Yesterday, the United States Supreme Court agreed to resolve a dispute concerning the Telephone Consumer Protection Act ("TCPA"), a federal law regulating unsolicited faxes and telephone calls to cell phones and numbers on the Do Not Call list. The TCPA is very unusual because, even though it is a federal statute enacted by Congress, it seems to deny plaintiffs the right to sue in federal court and forces them to file their cases in state courts.
The wording at issue is: "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-- an action based on a violation of [the TCPA]". Most courts interpret this to mean that a person filing suit under the TCPA may not file in federal court unless there is more than $75,000 at stake and the defendant is from another state, which means for the most part, only class actions can make it into federal court. However, two of the federal courts of appeals have decided that the TCPA, as a federal statute, provides everyone access to the federal court system, no matter how small their claim. The Supreme Court granted certification to decide the question, which it framed as follows: "Did Congress divest the federal district courts of their federal-question jurisdiction over private actions brought under the Telephone Consumer Protection Act?"
It is almost guaranteed the plaintiff will have at least one of the five votes necessary to win the right to file in federal court. In 1998, current Supreme Court justice Samuel Alito, then sitting on the Third Circuit Court of Appeals in Philadelphia, voted to allow plaintiffs to file in federal court, but was outvoted 2-1 on the issue. Should the right to file in federal court be established, telemarketers should expect to see even more of the TCPA cases that have been multiplying these last couple of years. The current case is styled Mims vs. Arrow Financial Services.
A similar issue is currently pending before the Third Circuit, which took the unusual step of calling for en banc review (every judge gets a vote, not just a panel of three). However, that case may now be put on hold while the Supreme Court decides the matter. The Supreme Court will not hear arguments in this case until the fall.
PartnerScott has focused on complex commercial litigation and arbitration involving advertising and marketing law, class action defense, administrative investigations, contractual disputes, consumer fraud, and business ...