Court Opinion

ID: 9615718
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:39:57.866522+00
Date Added: 2024-06-11T18:03:50.574561
License: Public Domain

SLOVITER, Circuit Judge,
dissenting.
There is a Wonderland quality about the majority’s enunciation of the inquiry before us: only if Congress intended to create a personal right and a private remedy, may a court hold that an implied right of action exists under a federal statute. I do not suggest that the majority misconstrues the recent Supreme Court precedent. Quite the contrary. The majority scrupulously reviews the relevant decisions in articulating its version of our task. The fact that I arrive at a different conclusion should not obscure the inescapable truth that we are both engaged in an illusory *309errand. The search is to determine whether Congress, the Congress that enacted the statute, also intended to create a private right of action. Do we really believe that Congress, with its legislative aides, lawyers, paralegals and assorted staff, is unable to state in simple declarative language that anyone injured by a violation of that statute may file suit in federal court? Do we really believe that it simply forgot? But whatever the reason Congress chose to remain silent, the Supreme Court set our course decades ago and we have the responsibility to follow by looking for clues that Congress intended that which it did not say.
Unlike the majority, I conclude that when Congress enacted § 3009(b) expressly creating a personal property right in recipients of unordered merchandise, it also enabled those recipients to take the action necessary to exercise that right, or, in the parlance of the precedents, effect a remedy.
Section 3009(b) states that unordered merchandise “may be treated as a gift by the recipient, who shall have the right to retain, use, discard, or dispose of it in any manner he sees fit without any obligation whatsoever to the sender.” 39 U.S.C. § 3009(b) (emphasis added). As the majority recognizes, “the ‘rights-creating’ language so critical to the Court’s analysis” is unquestionably present here. Alexander v. Sandoval, 532 U.S. 275, 288, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001) (citing Cannon v. Univ. of Chicago, 441 U.S. 677, 690 n. 13, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979) (asserting that “the right- or duty-creating language of the statute has generally been the most accurate indicator of the propriety of implication of a cause of action”)). We shift, then, to Congress’ intent to create a remedy, with primary focus on the statute’s text and structure.
Congress expressly defined the legal status of unordered merchandise, deeming it “a gift” to the recipient. Recognizing that the senders of unordered merchandise would likely attempt to “trick or bully” recipients into paying for that merchandise, 116 Cong. Rec. 22,314 (1970), Congress confirmed the recipient’s right of possession by providing that the receipt of the merchandise was to be free of any obligation to the sender. Therefore, the functional effect of Congress’ language was to vest in the recipient unencumbered title to the merchandise. See Ray Andrews Brown, The Law of Personal Property §§ 2.6, 7.12 (3d ed.1975). The creation of this property right implies that Congress contemplated that a recipient of unordered merchandise would be entitled to the attendant rights of ownership, including the ability to enforce his or her right to title.
The Supreme Court has upheld a limited right of action in analogous circumstances. In Transamerica Mortgage Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 12-13, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979), the Court considered whether a private right of action could be implied from certain provisions of the Investment Advisers Act of 1940 (“IAA”). Section 215 of the IAA provided “that contracts whose formation or performance would violate the Act ‘shall be void ... as regards the rights of the violator and knowing successors in interest.” Id. at 16-17, 100 S.Ct. 242 (quoting 15 U.S.C. § 80b-15). The Court reasoned that “[b]y declaring certain contracts void, § 215 by its terms necessarily contemplates that the issue of voidness under its criteria may be litigated somewhere.” Id. at 18, 100 S.Ct. 242. The Court then reasoned that Congress must not only have assumed that beneficiaries of § 215 would be able to raise the statute “defensively in private litigation,” but that Congress must also have envisioned that a beneficiary would be able to “resort to a *310court to have the contract rescinded and to obtain restitution of consideration paid.” Id. Therefore, the Court concluded, “when Congress declared in § 215 that certain contracts are void, it intended that the customary legal incidents of voidness would follow, including the availability of a suit for rescission or for an injunction against continued operation of the contract, and for restitution.” Id. at 19, 100 S.Ct. 242.
