and well-represented national corporations such as amicus DirecTV, by
allowing citizens to pool claims and resources together in class actions to stop the violations.In The
Court of Appeals of Maryland
No. 21
September Term 2003
BRUCE LEVITT
Petitioner
vs.
FAX.COM, INC., et al.
Respondents,
On a Writ of Certiorari to the Court of Special Appeals of Maryland
REPLY BRIEF FOR PETITIONER
Michael C. Worsham, Esq. Stephen H. Ring, P.C.
1916 Cosner Road Olde Towne Professional Park
Forest Hill, Maryland 21050 316 East Diamond Avenue
(410) 557-6192 Suite 102
Gaithersburg, Maryland 20877
Attorneys for Petitioners (301) 990-4840
Table of Contents
I. Table of Cases and Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
II. Statement of the Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
III. Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
A. Respondents Fail To Address All Of The TCPA’s Statutory Language. . . . . . 1
1. Respondents fail to give meaning to the words “otherwise” and
“appropriate” in the TCPA’s enforcement language. . . . . . . . . . . . . . . . . .2
2. Respondents fail to give meaning to the words “or rules of court”. . . . . . 3
3. Respondents failed to give meaning to Congress’ provision for TCPA
injunctive relief to be available to private citizens. . . . . . . . . . . . . . . . . . .5
4. The TCPA allows class actions, which are not heard in small
claims courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. The TCPA private right of action was created by Congress to address
lack of government enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
C. The Tenth Amendment does not prohibit Congress from requiring state courts to hear Federal Causes of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1. State courts are not the exclusive jurisdiction for TCPA claims. . . . . . 12
2. Requiring state courts to hear a federal cause of action does not
constitute a “commandeering of state governments” in violation of
the Tenth Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IV. Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Text of Constitutions and Statutes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23-27
U.S. Constitution, Article III, Sec. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
U.S. Constitution, Article IV, Sec. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15 U.S.C. § 3207(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
39 U.S.C. § 3017(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24-25
42 U.S.C. § 604a(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27
TABLE OF CASES AND AUTHORITIES
Case Cited at pages:
Accounting Outsourcing, LLC v. Verizon Wireless Personal Communications, LP, 2003
U.S. Dist. LEXIS 15251 (decided Sep. 4, 2003) (M.D. La.). . . . . . . . . . . . . . . . . . 13
Califano v. Yamasaki, 442 U.S. 682 (1979). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Cary v. Curtis, 44 U.S. 236 (1845). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Conroy v. Aniskoff, 507 U.S. 511 (1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ESI Ergonomic Solutions, LLC v. United Artists Theatre Circuit, Inc., 50 P.3d 844 (2002), 2002 Ariz. App. LEXIS 109. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Frost v. State, 336 Md. 125 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Geico v. Insurance Comm’r, 332 Md. 124 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473 (1981). . . . . . . . . . . . . . . . . . . . . . .12
Howlett v. Rose, 496 U.S. 356 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 14
Kinder v. Citbank, 2000 U.S. Dist. LEXIS 13853 (S. D. Cal.) . . . . . . . . . . . . . . . . . . . . . 13
New York v. United States, 505 U.S. 144 (1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 19
Palmore v. United States, 411 U.S. 389 (1973). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 20
Printz v. United States, 521 U.S. 898 (1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16, 17
Second Employers' Liability Cases, 223 U.S. 1 (1912). . . . . . . . . . . . . . . . . . . . . . . . . . 16
Testa v. Katt, 330 U.S. 386 (1947). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
United States v. Bass, 404 U.S. 336 (1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Will v. Michigan, 491 U.S. 58 (1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
STATUTES
15 U.S.C. § 3207(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
28 U.S.C. § 1332 (diversity statute). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
39 U.S.C. § 3017(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
42 U.S.C. § 604a(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Telephone Consumer Protection Act:
47 U.S.C. § 227. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 6
47 U.S.C. § 227(b)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 5, 12
47 U.S.C. § 227(c)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
47 U.S.C. § 227(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13
Annotated Code of Maryland:
Commercial Law Article §14-1313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Courts & Judicial Proceedings Article, § 4-401. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Courts & Judicial Proceedings Article, § 4-402(a). . . . . . . . . . . . . . . . . . . . . . . . . 5
Courts & Judicial Proceedings Article, § 4-404. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Public Utility Companies Article, § 8-204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10
CONSTITUTIONAL PROVISIONS
U.S. Constitution, Article III (federal courts). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19
U.S. Constitution, Article VI, clause 2 (Supremacy Clause). . . . . . . . . . . . . . . . . . . . . . . .12
U.S. Constitution, Article IV, § 1 (Full Faith and Credit Clause). . . . . . . . . . . . . . . . . 16, 17
U.S. Constitution, Tenth Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15-21
Maryland Declaration of Rights, Article 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
