Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 4

FACTS Numerous consumer complaints about abuses of telephone technology-for example, computerized calls dispatched to private homes-prompted Congress to pass the Telephone Consumer Protection Act of 1991 (TCPA or Act). Congress determined that federal legislation was needed because telemarketers, by operating interstate, were escaping state-law prohibitions on intrusive nuisance calls. The Act bans certain practices invasive of privacy and directs the Federal Communications Commission (FCC or Commission) to establish implementing regulations. It authorizes the states to bring civil actions to enjoin prohibited practices and to recover damages on their residents' behalf. The Act provides that jurisdiction over state-initiated TCPA suits lies exclusively in the U.S. district courts. Congress also provided for civil actions by private parties seeking redress for violations of the TCPA or of the Commission's regulations.
Marcus D. Mims, complaining of multiple violations of the Act by respondent Arrow Financial Services, LLC (Arrow), a debt-collection agency, commenced an action for damages against Arrow in the U.S. District Court for the Southern District of Florida. Mims invoked the court's ''federal question'' jurisdiction, i.e., its authority to adjudicate claims ''arising under the … laws … of the United States,'' 28 U.S.C. § 1331. The District Court, affirmed by the U.S. Court of Appeals for the Eleventh Circuit, dismissed Mims's complaint for want of subject matter jurisdiction. Both courts relied on Congress' specification, in the TCPA, that a private person may seek redress for violations of the Act (or of the Commission's regulations thereunder) ''in an appropriate court of [a] State,'' ''if [such an action is] otherwise permitted by the laws or rules of court of [that] State.'' The U.S. Supreme Court granted certiorari.
DECISION The judgment of the United States Court of Appeals for the Eleventh Circuit is reversed, and the case is remanded.
OPINION Ginsburg, J. Federal courts, though ''courts of limited jurisdiction,'' [citation], in the main ''have no more right to decline the exercise of jurisdiction which is given, then to usurp that which is not given.'' [Citation.] Congress granted federal courts general federal-question jurisdiction in 1875. [Citation.] *** ''The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.'' 28 U.S.C. §1331. The statute originally included an amount-in-controversy requirement, set at $500. [Citation.] Recognizing the responsibility of federal courts to decide claims, large or small, arising under federal law, Congress in 1980 eliminated the amount-in- controversy requirement in federal-question (but not diversity) cases. [Citation.] ***
Because federal law creates the right of action and provides the rules of decision, Mims's TCPA claim, in 28 U.S.C. §1331's words, plainly ''aris[es] under'' the ''laws … of the United States.'' ***
Arrow agrees that this action arises under federal law, [citation], but urges that Congress vested exclusive adjudicatory authority over private TCPA actions in state courts. In cases ''arising under'' federal law, we note, there is a ''deeply rooted presumption in favor of concurrent state court jurisdiction,'' rebuttable if ''Congress affirmatively ousts the state courts of jurisdiction over a particular federal claim.'' [Citation.] The presumption of concurrent state-court jurisdiction, we have recognized, can be overcome ''by an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.'' [Citation.]
***
Arrow's arguments do not persuade us that Congress has eliminated §1331 jurisdiction over private actions under the TCPA.
The language of the TCPA-''A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring [an action] in an appropriate court of that State,'' 47 U.S.C. §227(b)(3)-Arrow asserts, is uniquely state-court oriented. [Citation.] That may be, but ''[i]t is a general rule that the grant of jurisdiction to one court does not, of itself, imply that the jurisdiction is to be exclusive. [Citation.]
Nothing in the permissive language of §227(b)(3) makes state-court jurisdiction exclusive, or otherwise purports to oust federal courts of their 28 U.S.C. §1331 jurisdiction over federal claims. ***
Title 47 U.S.C. §227(b)(3) does not state that a private plaintiff may bring an action under the TCPA ''only'' in state court, or ''exclusively'' in state court. ***
***
Nothing in the text, structure, purpose, or legislative history of the TCPA calls for displacement of the federal-question jurisdiction U.S. district courts ordinarily have under 28 U.S.C. §1331. In the absence of direction from Congress stronger than any Arrow has advanced, we apply the familiar default rule: Federal courts have §1331 jurisdiction over claims that arise under federal law. Because federal law gives rise to the claim for relief Mims has stated and specifies the substantive rules of decision, the Eleventh Circuit erred in dismissing Mims's case for lack of subjectmatter jurisdiction.
INTERPRETATION Federal courts retain jurisdiction over causes of action created by federal law, unless the federal law in question, expressly or by fair implication, excludes federal court jurisdiction.
CRITICAL THINKING QUESTION Why would Congress have specifically granted private party TCPA jurisdiction to the state courts when those courts already had concurrent jurisdiction in federal question cases?