Federal court jurisdiction over private TCPA claims: why the federal Courts of Appeals got It fight.

• Author: Tharp, Kevin N.
• Position: Telephone Consumer Protection Act of 1991

1. INTRODUCTION

   In their first-year civil procedure class, law students learn that a federal statute grants federal district courts jurisdiction over cases "arising under" federal law.(1) Yet, section 1331 is not nearly as encompassing--or as potent--in its grant of federal question jurisdiction to federal courts as its language suggests.(2) The law governing the extent to which Congress must act before federal courts will decide that Congress intended to grant jurisdiction to federal courts over particular cases is far from well-settled. The unique provision for jurisdiction over private claims brought under the Telephone Consumer Protection Act of 1991 (TCPA)(3) put this amorphous body of law, with its equally amorphous application by individual courts, to the test.

   The TCPA is a federal statute enacted to "protect the privacy interests of residential telephone subscribers by placing restrictions on unsolicited, automated telephone calls to the home" and to "facilitate interstate commerce by restricting certain uses of facsimile [fax] machines and automatic dialers."(4) The statute accomplishes this end by prohibiting certain unsolicited phone calls and calls using an automated or prerecorded voice to deliver a message without the prior express consent of the party receiving the call.(5) In addition, the statute prohibits the sending of unsolicited advertisements to telephone fax machines.(6)

   These provisions may be enforced by either of two mechanisms. First, private citizens may bring a private action to enjoin a violation of the Act and to recover damages. These damages may either be actual damages or $500 per violation, whichever is greater.(7) Second, the Attorney Generals of the various states are authorized to bring a civil action on behalf of their residents who have been subjected to violations of the Act.(8)

   The key portion of the Act, for the purposes of this Note, is the clause in the statute that provides jurisdiction over the private actions brought to enforce the TCPA.(9) This portion of the statute provides that "[a] person or entity may, if otherwise permitted by the laws or rules of court of a [s]tate, bring in an appropriate court of that [s]tate" an action to enforce the statute.(10) Two aspects of this provision are noteworthy. First, for a court of any particular state to have jurisdiction over private TCPA claims, the legislature of that state must have authorized its courts to exercise jurisdiction. Congress inserted this provision into the statute to eliminate the potential problems caused if Congress effectively ordered state courts, and only state courts, to enforce federal statutes,(11) The second aspect of this provision consumes the remainder of this Note. While the statute expressly provides for jurisdiction by those state courts whose legislatures allow them to hear TCPA cases, the statute is silent regarding federal district court jurisdiction over private TCPA claims.

   Whether the federal district courts have jurisdiction over private TCPA claims remains an open question. Since the TCPA's enactment in 1991, five federal courts of appeals have concluded that the district courts do not have jurisdiction over these claims.(12) One district court concluded that federal district courts do have jurisdiction over private TCPA claims.(13)

   In the final analysis, the courts of appeals are correct. Congress did not grant jurisdiction over private TCPA claims to the federal district courts. However, these courts overlooked important justifications for this result. These courts failed to consider the possibility that defendants would remove TCPA cases to the federal courts if federal jurisdiction was permitted. The removal of these cases is contrary to the public policy found in the legislative history of the TCPA. Coupled with the uniqueness of language granting jurisdiction of private TCPA claims in the statute, the arguments posited by the courts in opposition to federal jurisdiction over TCPA claims are more than sufficient to refute the claim that federal district courts have jurisdiction over private TCPA claims.

   Part II of this Note provides an overview of federal question jurisdiction and the jurisdictional issue raised by the unique language of the TCPA. Part III discusses the approach that the federal circuit courts have taken in resolving the question of whether federal district courts have jurisdiction over private TCPA claims. Part IV discusses the criticisms of the federal circuit courts' approach and why these are unfounded. Part V discusses and applies the correct approach to federal jurisdiction questions in the TCPA. Part VI demonstrates that a proper consideration of the possibility of removing TCPA cases to federal court requires that state courts exercise exclusive jurisdiction.

