Mlc Mortg. Corp. v. Sun America Mortg. Co.

Decision Date26 May 2009
Docket NumberNo. 105,732.,No. 105,448.,105,448.,105,732.
Citation2009 OK 37,212 P.3d 1199
PartiesMLC MORTGAGE CORPORATION, an Oklahoma corporation, on behalf of Themselves and All Others Similarly Situated, Plaintiff/Appellant, v. SUN AMERICA MORTGAGE COMPANY, an Arizona corporation, Defendant/Appellee. and Adams & Associates, P.C., on Behalf of Themselves and All Others Similarly Situated, Plaintiffs/Appellants, v. Helena's Adventures in Travel, Inc., an Oklahoma corporation, Defendant/Appellee.
CourtOklahoma Supreme Court

CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION 2

¶ 0 In the styled and numbered causes, the plaintiffs/appellants, MLC Mortgage Corporation and Adams and Associates, P.C. [collectively, private parties/consumers], filed actions alleging they received unrequested solicitations via fax machine from the defendants/appellees, Sun America Mortgage Company and Helena's Adventures in Travel, Inc. [collectively, solicitors/advertisers], in violation of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. § 227 (2005). The solicitors filed motions for summary judgment arguing that the district courts had no authority to proceed in a private action for damages under the TCPA. The trial court granted the summary judgment motions. The Court of Civil Appeals reversed and remanded determining that a private cause of action could be pursued and that there were unresolved factual issues regarding the circumstances of the contacts made. We granted certiorari to issue a precedential pronouncement on an issue of first impression in Oklahoma. We hold that private parties may pursue violations of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. § 227 (2005), in Oklahoma courts.

CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION VACATED; TRIAL COURT REVERSED AND CAUSE REMANDED.

Joe Brett Reynolds, Joe Brett Reynolds, P.C., Oklahoma City, OK, for Plaintiffs/Appellants, MLC Mortgage Corporation and Adams & Associates, P.C.

Mack J. Morgan III, Charles Goodwin, Crow & Dunleavy, Oklahoma City, OK, and David A. Selden, Jodi Hill, Ballard, Spahr, Andrews & Ingersoll, LLP, Phoenix, AZ, for Defendant/Appellee, Sun America Mortgage Co.

Kris Ted Ledford, Patrick H. Kernan, Kernan & Ledford, Tulsa, OK, and Maurice G. Woods, II, McAtee & Woods, P.C., Oklahoma City, OK, for Defendant/Appellee, Helena's Adventures in Travel, Inc.

WATT, J.:

¶ 1 The above styled and numbered causes are consolidated for disposition by a single opinion.1 We granted certiorari to consider an issue of first impression: whether Oklahoma courts have jurisdiction over a private party's suit alleging violation of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. § 227 (2005).2

¶ 2 We join the almost unanimous pronouncements of extant federal and state courts having decided the issue3 and determine that private parties may pursue violation of the TCPA in Oklahoma courts. Our holding is supported by provisions of the Oklahoma Constitution: 1) art. 2, § 6 guaranteeing Oklahoma citizens open access to the judicial system;4 and 2) art. 7, § 7(a) allocating unlimited original jurisdiction of all justiciable matters not otherwise restricted to the district courts.5

RELEVANT FACTS

¶ 3 Suit was filed on behalf of the consumers and all others similarly situated6 in both causes in an attempt by the private parties to recover damages under the TCPA based on the receipt of allegedly unsolicited telephone facsimile advertisements (faxes). The solicitors argued that because the Oklahoma Legislature had not specifically provided for such a cause of action, no private suit could be maintained. They also asserted that any faxed documents received by the private parties were not "unsolicited" within the meaning of the TCPA.7 In both suits, the advertisers moved for summary judgment arguing that the district court lacked jurisdiction to proceed in the causes. The motions were granted; and appeals were filed in 2008.

¶ 4 On December 31st of the same year, the Court of Civil Appeals issued two opinions, identical in their reasoning. The appellate court reversed the trial court and remanded the causes. It determined that a private cause of action could be maintained in Oklahoma courts and that remand was necessary for the determination of material facts concerning circumstances surrounding the transmission of the faxed materials. Petitions for certiorari were filed on January 20, 2009. On March 31, 2009, the Court granted certiorari in both causes.

