ErieNet Inc v. Velocity Net Inc ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
9-25-1998
ErieNet Inc v. Velocity Net Inc
Precedential or Non-Precedential:
Docket 97-3562
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Filed September 25, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 97-3562
ERIENET, INC.; SANDRA MACKENZIE;
JOHN KNAUER; FRANK MEZLER, JR.,
Appellants
v.
VELOCITY NET, INC.;
THOMAS DYLEWSKI; CHAD FERENACK
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 97-cv-00001E)
Argued April 27, 1998
BEFORE: ALITO, RENDELL, and GARTH, Circuit Judges
(Filed: September 25, 1998)
Daniel J. Pastore [ARGUED]
The McDonald Group
456 West Sixth Street
Erie, PA 16507-1216
Counsel for Appellants
Craig A. Markham [ARGUED]
Elderkin, Martin, Kelly &
Messina
150 East 8th Street
Box 1819
Erie, PA 16501
Counsel for Appellees
OPINION OF THE COURT
RENDELL, Circuit Judge.
This appeal requires us to consider the unique and
apparently unprecedented question of whether federal
district courts have jurisdiction over consumer lawsuits
brought under a federal statute that creates a private cause
of action, is silent as to whether such actions can be
brought in federal courts, but expressly refers consumer
claims to state courts. Appellant ErieNet, Inc., an Internet
service provider, and the individual appellants, ErieNet
subscribers, brought suit in federal district court under the
private enforcement provision of the Telephone Consumer
Protection Act ("TCPA"), 47 U.S.C. S 227. Appellants allege
that appellees VelocityNet, Inc., another Internet service
provider, and its agents and employees sent unsolicited e-
mail messages to ErieNet subscribers in violation of the
TCPA. Because the TCPA refers such consumer suits to
state courts, the district court concluded that it lacked
subject matter jurisdiction and dismissed the case
pursuant to Federal Rule of Civil Procedure 12(h)(3). We
have jurisdiction over this appeal pursuant to 28 U.S.C.
S 1291, and we will exercise plenary review. See Growth
Horizons, Inc. v. Delaware County, 983 F.2d 1277, 1280 (3d
Cir. 1993) (citations omitted). We will affirm.
I.
Enacted in 1991 as part of the Federal Communications
Act, the TCPA seeks to deal with an increasingly common
nuisance -- telemarketing. More than 300,000 solicitors
call more than 18,000,000 Americans each day. See 47
U.S.C. S 227, Congressional finding No. 3. By 1991, over
half the states had enacted statutes restricting the
marketing uses of the telephone. However, Congress
recognized that "telemarketers can evade [state]
prohibitions through interstate operation; therefore, Federal
law is needed to control residential telemarketing
practices." 47 U.S.C. S 227, Congressionalfinding No. 7;
see also S. Rep. No. 102-178, at 5 (1991), reprinted in,
2
1991 U.S.C.C.A.N. 1968, 1973 ("The Committee believes
that Federal legislation is necessary to protect the public
from automated telephone calls . . . Federal action is
necessary because the States do not have the jurisdiction
to protect their citizens against those who use these
machines to place interstate telephone calls.").
Accordingly, Congress enacted the TCPA, which
prohibits, inter alia, various uses of automatic telephone
dialing systems, the initiation of certain telephone calls
using artificial or prerecorded voices, and the use of any
device to send an unsolicited advertisement to a telephone
facsimile machine. See 47 U.S.C. S 227(b).1 Under S 227(f),
states may bring civil actions in federal court on behalf of
their residents for violations of the TCPA. In addition, the
statute expressly creates a private right of action:
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, whichever is greater, or
(C) both such actions.
47 U.S.C. S 227(b)(3). Senator Hollings, the sponsor of the
bill, stated:
The substitute bill contains a private right-of-action
provision that will make it easier for consumers to
recover damages from receiving these computerized
calls. The provision would allow consumers to bring an
_________________________________________________________________
1. Although this litigation relates to unsolicited e-mail messages,
appellants seek to apply the provision of the TCPA prohibiting the use of
any device to send an unsolicited advertisement to a telephone facsimile
machine. Appellants contend that this provision applies to the facts of
this case because the e-mail messages were sent by a computer, were
unsolicited advertisements, and were sent to ErieNet's computer
network, which constitutes a telephone facsimile machine within the
meaning of the TCPA.
3
action in State court against any entity that violates the
bill. The bill does not, because of constitutional
constraints, dictate to the States which court in each
State shall be the proper venue for such an action, as
this is a matter for state legislators to determine.
Nevertheless, it is my hope that the States will make it
as easy as possible for consumers to bring such actions,
preferably in small claims court. The consumer outrage
at receiving these calls is clear. Unless Congress makes
it easier for consumers to obtain damages from those
who violate this bill, these abuses will undoubtedly
continue.
