Hooters of Augusta, Inc. v. Nicholson

• Decision Date: 14 July 2000
• Docket Number: No. A00A0429.,A00A0429.
• Citation: 245 Ga. App. 363,537 S.E.2d 468
• Parties: HOOTERS OF AUGUSTA, INC. v. NICHOLSON et al.
• Court: Georgia Court of Appeals

537 S.E.2d 468

245 Ga. App. 363

HOOTERS OF AUGUSTA, INC. v. NICHOLSON et al.

No. A00A0429.

Court of Appeals of Georgia.

July 14, 2000.

Reconsideration Denied July 27, 2000.

Certiorari Denied January 19, 2001.

Fulcher, Hagler, Reed, Hanks & Harper, Mark C. Wilby, Elizabeth McLeod, Augusta, Bondurant, Mixson & Elmore, Emmet J. Bondurant, Frank M. Lowrey IV, Atlanta, for appellant.

Burnside, Wall, Daniel, Ellison & Revell, Harry D. Revell, Augusta, for appellees.

Thurbert E. Baker, Attorney General, Robert S. Bomar, Deputy Attorney General, Harold D. Melton, Senior Assistant Attorney General, Stacey Ferris-Smith, Assistant Attorney General, amici curiae.

ELLINGTON, Judge.

Sam Nicholson filed a class action against Bambi Clark d/b/a Value-Fax of Augusta and Hooters of Augusta, Inc., alleging that Hooters used Clark to send unsolicited advertisements to facsimile machines in violation of the federal Telephone Consumer Protection Act ("TCPA"), 47 USC § 227. The class action complaint sought injunctive relief and statutory damages for each violation. The trial court certified the class. The trial court denied Hooters' motion to dismiss and motion for summary judgment. Following the grant of its application for interlocutory review, Hooters appeals, contending that the plaintiffs have no private right of action under the TCPA; that the TCPA cannot reach purely intrastate communications; that Hooters is not liable for the conduct of an independent contractor; and that the class was improperly certified. For the reasons which follow, we affirm.

1. Hooters contends that Nicholson and the other class members may assert a claim under the TCPA only if Georgia law explicitly provides a private right of action for intrastate unsolicited facsimile advertisements and that, because Georgia law does not so provide, the trial court erred in denying Hooters' motion to dismiss.

(a) We first examine whether consumers in general may bring private actions under the TCPA only if applicable state law explicitly provides such a right for intrastate transmissions. The TCPA prohibits a number of specific telemarketing activities, including in pertinent part "the use of any device to send an unsolicited advertisement to a telephone facsimile machine." Erienet, Inc. v. Velocity Net, 156 F.3d 513, 514-515 (3rd Cir.1998); see 47 USC § 227(b)(1)(C). With regard to enforcement, the TCPA authorizes states to bring civil actions in federal court on behalf of their residents for violations of the act. 47 USC § 227(f). In addition to state enforcement, the subsection of the TCPA which prohibits unsolicited facsimile advertisements provides for a private right of action, as follows:

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 ... 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.

(Emphasis supplied.) 47 USC § 227(b)(3).

As the trial court recognized, whether the complaint states a cause of action turns on the interpretation of the clause "if otherwise permitted by the laws or rules of court of a State." In opposing Hooters' motion to dismiss for failure to state a claim, Nicholson argued that the clause means that state courts may automatically hear TCPA actions unless the state "opts out" and enacts a law prohibiting such private actions in its courts. The trial court agreed, adopting the construction set out in an opinion from the Court of Appeals for the Fourth Circuit, Intl. Science &c. Inst. v. Inacom Communications, 106 F.3d 1146 (4th Cir.1997). In Intl. Science, the Fourth Circuit explained in dicta:

The clause in 47 U.S.C. § 227(b)(3) "if otherwise permitted by the laws or rules of court of a State" does not condition the substantive right to be free from unsolicited faxes on state approval.... Rather, the clause recognizes that states may refuse to exercise the jurisdiction authorized by the statute. Thus, a state could decide to prevent its courts from hearing private actions to enforce the TCPA's substantive rights.... [C]oncerned over the potential impact of private actions on the administration of state courts, Congress included a provision to allow the states to prohibit private TCPA actions in their courts.... With those interests in mind and recognizing that other enforcement mechanisms are available in the TCPA, we believe Congress acted rationally in ... allowing states to close [their courts] to the millions of private actions that could be filed if only a small portion of each year's 6.57 billion telemarketing transmissions were illegal under the TCPA.

