Usa Tax Law v. Office Warehouse Wholesale, 05CA2742.

• Citation: 160 P.3d 428
• Decision Date: 19 April 2007
• Docket Number: No. 05CA2742.,05CA2742.
• Parties: USA TAX LAW CENTER, INC., d/b/a U.S. Fax Law Center, Inc., Plaintiff-Appellant, v. OFFICE WAREHOUSE WHOLESALE, LLC, d/b/a OWW, LLC, Defendant-Appellee.
• Court: Court of Appeals of Colorado

160 P.3d 428

USA TAX LAW CENTER, INC., d/b/a U.S. Fax Law Center, Inc., Plaintiff-Appellant, v. OFFICE WAREHOUSE WHOLESALE, LLC, d/b/a OWW, LLC, Defendant-Appellee.

No. 05CA2742.

Colorado Court of Appeals, Div. IV.

April 19, 2007.

Sawaya, Rose, Funderburg & Kaplan, P.C., Richard B. Rose, Denver, Colorado, for Plaintiff-Appellant.

No Appearance for Defendant-Appellee.

Opinion by Judge HAWTHORNE.

In this Telephone Consumer Protection Act (TCPA) case, plaintiff, USA Tax Law Center (USA), appeals the trial court's partial summary judgment in favor of defendant, Office Warehouse Wholesale, LLC (Office). The trial court determined that USA did not have a private right of action for Office's failure to include required identifying information on its facsimile advertisements. We affirm.

I. Background

In 2003, USA sued Office under the TCPA, 47 U.S.C. § 227 (2001), for sending fifty-four unsolicited facsimile advertisements to its assignors. USA alleged that each unsolicited advertisement violated § 227(b) and entitled it to $500 in statutory damages. It also alleged that the unsolicited advertisements did not contain the identifying information required by § 227(d) and the Federal Communications Commission (FCC) regulation, 47 C.F.R. § 68.318(d) (2006) (the regulation), which, in USA's view, constituted a separate violation of the TCPA entitling it to an award of an additional $500 in statutory damages for each advertisement. Finally, USA alleged that it was entitled to treble damages under the statute because the violations were knowing or willful.

Office moved to dismiss, arguing that the TCPA did not provide a private cause of action for its failure to include required identifying information, and, as a result, USA was not entitled to statutory damages for those violations. The trial court, treating the motion as one for summary judgment, granted partial summary judgment in favor of Office. It found that no private cause of action existed under the TCPA for violations of facsimile identification requirements.

In 2005, the trial court granted USA's motion for default judgment, finding Office sent fifty-four unsolicited facsimile advertisements in violation of § 227(b). It awarded USA statutory damages and treble damages for each violation, totaling $81,000. This appeal as to the facsimile identification claims followed.

II. Standard of Review

Our standard of review in this case is de novo for two reasons. First, we review a trial court's decision to grant summary judgment de novo because it presents a question of law. Polk v. Hergert Land & Cattle Co., 5 P.3d 402, 404 (Colo.App.2000). Second, we review a trial court's interpretation of a statute de novo because it presents a question of law. State ex rel. Salazar v. Cash Now Store, Inc., 31 P.3d 161, 164 (Colo. 2001).

III. Right of Action Under Regulation

USA contends that the trial court erred in granting partial summary judgment in Office's favor because even though no private right of action exists to enforce § 227(d)'s identification requirements, one exists to enforce the same requirements in the regulation. We disagree.

"Like substantive federal law itself, private rights of action to enforce federal law must be created by Congress." Alexander v. Sandoval, 532 U.S. 275, 286, 121 S.Ct. 1511, 1519, 149 L.Ed.2d 517 (2001). Absent statutory intent to create a private right of action, "courts may not create one, no matter how desirable that might be as a policy matter, or how compatible with the statute." Alexander, supra, 532 U.S. at 286-87, 121 S.Ct. at 1520.

"[T]he fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person." Cannon v. Univ. of Chicago, 441 U.S. 677, 688, 99 S.Ct. 1946, 1953, 60 L.Ed.2d 560 (1979).

To determine whether a federal statute creates a private right of action, we may consider whether (1) the plaintiff falls within the class the statute was enacted to benefit; (2) there is evidence of any legislative intent to create or to deny a private right of action; (3) a private right of action is consistent with the purposes of the legislative scheme; and (4) the area of law is one traditionally relegated to the states. See Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975); Henderson v. Bear, 968 P.2d 144, 146 (Colo.App.1998). More recent Supreme Court decisions have held the determinative question is "whether Congress intended to create the private right of action asserted." Touche Ross & Co. v. Redington, 442 U.S. 560, 568, 99 S.Ct. 2479, 2485, 61 L.Ed.2d 82 (1979); see Henderson v. Bear, supra.