RULES
Maryland Rules of Civil Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
TREATISES AND LAW REVIEW ARTICLES
Robert Biggerstaff, State Courts and the Telephone Consumer Protection Act of 1991:
Must States Opt-in? Can States Opt-out?, 33 Conn. L. Rev. 404 (2001). . . . 19, 20
LEGISLATIVE AUTHORITIES
137 Cong. Rec. S9840-02 and S16,207 (daily ed. Nov. 7, 1991) (Sen. Hollings). . . . . . . . 3
137 Cong. Rec. S.30821-22 (1991) (Sen. Hollings). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
S. Rep. No. 102-178 (1991), reprinted in 1991 U.S.C.C.A.N. 1968. . . . . . . . . . . . .7, 13-14
Hearings on H.R. 628, H.R. 2131 and H.R. 2184 before the Subcommittee on Telecommunications and Finance of the Committee on Energy and Commerce, 101st Cong., 1st Sess., May 24, 1989, at 82 (testimony of John Glynn). . . . . . . . . . . . 9, 10
Hearings before the Subcomm. On Communications of the Senate Comm. On
Commerce, Sci. and Transp., on S.1462, The Automated Telephone Consumer Protection Act of 1991; S. 1410, The Telephone Advertising Consumer Protection Act; and S. 857, Equal Billing for Long Distance Charges,102d Cong., July 24, 1991 (Statement of Alfred C. Sikes, Chairman, FCC). . . . . . . . . . . . . . . . . . . . . . . .7
FCC DECISIONS
In the Matter of Fax.com, Inc., Apparent Liability for Forfeiture, 17 FCC Rcd. 15927 (adopted Aug. 2, 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Consumer.Net v. AT&T Corp., 15 F.C.C.R. 281 (1999). . . . . . . . . . . . . . . . . . . . . . . . . . 14
Get-Aways, Inc. 15 F.C.C.R. 1805 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Unsolicited Telephone Calls, 77 FCC 2d 1023 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
DICTIONARY
Webster’s Ninth New Collegiate Dictionary (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
II. STATEMENT OF THE CASE
Petitioners, Bruce Levitt as class representative, and the certified class of Maryland recipients of the unsolicited faxes at issue, point out and re-emphasize one important fact not included in Respondents’ Statement of the Case. On December 24, 2002 the trial court issued an order granting Plaintiff Bruce Levitt’s motion for class certification and appointing undersigned counsel as class counsel. (R. at Docket no. 0067003). Therefore, the party before this Court is a certified class of persons, not just an individual, and the issue ultimately and necessarily being decided by this Court is whether a certified class of Maryland persons may bring a private class action in a Maryland state court for violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA).
III. ARGUMENT
Petitioners responds to the arguments of Respondents Fax.com, Inc. and JD&T Enterprises, Inc. d/b/a Travel To Go, as well as the arguments made by the Respondents in the companion cases and those of amicus curiae.
A. Respondents Fail To Address All Of The TCPA’s Statutory Language.
The various arguments of Respondents and amici fail to adequately consider or address all of the relevant statutory language. Through both omission and taking the language out of context, Respondents attempt to impart a meaning not intended by Congress. The Court must consider the entire relevant statutory language in the TCPA which grants Maryland citizens a private right of action in state court for unsolicited commercial faxes (as well as certain prerecorded voice solicitations). The relevant statutory language 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 -
(A) an action based on a violation of his subsection or the regulations prescribed under this subsection to enjoin such violation,
(B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or
(C) both such actions.
47 U.S.C. § 227(b)(3) (emphasis added).
Despite several Briefs by Respondents and amici, four key aspects of this statutory language were not specifically or adequately addressed: (1) the word otherwise; (2) the words or rules or court; (3) the word appropriate; and (4) subsections (A) and (C) of 47 U.S.C. § 227(b)(3), both of which provide for injunctive relief to private citizens.
(1) Respondents fail to give meaning to the words “otherwise” and “appropriate” in the TCPA’s enabling language.
Respondents and amici have cited the “if otherwise permitted” language repeatedly, but have rendered the word ‘otherwise’ as meaningless surplusage, in violation of the rules of statutory interpretation. Geico v. Insurance Comm’r, 332 Md. 124, 132 (1993). Congress did not draft the TCPA to say a person may bring a private action “if expressly permitted” by the state legislature, which is how Respondents are reading the language. Congress did not even write the TCPA to read that a private action may be brought “if permitted” by the state legislature.
What Congress actually wrote is that private actions may be brought “if otherwise permitted by the laws or rules of court of a State.” This word “otherwise” must be given some meaning, in light of the rest of the language and Congressional intent. Respondents Fax.com and JD&T provided a definition of “otherwise” from the American Heritage Dictionary (Resp. Brf. at 15). Petitioners definition is in agreement: (1) in a different way or manner; (2) in different circumstances; (3) in other respects. Webster’s Ninth New Collegiate Dictionary (1983) at 835. The word ‘otherwise’ is used as an adverb in the TCPA, but the definition of ‘otherwise’ when used as a pronoun is also useful: ‘something or anything else : something to the contrary. Id. at 836.
These definitions clearly do not have the meaning of “express” or “expressly” as Respondent would like them to have, so that the TCPA would be read to allow private actions only “if expressly permitted” by the state. What the word ‘otherwise’ as used in the TCPA actually means is that absent some other/different law or rule of state court, a person may bring an action in an appropriate court of the state. The other/different law or rule must be a neutral rule applicable to all cases.