Small claims court or a similar court would allow the
consumer to appear before the court without an
attorney. The amount of damages in this legislation is
set to be fair to both the consumer and the
telemarketer. However, it would defeat the purposes of
the bill if the attorneys' costs to consumers of bringing
an action were greater than the potential damages. I
thus expect that the States will act reasonably in
permitting their citizens to go to court to enforce this
bill.
137 Cong. Rec. S16205-06 (daily ed. Nov. 7, 1991)
(statement of Sen. Hollings) (emphasis added).
Although actual monetary losses from telemarketing
abuses are likely to be minimal, this private enforcement
provision puts teeth into the statute by providing for
statutory damages and by allowing consumers to bring
actions on their own. Consumers who are harassed by
telemarketing abuses can seek damages themselves, rather
than waiting for federal or state agencies to prosecute
violations. Although S 227(f)(1) of the statute does authorize
states to bring actions on their citizens' behalf, the sheer
number of calls made each day -- more than 18,000,000 --
would make it impossible for government entities alone to
completely or effectively supervise this activity.
II.
We recognize at the outset that the circumstances of this
case are unique. We are confronted with "an unusual
4
constellation of statutory features." Chair King, Inc. v.
Houston Cellular Corp., 131 F.3d 507, 512 (5th Cir. 1997).
A federal statute creates a private cause of action. The
statute is not silent as to where such actions may be
brought; rather, it refers potential plaintiffs to the state
courts. Neither the text nor the legislative history makes
any reference to federal courts. Furthermore, the statute
does not appear to reflect any significant federal interest, or
one that is uniquely federal. It does not reflect an attempt
by Congress to occupy this field of interstate
communication or to promote national uniformity of
regulation. Rather, Congress recognized that state
regulation of telemarketing activity was ineffective because
it could be avoided by interstate operations. Federal
legislation was necessary in order to prevent telemarketers
from evading state restrictions. See Van Bergen v.
Minnesota, 59 F.3d 1541, 1548 (8th Cir. 1995).
This statutory scheme is significant because a district
court's federal question jurisdiction is dependent on an act
of Congress. "While Article III of the Constitution authorizes
judicial power of ``cases, in law and equity, arising under'
. . . the Constitution, laws, and treaties of the United
States, the district courts have only that jurisdiction that
Congress grants through statute." International Science &
Tech. Inst., Inc. v. Inacom Communications, Inc., 106 F.3d
1146, 1153 (4th Cir. 1997) (citing Sheldon v. Sill, 49 U.S.
441, 449 (1850)). The question, therefore, is whether
Congress has provided for federal court jurisdiction over
consumer suits under the TCPA. To answer that question,
we first examine whether the TCPA itself reflects Congress'
intent to grant federal jurisdiction. If the TCPA does not
reflect such an intent, we must then consider whether
some other statute authorizes federal jurisdiction under
these circumstances. In considering these questions, we
keep in mind the "fundamental precept that federal courts
are courts of limited jurisdiction. The limits upon federal
jurisdiction, whether imposed by the Constitution or by
Congress, must be neither disregarded nor evaded." Owen
Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978).
A.
Every court of appeals to consider the question has held
that the TCPA does not grant federal court jurisdiction over
5
the private causes of action at issue in this litigation. See
Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287, 1287-
88 (11th Cir.), modified, 140 F.3d 898 (11th Cir. 1998);
Chair King, 131 F.3d at 509; International Science, 106 F.3d
at 1150. But see Kenro, Inc. v. Fax Daily, Inc., 962 F. Supp.
1162, 1164 (S.D. Ind. 1997) (rejecting the International
Science analysis and finding federal jurisdiction over private
enforcement actions under the TCPA). Appellants
nonetheless argue that the statute does reflect Congress'
intent to create a private right of action that may be
brought in federal court, and that nothing in the text or
legislative history expressly precludes federal court
jurisdiction.
In interpreting a statute, we are charged with the duty to
consider the provisions of the whole law, its object, and its
policy. See United States Nat'l Bank of Oregon v.
Independent Ins. Agents of Am., Inc., 508 U.S. 439, 455
(1993) (quoting United States v. Heirs of Boisdore, 49 U.S.
113, 122 (1849)). Furthermore, we must construe the
statute " ``so that effect is given to all its provisions, so that
no part will be inoperative or superfluous, void, or
insignificant.' " Pennsylvania Medical Soc'y v. Snider, 29
F.3d 886, 895 (3d Cir. 1994) (quoting 2A Norman J. Singer,
Sutherland Statutory Construction S 46.06, at 119-20 (5th
ed. 1992) (citations omitted)). Guided by these principles,
we join the Fourth, Fifth, and Eleventh Circuits in
concluding that Congress intended that private enforcement
suits under the TCPA be brought in state, and not federal,
courts.