(Emphasis supplied.) Id. at 1156-1157. The Fourth Circuit concluded the TCPA "recognizes state power to reject Congress' authorization" of private enforcement but does not require explicit enabling legislation. Id. at 1158. The trial court in this case applied the same opt-out analysis and concluded "even though Georgia law does not expressly allow private TCPA actions, it does not expressly prohibit them either," and on this basis denied Hooters' motion to dismiss for failure to state a claim.

The few state court decisions construing the clause are not in agreement.¹ In the absence of clear and controlling authority, we will not construe the TCPA in a manner which leaves Georgia citizens without a remedy. We are persuaded by the analysis in Intl. Science quoted above and therefore construe the TCPA as creating a private right of action and conferring jurisdiction upon state courts.² (b) The trial court correctly determined that Georgia law does not expressly prohibit private TCPA actions for the transmission of unsolicited facsimile advertisements. The Georgia Public Utilities Code prohibits the transmission of unsolicited facsimile advertisements; private actions are neither explicitly authorized nor forbidden in the relevant Code section.³ OCGA § 46-5-25. In accordance with our conclusion in Division 1(a), the absence of a statute declining to exercise the jurisdiction authorized by the TCPA gives Georgia citizens the right to seek the relief provided by the TCPA.

We believe the dissent reads too much into the explicit inclusion of a private cause of action in a related Code section, OCGA § 46-5-27(i), which deals with telephone solicitations to residences. Section 46-5-27 was enacted in 1998⁴—after the TCPA had been in place for seven years. We can certainly presume the legislature drafted OCGA § 46-5-27 with awareness of the TCPA.⁵ OCGA § 46-5-25, on the other hand, was enacted in 1990⁶—the year before the TCPA—in the first wave of the Georgia General Assembly's attempt to address the public's frustration with telemarketing abuses. Obviously, we cannot presume the legislature drafted OCGA § 46-5-25 with the TCPA's private right of action in mind.

Furthermore, until this year no state or federal court in a published opinion interpreted the clause "if otherwise permitted by the laws ... of a State" as signifying that the TCPA allows a private right of action to be brought in state court for interstate communications only if the state legislature passes legislation consenting to state court actions based on the TCPA. Autoflex Leasing v. Manufacturers Auto Leasing, Inc., 16 S.W.3d 815, 817 (Tex.App.2000). As noted above, the interpretation of that clause remains the subject of dispute. See Kaplan v. Democrat & Chronicle, 266 A.D.2d 848, 698 N.Y.S.2d 799, 800 (1999); Kaplan v. First City Mtg., 183 Misc.2d 24, 701 N.Y.S.2d 859, 863 (City Ct.1999). Our rule of statutory construction which requires us to presume that the legislature is aware of existing law does not require us to presume that the legislature's failure to include a private right of action in OCGA § 46-5-25 "was a considered choice" under these circumstances.

Because we conclude that Georgia consumers may pursue private actions under the TCPA, the trial court correctly denied the motion to dismiss. See Cellular One v. Emanuel County, 227 Ga.App. 197-198, 489 S.E.2d 50 (1997).

2. Hooters contends that the TCPA cannot reach purely intrastate communications. See 47 USC § 152(a) (limiting the Communications Act to interstate and foreign communications). As the trial court found, however, Congress expressed its intent to regulate both interstate and intrastate communications under the TCPA by amending 47 USC § 152(b) to specifically except the TCPA from the "interstate" limitation of 47 USC § 152(a).⁷ The Commission's enabling rules further show that the TCPA governs both intrastate and interstate transmissions. See 47 CFR § 64.1200 et seq. The trial court did not err in denying Hooters' motion to dismiss or for summary judgment on this basis.

3. Hooters contends it cannot be held liable under the TCPA for Clark's conduct because she was an independent contractor. First, a jury question remains regarding Clark's status as an independent contractor. Generally, an employer-employee relationship, and the possibility of vicarious liability under the theory of respondeat superior, exists when the employer has the right to control the time and manner of executing the work. Owens v. Barclays-American/Mtg. Corp., 218 Ga.App. 160, 161, 460 S.E.2d 835 (1995). An independent contractor, on the other hand, has the right to perform the work by his own means, method and manner; the employer has the right merely to require certain results. Id. In this case, the trial court correctly determined that the evidence presented a jury question as to Hooters' right to control the means, method and manner of executing the work, specifically in terms of designing and producing the ad and (more importantly for determining whether the advertisements were unsolicited and therefore in violation of the TCPA) in...