The word ‘otherwise’ and the “if otherwise permitted” language was needed because, although the Supremacy Clause empowers Congress to create federal causes of action and require them to be heard in state court, Congress can not dictate to the state courts how to run their courts or where in the state court system actions must be allowed. Senator Hollings, the TCPA’s sponsor, specifically pointed this fact out in language cited in Petitioners’ Brief: “The bill does not, because of constitutional constraints, dictate to the States which court in each State shall be the proper venue for such action, as this is a matter for State legislators to determine.” 137 Cong. Rec. S. 16,205 (daily ed. Nov. 1991) (Sen. Hollings) (emphasis added). The word appropriate in the TCPA’s language emphasizes the actual meaning of the statutory language. Congress was doing the best it could to steer TCPA actions to an appropriate state court forum without dictating to the states how to run their court system.
(2) Respondents fail to give meaning to the words “or rules of court.”
A second key part of the statutory language not addressed at all by Respondents or amici is the words “or rules or court” in the private right of action enabling language. If Respondents’ reading of the language was correct, the Maryland Rules of Civil Procedure could enable or disable the right of Maryland citizens to file private suits. This is completely contrary to the uses and intent of the rules of court of Maryland or any other state, which are general provisions created to address the broad array of cases which the state courts must administer, and not written or created for specific types of cases. Respondents position would violate the prohibition on reading a statute “in a way that is inconsistent with, or ignores, common sense or logic.” Frost v. State, 336 Md. 125, 137 (1994).
The disjunctive word ‘or’ precedes the words ‘rules of court.’ Thus, even if the TCPA was interpreted to somehow allow a state legislature to choose to “opt out” of the private right of action for its citizens by passing a law, if the rules of court otherwise allow it, such private suits are allowed in state court. This Court can take judicial notice of the fact that there are of course no such Maryland rules specifically addressing the TCPA private right of action one way or another or limiting this private right. It is extremely far-fetched to believe that Congress intended entities such as the Standing Committee On Rules Of Practice And Procedure of this Court of Appeals to be the gate-keeper for citizens who want to redress violations of a federal consumer protection law. More importantly and determinative here, there is no clear statement that this was Congress’s intent, just as there is no clear statement either that Congress intended to allow state legislatures to “opt out.”
The Maryland Rules do limit how and where TCPA cases may be brought, but in a neutral and even-handed fashion. For example, the instant class action could not have been brought in small claims court, and in that sense the Rules could be seen as denying or limiting a TCPA claim. However, that limit is due to a neutral rule (or law) which applies to all Maryland class actions, not just TCPA class actions. The Maryland Rules (or laws) do not bar TCPA class actions per se, but only direct litigants as to where such suits must be filed.
(3) Respondents failed to give meaning to Congress’ provision for TCPA injunctive relief to be available to private citizens.
The third key omission in Respondents’ Brief is the failure to address Congress’ creation of a private right of action for injunctive relief in subsections (A) and (C) of the private right of action enabling language. 47 U.S.C. § 227(b)(3)(A) and (C). Injunctive relief is not ordinarily granted in small claims courts. This is certainly true in Maryland. Maryland Annotated Code, Courts & Judicial Proceedings article, §4-402(a) (“Except as provided in §§ 4-401 and 4-404 of this subtitle, the District Court does not have equity jurisdiction”) (no provisions in § 401 or 404 allow TCPA injunctive relief in District Court). Congress recognized that telemarketing and unsolicited commercial faxing were so widespread that in certain cases, injunctive relief may be necessary, and provided private citizens this form of relief.
Respondents and amici argue as if Congress intended for TCPA cases to be brought only in a small claims court. Congress’ specific creation of a form of relief - injunctive relief - not generally obtainable in small claims court, clearly refutes this argument. Again, Congress could not instruct state courts exactly which court or how to provide for relief, but expected that state court systems would make it easy for citizens to obtain the necessary relief, whether it be damages or injunctions. Congress’ concern was vindication of statutory rights, and making it as easy as possible for citizens to obtain relief, and doing so without treading on the states’ right to run their court systems. Congress recognized that federal law must take state court systems “as it finds them.” Howlett v. Rose, 496 U.S. 356, 372 (1990).
(4) The TCPA Allows Class Actions, Which Are Not Heard In Small Claims
Courts.
What is not present in the TCPA’s private right enabling language is also instructive to its overall interpretation. Congress also did not specifically preclude private class actions, which like injunctive relief, is not obtained in a small claims court. Nothing in 47 U.S.C. § 227(b)(3) or elsewhere in the TCPA precludes a class action. A consequence of this is the creation of a presumption in favor of allowing TCPA class actions. ESI Ergonomic Solutions, LLC v. United Artists Theatre Circuit, Inc., 50 P.3d 844, 925 (2002), 2002 Ariz. App. LEXIS 109 at 19-20 (TCPA class action allowed because “Having provided for a private right of action and having decided the appropriate penalty, Congress did not preclude the use of class actions to obtain redress for violations . . . Class action relief is unavailable only if Congress expressly excludes it . . . and Congress has done so in some statutes . . . Congress provided no express exclusion of class action relief in 47 U.S.C. § 227.”); Califano v. Yamasaki, 442 U.S. 682, 700 (1979) (class actions under a remedial statute presumed unless expressly prohibited, without the need for any language in the statute expressly authorizing a class action).
Class actions are wholly consistent with both Congress’s intent to allow citizens to
effectuate the statute’s protections via private action, and with Sen. Hollings’ statements to
make relief as easy as possible for citizens to obtain. Clearly it is easier for a private citizen
to obtain relief against entrenched violators such as Fax.com who engage in scorched-earth
litigation defenses,
and well-represented national corporations such as amicus DirecTV, by
allowing citizens to pool claims and resources together in class actions to stop the violations.
B. The TCPA private right of action was created by Congress to address lack of government enforcement.
The TCPA’s private right of action was created at the request of Sen. Hollings, the bill’s sponsor, because government enforcement alone would be inadequate. Sen. Hollings was reacting to the FCC’s inaction and failure to appreciate or even recognize the magnitude of the problem, and presumably to other evidence presented to Congress regarding problems with state enforcement.
Fortunately, this portion of the TCPA’s legislative history is preserved. The FCC position is documented in the TCPA’s Senate Report: “The FCC, however, has decided not to take any action to regulate unsolicited calls. After examining this issue in 1980 and 1986, the FCC concluded that it did not need to take any action.” S. Rep. 102-178 (Oct. 9, 1991) 1991 U.S.C.C.A.N. 1968 (1991) (citing Unsolicited Telephone Calls, 77 FCC 2d 1023 (1980); Automatic Dialing Devices, FCC Release No. 86-352 (1986)). The same Senate Report noted that in the FCC statement submitted to the Communications Subcommittee for the record of the hearing on the bill, then-FCC Chairman Alfred C. Sikes stated: "It is not clear, however, that sweeping Federal legislation is required. *** [T]his may be a situation where continued regulatory scrutiny and monitoring, subject to congressional review and oversight, is preferable to passage of legislation." Id. (Statement of Alfred C. Sikes, Chairman, FCC, Hearings before the Subcomm. On Communications of the Senate Comm. On Commerce, Sci. and Transp., on S.1462, The Automated Telephone Consumer Protection Act of 1991; S. 1410, The Telephone Advertising Consumer Protection Act; and S. 857, Equal Billing for Long Distance Charges,102d Cong., July 24, 1991, (“July 1991 TCPA hearings”) at 54.
Sen. Hollings, Chair at the time of the Committee on Commerce, Science, and Transportation, saw this FCC response, and specifically commented on it:
Several parties, including the Federal Communications Commission (FCC) itself, raised concerns that the FCC might not have the resources to pursue violators of this bill. The will of the FCC to enforce the bill rigorously was also questioned, especially since the chairman of the FCC submitted testimony at the July hearing to indicate that he believed the bill was unnecessary.
137 Cong. Rec. S.30821-22 (1991) (statement of Sen. Hollings).
Sen. Hollings knew that the way to address the FCC’s lack of interest and/or resources in enforcing the TCPA was to provide for citizen enforcement through a private attorney general statute. His is the only substantive discussion of the intent of the TCPA private right of action language, and is repeated here in its entirety:
Mr. President, the substitute bill I am offering today contains a number of small changes to the bill that was reported by the Commerce Committee. These changes address concerns that were raised at the hearing in Washington and hearings in South Carolina, and in the additional comments that were received from the public.
The substitute bill contains a private right-of-action provision that will make it easier for consumers to recover damages from receiving these computerized calls. The provision would allow consumers to bring an action in State court against any entity that violates the bill. The bill does not, because of constitutional constraints, dictate to the States which court in each State shall be the proper venue for such an action, as this is a matter for State legislatures to determine. Nevertheless, it is my hope that States will make it easy as possible for consumers to bring such actions, preferably in small claims court. The consumer outrage at receiving these calls is clear. Unless Congress makes it easier for consumers to obtain damages from those who violate this bill, these abuses will undoubtedly continue.
Small claims court or a similar court would allow the consumer to appear before the court without an attorney. The amount of damages in this legislation is set to be fair to both the consumer and the telemarketer. However, it would defeat the purposes of the bill if the attorneys’ costs to consumers of bringing an action were greater than the potential damages. I thus expect that the States will act reasonably in permitting their citizens to go to court to enforce this bill.
137 Cong. Rec. S.30821-22 (1991) (statement of Sen. Hollings) (emphasis added) (the substitute bill referred to by Sen. Hollings was S. 1462. The private enforcement provisions were also added to S.1410 the same day. Id. at 30911, Sen. Pressler Amendment #1310). Notably, in the above passage Sen. Hollings refers to states deciding the “proper venue for such an action” and the constitutional constraints on Congress dictating this venue. Venue is an entirely different concept from subject matter jurisdiction. Sen. Hollings was clearly referring to where the private TCPA would be heard, not whether they would be heard in state court. He was referring to neutral rules of court administration.
Also included among the other relevant testimony that Congress heard on the various bills that lead to the TCPA was testimony from Maryland’s Office of People’s Counsel:
Maryland, as I indicated, has passed a law. One of the unfortunate aspects of this law is it has been delegated to the Maryland Public Service commission, which does not have enforcement powers. Efforts to delegate that authority to the Attorney General have been thwarted over the past several years. So far in Maryland, cases of extreme fraud have been prosecuted in the State of Maryland. But the simple use of these abuses, these automatic dialers, have not thus far been prosecuted on the general basis.