Appellants note that Congress stated only that private
rights of action "may" be brought in state court. See 47
U.S.C. S 227(b)(3). Appellants argue that such permissive
language does not limit jurisdiction to state courts, and
therefore leaves federal jurisdiction intact. We decline to
attribute this logic or intent to Congress. In Tafflin v. Levitt,
493 U.S. 455, 458-59 (1990), the Supreme Court
recognized that there is a presumption in favor of state
court jurisdiction over claims arising under federal law. The
Court held that an express grant of federal jurisdiction over
civil RICO claims did not oust the state courts of
jurisdiction. See id. at 460-61. While state courts would
6
have had jurisdiction over private TCPA actions even if
Congress had made no reference to state courts, we
conclude that Congress referred these claims to state court
as forcefully as it could, given the constitutional difficulties
associated with Congress' mandating a resort to state
courts. See 137 Cong. Rec. S16205-06 (daily ed. Nov. 7,
1991) (statement of Sen. Hollings).
The appellants' argument that the permissive reference to
state courts implies the existence of federal jurisdiction is
undercut by the fact that there is no presumption of
jurisdiction in the federal courts. See Sheldon, 49 U.S. at
442 (noting that federal court jurisdiction must be
authorized by Congress). State courts are courts of general
jurisdiction, while federal courts are courts of only limited
jurisdiction. As the Fourth Circuit recognized, "[i]f a statute
authorizes suit in state courts of general jurisdiction
through the use of the term ``may,' that authorization
cannot confer jurisdiction on a federal court because
federal courts are competent to hear only those cases
specifically authorized." International Science, 106 F.3d at
1151 (citing Sheldon, 49 U.S. at 449). The permissive
authorization of jurisdiction in state courts does not imply
that jurisdiction is also authorized in federal courts. For
Congress' reference to state courts to have any meaning, it
must reflect something other than a mere confirmation of
concurrent jurisdiction over private enforcement actions.
We believe that the most natural reading of this language is
that Congress intended to authorize private causes of
action only in state courts, and to withhold federal
jurisdiction.2
_________________________________________________________________
2. Because of the differences between the respective jurisdictions of
state
and federal courts, we do not place great reliance on Tafflin as setting
forth a doctrinal guide for our analysis here. It is in this respect that
we
disagree with our dissenting colleague. The Supreme Court in Tafflin
traced the historical roots of concurrent jurisdiction, emphasizing the
principle that " ``nothing in the concept of our federal system prevents
state courts from enforcing rights created by federal law.' " 493 U.S. at
459 (quoting Dowd Box Co. v. Courtney, 368 U.S. 502, 507-08 (1962)).
The Court thus recognized "a deeply rooted presumption" in favor of
concurrent jurisdiction over federal causes of action, and noted the rare
and unique situations in which that presumption will be held to have
7
Our review of the other provisions of the statute supports
this reading. It is apparent from a review of the TCPA and
the Communications Act that Congress consciously drew
careful jurisdictional distinctions. For example, in
S 227(f)(2) of the TCPA, Congress expressly mandates
exclusive federal court jurisdiction over TCPA actions
brought by states on behalf of their residents. The statute
specifically addresses venue, service of process, and
possible conflicts with FCC enforcement efforts. See 47
U.S.C. S S 227(f)(4) & (7). In S 227(b)(3), however, Congress
does not even allude to these issues in connection with the
private enforcement action at issue here. The Fifth Circuit
has interpreted this as an indication of Congress' intent to
limit such private actions to state courts. See Chair King,
131 F.3d at 512. In other parts of the Communications Act,
where Congress intended to authorize concurrent
jurisdiction, it did so expressly.3 Its failure to provide for
_________________________________________________________________
been overcome. Id. Tafflin spoke only to the issue of whether state court
jurisdiction, which is presumed, could be ousted or divested, while the
issue before us is whether federal jurisdiction, which must be provided
for by Congress, does in fact exist.
Thus, we believe that the reasoning of Tafflin does not, as the dissent
asserts, transfer to the instant legislation which, in referring consumer
suits to state courts, does not provide for any jurisdiction in federal
court. Given the fact that state court concurrent jurisdiction is
presumed, while federal jurisdiction must be provided for, the Tafflin
reasoning is not easily borrowed in this context. Further, the Tafflin
test
for divestment is not susceptible to application under our facts because,
again, the Tafflin Court was speaking only to the issue of overcoming the
presumption of state court jurisdiction, not as is the case here,
determining whether Congress intended federal courts to have
jurisdiction under S 1331, or had indicated a contrary intention that
jurisdiction should not lie in federal court under S 1331.
