Worsham v. Fairfield Resorts, Inc.Worsham v. Fairfield Resorts, Inc.
Thе question presented by this appeal is whether the applicable statute of limitations for a claim filed in Maryland pursuant to the federal Telephone Consumer Protection Act of 1991 (“TCPA”) is four years—based upon the federal “catch all” limitation period set forth in
Facts and Procedural History
The appellant in this case is Paul Worsham. On February 26, 2007, Worsham filed a complaint in the Circuit Court for Montgomery County, alleging that he had received a telephone solicitor’s call that violated the federal TCPA. Worsham alleged that a company using telemarketing to promote its services—Fairfield Resorts, Inc., appellee—had unlawfully called Worsham’s residential telephone number on February 28, 2003, using automated
The content of the prerecorded message was:
Page with the Fairfield Resorts in Alexandria, Virginia. We’re inviting people in your area to the open house of our luxurious resort, and just for taking a short 90 minute tour, you’ll receive a certificate good for four hotel getaways, including dinner, and spending monеy. For more details, call our representatives at 1-800-249-0214, and please mention offer 300. Thanks.
Worsham’s complaint alleged that the call violated the provision of the TCPA set forth in
[a]n injunction prohibiting the Defendants ... from initiating telephone calls to any residential line using a prerecorded voicе to deliver a message without the prior express invitation, permission or consent of the called party, or without providing the name of the individual caller, the name of the person on whose behalf the call is being made, and/or a telephone number or address at which the person or entity may be contacted.
Fairfield filed a motion to dismiss the complaint pursuant to Maryland Rule 2—322(b)(2). Fairfield asserted that all claims
were barred by the three-year statute of limitations set forth in CJP § 5-101. Fairfield also asserted that the TCPA provided no private cause of action for the alleged violation of
Worsham responded and argued that the suit was timely filed, asserting:
The statute of limitations for violations of the federal Telephone Consumer Protection Act,47 U.S.C. § 227 is governed by the four year limitations period established by28 U.S.C. § 1658 . Unless specified otherwise, when a cause of аction is created by a federal statute enacted after December 1, 1990, the limitations period is four years. Jones v. R.R. Donnelley & Sons Co.,541 U.S. 369 , 382,124 S.Ct. 1836 ,158 L.Ed.2d 645 (2004).
After a hearing, the circuit court granted Fairfield’s motion to dismiss the claims against it with prejudice “on the grounds that such claims are barred by the statute of limitations.” This appeal followed. 1
Because the sole basis upon which the circuit court dismissed Worsham’s claims was the application of the Mary
land statute of limitations, we shall limit our discussion to whether the court correсtly determined that the four-year statute of limitations established by
The first,
47 U.S.C. § 227 . Restrictions on use of telephone equipment.
(b) Restrictions on use of automated telephone equipment.
(1) Prohibitions. It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—
(B) to initiate any telephone call to any residential telephone line using an artificial or prerecorded voicе to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the [Federal Communications] Commission under paragraph (2)(B); — [2]
The second pertinent provision,
(3) Private right of action. 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 this 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.
If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph.
Accordingly, the TCPA prohibits the commercial use of prerecorded telephone messages in calls placed to residential telephone lines, subject to certain exemptions. Further, the TCPA provides for pursuit of a private cause of action in State court seeking an injunction or damages or both.
At first blush, Congress’s statutory scheme of creating a private cause of action for violation of a federal law, but requiring that such private cause of action be рursued only in state courts, seems like an oddity. But, as Judge John C. Eldridge explained, writing for the Court of Appeals in
Levitt v. Fax.com, Inc.,
In
R.A. Ponte Architects, Ltd. v. Investors’ Alert,
Congress enacted the Telephone Consumer Protection Act in November 1991, and it was signed into law in December of that year. The purpose of the Act was to address telemarketing practices that were made possible by technological changes that resulted, inter alia, in a substantial increase in unsolicited commercial telephone calls and faxes, and the resulting expense and disruption imposed on the recipients. At that point in time, some states had begun to take action to restrict such telemarketing practices.... State laws, however, had limited effect because states did not have jurisdiction over interstate calls. The federal law was primarily intеnded to reach unsolicited facsimile and other telephone communications that crossed state lines, and fell outside the jurisdiction of the states.
The scant legislative history relative to the private cause of action authorized by
In introducing the “amendment” or “substitute bill” containing the private cause of action codified as47 U.S.C. § 227(b)(3) , Senator Hollings initially set forth some of the background for theprovision (137 Cong. Rec. 30821[-30822]):
“The telemarketing industry appears oblivious to the harm it is creating. Two months ago, a reрresentative of the Direct Marketing Association said on television that telemarketers have a right to call us in our homes. This is absurd. I echo Supreme Court Justice Louis Brandéis, who wrote 100 years ago that ‘the right to be left alone is the most comprehensive of rights and the one most valued by civilized man.’ ”
“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 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. The consumer outrage at receiving these calls is сlear. 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.”
The above-quoted statements by Senator Hollings contain essentially the whole legislative history underlying the private cause of action provision in
(Emphasis added by Court of Appeals in Ponte.)