Just as the voidness of a contract is accompanied by “customary legal incidents,” so is the passage of title resulting from delivery of the “gift” created by § 3009(b).37 “By putting the donee in possession of the property, physical delivery usually obviates the need for the donee to seek judicial enforcement of the gift.” Restatement (Third) of Property: Wills and Other Donative Transfers § 6.2 cmt. c (2003); see also Farrington v. Tennessee, 95 U.S. 679, 683, 24 L.Ed. 558 (1877) (“A gift consummated is as valid in law as any thing else.”). Of course, judicial enforcement remains available where the recipient requires vindication of his or her right to title. Indeed, federal courts have long recognized that the possession of a gift gives rise to an enforceable right. See, e.g., Comm’r of Internal Revenue v. Copley’s Estate, 194 F.2d 364, 369 (7th Cir.1952) (noting that a completed gift “conferred upon the donee an enforceable right”); First Nat’l Bank of Boston v. Comm’r of Internal Revenue, 63 F.2d 685, 691 (1st Cir.1933) (stating that “delivery and acceptance with intent to make a completed gift passes an enforceable title”).
Thus, the language of § 3009(b) implies that beneficiaries of that statute may vindicate their right to possession in a limited cause of action for declaratory relief or, if the owner has been fraudulently induced to pay for the merchandise as is alleged here, restitution. See Kipperman v. Acad. Life Ins. Co., 554 F.2d 377, 380 (9th Cir.1977) (concluding that a private right of action under § 3009 should be limited to the extent that it does not overlap with the Federal Trade Commission’s enforcement authority). Moreover, absent a contrary indication, courts should assume that this statutory right may be litigated in federal court. TAMA, 444 U.S. at 19 n. 8, 100 S.Ct. 242.
The structure of § 3009 also supports a private right of action. Section 3009 is comprised of four subsections. Subsection (a) declares that the mailing of unordered merchandise and related communications, as defined in subsection (c), “constitutes an unfair method of competition and an unfair trade practice in violation of section 45(a)(1) of title 15 [the Federal Trade Commission Act (‘FTCA’) ].” Subsection (b) creates the property right at issue in this litigation and requires the senders of unordered merchandise to mark all merchandise with a message notifying the recipients of that right. Subsection (c) prohibits senders of unordered merchandise to “mail to any recipient of such merchandise a bill for such merchandise or any dunning communications.” Finally, subsection (d) defines “unordered merchandise.” In summary, the statute defines the prohibited activities in subsections (c) and (d), declares that those activities are violative of the FTCA in subsection (a), and then provides a property right for the parties impacted by the prohibited activities in subsection (b).
*311Although subsection (a) implies that Congress intended the Federal Trade Commission (“FTC”) to enforce those proscriptions, there is no suggestion in the statutory language that the beneficiaries of § 3009(b) must rely on that overworked agency for the vindication of their distinct property right. This analysis is congruent with the reasoning of TAMA. In that case, the Court distinguished between § 215 of the IAA, where it implied a private right of action, and § 206 of that Act, where it did not. It explained that “[u]nlike § 215, § 206 simply proscribes certain conduct, and does not in terms create or alter any civil liabilities.” TAMA, 444 U.S. at 19, 100 S.Ct. 242. Of course, § 3009 does more than just proscribe conduct undertaken by the senders of unordered merchandise; it alters the legal obligations of the relevant parties regarding the ownership of, and liability for, that merchandise.
Moreover, while 15 U.S.C. § 45(b) authorizes the FTC to enjoin parties employing unfair trade practices, that provision does not provide a method for parties harmed by such acts to obtain relief through the FTC. In fact, although the majority mentions that the FTCA provides for restitution to the victims of unfair trade practices, see 15 U.S.C. § 45(a)(4)(B), that provision was not added to the FTCA until 2006, thirty-six years after § 3009 was enacted, see Pub.L. No. 109-455, 120 Stat. 3372 (Dec. 22, 2006). Thus, a remedy of restitution, as Wisniew-ski seeks under the distinct property right created by § 3009(b), has not traditionally been within the scope of the FTC’s enforcement power and was not within the FTC’s power at the time § 3009 was enacted.
