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July 21, 2011

Auto Dialer: Parsing The Telephone Consumer Protection Act's Supreme Court Decision

By David Sims, TMCnet Contributing Editor

Lexology walks us through a recent legal action of interest to the auto dialer industry: specifically the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227(b)(3), for which the U.S. Supreme Court recently granted certiorari on this very issue in Mims v. Arrow Financial Services.      

Don’t take anything we say here as legal advice, please, for any questions or clarifications see your local lawyer who deals with this sort of thing professionally.

Section 227 of the TCPA says a person "may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State..." an action for a TCPA violation. It doesn’t say whether in granting jurisdiction to state courts under certain conditions, Congress meant to divest U.S. district courts of their federal question jurisdiction and bar the filing of such suits in federal courts.

There’s a diversity of legal opinion on the issue. As the authors of the Lexology article say, “tThe Second, Third, Fourth, Fifth, Ninth, and Eleventh Circuits have all held that federal courts lack federal question jurisdiction over TCPA private actions. On the other hand, the Sixth and Seventh Circuits have ruled that federal courts do have federal question jurisdiction over private TCPA suits.”

So there you have it.

Now in Mims v. Arrow Financial Services, Marcus Mims “sued in federal court in Florida under the TCPA private right of action provision after he allegedly received multiple calls to his cell phone from a student loan debt collector, who used an auto dialer to place the calls and left prerecorded voicemail messages.”

The court said it didn’t have the federal question jurisdiction to hear the case, so they told Mims to take a hike. The dismissal was affirmed by the Eleventh Circuit. Mims petitioned for certiorari, which the Supreme Court granted June 27, in which Mims “discussed common grounds for granting certiorari, such as the split among the federal circuits and the high volume of federal cases that have grappled with this jurisdictional issue.”

Mims' petition also said, “Such an approach leaves the state courts with great power to interpret federal law and to oversee an issue that has national scope.” As Lexology notes, “a private TCPA action can only be brought in a state court if it is ‘permitted by the laws or rules of court of a State,’ so a state could theoretically, and several already do, prohibit private TCPA actions.

Mims also says the majority approach ignores the plain language of the statute creating federal question jurisdiction, the majority approach drew the wrong inference when comparing the private right of action with the TCPA's grant of authority to the states to sue in federal courts for TCPA violations and that Congress only spoke of state court jurisdiction in the private right of action section, so as not to create the impression that only federal courts had jurisdiction over private claims.

“In other words, the statute was supposed to make sure state and federal courts had concurrent jurisdiction,” Lexology says, noting that arguments in Mims v. Arrow Financial Services will not take place until the Supreme Court reconvenes for its 2011 term in October. It could increase the number of forums in which TCPA private actions could be brought, or it could provide a forum for the plaintiffs' bar to generate interest among consumers in pursuing TCPA claims.

David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Jamie Epstein

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