Us Fax Law Center, Inc. v. Ihire, Inc.
| Decision Date | 07 February 2007 |
| Docket Number | No. 05-1465.,No. 05-1441.,No. 05-1447.,No. 05-1523.,No. 05-1325.,No. 05-1521.,05-1325.,05-1441.,05-1447.,05-1465.,05-1521.,05-1523. |
| Citation | 476 F.3d 1112 |
| Parties | US FAX LAW CENTER, INC., a Colorado corporation, Plaintiff-Appellant, v. IHIRE, INC., n/k/a Value Asset Leasing, Inc., a Maryland corporation; iHire, LLC, a Delaware limited liability company; David MacFadyen, individually and in his official capacity as President and CEO of iHire, n/k/a Value Asset Leasing, Inc.; Donald MacFadyen, individually and in his official capacity as a Director of iHire, n/k/a/ Value Asset Leasing, Inc.; Jason MacFadyen, individually and in his official capacity as a Director of iHire, n/k/a Value Asset Leasing, Inc.; Melvin Coursey, individually; Megan Coursey, individually; R.J. Friedlander, individually; Mack Friedlander, individually; Katie Friedlander, individually; Laurie Bryan, individually; Alana Craft-Denton, individually; Eric Hartman, individually; Dawn Bair, individually; Richard McInyre, individually; Bernard Hoffman, individually; Loma Hoffman, individually; Malory Factor, individually; Eric Von Hippel, individually; Greg Williams, individually; Shawn Parker, individually; Ron Goldberg, individually; John Estep, individually; Butch Fisher, individually; Janine Rathburn, individually, Defendants-Appellees. Consumer Crusade, Inc., a Colorado corporation, Plaintiff-Appellant, v. Sunbelt Communications and Marketing, LLC, a Nevada limited liability company; Lara L. Horne-Albrecht, its officers and directors, Defendants-Appellees. Consumer Crusade, Inc., a Colorado corporation, Plaintiff-Appellant, v. Scientific Research Group, Inc., a Florida corporation; Brian McClintock, its officer(s) and director(s), Defendants-Appellees. Consumer Crusade, Inc., a Colorado corporation, Plaintiff-Appellant, v. Avalona Communications, a Florida corporation, doing business as Stockreporters.com,; Peter Emmanuel, its officers and directors, Defendants-Appellees. Consumer Crusade, Inc., a Colorado corporation, Plaintiff-Appellant, v. Live Leads Corporation, a California corporation; Justin Snyder, its Officer and Director, Defendants-Appellees. Consumer Crusade, Inc., a Colorado corporation, Plaintiff-Appellant, v. iHire, LLC, a Delaware limited liability company; David MacFadyen, its officer(s) and Director(s), Defendants-Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Andrew L. Quiat, General Counsel, U.S. Fax Law Center, Inc., Centennial, Colorado, (Frank J. Ball and Stephen S. Allen, Law Offices of Frank J. Ball, Greenwood Village, Colorado, with him on the briefs), for Plaintiff-Appellant U.S. Fax Law Center, Inc.
Agim M. Demirali, The Demirali Law Firm, P.C., Denver, Colorado, for Plaintiff-Appellant Consumer Crusade, Inc.
Brandee L. Caswell, (Natalie M. Hanlon-Leh and Jennifer T.K. Harrison, on the briefs), Faegre & Benson, L.L.P., Denver, Colorado, for Defendants-Appellees iHire, LLC, David MacFadyen and Lara L. Horne-Albrecht.
Douglas A. Turner, Douglas A. Turner, P.C., Golden, Colorado, for Defendant-Appellee Avalona Communications and Peter Emmanuel.
Before, KELLY, McKAY, and BRISCOE, Circuit Judges.
Plaintiff-Appellant U.S. Fax Law Center, Inc. and Plaintiff-Appellant Consumer Crusade, Inc. (collectively "Plaintiffs") filed six separate lawsuits in federal district court seeking damages for unsolicited faxes under the Telephone Consumer Protection Act (TCPA). In different orders issued by different judges, all six suits were dismissed based on lack of jurisdiction, lack of standing, or both. The Plaintiffs now challenge the underlying judgments, asserting that there is diversity jurisdiction over the TCPA claims and that they have representational standing. We consolidated the cases for oral argument and now resolve them in this opinion. Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm the various judgments of dismissal based on the Plaintiffs' lack of standing while rejecting the rationale that diversity jurisdiction is unavailable for these claims.
