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Opinion recap: Court requires federal hearing in telemarketing case

With its opinion yesterday in Mims v. Arrow Financial Services, LLC, the Court stuck with the well-settled rules for federal-question jurisdiction, rejecting the conclusion of most of the courts of appeals that the odd language of the federal Telephone Consumer Protection Act (the “TCPA”) relegated suits under that statute to state courts.

The statute established a federal regulatory regime with stark limits on telemarketing phone calls, and provided for enforcement not only by the FCC and state regulators, but also by offended individuals.   The relevant provision states that a private plaintiff seeking redress for violations of the TCPA can file suit “in an appropriate court of [a] State.”  The case reached the Court because most of the courts of appeals (including the Eleventh Circuit in this case) held that this affirmative authorization of suits in state courts implicitly divested federal courts of jurisdiction.  Noteworthy among those rejecting that view was then-Judge Samuel Alito, who dissented from a decision by the Third Circuit barring federal jurisdiction over TCPA claims.

Despite some wandering questions at the argument, suggesting at least a possibility of using the case to break new ground, the Court instead treated the case as a routine application of settled principles, producing a speedy (first case from the December sitting) and unanimous decision by Justice Ginsburg.  [Indeed, this is the fourth majority opinion already this Term for the hard-working Justice Ginsburg, the most on the Court; Justices Kennedy and Alito have yet to issue a majority opinion.]

Calming those who might have feared something anomalous, the Court started its analysis with Justice Holmes’s classic statement in American Well Works Co. v. Bowler Co. that a “suit arises under the law that creates the cause of action.”  Because there was no doubt that the lawsuit here was created by the TCPA, the only remaining question was whether something in the TCPA divested the federal courts of the jurisdiction they otherwise would have under Section 1331 (which grants jurisdiction over all suits “arising under” federal law).

The Court gave short shrift to the argument (a big winner in the courts of appeals) that the explicit grant of jurisdiction to state courts implicitly divested federal jurisdiction.  Justice Ginsburg quipped that “Section 1331 . . .  is not swept away so easily.”   Liberally quoting from then-Judge Alito’s dissent from the Third Circuit’s contrary ruling on this issue, the Court formulated the standard for divestment as requiring statutory language that “expressly or by fair implication” excludes federal-court adjudication.

Viewed through that lens, Arrow’s argument against federal jurisdiction had no chance.  Justice Ginsburg offered several points.  First, she noted that nothing in the affirmative language of the TCPA “purports to oust federal courts” of jurisdiction.  Second, she pointed out that other sections of the TCPA explicitly oust state courts of jurisdiction (referring to provisions under which actions brought by states must be brought “exclusive[ly]” in federal courts).

Finally, instead of relying solely on a clear-statement rule, Justice Ginsburg addressed Arrow’s textual argument head-on.  Surprisingly, the answer she chose to offer was that Congress could have included the specific authorization for suits in state courts simply to avoid litigation over the question; she noted extensive litigation on that question under RICO and the Civil Rights Act.   Given the clarity of the Court’s jurisprudence on that question in recent years, a more natural response would have been that Congress addressed the subject only to limit the obligation of state courts to hear the cases: the statute not only authorizes state court jurisdiction, it suggests it is limited to “an appropriate court [in which such an action is] otherwise permitted by the laws or rules of [that] State.”

Justice Ginsburg dismissed out of hand the idea that exclusive state jurisdiction was the best way to further Congress’s goals, emphasizing the legislative intent to solve a national problem.  This section of her opinion is noteworthy for its successful elucidation of congressional intent without any explicit reference to legislative history (which presumably would have evoked separate writing from Justice Scalia).   Although several of the Justices seemed troubled by the idea at oral argument, she concluded that there was no reason to fear the cluttering of the lower federal courts with large masses of trivial telemarketing cases; empirical scholars would beam with pride to see her citation of data (apparently hand-collected) about the number of TCPA cases filed in district courts in the Seventh Circuit after that court took a pro-jurisdiction stance.

In the end, the opinion contains a few snippets of jurisprudential interest.  The deep thinkers of federal jurisdictional theory will doubtless mull the gratuitous explication in footnote 8 of Shoshone Mining Co. v. Rutter.  Others might wonder whether the Court’s discussion of the circumstances in which state courts are obligated to hear cases arising under federal law (which relegates Testa v. Katt to a minor citation at the end of a long footnote) suggests a willingness to retreat from its firm vigilance on that point.  But in the end, the case is likely to go down as what it seemed to be when the Court granted review: an occasion for settled principles to reverse a wayward rule of decision in the courts of appeals.

Recommended Citation: Ronald Mann, Opinion recap: Court requires federal hearing in telemarketing case, SCOTUSblog (Jan. 19, 2012, 12:41 PM),