Furthermore, parallel enforcement by the FTC and private parties is commonly used to reduce the burden on the FTC. See Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1174 n. 5 (11th Cir.1985) (noting the existence of private enforcement under the Fair Debt Collection Practices Act for actions that are also enforced by the FTC); FTC v. TRW, Inc., 628 F.2d 207, 209 (D.C.Cir.1980) (parallel private enforcement under the Federal Credit Reporting Act); Stephanie Kanwit, 1 Fed. Trade Comm’n § 1:7 (2007) (noting that “several statutes enforced by the [FTC], such as the Truth in Lending Act, permit private suits” and that the FTC “is increasingly encouraging private parties to supplement its limited resources and assist in policing the marketplace”).
I recognize, as the majority emphasizes, that the Supreme Court has observed that the “express provision of one method of enforcing a substantive rule suggests that Congress intended to preclude others.” Sandoval, 532 U.S. at 290, 121 S.Ct. 1511. Distinguished from the proscription in § 3009(a), the property right created in § 3009(b) does not refer to the FTCA, nor did the 1970 version of the FTCA provide an enforcement mechanism for that right. Notably, the Court in TAMA implied a private right of action, albeit limited to rescission or restitution, despite the existence of a separate provision of the IAA permitting the Securities and Exchange Commission “to bring suit in a federal district court to enjoin violations of the [IAA] or the rules promulgated under it.” 444 U.S. at 14, 100 S.Ct. 242. The FTC’s powers were similarly limited at the time § 3009 was enacted. Therefore, Wisniew-ski’s ability to obtain the limited remedy of restitution is a necessary corollary to the distinct right created by the statute.
It is important to focus on the remedy Wisniewski seeks. He claims that, in violation of the Act, Rodale pressured him to pay for books he contends he did not order. The express language of § 3009(c) provides that no mailer of unordered mer*312chandise “shall mail ... a bill for such merchandise or any dunning communication.” Wisniewski’s right to recover the funds exacted from him in violation of that provision would provide “specific and limited relief,” 444 U.S. at 18, 100 S.Ct. 242, comparable to the suit for rescission in TAMA.
The Postal Reorganization Act of 1970 (“PRA”) effected a major reorganization of the federal postal service. See Postal Reorganization Act, Pub.L. No. 91-375, 84 Stat. 719 (Aug. 12, 1970). Section 3009 was included as part of the newly created Chapter 30 (“Nonmailable Matter”), positioned between the prohibition on pandering advertisements in § 3008 and the regulations governing the mailing of sexually oriented advertisements in § 3010. As none of the other provisions in this chapter of Title 39 created a property right similar to that created by § 3009, the lack of an overarching citizen suit provision is not unexpected.
Rodale argued, and the District Court found persuasive, that Congress’ explicit creation of a private right of action in “another section of the Postal Reorganization Act ... strongly suggests that its failure to create this right in § 3009 was intentional.” Wisniewski v. Rodale, Inc., 406 F.Supp.2d 550, 557 (E.D.Pa.2005) (citing 39 U.S.C. § 3017(e)(l)-(2)). However, § 3017 was not enacted along with § 3009 as part of the PRA. Rather, § 3017 was passed twenty-nine years later, as part of the Deceptive Mail Prevention and Enforcement Act, Pub.L. No. 106-168, 113 Stat. 1806, 1814 (Dec. 12, 1999). By 1999, the Supreme Court’s implied private right of action jurisprudence, along with its tendency to reject implied rights of action, was well-established. The fact that Congress took care to include a private right of action in an unrelated section of Title 39 in 1999 has little bearing on Congress’ silence when it enacted § 3009 in 1970.