3. See 47 U.S.C. S 214(c) (any court of competent jurisdiction may issue
injunction); 47 U.S.C. S 407 (authorizing suit for carrier's noncompliance
with order for payment in United States district court or in any state
court of general jurisdiction); 47 U.S.C. S 415(f) (establishing one year
statute of limitations for petitions brought to enforce order for payment
of money in federal or state court); 47 U.S.C. S 553(c)(1) (authorizing
suit
for unauthorized cable reception in United States district court or any
other court of competent jurisdiction); 47 U.S.C. S555(a) (authorizing
review of decisions of a franchising authority in United States district
court or any state court of competent jurisdiction); 47 U.S.C.
S 605(e)(3)(A) (authorizing suit for unauthorized publication in United
States district court or any other court of competent jurisdiction).
8
concurrent jurisdiction under S 227(b)(3) of the TCPA is
therefore significant. See Chair King, 131 F.3d at 512;
International Science, 106 F.3d at 1152 (finding significance
in Congress' failure to refer to federal jurisdiction in S 227,
as compared to the express grants of concurrent
jurisdiction in other parts of the Communications Act).
Finally, appellants argue that we should interpret S 227
as providing for a private cause of action in federal court
because this is consistent with, and would serve, the
underlying purposes of the TCPA to protect the public from
telemarketing abuses, to supplement state jurisdiction over
the proscribed activity, and to provide a private right of
action. However, the mere need for federal legislation and
provision of remedies does not give a right of access to a
federal forum. Federal legislation was deemed necessary
because telemarketers could avoid state legislation by
engaging in interstate operations, not because Congress
recognized a significant federal interest deserving of
protection in federal courts. See 47 U.S.C.S 227,
Congressional finding No. 7; S. Rep. No. 102-178, at 5,
reprinted in, 1991 U.S.C.C.A.N. 1968, 1973; see also
VanBergen, 59 F.3d at 1548.
Furthermore, Senator Hollings' statements indicate that
an overriding concern in the creation of the private right of
action was to make it easier for consumers to recover
damages -- "preferably in small claims court." 137 Cong.
Rec. S16205-06 (daily ed. Nov. 7, 1991) (statement of Sen.
Hollings). The implication is that suits in courts other than
state small claims courts would be more costly and
burdensome to consumers. The entire focus of Senator
Hollings' statement is on state courts. It does not appear
that he, the bill's sponsor, contemplated private
enforcement actions in federal courts. We agree with the
Fourth Circuit that "the clear thrust of his statement was
consistent with the bill's text that state courts were the
intended fora for private TCPA actions." International
Science, 106 F.3d at 1153.
Thus, looking to the statute as a whole, and attempting
to give effect to every provision, we find that the explicit
reference to state courts, and the absence of any reference
9
to federal courts, reflects Congress' intent to withhold
jurisdiction over such consumer suits in federal court.
B.
Appellants argue that it is not necessary that the TCPA
itself confer federal jurisdiction over private rights of action.
Rather, appellants contend that, regardless of the TCPA,
jurisdiction is proper pursuant to 28 U.S.C. S 1331, which
gives district courts jurisdiction over "civil actions arising
under the Constitution, laws, or treaties of the United
States." The term "arising under" eludes precise definition.
Justice Holmes articulated the most common definition: "[a]
suit arises under the law that creates the cause of action."
American Well Works Co. v. Layne & Bowler Co., 241 U.S.
257, 260 (1916). More recently, this court has recognized
two tests that generally apply to a court's assessment of
federal question jurisdiction. See Virgin Islands Housing
Auth. v. Coastal General Constr. Serv. Corp., 27 F.3d 911,
916 (3d Cir. 1994). "First, the question is whether federal
law creates the cause of action. If not, the second inquiry
is whether the complaint poses a substantial federal
question." Id. (citing West 14th St. Commercial Corp. v. 5 W.
14th Owners Corp., 815 F.2d 188, 192 (2d Cir. 1987)). See
also Franchise Tax Board v. Construction Laborers Vacation
Trust, 463 U.S. 1, 27-28 (1983). Appellants argue that their
complaint satisfies both these tests in that,first, the TCPA
creates the cause of action, and second, since the claims
asserted in the complaint require the construction of the
TCPA, a substantial federal question is posed.
In connection with the first question, here federal law
does create the cause of action. However, the fact that
federal law creates the cause of action does not necessarily
end the inquiry regarding the existence of federal subject
matter jurisdiction. Although S 1331 functions as a general
grant of jurisdiction to district courts of cases in which the
cause of action was created by federal law, "it does not
mean that jurisdiction is not precluded by another statute
or doctrine of judicial administration." First Jersey
Securities, Inc. v. Bergen, 605 F.2d 690, 694 (3d Cir. 1979)
(finding that failure to exhaust administrative remedies
precludes district court jurisdiction). Accordingly, "[t]o
10
establish a cause of action in district court under section
1331 [the plaintiffs] must show first that their action . . .