2. FEDERAL QUESTION JURISDICTION AND THE TCPA

   1. Federal Question Jurisdiction

      Federal courts are courts of limited jurisdiction.(14) The limits of federal jurisdiction find their origins in Article III of the U.S. Constitution.(15) Article III specifically limits the jurisdiction of the federal courts to enumerated circumstances.(16) The genesis of federal question jurisdiction lies in Article III's grant of power to the federal courts to hear cases "arising under" federal law.(17) As the Supreme Court has recognized, however, Article III's grant of power is "not self-executing."(18) With the passage of the Judiciary Act of 1875,(19) Congress granted the federal courts general federal question jurisdiction.

      The question then becomes: to what extent must Congress act to grant jurisdiction to federal courts over cases arising under a particular federal statute? Of course, this is primarily a determination of whether Congress intended to grant federal district courts jurisdiction over cases arising under a particular statute.(20) The law responding to this question, however, is not well-settled. The approaches that courts and the scholarship in this area have taken in resolving this issue fall into two camps, as the case law illustrates, depending upon the significance attached to section 1331. The first approach, exemplified by Kenro, Inc. v. Fax Daily, Inc.,(21) reads section 1331 very broadly. Under this view, section 1331 grants federal district courts the power to hear all cases in which federal law creates the cause of action, even if the statute in question is silent regarding the issue of federal jurisdiction.(22) In this way, courts using the Kenro approach read section 1331 as creating a refutable presumption in favor of the existence of federal question jurisdiction for every cause of action created by federal law. As a result, under this approach, the only way that a court may properly conclude that Congress did not intend to give federal courts jurisdiction over cases arising under a federal statute is to discover a contrary intent on the part of Congress--either via express prohibition of federal jurisdiction in the language of the statute or the legislative history.

      The second approach, exemplified by International Science & Technology Institute, Inc. v. Inacom Communication, Inc.,(23) views section 1331 as insufficient to provide the sole basis for conferring jurisdiction to district courts over cases brought to enforce a statute that expressly confers jurisdiction to courts other than district courts.(24) Courts subscribing to this approach rely on Supreme Court precedents that have interpreted the phrase "arising under" in section 1331 more narrowly than its constitutional counterpart in Article III.(25) These courts interpret section 1331 to be sufficiently narrow as to require an additional signal from Congress to give rise to the conclusion that Congress intended to grant federal courts jurisdiction over cases arising under federal law.(26) The International Science & Technology Institute approach takes the view that section 1331 creates a much weaker presumption of federal jurisdiction over these cases than does the Kenro approach.(27) These different views of the role that section 1331 plays in expressing the intent of Congress to confer federal jurisdiction account for the different conclusions reached concerning whether Congress intended to grant federal courts jurisdiction over cases brought under the TCPA.

   2. Jurisdictional Possibilities and the Novelty of the TCPA

      Federalism creates interesting jurisdictional conundrums for cases founded upon federal law due to the potential availability of both state and federal courts.(28) Depending upon the language of the particular statute under which the cause of action is brought, the cause of action may encounter three possible jurisdictional scenarios. The first and most prevalent situation is referred to as concurrent jurisdiction.(29) A statute granting concurrent jurisdiction allows both state courts and federal district courts to hear cases brought to enforce rights created by federal law.(30) In fact, Supreme Court precedents have effectively created a presumption of concurrent jurisdiction, unless "excluded by express provision, or by incompatibility in its exercise arising from the nature of the particular case."(31)

      The second jurisdictional scenario includes only those statutes providing for exclusive federal jurisdiction. As the name suggests, only federal district courts are permitted to hear cases brought under these statutes.(32) As the Supreme Court noted in Charles Dowd Box Co. v. Courtney,(33) "exclusive federal court jurisdiction over cases arising under federal law has been the exception rather than the rule," due in part to the effective presumption of concurrent jurisdiction discussed above.(34) Even so, the vast majority of federal statutes provide for either concurrent jurisdiction or exclusive federal jurisdiction.(35)

      The last possible scenario occurs when federal law grants jurisdiction exclusively to state courts. As the Third Circuit noted, this situation is "unique."(36) As a result...