Based upon the legislative history, the Court of Appeals concluded that the language in the TCPA that was deferential to the individual states—“if otherwise permitted by the laws or rules of court of a State”—was intended to avoid dictating “which court in a particular state had jurisdiction over the cause of action. What was left for the determination of state legislators was the ‘proper venue.’”
Id.
at 711,
The substantive issue of whether the federal cause of action should be entertained in the appropriatе state court was not a matter left to state legislators. While leaving to the states the determination of “the proper venue,” the sponsor of the federal statute hoped that state legislatures would allow injured consumers to bring the actions in small claims or similar courts rather than in superior courts of general jurisdiction -with their higher costs and substantial attorneys’ fees.
Accord
Robert R. Biggerstaff,
The
Ponte
Court rejected the argument thаt the phrase “if otherwise permitted by the laws or rules of court of a State” should be interpreted to make the private cause of action conditional upon legislative enactments in the individual states, observing: “[PJarticularly in light of Senator Hollings’s explanation, it seems clear that the word ‘laws’ covered matters such as the monetary jurisdiction of state courts and procedure in those courts.”
[W]ith respect to both the federal government and the states, the monetary jurisdiction of different courts is determined by statutes enacted by legislative bodies. The same is true, subject to state constitutional requirements, concerning the general types of actions that may be brought in particular courts, the nature of the relief available in different courts, the availability of jury trials in some courts but not in others, etc.
To similar effect, the Court stated, id. at 715,857 A.2d 1 : In light of the sponsor’s concern over the “proper venue” for actions under47 U.S.C. § 227(b)(3) , and his deference to state legislators concerning the proper venue and procedure for the federal cause of action, the reference to state “laws or rules of court” is understandable.
In the concluding paragraph of the
Ponte
opinion, the Court stated,
id.
at 719,
We hold, therefore, that Maryland trial courts have jurisdiction over the private cause of action created by47 U.S.C. § 227(b)(3) . Whether a particular case under§ 227(b)(3) should be brought in a circuit court or the District Court of Maryland will depend upon the amоunt of money involved and the monetary jurisdictional provisions, for civil actions at law for money damages, set forth in the Courts and Judicial Proceedings Article of the Maryland Code.
The Court of Appeals did not have occasion in
Ponte
to address the statute of limitations that would apply to a private cause of action asserted under
The federal statute of limitations was enacted by Congress on December 1, 1990, just а few months before Congress enacted the TCPA. Section 1628 provides: “Except as otherwise provided by law, a civil action arising under an Act of Congress, enacted after the date of the enactment of this
section may not be commenced later than 4 years after the cause of action accrues.” (In 2002, this language was designated
Two arguments have been advanced for applying the state statute of limitations rather than
The history leading up to the enactment of
In Board of Regents of Univ. of State of N.Y. v. Tomanio,446 U.S. 478 , 483,100 S.Ct. 1790 ,64 L.Ed.2d 440 (1980), we observed that Congress’ failure to enact a uniform statute of limitations applicable to federal causes of action created a “void which is commonplace in federal statutory law.” Over the years that void has spawned a vast amount of litigation. Prior to the enactment of§ 1658 , the “settled practice was to adopt a local time limitation аs federal law if it [was] not inconsistent with federal law or policy to do so.” Wilson v. Garcia,471 U.S. 261 , 266-67,105 S.Ct. 1938 ,85 L.Ed.2d 254 (1985). Such “[limitation borrowing,” Board of Regents v. Tomanio,446 U.S., at 484 ,100 S.Ct. 1790 , generated a host of issues that required resolution on a statute-by-statute basis. For example, it often was difficult to determine which of the forum State’s statutes of imitations was the most appropriate to apply to the federal claim. We wrestled with that issue in Wilson v. Garcia, in which we considered which state statute provided the most appropriate limitations principle for claims arising under42 U.S.C. § 1983 .471 U.S., at 268, 276-279 ,105 S.Ct. 1938 (resolving split of authority over whеther the closest state analogue to an action brought under§ 1983 was an action for tortious injury to the rights of another, an action on an unwritten contract, or an action for a liability on a statute). Before reaching that question, however, we first had to determine whether the characterization of a§ 1983 claim for statute of limitations purposes was an issue of state or federal law and whether all such claims should be characterized in the same way. Ibid. Two years later, in Goodman v. Lukens Steel Co., we answered the samе three questions for claims arising under § 1981.482 U.S., at 660, 661-662 ,107 S.Ct. 2617 . Both decisions provoked dissent and further litigation.