``arises under' . . . [federal law] and second that section
1331 jurisdiction is not preempted by a more specific
statutory provision conferring exclusive jurisdiction
elsewhere." Connors v. Amax Coal Co., Inc., 858 F.2d 1226,
1229-30 (7th Cir. 1988) (concluding that, even if plaintiff's
claims arose under ERISA or federal common law, S 1331
could not supersede provisions of Longshore and Harbor
Workers' Compensation Act and Black Lung Benefits Act
conferring exclusive jurisdiction in the courts of appeals).
For example, federal statutes frequently assign jurisdiction
to a court other than the federal district courts. See, e.g.,
28 U.S.C. S 1491(a)(1) (assigning jurisdiction of certain
takings claims to the Court of Federal Claims); 29 U.S.C.
S 160(f) (assigning original jurisdiction to review agency
orders under the National Labor Relations Act to federal
courts of appeals). By virtue of such a specific reference or
assignment, Congress negates district court jurisdiction
under S 1331.4 Although the TCPA is certainly unique in
that it refers litigants to the jurisdiction of a state court
rather than another federal court, the principle is the same.
We recognize that, given S 1331's general grant of federal
question jurisdiction, Congress could have more clearly
expressed its intent in the TCPA to decline to provide
jurisdiction for these consumer suits in district court.
However, we have never before required Congress, when
assigning jurisdiction to a court other than the district
court, to state that the district court is without jurisdiction.
_________________________________________________________________
4. We decline to apply the Tafflin Court's analysis of the divestment of
state court jurisdiction to our S 1331 analysis. The federal courts' S
1331
jurisdiction is not equivalent to the general jurisdiction of state
courts.
Congress itself conferred federal question jurisdiction on district courts
in S 1331. By contrast, state courts do not have jurisdiction over federal
causes of action because of any act of Congress. Rather, "state courts
have inherent authority . . . to adjudicate claims arising under the laws
of the United States." Tafflin, 493 U.S. at 458. The mere fact that S 1331
creates federal question jurisdiction does not mean that it creates any
presumption in favor of federal jurisdiction in particular cases. With
respect to the withholding of federal jurisdiction, in contrast to the
divestment of state jurisdiction, there is no requirement that a statement
of Congressional intent be explicit or unmistakable.
11
See Public Util. Comm'r v. Bonneville Power Admin., 767
F.2d 622, 627 (9th Cir. 1985) (citations omitted) (noting
that "jurisdiction over a specific class of claims which
Congress has committed to the court of appeals generally is
exclusive, even in the absence of an express statutory
command of exclusiveness"). To find federal court
jurisdiction here would not only be contrary to the clear
intent of Congress, but also would represent a departure
from well-established principles reflecting a reluctance to
find federal jurisdiction unless it is clearly provided for. As
federal courts are courts of only limited jurisdiction, there
is a general presumption against federal jurisdiction which
a plaintiff bears the burden of rebutting. See Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)
(citations omitted). Furthermore, statutes purporting to
confer federal jurisdiction are to be construed narrowly,
with ambiguities resolved against a finding of federal
jurisdiction. See Mars Inc v. Kabushiki-Kaisha Conlux, 24
F.3d 1368, 1373 (Fed. Cir. 1994); Boelens v. Redman
Homes, Inc., 748 F.2d 1058, 1067 (5th Cir. 1984) (citations
omitted). We conclude that because the TCPA reflects
Congress' intent to authorize consumer suits in state courts
only, and because it is "a more specific statutory provision
conferring exclusive jurisdiction elsewhere," appellants
cannot rely on the general federal question jurisdiction of
S 1331.
In addition, we note that appellants' argument that
federal question jurisdiction is proper because the
complaint poses a substantial federal question seems
misplaced in these circumstances. Generally, courts refer to
this test when the first test is not met, namely, when there
is no federal cause of action. See, e.g., Merrell Dow
Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 809-10
(1986); Franchise Tax Board, 463 U.S. at 13 (considering
federal subject matter jurisdiction over a cause of action
created by state law that implicates a question of federal
law). Here, however, federal law is the source of appellants'
cause of action, but refers litigants to state courts only.
Thus, regardless of the presence of a substantial federal
question, Congress' intent to preclude consumer suits
under TCPA in federal court trumps the general grant of
12
federal question jurisdiction in S 1331. See Connors, 858
F.2d at 1229-30; First Jersey Securities, 605 F.2d at 694.
