International Science & Technology Institute, Incorporated v. Inacom Communications, IncorporatedInternational Science & Technology Institute, Incorporated v. Inacom Communications, Incorporated
Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge WILLIAMS and Judge MOTZ joined.
OPINION
We today reach the somewhat unusual conclusion that state courts have exclusive jurisdiction over a cause of action created by federal law. Holding that the states have been given, subject to their consent, exclusive subject matter jurisdiction over private actions authorized by the Telephone Consumer Protection Act of 1991,
I
In 1991, Congress amended the Communications Act of 1934,
The relevant section of the TCPA provides, “It shall be unlawful for any person within the United States ... to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine.”
The TCPA creates a private right of action to obtain an injunction,
II
During the summer months of 1995, International Science & Technology Institute, Inc. (“International Science”) received at its fax machine several unsolicited advertisements for discount long-distance telephone service from Inacom Communications, Inc. (“Ina-Com”). International Science claims that Inacom sent “thousands of such unsolicited advertisements to small business enterprises throughout the United States in knowing and willful violation of the [TCPA].” Proceeding under the TCPA and invoking federal-question jurisdiction granted by
The language in § 227(b)(3) is unambiguous. The statute clearly places jurisdiction for a private right of action in the state courts, just as it places jurisdiction for actions brought by the State or the FCC in the District Courts of the United States. Contrary to plaintiffs assertion, there is no ambiguity created because Congress omitted the phrase “exclusive jurisdiction” from§ 227(b)(3) .
In response to International Science’s argument that the statute did not make state jurisdiction exclusive and that federal jurisdiction could therefore be implied, the district court ruled that it could not imply a federal right of action when Congress had expressed an intent to create only a right of action in state courts.
On appeal, International Science makes three arguments: (1) that the permissive language of
Ill
To discern whether Congress intended to authorize jurisdiction over private actions exclusively in state courts, we first turn, as we must, to the TCPA’s text.
See, e.g., New York State Conf. of Blue Cross and Blue Shield Plans v. Travelers Insurance Co.,
— U.S. —, —,
When, however, the permissive authorization extends only to courts of general jurisdiction, that authorization cannot confer jurisdiction on unmentioned courts of
limited
jurisdiction, which require a specific grant. If a federal statute permissively authorizes suit in federal court, that authorization does not of necessity preclude suit in state courts of general jurisdiction, which are presumed competent unless otherwise stated.
See Tafflin, id.
But the contrary assertion cannot be true. If a statute authorizes suit in state courts of general jurisdiction through the use of the term “may,” that authorization cannot confer jurisdiction on a federal court because federal courts are competent to hear only
Thus, when International Science argues that the Supreme Court’s holding in
Tafflin
has foreclosed our finding exclusive jurisdiction in state court for private TCPA actions, it fails to recognize that the circumstances in
Tafflin
are the reverse of those in the ease before us. While state courts are presumed to have jurisdiction over federally created causes of action unless Congress indicates otherwise,
see Tafflin,
Accordingly, we conclude that when, in
We are further confirmed in this construction of
Finally, the legislative history of the TCPA supports our interpretation that Congress intended that private actions under
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 comí; in each State shall be the proper venue for such an action, as this is a matter for State legislators to determine. Nevertheless, it is my hope that States will make it as easy as possible for consumers to bring such actions, preferably in small claims court....
Small claims court or a similar court would allow the consumer to appear beforethe 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. S16205-06 (daily ed. Nov. 7, 1991) (statement of Sen. Hollings). While Senator Hollings did not explicitly say that only state court jurisdiction was appropriate, we believe the clear thrust of his statement was consistent with the bill’s text that state courts were the intended fora for private TCPA actions.
International Science argues, notwithstanding, that a congressional intent to establish concurrent jurisdiction for private civil actions in both state and federal courts is manifested through its preemptive occupation of the field of interstate telecommunications. International Science states, “federal courts have exclusive jurisdiction in respect of essentially all matters arising under chapter 5” of the Communications Act, citing
Harrison Higgins, Inc. v. AT & T Communications, Inc.,
Accordingly, when Congress provided in
IV
International Science contends that, even if the TCPA does not itself provide for federal jurisdiction over private actions, the general federal-question jurisdictional statute,
While Article III of the Constitution authorizes judicial power of “cases, in law and equity,
arising under
” (emphasis added) the Constitution, laws, and treaties of the United States, the district courts have only that jurisdiction that Congress grants through statute.
See Sheldon,
Congress gave federal-question jurisdiction to district courts under
It is true that, as a general matter, a cause of action created by federal law will properly be brought in the district courts. But “despite the usual reliability of the [principle that ’a suit arises under the law that creates the cause of action,’ the Supreme] Court has sometimes found that formally federal causes of action were not properly brought under federal-question jurisdiction.”
Merrell Dow,
Moreover, the dominant reason that Congress created a private TCPA action at all was out of solicitude for states which were thwarted in their attempts to stop unwanted telemarketing. Congress found in the statute:
Over half the States now have statutes restricting various uses of the telephone for marketing, but telemarketers can evade their prohibitions through interstate operations; therefore, Federal law is needed to control residential telemarketing practices.
