb moved for summary judgment of the TCPA claim in July 2007. Carnival cross-moved for summary judgment in August 2007. By way of a defense to the TCPA claim, Carnival argues that it had an EBR with Gottlieb and that, pursuant to footnote 87 of the FCC's 1992 Report and Order, Carnival did not need Gottlieb's express invitation or permission to fax him the cruise fliers. Gottlieb argues in response that he did not have an EBR with Carnival and, alternatively, that even if he had an EBR with Carnival, the EBR exemption as articulated in the 1992 Report and Order is contrary to the express prohibition of Congress and therefore has no efficacy.

In its 2009 Order, the Court granted Gottlieb's motion for summary judgment and denied the defendant's cross-motion for summary judgment. The Court held that the EBR exemption was plainly contrary to the express language of the TCPA and, pursuant to Chevron USA, Inc. v. Nat'l Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984),³ did not warrant the Court's deference. Carnival now moves for reconsideration of that Order and argues that the Court overlooked 28 U.S.C. § 2342 which, according to Carnival, gives courts of appeals exclusive jurisdiction to invalidate the EBR exemption. Section 2342 reads:

The court of appeals (other than the United States Court of Appeals for the Federal Circuit) has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of—

(1) all final orders of the Federal Communications Commission made reviewable by section 402(a) of title 47; (2) all final orders of the Secretary of Agriculture made under chapters 9 and 20A of title 7, except orders issued under sections 210(e), 217a, and 499g(a) of title 7;

(3) all rules, regulations, or final orders of—

(A) the Secretary of Transportation issued pursuant to section 50501, 50502, 56101-56104, or 57109 of title 46 or pursuant to part B or C of subtitle IV, subchapter III of chapter 311, chapter 313, or chapter 315 of title 49; and

(B) the Federal Maritime Commission issued pursuant to section 305, 4 1304, 41308, or 41309 or chapter 421 or 441 of title 46;

(4) all final orders of the Atomic Energy Commission made reviewable by section 2239 of title 42;

(5) all rules, regulations, or final orders of the Surface Transportation Board made reviewable by section 2321 of this title;

(6) all final orders under section 812 of the Fair Housing Act; and

(7) all final agency actions described in section 20114(c) of title 49.

Jurisdiction is invoked by filing a petition as provided by section 2344 of this title.

(emphasis added).⁴ Section 2342(1) thus grants courts of appeals exclusive jurisdiction to review all final orders of the FCC that are reviewable under § 402(a) which also speaks of "orders":

Judicial review of Commission's orders and decisions.

(a) Procedure. Any proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter ... shall be brought as provided by and in the manner prescribed in [§ 2342].

When this Court issued the 2009 Order, it relegated discussion of § 2342 and § 402(a) to a footnote:

The defendant argues that this Court does not have jurisdiction to set aside the FCC interpretation at issue because 28 U.S.C. § 2342 provides that the "court of appeals ... has exclusive jurisdiction to enjoin, set aside, suspend ... or determine the validity of (1) all final orders of the Federal Communications Commission made reviewable by section 402(a) of title 47." This argument fails to distinguish between FCC orders and FCC interpretations of federal statutes. See Wilson v. A.H. Belo Corp., 87 F.3d 393, 396-97 (9th Cir.1996) (the court of appeals has exclusive jurisdiction to review the validity of FCC rulings). While the former may only be challenged pursuant to § 2342, the latter do not deserve the Court's deference if clearly in conflict with the intent of Congress.

2009 Order, 595 F.Supp.2d at 219 n. 5.

The defendant now moves for the Court to reconsider that Order and hold that it lacked the jurisdiction to invalidate the EBR exemption.

2. The Court lacked jurisdiction

While the defendant's characterization that it had "extensively briefed" this jurisdictional issue in its previous memoranda may be seriously questioned, see Defendant's Memorandum of Law in Support of the Motion for Reconsideration ("Def. Mem. Recon."), dated Feb. 20, 2009, at 3, the Court nevertheless now holds that it did overlook some relevant authority and that, as a result, it erred in concluding that the EBR exemption did not constitute a "final order" within the meaning of 28 U.S.C. § 2342 and 47 U.S.C. § 402(a). The Court upon reconsideration now holds that, because the EBR exemption is a "final order," this Court did not have jurisdiction to invalidate the EBR exemption and must apply it as if it were part and parcel of the TCPA.

Section 2342(1) speaks of "final orders" of the FCC that are reviewable under § 402(a) of title 47 which itself refers to FCC "orders." Neither § 2342 nor § 402(a) define what an "order" is, but § 2342, when parsed in its entirety, does imply one. Subsections (3) and (4) of § 2342 provide for appellate court review of "all rules, regulations, or final orders" of the Secretary of Transportation, the Federal Maritime Commission, and the Surface Transportation Board. The absence of "rules" and "regulations" from subsection (1) and the inclusion of those terms in subsections (3) and (4) suggest that, in enacting § 2342, Congress distinguished rules and regulations from "final orders."

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