Appellants also contend that federal jurisdiction is
authorized by 28 U.S.C. S 1337(a), which provides that
"district courts shall have original jurisdiction of any civil
action or proceeding arising under any Act of Congress
regulating commerce . . . ." The same tests for determining
whether an action "arises under" federal law for purposes of
S 1331 apply to determine whether an action"arises under"
an Act of Congress regulating commerce. See Franchise Tax
Board, 463 U.S. at 8 n. 7 (citations omitted). Accordingly,
any action that could be brought in federal court under
S 1337 could also be brought under S 1331. See 13 Charles
Alan Wright et al., Federal Practice and Procedure S 3574, at
235. When first enacted, S 1337 nonetheless served an
important function because, unlike S 1331, it did not
include an amount in controversy requirement. See id. at
238. As this was the only function ever served byS 1337,
Congress' elimination of S 1331's amount in controversy
requirement rendered the grant of jurisdiction inS 1337
superfluous. See id.
In this case, appellants' argument that S 1337 authorizes
federal jurisdiction fails for the same reason that their
argument under S 1331 fails. Like S 1331, S 1337 is a
general jurisdictional statute. As such, it can be supplanted
by another statute that assigns jurisdiction elsewhere. See
Simmons v. Arkansas Power & Light Co., 655 F.2d 131, 133
(8th Cir. 1981); Assure Competitive Transp., Inc. v. United
States, 629 F.2d 467, 471 (7th Cir. 1980). Congress' intent
to limit consumer suits under the TCPA to state courts
supersedes the general grant of jurisdiction in S 1337.
Finally, appellants argue that since the statute does not
clearly state whether a private cause of action may be
brought in federal court, a Cort v. Ash, 422 U.S. 66 (1975),
analysis should apply to determine whether a federal cause
of action should be inferred from the statute.5 That
_________________________________________________________________
5. The Court in Cort v. Ash identified several factors as relevant to a
determination of whether a private cause of action is implicit in a
statute
that does not expressly create one:
13
analysis, however, is directed at a different question from
the one we address. The Cort v. Ash factors probe whether
a private right of action can be implied from a statute that
does not expressly create one. In this case, a private right
of action is clearly created; the uncertainty relates only to
the proper forum for that action. The Supreme Court has
recognized that the question of whether a statute creates a
private right of action is distinct from the question of
whether a federal court has jurisdiction:
[T]he threshold question clearly is whether the Amtrak
Act or any other provision of law creates a cause of
action whereby a private party such as the respondent
can enforce duties and obligations imposed by the Act;
for it is only if such a right of action exists that we
need consider whether the respondent had standing to
bring the action and whether the District Court had
jurisdiction to entertain it.
National R.R. Passenger Corp. v. National Ass'n of R.R.
Passengers, 414 U.S. 453, 456 (1974); see also Keaukaha-
Panaewa Community Ass'n v. Hawaiian Homes Comm'n,
588 F.2d 1216, 1220 (9th Cir. 1978).
To the extent that Cort v. Ash does inform our
jurisdictional analysis, it teaches that our focal point must
be Congress' intent. See Thompson v. Thompson, 484 U.S.
174, 179 (1988). The Cort v. Ash analysis illustrates that in
attempting to discern Congress' intent, we must consider
that which is implicit, as well as that which is explicit, in
a statute. As the foregoing discussion demonstrates,
_________________________________________________________________
First, is the plaintiff ``one of the class for whose especial
benefit the
statute was enacted' . . . ? Second, is there any indication of
legislative intent, explicit or implicit, either to create such a
remedy
or to deny one? Third, is it consistent with the underlying
purposes
of the legislative scheme to imply such a remedy for the plaintiff?
And finally, is the cause of action one traditionally relegated to
state
law, in an area basically the concern of the States, so that it
would
be inappropriate to infer a cause of action based solely on federal
law?
Id. at 78 (citations omitted).
14
Congress intended to refer private litigants under the TCPA
to state court, and to preclude federal question jurisdiction
over such consumer suits.
III.
For the foregoing reasons, we will affirm the order of the
district court dismissing this case for lack of subject matter
jurisdiction.
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ALITO, Circuit Judge, dissenting:
It is undisputed that the Telephone Consumer Protection
Act ("TCPA"), 47 U.S.C. S 227, a federal statute, creates a
private right of action on behalf of a person or entity
victimized by telemarketing abuse. Such an action is
plainly one "arising under the . . . laws . . . of the Unites
States" within the meaning of 28 U.S.C. S 1331, the general
federal question jurisdiction statute. The majority, however,
holds that the district courts do not have jurisdiction to
entertain private TCPA actions under section 1331 because
47 U.S.C S 227(b)(3) in effect divests the federal courts of
jurisdiction. But section 227(b)(3) says nothing about the
jurisdiction of the federal district courts; instead, it says
merely that an action under that provision "may" be
brought in an appropriate state court "if otherwise
permitted by the laws or rules of court of" that state. More
than this, it seems to me, is needed to divest a federal
district court of its jurisdiction under section 1331. Indeed,
I think that the Supreme Court's decision in Tafflin v.