Plaintiffs aggregate claims from individuals and businesses that receive junk faxes in violation of 47 U.S.C. § 227(b)(1)(C), a subsection of the TCPA. They take assignments of claimants' rights under the TCPA and pursue those claims in federal and state court. In these federal cases, Plaintiffs allege that the various Defendants-Appellees violated the TCPA by knowingly and willfully sending unsolicited advertisements by fax to the assignors, who are Colorado residents. Plaintiffs seek a $500 statutory award for each unsolicited fax, along with a $1500 statutory award for each fax sent knowingly and willfully. See id. § 227(b)(3).1
As previously stated, we consider six judgments on appeal. All six are based on orders containing similar rationales. In the first order dismissing one of the suits, US Fax Law Center, Inc. v. iHire, Inc., 362 F.Supp.2d 1248 (D.Colo.2005), the district court determined that U.S. Fax Law Center lacked representational standing to assert TCPA claims because such claims are unassignable under Colorado law. Id. at 1253. Specifically, the court held that the claims are unassignable because they are "personal-injury privacy claims" and penal in nature. Id. at 1252-53. In another order dismissing one of the suits, Consumer Crusade, Inc. v. Fairon & Associates., Inc., 379 F.Supp.2d 1132 (D.Colo. 2005), the district court found it lacked diversity jurisdiction over TCPA claims. Id. at 1136-37. The other orders of dismissal rely on the grounds enumerated in these first two orders.
We review a dismissal for lack of subject-matter jurisdiction de novo. Johnson v. Rodrigues, 226 F.3d 1103, 1107 (10th Cir.2000). In Fairon, the district court below held that it lacked subject matter jurisdiction over the TCPA claims because six federal circuit courts have concluded, based on § 227(b)(3) of the TCPA, that Congress intended to preclude federal question jurisdiction over TCPA claims.3 379 F.Supp.2d at 1133. The district court extended the reasoning from the federal question cases to find that Congress also intended to preclude diversity jurisdiction. Id. at 1136-38.
Section 227(b)(3) states:
(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).
Absent precedent from this circuit, the Fairon court relied on the federal question cases to conclude "that the exclusive forum for enforcement [of the TCPA] is the state courts [and] original jurisdiction in a federal court would appear to be precluded."4 Id. at 1136 (emphasis added). Specifically, the court gave five reasons why the TCPA divests federal courts of diversity jurisdiction. First, it noted the "exclusive references to the state courts as the forums for adjudicating private TCPA actions [in §§ 227(b)(3) and (c)]." Id. at 1137. Second, it noted the "complete deference given to `the laws or rules of court of a State' for bringing `in an appropriate court of that State' a private TCPA action." Id. Third, it pointed to explicit recognition in congressional findings that "telemarketers can evade state prohibitions through interstate operations without recognizing a federal forum for obtaining private relief in such circumstances. . . ." Id. (citation omitted). Fourth, it pointed to the TCPA's "exclusive grant of federal jurisdiction accorded parens patriae cases brought by a state [under § 227(f)(2)]." Id. Moreover, the court noted, Congress could have clarified the TCPA in its 2003 amendments to explicitly confer diversity jurisdiction, rectifying the holdings of the federal question cases which suggested that TCPA claims could be brought only in state court. Id. These facts, said the court, "lead to the conclusion that federal diversity jurisdiction was not extended to private claims by such legislation." Id.
The district court decided Fairon on July 28, 2005. Since that time, two circuit courts have addressed whether federal courts have jurisdiction over TCPA claims based on diversity. See Gottlieb v. Carnival Corp., 436 F.3d 335 (2d Cir.2006); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir.2005). Prior to Gottlieb and Brill, the six circuit cases relied upon by the Fairon court all involved TCPA claims based on federal question jurisdiction. See Murphey v. Lanier, 204 F.3d 911 (9th Cir.2000); Foxhall Realty Law Offices, Inc. v. Telecomm. Premium Servs., 156 F.3d 432 (2d Cir.1998); ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir.1998); Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287 (11th Cir.1998); Int'l Science & Tech. Inst., Inc. v. Inacom Commc'ns, Inc., 106 F.3d 1146 (4th Cir. 1997); Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507 (5th Cir.1997).
Gottlieb and Brill rejected extension of the reasoning from the TCPA federal question cases to TCPA diversity cases. Both Gottlieb and Brill held that plaintiffs can prosecute TCPA claims in federal court based on diversity, despite the unanimous circuit decisions holding that no such suit may be maintained based on federal question jurisdiction. See Gottlieb, 436 F.3d at 339 (); Brill, 427...
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