Klein v. Vision Lab Telecommunications, Inc., 05 Civ. 3615(WCC).

• Decision Date: 18 November 2005
• Docket Number: No. 05 Civ. 3615(WCC).,05 Civ. 3615(WCC).
• Parties: Benjamin KLEIN and Atlas Telecommunications of Rockland County, Inc., a New York Corporation, Plaintiffs, v. VISION LAB TELECOMMUNICATIONS, INC., a Florida Corporation, Defendant.
• Court: U.S. District Court — Southern District of New York

Page 528

399 F.Supp.2d 528

Benjamin KLEIN and Atlas Telecommunications of Rockland County, Inc., a New York Corporation, Plaintiffs, v. VISION LAB TELECOMMUNICATIONS, INC., a Florida Corporation, Defendant.

No. 05 Civ. 3615(WCC).

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

November 18, 2005.

Bellin & Associates (Aytan Y. Bellin, of counsel), for Plaintiffs.

Storch Amini & Munves, P.C., New York, NY (Russell D. Munves, of counsel), for Defendant.

Wildman, Harrold, Allen & Dixon LLP, Chicago, IL (R. John Street, Samuel S. Cohen, of counsel), for Defendant.

for Defendant.

OPINION AND ORDER

WILLIAM C. CONNER, Senior District Judge.

On March 14, 2005, plaintiffs Benjamin Klein and Atlas Telecommunications of Rockland County, Inc. ("Atlas") (collectively, "plaintiffs") brought a state court action against defendant Vision Lab Telecommunications, Inc. ("Vision Lab") alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227(b), ("TCPA" or the "Act") and its state counterpart, section 396—aa of the New York General Business Law. Vision Lab removed the case pursuant to 28 U.S.C. §§ 1441 and 1446, asserting removal was proper under the diversity jurisdiction statute, 28 U.S.C. § 1332. Plaintiffs move to remand arguing that this Court lacks subject matter jurisdiction because the TCPA grants state courts exclusive jurisdiction over private causes of action brought under 47 U.S.C. § 227(b). In their reply memorandum, plaintiffs requested alternative relief in the form of a certification for interlocutory appeal if this Court denies remand.

Shortly thereafter, defendant filed a motion to dismiss certain of plaintiffs' claims under FED. R. Civ. P. 12(b)(6) because: (1) plaintiffs' damages claims alleging violations of 47 C.F.R. § 68.318(d), a Federal Communications Commission ("F.C.C.") regulation governing facsimile sender identification, do not present an actionable claim under the TCPA; (2) plaintiffs' claims arising from interstate facsimile transmissions under the New York State statute are preempted by the TCPA; and (3) plaintiffs' prayer for attorney's fees is not authorized by either the federal or state statutes at issue in this case.

For the reasons stated below, plaintiffs' motion to remand is denied and defendant's motion to dismiss certain of plaintiffs' claims is granted. In addition, plaintiffs' request for certification for interlocutory appeal is granted. Accordingly, the action is stayed pending the decision of the Court of Appeals for the Second Circuit.

BACKGROUND

Klein, a resident of the State of New York, serves as C.E.O. of Atlas, a New York corporation with its principal place of business in Monsey, New York. (V.Complt. ¶¶ 11 1-2.) Vision Lab is a Florida corporation with its principal place of business in Miami Beach, Florida. (Id. ¶ 3.)

Plaintiffs allege that from May 2004 to February 2005, Vision Lab faxed in excess of 150 unsolicited advertisements to three telephone numbers registered to plaintiffs and linked to fax machines. Specifically, plaintiffs allege that Vision Lab faxed Klein seventy unsolicited advertisements, including twelve unsolicited advertisements for travel services and/or vacations; seventeen unsolicited advertisements for mortgages and/or mortgage services; forty unsolicited advertisements for stocks and/or stock investments; and one unsolicited advertisement for notary public training seminars. (Id. ¶¶ 6-9.) In addition, plaintiffs allege that Vision Lab faxed Atlas ninety-five unsolicited advertisements, including eleven unsolicited advertisements for travel services and/or vacations; ten unsolicited advertisements for mortgages and/or mortgage services; seventyone unsolicited advertisements for stocks and/or stock investments; and three unsolicited advertisements for notary public training seminars. (Id. ¶¶ 14-16, 21-24.) Plaintiffs state that all these faxes were "wholly unsolicited" and were sent without the consent of either Klein or Atlas. (Id. ¶¶ 10, 17, 25.) Plaintiffs add that Vision Lab, a "facsimile broadcaster," "has willfully arranged for and caused hundreds of thousands of similar unsolicited faxes to be sent to fax machines all over the United States without the consent" of the recipients. (Id. ¶¶ 11, 13, 18, 20, 26, 28.)