Levitt, 493 U.S. 455 (1990), clearly shows that the majority
has erred. I therefore respectfully dissent.
In Tafflin, the Supreme Court interpreted the following
provision from the federal RICO statute:
Any person injured in his business or property by
reason of a violation of section 1962 of this chapter
may sue therefor in any appropriate United States
district court.
18 U.S.C. S 1964 (emphasis added). The Court found that
this language was insufficient to divest state courts of
concurrent jurisdiction over private RICO actions,
explaining:
[The statute's] grant of federal jurisdiction is plainly
permissive, not mandatory, for the statute does not
state nor even suggest that such jurisdiction shall be
exclusive. It provides that suits of the kind described
"may" be brought in the federal district courts, not that
they must be.
Tafflin, 493 U.S. at 796 (internal quotations omitted).
Applying this reasoning to the instant case, it is clear that
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the language of the TCPA is insufficient to divest district
courts of their federal question jurisdiction, as the statute
merely provides that private suits "may" be brought in state
court. See 47 U.S.C. S 227(b)(3).
The majority, however, declines to apply the reasoning of
Tafflin on the ground that Tafflin concerned divestment of
state court jurisdiction whereas this case concerns
divestment of federal court jurisdiction. According to the
majority, because "[s]tate courts are courts of general
jurisdiction, while federal courts are courts of only limited
jurisdiction[,] . . . [t]he permissive authorization of
jurisdiction in state courts does not imply that jurisdiction
is also authorized in federal courts."1 Maj. Op. at 7. This
observation, while entirely accurate, is irrelevant to the
issue before us. The appellants are not arguing that the
TCPA authorizes federal jurisdiction by implication. Rather,
the appellants simply maintain that the TCPA does not
divest district courts of the federal question jurisdiction
they already possess under 28 U.S.C. S 1331. 2 Although the
majority eventually confronts this issue in Part IIB of its
opinion, it fails to explain in that section why it does not
apply the Tafflin Court's divestment analysis.3
By sidestepping Tafflin, the majority is able to conclude
that Congress's reference to state courts in the TCPA "must
_________________________________________________________________
1. See also International Science & Tech. Inst., Inc. v. Inacom
Communications, Inc., 106 F.3d 1146, 1151-52 (4th Cir. 1997) ("If a
statute authorizes suit in state courts of general jurisdiction through
the
use of the term ``may,' that authorization cannot confer jurisdiction on a
federal court because federal courts are competent to hear only those
cases specifically authorized.").
2. In light of the fact that district courts have possessed general
federal
question jurisdiction since 1875, see Schweiker v. Chilicky, 487 U.S.
412, 420 (1988), I am somewhat puzzled by the majority's reliance on
"well-established principles reflecting a reluctance to find federal
jurisdiction unless it is clearly provided for." Maj. Op. at 12.
3. The majority's reliance on the divestment analysis in Public Util.
Comm'r v. Bonneville Power Admin., 767 F.2d 622, 627 (9th Cir. 1985),
is misplaced. The statute at issue in Bonneville, unlike the TCPA,
contained mandatory language assigning jurisdiction to another court.
See id. at 626 (quoting 16 U.S.C. S 839f(e)(5) ("Suits . . . shall be
filed in
the United States court of appeals for the region.")) (emphasis added).
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reflect something other than a mere confirmation of
concurrent jurisdiction." Maj. Op. at 7. The Fourth and
Fifth Circuits have likewise found it "meaningful that
Congress explicitly mentioned only state courts" since
"mentioning state courts is unnecessary to vest them with
concurrent jurisdiction." International Science, 106 F.3d at
1152. See Chair King, Inc. v. Houston Cellular Corp., 131
F.3d 507, 512 (5th Cir. 1997). The problem with this view
is that it is inconsistent with the Supreme Court's decision
in Tafflin. Just as it was unnecessary for Congress to
mention state courts in the TCPA in order to vest them with
concurrent jurisdiction, it was unnecessary for Congress to
mention federal district courts in the RICO statute in order
to vest them with concurrent jurisdiction. See 28 U.S.C.
S 1331 ("The district courts shall have original jurisdiction
of all civil actions arising under the . . . laws . . . of the
United States."). Nevertheless, the Tafflin Court concluded
that the RICO statute's explicit mention of district courts
was not "meaningful" enough to vest them with exclusive
jurisdiction. I would similarly conclude that the TCPA's
explicit mention of state courts is not meaningful enough to
vest them with exclusive jurisdiction.