"Language in a regulation may invoke a private right of action that Congress through the statutory text created, but it may not create a right that Congress has not." Alexander, supra, 532 U.S. at 291, 121 S.Ct. at 1522; see also Freeman v. Fahey, 374 F.3d 663, 665 (8th Cir.2004) (no private right of action under 42 U.S.C. § 5309 even though regulations under the statute mentioned private right of action). Further, a regulation may not amend statutory language or add something that is not already present. California Cosmetology Coal. v. Riley, 110 F.3d 1454, 1460 (9th Cir.1997).

"The question whether a statute creates a cause of action, either expressly or by implication, is basically a matter of statutory construction." Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15, 100 S.Ct. 242, 245, 62 L.Ed.2d 146 (1979).

When interpreting a federal statute, we begin with the statutory language itself. Joy Techs., Inc. v. Sec'y of Labor, 99 F.3d 991, 997 (10th Cir.1996). "If the terms of the statute are clear and unambiguous, the inquiry ends and we simply give effect to the plain language of the statute." Toomer v. City Cab, 443 F.3d 1191, 1194 (10th Cir.2006). We also interpret the statutory language according to its plain and ordinary meaning. See Toomer, supra.

Likewise, we interpret federal regulations in a manner that gives them effect according to their plain meaning. See Time Warner Entm't Co. v. Everest Midwest Licensee, L.L.C., 381 F.3d 1039 (10th Cir.2004).

Because this is an issue of first impression in Colorado, we may look to courts of other states for guidance. See In re Marriage of Bolding-Roberts, 113 P.3d 1265, 1267 (Colo.App.2005). In addition, because this case involves a federal statute, lower federal court decisions may also provide us with some guidance, although only a decision of the U.S. Supreme Court would be binding. See Cmty. Hosp. v. Fail, 969 P.2d 667, 672 (Colo.1998).

A. Statutory Language

Here, we are faced with two separate provisions of the TCPA. First, § 227(b)(1)(C) prohibits persons from sending unsolicited advertisements to a telephone facsimile machine unless there is an "established business relationship" between the sender and the recipient. Section 227(b)(3) provides a private right of action to enjoin violations of § 227(b), and the regulations promulgated under that subsection, and to recover actual damages or $500, whichever is greater, for each violation, or both. 47 U.S.C. § 227(b)(3)(A) ("any person or entity" may bring an action in state court "based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation"). It also provides for treble damages for willful or knowing violations. 47 U.S.C. § 227(b)(3).

Second, § 227(d)(1)(B) requires persons sending messages using telephone facsimile machines to clearly mark

in a margin at the top or bottom of each transmitted page of the message or on the first page of the transmission, the date and time it is sent and an identification of the business, other entity, or individual sending the message and the telephone number of the sending machine or of such business, other entity, or individual.

Section 227(d) does not contain specific language creating a private right of action. However, the TCPA authorizes state attorneys general to institute civil proceedings for violations of the TCPA or its regulations. 47 U.S.C. § 227(f).

B. Regulations

Section 227(b)(2) requires the FCC to "prescribe regulations to implement the requirements of this subsection."

Section 227(d)(2) requires the FCC to

revise the regulations setting technical and procedural standards for telephone facsimile machines to require that any such machine which is manufactured after one year after December 20, 1991, clearly marks, in a margin at the top or bottom of each transmitted page or on the first page of each transmission, the date and time sent, an identification of the business, other entity, or individual sending the message, and the telephone number of the sending machine or of such business, other entity, or individual.

The regulation implementing § 227(d)(2) provides:

Telephone facsimile machines; Identification of the sender of the message. It shall be unlawful for any person within the United States to use a computer or other electronic device to send any message via a telephone facsimile machine unless such person clearly marks, in a margin at the top or bottom of each transmitted page of the message or on the first page of the transmission, the date and time it is sent and an identification of the business, other entity, or individual sending the message and the telephone number of the sending machine or of such business, other entity, or individual. If a facsimile broadcaster demonstrates a high degree of involvement in the sender's facsimile messages, such as supplying the numbers to which a message is sent, that broadcaster's name, under which it is registered to conduct business with the State Corporation Commission (or comparable regulatory authority), must be identified on the facsimile, along with the sender's name. Telephone facsimile machines manufactured on and after December 20, 1992, must clearly mark such identifying information on each transmitted page.

47 C.F.R. §...