Pub.L. No. 102-243, § 2(7), 105 Stat. 2394 (1991). See also Sen. R. No. 102-178, at 3 (1991), reprinted in 1991 U.S.C.C.A.N. at 1970 (“States do not have jurisdiction over interstate calls. Many States have expressed a desire for Federal legislation to regulate interstate telemarketing calls to supplement their restrictions on intrastate calls”); id. at 5, reprinted in 1991 U.S.C.C.A.N. at 1973 (“Federal action is necessary because States do not have the jurisdiction to protect their citizens against those who use these machines to place interstate telephone calls”). Thus, although Congress created the private TCPA action, it was from the beginning a cause of action in the states’ interest.
International Science argues, nevertheless, that to construe
International Science also argues, based on a misreading of
Merrell Dow,
that “federal courts [whether the district courts or other federal courts] always have jurisdiction of cases arising under federal law, if a private right of action is intended at all.” Contrary to International Science’s argument, the focus of
Merrell Dow
was not on such a principle but on the intent of Congress. After determining that “Congress did not intend a private federal remedy for violations of the statute that it enacted,”
[I]t would flout congressional intent to provide a private federal remedy for the violation of the federal statute. Wé think it would' similarly flout, or at least undermine, congressional intent to conclude that the federal courts might nevertheless exercise federal-question jurisdiction and provide remedies for violations of that federal statute solely because the violation of the federal statute is said to be a “rebuttable presumption” or a “proximate cause” under state law, rather than a federal action under federal law.
Id.
at 812,
In the TCPA, Congress made explicit provision not only for federal actions by state attorneys general but also for state actions by private individuals. Had it not done so, we might be left with a question under
Cort v. Ash,
V
International Science argues finally that we should avoid finding exclusive state jurisdiction for private actions under
We agree with International Science’s general assertion that courts should favor an otherwise permissible interpretation of a statute to avoid serious constitutional questions.
See, e.g., Public Citizen v. Dept. of Justice,
A
International Science first contends that to read the statute as authorizing exclusive state jurisdiction over private causes of action would violate the Fourteenth Amendment guarantee of “equal protection of the laws.”
International Science argues that interpreting
We believe that this argument is based on a misconstruction of the nature of the federal right. The clause in
The question is simply whether the legislative classification is rationally related to a legitimate governmental interest. Under this standard, the Act is entitled to a strong presumption of validity, and mustbe sustained if there is any reasonably conceivable state of facts that could provide a rational basis for the classification.
Thomasson v. Perry,
We believe that it is readily apparent from the congressional findings contained in the TCPA itself that Congress considered the effect that a newly created private right of action would have on judicial administration. Specifically finding that 18 million telemarketing calls are made daily, Pub.L. No. 102-243, § 2(3), 105 Stat. 2394 (1991), Congress understandably avoided opening federal courts to the millions of potential private TCPA claims by authorizing private actions only in state courts, presumably in the small claims courts. Similarly concerned over the potential impact of private actions on the administration of state courts, Congress included a provision to allow the states to prohibit private TCPA actions in their courts. We have no doubt that Congress has a legitimate interest in not overburdening state and federal courts. Nor can it be doubted that Congress has a legitimate interest in respecting the states’ judgments about when their courts are overburdened. With those interests in mind and recognizing that other enforcement mechanisms are available in the TCPA, we believe Congress acted rationally in both closing federal ■ courts and allowing states to close theirs to the millions of private actions that could be filed if only a small portion of each year’s 6.57 billion telemarketing transmissions were illegal under the TCPA.
The fact that private actions under the TCPA may be permitted in some state courts and prohibited in others, as determined by the states, does not render the TCPA viola-tive of the equal protection component of the Fifth Amendment’s Due Process Clause.
B
International Science also argues that to interpret
While we agree that we must be sensitive to any effort by Congress to commandeer state resources,
see New York,
An act of Congress may violate the Tenth Amendment if it exceeds the scope of delegated powers or “invades the province of state sovereignty reserved by the Tenth Amendment.”
New York,
In this case, Congress has not commanded state legislatures to legislate, as found impermissible in
New York. See
It is true that in the ease before us, we do not have the ameliorating fact that the TCPA provides for concurrent federal jurisdiction over private civil actions. To the contrary, in the TCPA Congress took the unusual step of making state court jurisdiction exclusive. Apparently recognizing that the exclusivity of state court jurisdiction could create a problem potentially left unresolved by
Testa,
Congress avoided any constitutional issue by refusing to coerce" states to hear private TCPA actions, providing instead that a person or entity may, “if otherwise permitted by the laws or rules of court of a State,” bring a TCPA action in an appropriate court of that state.
If state residents would prefer their government to devote its attention and resources to problems other than those deemed important by Congress, they may choose to have the Federal Government rather than the State bear the expense[and administrative burden] of [the TCPA], and they may continue to supplement that program to the extent state law is not preempted. Where Congress [thus] encourages state regulation rather than compelling it, state governments remain responsive to the local electorate’s preferences; state officials remain accountable to the people.
New York,
VI
While Congress created, in the TCPA, an individual right to be free from unsolicited fax advertising, it provided for private actions to enforce the right exclusively in state courts. Accordingly, jurisdiction of the United States district courts over private TCPA actions may not be premised on the general federal-question jurisdiction conferred by
AFFIRMED.
Notes
.
See, e.g.,
Age Discrimination in Employment Act,
. Notably, these statutes do not
explicitly
say that the Court of Federal Claims has exclusive jurisdiction over cases involving more than $10,000. One might conclude that district courts had concurrent jurisdiction by virtue of
. For precisely the same reason, we find no merit in International Science’s argument, made first on appeal, that jurisdiction lies by virtue of