Wednesday, January 18, 2012

Federal Question Jurisdiction Exists Over Telephone Consumer Protection Act Suits: Supreme Court

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

Private suits arising from automatically dialed calls to cellular telephones and other practices barred by the federal Telephone Consumer Protection Act (TCPA) may be brought in federal court under federal question jurisdiction, even though the TCPA provides for suits in state court and does not expressly authorize private suits in federal court, the U.S. Supreme Court ruled today in a unanimous opinion.

Intrusive Nuisance Calls

Congress created the TCPA in 1991, having determined that federal legislation was needed because telemarketers, by operating interstate, were escaping state law prohibitions on intrusive nuisance calls.

The Act permits a private person to seek redress for violations in an appropriate court of a state, if otherwise permitted by the laws or court rules of that state.

In this case, an individual filed a damages action in federal district court, alleging that a financial services firm, seeking to collect a debt, violated the TCPA by repeatedly using an automatic telephone dialing system or prerecorded or artificial voice to call the individual’s cellular phone without his consent.

Federal Question Jurisdiction

Holding that federal jurisdiction exists, the Supreme Court reversed a decision (CCH Advertising Law Guide ¶64,343) of the U.S. Court of Appeals in Atlanta—one of six U.S. Courts of Appeal that had held federal question jurisdiction lacking over private suits under the TCPA.

Private suits for violations of the TCPA meet the test for federal question jurisdiction as arising under the laws of the United States, it was held. The Court found unpersuasive the financial services firm’s contention that the TCPA provision for suits in state court displaced federal jurisdiction.

The firm’s argument that federal courts will be inundated by $500-per-violation TCPA statutory damages claims—or that defendants could use federal court removal to force small claims court plaintiffs to abandon suit—seemed more imaginary than real, the Court added.

The January 18, 2012 opinion in Mims v. Arrow Financial Services, LLC will be reported at CCH Advertising Law Guide ¶64,535.

No comments: