The U.S. Court of Appeals for the Third Circuit has ruled, 2-1, in Landsman & Funk, PC v. Skinder-Strauss Associates that federal district courts have diversity jurisdiction over “junk fax” class actions brought under the federal Telephone Consumer Protection Act (TCPA).

Previously, in ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir. 1998), the Third Circuit held that private TCPA claims do not present a federal question, but ErieNet did not address the issue of diversity jurisdiction.

The TCPA declares it unlawful under federal law “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” It provides for enforcement by both private parties and state attorneys general. Section 227(b)(3), titled “Private right of action,” states that actions may be brought in state court and is silent as to possible federal court jurisdiction.

In ErieNet, the Third Circuit held that Congress did not intend to grant federal question jurisdiction over private TCPA claims to federal courts, but the diversity jurisdiction issue was not before it. With Landsman, the Court joins the majority of courts in holding that “Congress did not intend for exclusive state court jurisdiction. The TCPA does not strip federal courts of diversity jurisdiction over actions brought under Section 227(b)(3).”

Because the Class Action Fairness Act (28 U.S.C. §1332(d)) permits class actions in federal court if there is at least minimal diversity and an aggregate amount of at least $5 million in controversy, diversity jurisdiction is presumed to exist unless Congress intended to take it away in the TCPA. The Third Circuit concluded that “nothing in the statutory text or legislative history of the TCPA expressly indicates that Congress intended to strip federal courts of their diversity jurisdiction under §1332 over TCPA claims.”

In a webinar on April 12, 2011, Ballard Spahr attorneys will provide an overview of the TCPA and Federal Trade Commission, and Federal Communications Commission (FCC) regulations and declaratory rulings; key case law developments; the Truth in Caller ID Act (TCIDA) and the FCC’s proposed TCIDA regulations; current “hot button” issues giving rise to TCPA litigation; and tips and strategies for successfully defending individual and class action TCPA cases. Click here for more information or to register.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). The litigators in the Group defend all manner of TCPA and Fair Debt Collection Practices Act cases. For more information, please contact Group Chair Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; John L. Culhane, Jr., 215.864.8535 or culhane@ballardspahr.com;  Burt M. Rublin, 215.864.8116 or rublin@ballardspahr.com; Martin C. Bryce, Jr., 215.864.8238 or bryce@ballardspahr.com; Keith R. Fisher, 202.661.2284 or fisherk@ballardspahr.com; Barbara S. Mishkin, 215.864.8528 or mishkinb@ballardspahr.com; or Mark J. Furletti, 215.864.8138 or furlettim@ballardspahr.com.

 


 

 

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