U.S. Courts Have Diversity Jurisdiction Over Junk-Fax Suits, Circuit Holds

A precedential ruling by the Third U.S. Circuit Court of Appeals opens the door to federal class actions under the Telephone Consumer Protection Act against senders of ‘junk fax’ messages.

The N.J. Law Journal reports:

The Third Circuit held 2-1 on Monday that federal courts have diversity jurisdiction over such suits brought under the Telephone Consumer Protection Act, 47 U.S.C. 227, which creates public and private causes of action for recipients of unsolicited advertising by fax.

“We hold that Congress did not divest the federal courts of diversity jurisdiction over private causes of action under the TCPA,” wrote Judge Marjorie Rendell, joined by Judge Theodore McKee. Judge Leonard Garth dissented.

[Image courtesy of Consumer Watchdog]

Rendell reasoned that courts have long recognized the presumption of diversity jurisdiction, regardless of the type of law under which a lawsuit arises. Federal-question jurisdiction is narrower in nature, she said: Where a federal question exists, district courts have original jurisdiction unless a statute places jurisdiction elsewhere.

She found the TCPA statute’s language provides no indication that individual federal claims under that statute should be treated any differently than other suits between diverse parties where the amount in controversy meets the $75,000 threshold set by the statute setting out the court’s diversity jurisdiction, 28 U.S.C. 1332.

UPDATE on junk fax suites…

GANN LAW BOOKS SUED IN U.S. COURT FOR SENDING OUT UNSOLICITED FAXES
Gann Law Books, a long-established publisher of standard desktop volumes for New Jersey lawyers, is the target of a federal putative class action alleging it sent out 10,000 illegal junk faxes over a four-year period. The Telephone Consumer Protection Act, 47 U.S.C. 227, makes it unlawful to send unsolicited advertisements by fax, and also bars sending such notices without certain opt-out language, even if the recipient has agreed to receive the notice. Statutory damages under the TCPA are $500 per transmission, which could bring the company’s exposure to $5 million. The suit, filed Tuesday, seeks certification of two nationwide classes and a class consisting of New Jersey residents. [Via N.J. Law Journal]