Hearings on H.R. 628, H.R. 2131 and H.R. 2184 before the Subcommittee on Telecommunications and Finance of the Committee on Energy and Commerce, 101st Cong., 1st Sess., May 24, 1989, at 82 (testimony of John Glynn). This testimony was referring to Maryland Public Utility Companies Article (PUC) § 8-204, which restricts the use of automated dialing equipment to make prerecorded solicitation calls, and provides for criminal penalties. The private right of action for violations for these types of calls arises from the same section of the TCPA as the private right of action for unsolicited faxes, and will necessarily be effected by this Court’s decision. The above testimony shows that Congress had before it evidence, specifically from Maryland, that state agencies were not able to enforce even their own state laws restricting automated telemarketing calls. Petitioner does not know whether authority to enforce PUC § 8-204 was later delegated to the Maryland Attorney General, but whether it was or not is irrelevant to the fact that at the time the TCPA was being considered by Congress, the evidence was that state agencies were either unable or unwilling to enforce existing laws. The Maryland People’s Counsel also presciently pointed out that:
The State of Maryland recently enacted legislation prohibiting the use of fax machines for unsolicited commercial solicitation to encourage a person to purchase goods, realty, or services. The use of "fax" machines for commercial solicitation is a recent development but one which will be used in an increasingly aggressive fashion in the future.
The fax machine, used properly can be a boon to business efficiency. It provides professional and business people with the opportunity to transmit written materials instantly from one local location to the other. Unfortunately, the same equipment can also be used to inundate the owners of fax machines with voluminous and unsolicited material. This material not only causes the same annoyance as junk mail, but it introduces added expense and inefficiency into normal office operations. Junk fax increases costs of operating a commercial fax machine and ties up fax machines when they could be used for constructive purposes.
I suspect that we are only now seeing the tip of the iceberg. As this inexpensive form of solicitation becomes more popular, the problem will grow in scale. The Maryland Statute is a constructive attempt to eliminate this nuisance. However, Maryland can only deal with intra-state communications. Because of Maryland's proximity to the District of Columbia, the law can easily be evaded. A bill dealing with the inter-state implications of junk fax would be useful in preventing the abuse of Maryland citizens. The bill proposed is a reasoned and limited effort to discourage this unconstructive and inefficient practice.
Id. at 82-83 (emphasis added). Congress heard this testimony from the Maryland’s People Counsel explaining why, because of both the limits on Maryland prosecution of interstate communications and Maryland’s proximity to D.C., the TCPA was needed to control the growing harm from unsolicited commercial faxes. Respondents argue that from this history, this Court should conclude, in the light of the ambiguous statutory language, that Congress clearly stated the following intention: that Congress meant to allow Maryland to opt-out of the citizen enforcement mechanism provided in the very federal law Congress passed to address a growing problem which a knowledgeable attorney from Maryland told Congress Maryland was incapable of addressing, and which was correctly predicted to get much worse. Respondents’ argument must fail.
Further support of not just the lack of will for government enforcement, but the inability to prosecute, is provided in the record of this case. The Maryland Attorney General’s office is not authorized to resolve business-to-business disputes. E146 (March 22, 2000 letter from Maryland Attorney General’s Consumer Protection Division stating that “Our authority is limited to complaints arising from a consumer transaction.”).
Petitioners would caution this Court from placing too much emphasis on legislative history, particularly when it revolves around the comments of a single U.S. Senator cited by Petitioners, Respondents and amici alike. Petitioners say this despite the fact that Sen. Hollings’ few statements support Petitioners’ position that any concern of Congress was over improperly telling states how to run their court systems, and not over whether Congress had to power to require the states to hear TCPA cases. However, Sen. Hollings’ statements, even coming as they do from one of the TCPA’s main sponsors, should not be given too much weight. Congress is a deliberative body, in which laws go through many stages of hearings and committees before final passage. No federal law should be interpreted primarily on the statements of one member of Congress, regardless of whose side those comments might support. In one of his many attacks on resorting to legislative history, Justice Scalia stated “If one were to search for an interpretive technique that, on the whole, was more likely to confuse than to clarify, one could hardly find a more promising candidate than legislative history. . . the equivalent of entering a crowded cocktail party and looking over the heads of the guests for one's friends.” Conroy v. Aniskoff, 507 U.S. 511, 519 (1993) (Scalia, J. concurring in judgment) (emphasis in original).
(C) The Tenth Amendment does not prohibit Congress from requiring state courts to hear federal causes of action.
Petitioners’ Brief noted that state courts have an original obligation to hear cases under federal law like the TCPA under the Supremacy Clause, which is binding upon states, courts, judges and the people. The Supremacy Clause states that:
This Constitution, and the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any thing in the Constitution or Laws of any state to the Contrary notwithstanding.
Supremacy Clause, U.S. Constitution, art. VI, § 2 (emphasis added). The Maryland Declaration of Rights recognizes this same fundamental constitutional concept. Md. Declaration of Rights, Art. 2.
States are presumed to have concurrent jurisdiction over federal claims. The few exceptions to the presumption of concurrent jurisdiction are rebuttal “by an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.” Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 478 (1981). None of these three conditions exists regarding the TCPA. There is no explicit direction in the TCPA or its legislative history to divest states of jurisdiction, no unmistakable implication from legislative history, and no clear incompatibility problems with state and federal court interests. State court jurisdiction is therefore presumed as a matter of law.
(1) State courts are not the exclusive jurisdiction for TCPA claims.
