Fulbright Briefing: Supreme Court Finds Federal Question Jurisdiction Over TCPA Claims

The Supreme Court recently confirmed that private rights of action for violations of the Telephone Consumer Protection Act ("TCPA") may be brought in either federal or state courts. On January 18, 2012, a unanimous Court decided Mims v. Arrow Financial Services, LLC, reversing the decision of the Eleventh Circuit and resolving a split between the circuits.

The TCPA was enacted in 1991 to address Congressional concerns regarding the potential invasion of privacy caused by unrestricted telemarketing. The TCPA prohibits, among other things, (i) use of an automatic telephone dialing system or an artificial or prerecorded message, without the consent of the called party, to any emergency telephone line or service for which the receiver is charged for the call; (ii) calls using artificial or prerecorded messages to residential telephone lines without prior express consent; (iii) sending unsolicited advertisements to fax machines; and (iv) using automatic telephone dialing systems to engage two or more of a business' telephone lines simultaneously. 47 U.S.C. § 227(b)(1)(A)-(D). The statute provides that private rights of action for violations of the statute could be brought "in an appropriate court of [a] State," "if [such an action is] otherwise permitted by the laws or rules of court of [that] State." 47 U.S.C. §§ 227(b)(3), (c)(5).

Petitioner in Mims brought an action in federal district court asserting that Respondent, a debt collection agency, violated the TCPA by using an automatic telephone dialing system or prerecorded or artificial voice to call his cellular phone without consent. The district court dismissed the complaint for lack of subject matter jurisdiction, holding that the TCPA vested jurisdiction over private actions exclusively in state courts. The Eleventh Circuit affirmed, thereby joining the Second, Third, Fourth, Fifth and Ninth Circuits. On the other side, the Sixth and Seventh Circuits have held that district courts have federal-question jurisdiction over private rights of action under the TCPA. In a unanimous opinion, the Supreme Court in Mims resolved the circuit split, holding that federal and state courts have concurrent jurisdiction over private suits under the TCPA. The Court held that the language of TCPA § 227(b)(3) does not make state-court jurisdiction exclusive or oust federal courts of 28 U.S.C. § 1331 jurisdiction. It found significant that TCPA liability "depends on a violation of a federal statutory requirement or a FCC regulation," not a violation of state substantive law. The Court also recognized the federal interest in regulating telemarketing, as evidenced by the regulatory role assigned by Congress to the FCC. For all of these reasons, the Court held that nothing in "the text, structure, purpose or legislative history of the TCPA calls for displacement of the federal-question jurisdiction U.S. district courts ordinarily have under 28 U.S.C. § 1331."

Read Fulbright's Briefing online.

This article was prepared by Judith A. Archer (jarcher@fulbright.com or 212 318 3342) and Sarah E. O'Connell (soconnell@fulbright.com or 212 318 3093) from Fulbright's Litigation Practice Group.

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