The practice of borrowing state statutes of limitations also forced courts to address the “frequently present problem of a conflict of laws in determining which State statute [was] controlling, the law of the forum or that of the situs of the injury.” S.Rep. No. 619, 84th Cong., 1st Sess., 4-6 (1955) (discussing problems caused by borrowing state statutes of limitations for antitrust claims). Even when courts were able to identify the appropriate state statute, limitations borrowing resulted in uncertainty for both plaintiffs аnd defendants, as a plaintiff alleging a federal claim in State A would find herself barred by the local statute of limitations while a plaintiff raising precisely the same claim in State B would be permitted to proceed. Ibid. Interstate variances of that sort could be especially confounding in class actions because they often posed problems for joint resolution. See Memorandum from R. Marcus, Assoc. Reporter to Workload Subcommittee (Sept. 1, 1989), reprinted in App. to Vol. 1 Federal Courts Study Committee, Working Papers and Subcommittee Reports (1990), Doc. No. 5, p. 10 (hereinafter Marcus Memorandum). Courts also were forced to grapple with questions such as whether federal or state law governed when an action was “commenced,” or when service of process had to be effectuated. SeeSentry Corp. v. Harris, 802 F.2d 229 (C.A.7 1986) (addressing those issues in the wake of our decision in Wilson). And the absence of a uniform federal limitations period complicated the development of fеderal law on the question when, or under what circumstances, a statute of limitations could be tolled. See802 F.2d, at 234-242 (discussing conflicting authority on whether tolling was a matter of state or federal law); Board of Regents v. Tomanio,446 U.S., at 485 ,100 S.Ct. 1790 (explaining that “ ‘borrowing’ logically included [state] rules of tolling”).
Those problems led both courts and commentators to “cal[l] upon Congress to eliminate these complex cases, that do much to consume the time and energies of judges but that do little to advance the cause of justice, by enacting federal limitations periods for all federal causes of action.” Sentry Corp. v. Harris,802 F.2d, at 246 . Congress answered that call by creating the Federal Courts Study Committee, which recommended the enactment of a retroactive, uniform federal statute of limitations. As we have noted,§ 1658 applies only to claims arising under statutes enacted after December 1, 1990, but it otherwise follows the Committee’s recommendation. The House Report accompanying the final bill confirms that Congress was keenly aware of the problems associated with the practice of borrowing state statutes of limitations, and that a central purpose of§ 1658 was to minimize the occasions for that practice.
The history that led to the enactment of§ 1658 strongly supports an interpretation that fills more rather than less of the void that has created so much unnecessary work for federal judges.
(Footnotes omitted.)
Given this background, the Supreme Court held that
We conclude that a cause of action “aris[es] under an Act of Congrеss enacted” after December 1, 1990—and therefore is governed by§ 1658 ’s 4-year statute of limitations—if the plaintiffs claim against the defendant was made possible by a pos!>-1990 enactment. That construction best serves Congress’ interest in alleviating the uncertainty inherent in the practice of borrowing state statutes of limitations while at the same time protecting settled interests. It spares federal judges and litigants the need to identify the appropriate state statute of limitations to apply to new claims but leaves in place the “borrowed” limitations periods for preexisting causes of action, with respect to which the difficult work already has been done.
See also North Star Steel Co. v. Thomas,
Clearly, the right to pursue a private cause of action for a violation of the TCPA, as permitted by
Although it is true that the first clause in
As the Court of Appeals pointed out in Ponte, Senator Hollings’s remarks regarding the private cause of action reflect a desire to respect a variety of state court structures. But there is nothing in Senator Hollings’s remarks that suggests any intent to exempt the private cause of action in the TCPA from the recently enacted uniform federal statute of limitations.
We recognize that there is a split of authority among courts of other jurisdictions that have considered this question.
3
By resort to linguistic contortions, some courts have concluded that (a) a TCPA claim does not “arise under” an act of Congress, or (b) the catchall statute of limitations imposed by
Accordingly, Worsham’s complaint was not barred by the statute of limitations, and the circuit court should not have dismissed the complaint on that basis.
We caution readers not to confuse actions filed pursuant to the federal TCPA with Maryland’s similar, but distinct, statutes prohibiting telephone abuse, including Maryland Code (1975, 2005 RepLVol.), Commercial Law Article, §§ 14-1313, addressing unsolicited facsimile trаnsmissions; 14-2201 et seq., the Maryland Telephone Solicitations Act; and 14-3201 et seq., the Maryland Telephone Consumer Protection Act. The statute of limitations for asserting claims pursuant to these Maryland statutes would be governed by State law rather than
JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY IS VACATED. CASE REMANDED FOR FURTHER PROCEEDINGS NOT INCONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY APPEL-LEE.
Notes
. Although Worsham’s complaint also named as a defendant Milton James Olmos, who was alleged to be thе president of Tele-Max Marketing, Inc., “a now-bankrupt company,” that defendant was never served. As a consequence, the grant of Fairfield’s motion disposed of all claims against all parties who had been served, and was appealable.
Turner v. Kight,
2. The potential exemptions are described in
(2) ... [T]he Commission—
(B) may, by rule or order, exempt from the requirements of paragraph (l)(B) of this subsection, subject to such conditions as the Commission may prescribe—
(i) calls that are not made for a commercial purpose; and
(ii) such classes or categories of calls made for commercial purposes as the Commission determines—
(I) will not adversely affect the privacy rights that this section is intended to protect; and
(II) do not include the transmission of any unsolicited advertisement; ____
. Among the cases that have held that the 4-year limitation period provided by