Thus, the text and structure of § 3009 imply that Congress intended to create a private right of action to enforce the property right created in § 3009(b), while the placement of § 3009 in the statutory scheme does not undermine that conclusion. To the extent that legislative history may aid this inquiry into Congressional intent, the parties concede that there is no evidence in that history directly supporting or opposing the existence of a private right of action. Of course, the absence of legislative history is not unexpected in this context and certainly does not defeat the inference created by the text and structure of § 3009. See TAMA, 444 U.S. at 18, 100 S.Ct. 242 (“[T]he legislative history of the Act is entirely silent — a state of affairs not surprising when it is remembered that the Act concededly does not explicitly provide any private remedies whatever.”); Cannon, 441 U.S. at 694, 99 S.Ct. 1946 (“[T]he legislative history of a statute that does not expressly create or deny a private remedy will typically be equally silent or ambiguous on the question.”).
Although the final two factors set forth in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), whether the right of action is consistent with legislative purpose and appropriate under federal law, are neither necessary nor sufficient to infer the existence of a private right of action, they may still aid a court’s analysis of whether Congress intended to create such a right. See Thompson v. Thompson, 484 U.S. 174, 183, 108 S.Ct. 513, 98 L.Ed.2d 512 (1988); Three Rivers Ctr. for Indep. Living, Inc. v. Housing Auth. of Pittsburgh, 382 F.3d 412, 421 (3d Cir.2004).
Therefore, to the extent that the majority’s opinion may be read for the proposition that Cort has no further interpretive *313value following Sandoval, I disagree. In Sandoval, the Court had no occasion to consult the remaining Cort factors once it had concluded that the text and structure of the relevant regulation did not imply that Congress intended to create a private right of action. See Sandoval, 532 U.S. at 288, 121 S.Ct. 1511 (finding “that we can end ... [the] search for Congress’s intent with the text and structure” of the statute when those sources did not reveal any such intent). However, where the text and structure are either ambiguous or support the existence of a private right of action, as here, other methods of statutory interpretation, including the Cort factors, may continue to inform a court’s analysis. See id. at 312, 121 S.Ct. 1511 (Stevens, J., dissenting) (acknowledging that Cort lays out viable rules and strategies to aid a court’s private right of action analysis). Thus, Sandoval did not create an exclusive test for analyzing the existence of an implied private right of action any more than Cannon or Thompson created a new test upon recognizing that Congressional intent is fundamental to this inquiry.38
As the only other court of appeals to have considered this issue found the latter two Cort factors relevant to its conclusion that § 3009 included a private right of action, I address those factors briefly. Specifically, the Court of Appeals for the Ninth Circuit found that a limited right of action for declaratory relief and restitution, and excluding the ability to seek in-junctive relief, “would be entirely consistent with the purpose of the statute.” Kipperman, 554 F.2d at 380. That court also concluded that, although “the practice with which section 3009 is concerned traditionally has been governed by state law ... subjecting it to national law is within the power of Congress and the limited private right we recognize will further the purposes Congress sought to serve by enacting the section.” Id. Therefore, the final two factors can at least be viewed as providing some support for the inference derived from the text and structure of § 3009 that Congress intended to create both a right and a remedy when it enacted the statute.
For the foregoing reasons, I would reverse the judgment of the District Court and hold that § 3009 includes a limited implied right of action for the restitution that Wisniewski now seeks.

. The majority's attempt to analogize to TAMA by applying a contract analysis to § 3009 fails because § 3009 does not create a contract right, but a property right. Therefore, § 3009 must be analyzed with an eye towards the "customary legal incidents” associated with the property right created thereby.

. A cursory review of federal case law reveals that only one other federal court has viewed the Court's decision as creating a distinct ‘‘Sandoval test.” That court, however, concluded that Sandoval created a four-step test considerably different from the two-step test discussed in the majority’s opinion. See Ruta v. Delta Airlines, Inc., 322 F.Supp.2d 391, 402 (S.D.N.Y.2004).