History and Purpose of the Telephone Consumer Protection Act (TCPA)

¶ 5 In 1991, the United States Congress conducted hearings on several bills related to the regulation of telemarketing8 in response to consumer complaints regarding the growing number of unsolicited telemarketing calls and fax advertisements.9 Relevant to our consideration here is the language of the TCPA prohibiting the use of telephone facsimile machines, computers, or other devices to send unsolicited advertisements to a fax machine. Specifically at issue is the portion of the TCPA creating a private right of action10 for anyone receiving an unsolicited facsimile advertisement and allowing the recovery of $500 for each violation.11 The purpose of the provision is to protect fax machine owners from unsolicited advertisements.12

De Novo Standard of Review.

¶ 6 The trial court granted summary judgment based on a legal determination that the private parties could not proceed on a cause of action for violation of the TCPA. Jurisdictional issues present questions of law.13 Therefore, our review is de novo.14 ¶ 7 a. Private Parties may Pursue Violations of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. § 227 (2005), in Oklahoma Courts.

¶ 8 The language relating to the consumers' private right of action is found in § 227(b)(3) of title 47 of the United States Code providing in pertinent part:

"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, or

(C) both such actions...." [Emphasis provided.]

The issue here is whether the phrase, "if otherwise permitted by the laws or rules of court of a State," allows consumers to bring a private right of action in Oklahoma courts for violation of the federal statutory provision.

¶ 9 The solicitors contend that the language in question requires the Oklahoma Legislature to affirmatively enable courts of this state to hear private claims arising under the TCPA. Because the Legislature has not passed a statutory provision specifically allowing private parties to file suit against violators of the TCPA, they argue that such actions may not be heard in our courts. The private parties assert that there is no need for legislative action before they may proceed to recover the statutorily provided recovery. We agree that legislative intervention is not a condition precedent to consumers recovering for violations of the TCPA in Oklahoma courts.

¶ 10 1) The Majority Position: Private Parties may proceed in State Courts without Legislative Intervention.

¶ 11 The overwhelming majority of courts considering the issue of whether private parties may sue for TCPA violations in state court have determined that citizens should be allowed to proceed.15 In settling the issue, extant federal and state courts have tended to apply one of three theories.16 Each of the theories focuses on an attempt to interpret the facially permissive language17 of the federal statute.

¶ 12 The "acknowledgment" approach is grounded in the Supremacy Clause of the United States Constitution.18 Courts adhering to this theory construe the phrase "if otherwise permitted" as a recognition by Congress that states have the right to structure their own court systems and that state courts are not obligated to change their procedural rules to accommodate TCPA claims.19 Under this view, no state can refuse to entertain a private TCPA action, but a state is not compelled to adopt special procedural rules for such actions.20 "Acknowledgment" states require no enabling legislation for parties to assert private TCPA claims.21

¶ 13 The "opt out" interpretation construes the TCPA to immediately authorize private rights of action in state court without the necessity of affirmative state action. In order that a state's courts not entertain such claims, there must be affirmative action through legislation or court rule specifically refusing to entertain a private TCPA claim.22 Absent such steps to opt out of private enforcement actions, concerns arise as to whether failure to allow private parties to pursue TCPA recoveries refuses to recognize the supremacy of the Federal Constitution.23

¶ 14 The third standard, and the one the solicitors urge us to adopt, looks at the language of the TCPA and concludes that Congress intended to deprive state courts of jurisdiction over private TCPA actions. Under this approach, the language "otherwise permitted" is said to indicate that the TCPA does not create an immediately enforceable right.24 Under this theory, such actions may be maintained in state court only after affirmative steps are taken to "opt in,"25 either by legislation or court rule, to exercise jurisdiction over such actions. This approach has been criticized as misconstruing the federal pronouncements on the TCPA.26 It also raises Tenth Amendment concerns if construed as a federal mandate for states to enact legislation.27

¶ 15 In contrast to the reasoning of the overwhelming majority of jurisdictions, only one state has unequivocally espoused the "opt in" theory. In The Chair King, Inc. v. GTE Mobilnet of Houston, Inc., 184 S.W.3d 707, 718 (Tex.2006), the Texas Supreme Court...

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