The Supreme Court has long abided by the "general rule
that the grant of jurisdiction to one court does not, of itself,
imply that the jurisdiction is to be exclusive." United States
v. Bank of New York & Trust Co., 296 U.S. 463, 479 (1936).
Consistent with this principle, the Tafflin Court concluded
that the RICO statute's permissive grant of jurisdiction to
federal district courts did not constitute an "explicit
statutory directive" sufficient to divest state courts of their
inherent federal question jurisdiction. 493 U.S. at 460-61.
Likewise, I would hold that the TCPA's permissive grant of
jurisdiction to state courts does not constitute an"explicit
statutory directive" sufficient to divest district courts of
their section 1331 federal question jurisdiction.
Notwithstanding the lack of a clear textual divestment in
the TCPA, the Supreme Court has instructed that
jurisdiction can also be divested "by unmistakable
implication from legislative history." Tafflin, 493 U.S. at
460. In this regard, the majority finds that Senator
Hollings's statement reveals Congress' clear intention to
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grant exclusive jurisdiction to the state courts. I disagree.
I do not believe that one speech given by one senator is
sufficient to demonstrate the "unmistakable" intent of
Congress. Moreover, even if Senator Hollings's statement
were given controlling weight, it merely indicates that the
TCPA was designed to "allow consumers to bring an action
in State court." 137 Cong. Rec. S16205 (daily ed. Nov. 7,
1991) (emphasis added). The Senator explained that giving
consumers the option of going to small claims court would
enable them to seek modest damages without incurring the
high costs of formal litigation. Id. However, the Senator said
nothing about preventing corporate adversaries who are
battling over large sums of money from choosing to go to
federal court. Therefore, I would not conclude that Senator
Hollings's statement does anything more than confirm the
permissive grant of state jurisdiction found in the statute's
text.
I am also unconvinced by the majority's contention that
the overall statutory scheme of the TCPA supports its
finding of exclusive state court jurisdiction. The majority
first notes that another section of the TCPA specifically
"mandates exclusive federal court jurisdiction over TCPA
actions brought by states on behalf of their residents." Maj.
Op. at 8 (citing 47 U.S.C. S 227(f)(2)). I agree that this
explicit grant of exclusive jurisdiction is significant, but I
believe that it cuts against the majority's conclusion.
Section 227(f)(2) reveals that, while drafting the TCPA,
Congress knew full well how to grant exclusive jurisdiction
with mandatory language. The most natural interpretation
of Congress' failure to use similar language in section
227(b)(3) is that Congress did not intend to grant exclusive
jurisdiction in that section.
The majority also relies on sections 227(f)(4) and 227(f)(7)
of the TCPA, which specifically address venue, service of
process, and possible conflicts between federal and state
enforcement efforts. The majority finds significance in the
fact that these issues are not discussed in connection with
the private right of action granted by section 227(b)(3).
However, since the general rules governing venue and
service of process in the district courts are well established,
see 28 U.S.C. S 1391(b); Fed. Rules Civ. Proc. 4, 4.1, there
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was no need for Congress to reiterate them in section
227(b)(3). The fact that venue and service of process are
discussed in section 227(f)(4) and not section 227(b)(3)
simply indicates that Congress wished to make
adjustments to the general rules in the former section and
not the latter. As for the conflict provision that appears in
section 227(f) but not section 227(b)(3), it is hardly
surprising that Congress would be concerned about agency
conflicts in the section of the TCPA dealing with official
state enforcement efforts but not in the section governing
private lawsuits.
Finally, the majority points to other provisions in the
Communications Act in which Congress expressly provided
for concurrent jurisdiction. According to the majority, these
provisions render Congress' "failure to provide for
concurrent jurisdiction under S 227(b)(3) . . . significant."
Maj. Op. at 8-9. However, because these provisions of the
Communications Act were not passed contemporaneously
with the TCPA, they shed little light on the intent of
Congress at the time of the TCPA's passage.
In the end, the majority fails to give any convincing
reason for finding that the permissive grant of jurisdiction
to state courts in the TCPA divests district courts of the
jurisdiction they possess under 28 U.S.C. S 1331. Moreover,
by rejecting the applicability of the Supreme Court's
reasoning in Tafflin, the majority reaches the odd
conclusion that divestments of federal court jurisdiction
over federal claims should be more easily found than
divestments of state court jurisdiction over federal claims.
In light of the longstanding and explicit grant of federal
question jurisdiction in 28 U.S.C. S 1331, I would instead
conclude that a divestment of district court jurisdiction
should be as reluctantly found as a divestment of state
court jurisdiction. Accordingly, I dissent.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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