TCPA enforcement is not exclusively in state court, as Respondents argue. Enforcement jurisdiction is split between state and federal courts, with state attorney general and FCC enforcement actionable in federal court, 47 U.S.C. § 227(f), and private citizen suits actionable in state court, 47 U.S.C. §§ 227(b)(3) and (c)(5). Congress created a reasonable distribution of jurisdiction based on what it perceived to be the types of cases that would typically be brought by private, state and federal persons or entities. TCPA defendants have argued that the availability of state attorney general and FCC enforcement mechanisms does not leave private citizens without relief from unwanted solicitations. In doing so, they recognize that TCPA enforcement is not available exclusively in state court.
Recent case law further defeats Respondents’ argument that the TCPA enforcement jurisdiction resides exclusively in state courts, even for private litigants. In Accounting Outsourcing, LLC v. Verizon Wireless Personal Communications, LP, 2003 U.S. Dist. LEXIS 15251 (decided Sep. 4, 2003) (M.D. La.), a U.S. District Court in Louisiana held that federal courts are not precluded from hearing TCPA claims under the diversity statute, 28 U.S.C. § 1332. The court refused to remand a TCPA class action that had been removed by the Defendants to federal court.
The Louisiana court did not decide the separate issue of whether federal courts can have supplemental jurisdiction over TCPA claims. However, the magistrate’s judge in the same case concluded that supplemental jurisdiction did exist. Id. at slip op. 4-5 (citing July 1, 2003 Magistrate’s Report and Recommendation on motion to remand). This conclusion is consistent with the only other opinion to decide this issue. In Kinder v. Citibank, 2000 U.S. Dist. LEXIS 13853, at 11 (S. D. Cal.), the court found that “nothing in the TCPA precludes federal courts from hearing TCPA claims where some other independent basis for jurisdiction exists.” The Kinder court also found diversity jurisdiction in federal courts for TCPA claims. Id. (“The Court therefore retains subject matter jurisdiction over Plaintiff’s TCPA claim based on diversity of citizenship, and alternatively, under supplemental jurisdiction, 28 U.S.C. § 1367.”).
Thus, federal court jurisdiction over the TCPA exists not only for state and federal government enforcement actions brought directly under the TCPA itself pursuant to 47 U.S.C. § 227(f), but also for private claims under both diversity and supplemental jurisdiction, including specifically class actions. There simply is no ‘burden’ on state court systems arising from the TCPA. This fact was stated unambiguously in a report from the Congressional Budget Office (CBO) included as part of the Senate TCPA hearings. The CBO concluded that “No costs would be incurred by state or local governments as a result of enactment of this bill.” September 9, 1991 letter to Sen. Hollings from Robert D. Reischauer, Director of the CBO. S. Rep. 102-178 (Oct. 9, 1991) 1991 U.S.C.C.A.N. 1968. The CBO letter completely refutes Respondents’ arguments that state legislatures might have a cost reason or motivation sufficient to justify a decision to close their courts to TCPA private actions. The CBO said there would be no burden, and Respondents and amici have produced absolutely no evidence of any such state burden.
Diversity and supplemental jurisdiction in federal courts for major private enforcement cases such as class actions, and for state and federal government enforcement jurisdiction directly under the TCPA dictates that there will be no such state burden in the future. Any burden on state courts is further reduced by the formal and informal complaint procedures available against violators under the FCC’s established complaint process. See Consumer.Net v. AT&T Corp., 15 F.C.C.R. 281 (1999) (formal complaint filed by consumer group for TCPA violations) and Get-Aways, Inc. 15 F.C.C.R. 1805 (1999) (FCC forfeiture following investigation in response to informal consumer complaint). Petitioners do not assert that there is absolutely no burden whatsoever for a state court to hear a TCPA claim, only that the burden is not material or excessive.
Even if there was a burden on the states, any burden arises from the Supremacy Clause itself, which empowers Congress to require states to entertain federal causes of action. Testa v. Katt, 330 U.S. 386, 393 (1947) (“state court cannot ‘refuse to enforce the right arising from the law of the United States because of conceptions of impolicy or want of wisdom on the part of Congress in having called into play its lawful powers.’”) (citation omitted); Howlett v. Rose, 496 U.S. 356, 369 (1990) (“A state court may not deny a federal right, when the parties are properly before it, in the absence of a ‘valid excuse.’”). An excuse that is “inconsistent with or violates federal law is not a valid excuse.” Id. at 371. “When Congress, in the exertion of the power confided to it by the Constitution, adopted the act, it spoke for all the people and all the States and thereby established a policy for all.” Id. The “valid excuse” exemption simply restates prior law: unless an “unmistakably clear” exception is spelled out in the statute, state courts have jurisdiction over actions to enforce federal statutes. Will v. Michigan Dept. of State Police, 491 U.S. 58, 65 (1989); United States v. Bass, 404 U.S. 336, 349 (1971) (“unless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance”) (citations omitted).
(2) Requiring state courts to hear a federal cause of action does not constitute a “commandeering of state governments” in violation of the Tenth Amendment.
Respondents candidly admit that they “do not contend that the Supreme Court has ever considered, let alone held, that Congress’ conferring of exclusive jurisdiction on the state judiciary for violations of federal law is, in fact, violative of the Tenth Amendment.” Resp. Brf. at 12. Then relying primarily on just two cases, Respondents argue that requiring state courts to be the exclusive forum to hear a particular federal cause of action would amount to a “commandeering of state government” in violation of the Tenth Amendment. Id. at 13.