Plaintiffs commenced this action against Vision Lab in New York Supreme Court by causing it to be served with a Verified Complaint on March 14, 2005. In the Complaint, plaintiffs allege Vision Lab committed 658 violations¹ of § 227(b) of the TCPA, which makes it unlawful to use any fax machine, computer, or other device to send unsolicited advertisements to a fax machine. This included 493 alleged violations of 47 C.F.R. § 68.318(d), an F.C.C. regulation dictating that fax transmissions bear certain sender identification information, which plaintiffs assert was prescribed under, and therefore actionable under, 47 U.S.C. § 227(b). Specifically, plaintiffs claim that all but two of the 165 faxes² caused three individual violations of § 68.318(d) by failing to: (1) with one exception, identify the business, other entity or individual that sent the faxes; (2) with one exception, clearly indicate the telephone number of the sending machine; and (3) clearly indicate the name of the fax broadcaster under which the fax broadcaster was registered to conduct business. (Id. ¶¶ 12, 19, 27.) Based on the statutory amount of $500 per violation, plaintiffs claim total statutory damages of $329,000, or $139,500 for violations against Klein and $189,500 for violations against Atlas. (Id. ¶¶ 39, 47.) Plaintiffs increase this total to $987,000 to reflect treble damages available under 47 U.S.C. § 227(b)(3) for defendant's alleged willful and knowing violations. (Id. ¶¶ 40, 48.)

Plaintiffs also allege violations of N.Y. GEN. Bus. LAW § 396-aa, which makes it unlawful to transmit advertisements by fax. Because § 396-aa exempts transmissions of five pages or less sent between the hours of 9:00 p.m. and 6:00 a.m., (see N.Y. GEN. Bus. LAW. § 396-aa(1)), plaintiffs claim only 119 violations of this statute— fifty-seven violations against Klein and sixty-two against Atlas. (V.Complt.¶¶ 42, 50.) Plaintiffs seek statutory damages in the amount of $5,700 for Klein and $6,200 for Atlas, for a total of $11,900, based on the statutory amount of $100 per violation. (Id. ¶¶ 44, 52.) In addition, plaintiffs seek attorney's fees and costs.

DISCUSSION

I. Plaintiffs' Motion to Remand

A defendant may remove a cause of action initially filed in state court provided the action is one "of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). It is well settled that removal statutes are to be strictly construed against removal, with all doubts resolved in favor of remand, as removal jurisdiction undercuts federalism and abridges the deference courts generally give to a plaintiff's choice of forum. See id.; see also In re NASDAQ Mkt. Makers Antitrust Litig., 929 F.Supp. 174, 178 (S.D.N.Y.1996) ("Removal jurisdiction must be strictly construed, both because the federal courts are courts of limited jurisdiction and because removal of a case implicates significant federalism concerns."); Leslie v. BancTec Serv. Corp., 928 F.Supp. 341, 347 (S.D.N.Y.1996). "When a party removes a state court action to the federal court on the basis of diversity of citizenship, and the party seeking remand challenges the jurisdictional predicate for removal, the burden falls squarely upon the removing party to establish its right to a federal forum by competent proof." R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir.1979); see also Caterpillar v. Williams, 482 U.S. 386, 391-92, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987).

Defendant removed the present action pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332, asserting complete diversity of citizenship of the parties and an amount in controversy in excess of $75,000. (See Notice of Removal at 1-4.) Plaintiffs rightly do not contest that the diversity jurisdiction statute's requirements are met. The requisite amount in controversy was properly pled, and the parties are of completely diverse citizenship: plaintiffs are a resident of New York and a New York corporation with its principal place of business in New York, and defendant is a Florida corporation with its principal place of business in Florida. Rather, plaintiffs contend that removal of this action was improper because the TCPA granted state courts exclusive jurisdiction over private causes of action brought under 47 U.S.C. § 227(b)(3).

The TCPA prohibits the "use [of] any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine." 47 U.S.C. § 227(b)(1)(C). Recipients of unsolicited fax advertisements may bring a private right of action under § 227(b)(3) of the TCPA, which provides:

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—

(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.

Plaintiffs rely extensively on the Second Circuit's decision in Foxhall Realty Law Offices, Inc. v. Telecomms. Premium Services Ltd., 156 F.3d 432 (2d Cir.1998), to support their position that § 227(b)(3) grants state courts exclusive jurisdiction over claims under the Act to the...