Insights

The United States Supreme Court recently issued a unanimous decision upholding the ability of federal district courts to exercise federal question jurisdiction to hear private actions under the Telephone Consumer Protection Act. The Court’s decision in Mims v. Arrow Financial Services, LLC, 2012 U.S. LEXIS 906 (U.S. (11th Cir. (S.D. Fla.) January 18, 2012), adopted the minority view among federal courts that had considered this issue. Simply stated, the Court concluded that, notwithstanding the unusual nature of the TCPA private right of action provision applicable here, federal courts retain the ability to exercise subject matter jurisdiction over federally-created causes of action unless and until Congress clearly expresses a contrary intent.

The substantive TCPA provision at issue in Mims requires callers to have the called party’s prior express consent to call his or her cell phone using an automatic telephone dialing system or a prerecorded message. The relevant TCPA private right of action provision states: “A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring [a private action] in an appropriate court of that State.” 47 U.S.C. § 227(b)(3). This provision is silent as to federal subject matter jurisdiction to hear private actions. (A separate TCPA provision expressly gives federal courts exclusive jurisdiction to hear enforcement actions brought by a state. 47 U.S.C. § 227(e)(6).) A majority of federal courts interpreting the TCPA’s private right of action had reasoned that the provision’s reference only to proceedings in state court reflected Congress’ intent to strip away federal question jurisdiction.

Marcus Mims claimed that Arrow Financial Services, LLC, a collection agency, repeatedly called his cell phone using technology regulated by the TCPA but without the consent the TCPA required. Mims sued Arrow in federal district court. Arrow moved to dismiss for lack of subject matter jurisdiction. The district court granted Arrow’s motion and, following Mims’ appeal, the appellate court affirmed dismissal. The U.S. Supreme Court granted Mims’ petition for certiorari to settle the issue of federal jurisdiction in TCPA cases once and for all.

The Court appeared to have little trouble resolving this issue in Mims’ favor, reversing the lower courts and the majority view. As Justice Ginsburg stated at the outset of the opinion: “We find no convincing reason to read into the TCPA’s permissive grant of jurisdiction to state courts any barrier to the U.S. district courts’ exercise of the general federal-question jurisdiction they have possessed since 1875.” The opinion explained that federal courts have such jurisdiction over suits arising under a federal law that creates the right of action, although Congress has the authority to divest it from federal courts. To exercise this authority, however, Congress must speak clearly.

The court did not find this clear statement in the TCPA’s private right of action provision. This provision allows that consumers may proceed in state courts, but it does not state that consumers may only proceed in state courts or exclusively in state courts. The court was persuaded by Congress’ choice of words, especially in light of the fact that the TCPA’s provision governing enforcement actions brought by the states does use the language of exclusivity: “An action . . . shall be brought in a district court of the United States . . . .” 47 U.S.C. § 227(e)(6)(E)(i). The Court found that this distinction in wording carried significantly more weight that the statements of one Senator in the TCPA’s legislative history envisioning private actions in state small claims courts.

Given the court’s straightforward analysis of this TCPA jurisdictional issue, readers with more than a fleeting familiarity with the TCPA might be more interested in the justices’ characterizations of the Act’s enforcement structure during oral argument in the Mims case. According to the transcript, the TCPA’s private right of action provision and the TCPA in general were labeled “odd” by Justices Kagan, Justice Ginsburg, and Chief Justice Roberts, “unusual” and “really odd” by Justice Breyer, “the oddest creature that’s ever been seen” (Justice Alito), “so weird” (Justice Scalia), and “peculiar” (Justice Kagan). Chief Justice Roberts went so far as to say that he had “never seen a statute like this before” and called the TCPA “the strangest statute” that he had ever seen. The attorneys arguing the case acknowledged that the provision was “extraordinarily unique,” “odd,” and “very distinct and unusual.” As someone with a busy practice counseling clients on TCPA compliance, I can understand these statements. If the TCPA is the oddest creature that Justice Alito has ever seen, however, he should visit my house sometime and check out the drawings my 4-year old brings home from preschool.

Michael A. Goodman is a partner in the Washington, D.C., office of Hudson Cook, LLP. Michael can be reached at 202- 327-9704 or by email at mgoodman@hudco.com.