Setting aside the fact that state courts are not the exclusive forum for TCPA cases, for either private or governmental plaintiffs, the two cases relied on by Respondents do not support their argument. While it is impermissible for Congress to require states to implement a federal program via their executive or legislative branches, it is acceptable and consistent with the Tenth Amendment for Congress to require states to make their judicial branch amenable to federal causes of action.
In Printz v. United States, 521 U.S. 898 (1997), the Supreme Court invalidated the federal Brady Handgun Violence Prevention Act which would have required the states’ chief law enforcement officers to conduct background checks on prospective handgun purchasers. This implicated and commandeered the states’ executive branch to carry out a federal program. For this reason, it ran afoul of the Tenth Amendment, which provides that “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” There was no impact from the Brady Act on the states’ judicial systems.
In Printz the Supreme Court looked at “historical understanding and practice” and observed that “that the Constitution was originally understood to permit imposition of an obligation on state judges to enforce federal prescriptions related to matters appropriate for the judicial power. Id. at 907. The Court noted that Second Employers' Liability Cases “stand for the proposition that a state court must entertain a claim arising under federal law ‘when its ordinary jurisdiction as prescribed by local law is appropriate to the occasion and is invoked in conformity with those laws.’” Id. at 907, n. 1 (citing Second Employers' Liability Cases, 223 U.S. 1, 56-57 (1912)). Distinguishing judicial powers and obligations from those of the legislative and executive branches, the Court reasoned:
It is understandable why courts should have been viewed distinctively in this regard;
unlike legislatures and executives, they applied the law of other sovereigns all the time . . . The Constitution itself, in the Full Faith and Credit Clause, Art. IV, § 1, generally required such enforcement with respect to obligations arising in other States.
Id. at 907 (citations omitted) (emphasis added). The Supreme Court considered acts of Congress early in this country’s history more probative than latter acts in determining the reach of federal constitutional powers. Id. at 905 (“early congressional enactments ‘provid[e] 'contemporaneous and weighty evidence' of the Constitution's meaning.’) (inner citations omitted). After examining historical laws and cases, the Supreme Court’s conclusion distinguished the obligations imposed on the judicial and executive branches by the early sessions of Congress’:
For these reasons, we do not think the early statutes imposing obligations on state courts imply a power of Congress to impress the state executive into its service. Indeed, it can be argued that the numerousness of these statutes, contrasted with the utter lack of statutes imposing obligations on the States' executive (notwithstanding the attractiveness of that course to Congress), suggests an assumed absence of such power.
Id. at 907-908 (emphasis added). The Supreme Court thus found a strong historical basis for Congressional imposition on state judiciaries, based on numerous early statutes. The obligation of state courts to hear these early statutes arose then, as now, from the Full Faith and Credit Clause when state courts apply the laws of other sovereign states, and the Supremacy Clause when applying a law of Congress, the national sovereign.
Printz clearly provides no support for Respondents’ argument that federal creation of exclusive state court jurisdiction of a federal cause of action violates the Tenth Amendment or dual-sovereignty. Neither does the other main case relied on by Respondents, New York v. United States, 505 U.S. 144 (1992).
In New York the Supreme Court invalidated the ‘take title’ provisions of the Low-Level Radioactive Waste Policy Act as an impermissible requirement on state governments to implement federal regulations: “No matter how powerful the federal interest involved, the Constitution simply does not give Congress the authority to require the States to regulate.” Id. at 178.
The Supreme Court in New York cited the “well established power of Congress to pass laws enforceable in state courts.” New York, 505 U.S. at 178 (citing several cases). The laws at issue in the earlier cases were enforceable as simple applications of the Supremacy Clauses’s provision that federal law is the supreme law of the land, and because they all involved:
congressional regulations of individuals, not congressional requirements that States regulate. Federal statutes enforceable in state courts do, in a sense, direct state judges to enforce them, but this sort of federal "direction" of state judges is mandated by the text of the Supremacy Clause. No comparable constitutional provision authorizes Congress to command state legislatures to legislate.
Id. at 178-179. So here again, the Supreme Court distinguished Congressional requirements imposed on state courts versus state legislatures, on the basis that the laws at issue regulated individuals, and not the States as entities. New York likewise does not support Respondents’ position.
A further constitutional problem raised by Respondents’ argument that Congress may only create state court jurisdiction if it also creates concurrent federal jurisdiction is Article III of the Constitution. Article III, § 1 defines and creates the federal court system, including the Supreme Court and the lower federal courts. Congress has sole discretion regarding the inferior federal courts and in defining their jurisdiction, although Congress is “ not constitutionally required to create inferior Article III courts to hear and decide cases within the judicial power of the United States.” Palmore v. United States, 411 U.S. 389, 400-401. If inferior courts are created by Congress, Congress is not “required to invest them with all the jurisdiction it was authorized to bestow under Art. III.” Congress’ power over the creation and defining of inferior federal courts is expansive:
The judicial power of the United States . . . is (except in enumerated instances, applicable exclusively to this court) dependent for its distribution and organization, and for the modes of its exercise, entirely upon the action of Congress, who possess the sole power of creating the tribunals (inferior to the Supreme Court) . . . and of investing them with jurisdiction either limited, concurrent, or exclusive, and of withholding jurisdiction from them in the exact degrees and character which to Congress may seem proper for the public good.
Id. (citing Cary v. Curtis, 44 U.S. 236, 245 (1845)).
Assuming arguendo that Congress may not constitutionally require states to be the exclusive forum for a federal cause of action, a point Petitioners do not concede, and one not even raised in this case since the TCPA provides for concurrent state and federal court jurisdiction for both private citizens and governmental entities, requiring Congress to invest the federal courts with jurisdiction in order to effectuate and enforce its laws runs afoul of Congress’ plenary power under Article III. Respondents’ reasoning would require Congress to create federal court jurisdiction every time Congress created state court jurisdiction, eviscerating Congress’ power and discretion under Article III over the federal courts. It would mean every federal act would require federal jurisdiction. Respondents would even strip Congress of its Article III powers when passing a statute like the TCPA, where creating state jurisdiction, even exclusive state court jurisdiction for certain claims, is a reasonable decision by Congress given the anticipated small size and nature of many TCPA suits and Congress’ goal to make citizen enforcement easy. This interpretation is unconstitutional, or at best, one which creates a very thorny constitutional issue which this Court must avoid reaching. New York, 505 U.S. at 170 (“where an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress.”) (citation omitted).
Even if exclusive state court jurisdiction for a federal claim seems unusual, it is certainly not unique to the TCPA. Respondents’ counsel claimed they were “hard pressed to find a federal statute that even purports to do that. The closest we have come is a provision of the Postal Service Act, 39 U.S.C. 3017 (2000), which utilizes the same ‘if otherwise permitted’ language found in the TCPA.” Resp. Brf. at 9, n. 4. In fact, the law review article cited in the Petitioners’ Brief cited several federal statutes: The Deceptive Mail Prevention and Enforcement Act, 39 U.S.C. § 3017(e) (1998) (injunction/recovery with respect to prohibited mailings in language the mirrors the TCPA’s private right of action); 42 U.S.C. § 604a(i) (1998) (enforcement/compliance with respect to public welfare grants to states); 15 U.S.C. § 3207(b) (1994) (enforcement of natural gas retail sales regulation) (All are cited in Robert Biggerstaff, State Courts and the Telephone Consumer Protection Act of 1991: Must States Opt-in? Can States Opt-out?, 33 Conn. L. Rev. 404 (2001) at 442, n. 207) (these statutes are provided at the back of this Reply Brief). Thus, the TCPA is not unique in this regard.
The history of state court jurisdiction over federal claims supports the private right of action in both the statutes just cited and the TCPA:
until 1875 Congress refrained from providing the lower federal courts with general federal-question jurisdiction. Until that time, the state courts provided the only forum for vindicating many important federal claims. Even then, with exceptions, the state courts remained the sole forum for the trial of federal cases not involving the required jurisdictional amount, and for the most part retained concurrent jurisdiction of federal claims properly within the jurisdiction of the lower federal courts.
Palmore v. United States, 411 U.S. 389, 401-402 (1973) (emphasis added). Thus, for the first 100 years, this country’s state courts were the sole forum for many federal claims. The TCPA is not either unique or new. The U.S. has a history of state courts being the exclusive forum for federal claims. The Biggerstaff articles touches on this history, and the why - because when this country was started, the federal courts were not yet created, so the existing state courts had to hear a variety of claims, including federal claims, and did so without objection. Biggerstaff at 433-438.
In summary, private suits under the TCPA call upon the judicial resources of the states, not their legislative or executive resources, and therefore do not fall within the “commandeering” to be avoided under the Tenth Amendment. Even if the TCPA created exclusive state court jurisdiction for enforcement, such a delegation by Congress is neither new or unique in this country.
IV. CONCLUSION
Corresponding to the Questions Presented:
1. The Court of Special Appeals erred in holding that a state has the constitutional authority to “opt out” of the TCPA. The Supremacy Clause requires states to honor federal laws, and the TCPA creates no material burden on the state courts implicating or running afoul of the Tenth Amendment.
2. The TCPA statute and legislative history contain no clear statement sufficient to alter the traditional federal-state constitutional balance so as to permit states to choose to “opt out” of their obligation to honor federal law and hear private TCPA suits. The statute and legislative history demonstrate that the TCPA’s private right of action language concerns the use of neutral laws or rules of state court procedure to administer TCPA cases.
3. Even if Maryland may constitutionally “opt out” of the TCPA’s private right of action and Congress provided a “clear statement” to allow this “opt out,” the Court of Special Appeals erred in holding that Maryland actually did choose to “opt out” of the TCPA. There is absolutely no support whatsoever that the legislature has taken any action of any kind regarding the TCPA. Legislative inaction on Commercial Law Article § 14-1313 and unrelated bills on telemarketing and commercial email issues are wholly irrelevant to determining whether Maryland recognizes private TCPA actions for unsolicited faxes.
The Circuit Court’s grant of summary judgment to the Respondents Fax.com, Inc. and JD&T Enterprises (Travel To Go) should be reversed and remanded, with a finding that the Maryland courts have jurisdiction over private suits to enforce the TCPA, including its unsolicited facsimile provisions, and including class actions, with a directive that proceedings are to resume in the Baltimore City Circuit Court.
Respectfully submitted,
Michael C. Worsham, Esq. Stephen H. Ring, P.C.
1916 Cosner Road Olde Towne Professional Park
Forest Hill, Maryland 21050 316 East Diamond Avenue, Suite 102
(410) 557-6192 Gaithersburg, Maryland 20877
Attorneys for Petitioners