Court Opinion

ID: 72719
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:42:43+00
Date Added: 2024-06-11T09:40:06.025544
License: Public Domain

PUBLISH

         IN THE UNITED STATES COURT OF APPEALS

               FOR THE ELEVENTH CIRCUIT

                   _________________

                      No. 96-9149
                  __________________
              D. C. Docket No. 95-CV-101

SAM NICHOLSON, and All Other Persons
or Entities Similarly Situated,

                              Plaintiffs-Appellants,

    versus

HOOTERS OF AUGUSTA, INC.,

                              Defendant-Cross-Claimant-
                              Third-Party Plaintiff-
                              Appellee,

BAMBI K. CLARK d.b.a. Value-Fax
of Augusta,

                              Defendant-Cross-
                              Defendant-Appellees.

                 _____________________

     Appeal from the United States District Court
         for the Southern District of Georgia
                 ____________________
                   (March 10, 1998)
Before DUBINA, Circuit Judge, and HILL and GIBSON*, Senior
Circuit Judges.

JOHN R. GIBSON, Senior Circuit Judge:

     Sam Nicholson appeals the district court's dismissal

of   his   action    against    Hooters   of   Augusta,      Inc.    for

failure to state a claim.        Nicholson alleged that Hooters

violated the Telephone Consumer Protection Act, 47 U.S.C.

§ 227 (1994), by sending unsolicited advertisements to

Nicholson's facsimile machine.            Nicholson contends the

court erred in concluding that the Telephone Consumer

Protection     Act     covers     only    interstate,        and     not

intrastate, transmissions of unsolicited advertisements

by facsimile, and that individual citizens may not bring

suit under the Act.       Because we conclude that Congress

granted      state     courts     exclusive      subject       matter

jurisdiction    over    private    actions     under   the    Act,    we

vacate the judgment of the district court and remand with

directions to dismiss this case for lack of subject

     *Honorable John R. Gibson, Senior U.S. Circuit
     Judge for the Eighth Circuit, sitting by
     designation.
                                  -2-
matter jurisdiction.

       The Telephone Consumer Protection Act prohibits "any

person within the United States... [from] us[ing] any

telephone facsimile machine, computer, or other device to

send     an   unsolicited     advertisement       to    a        telephone

facsimile machine."         47 U.S.C. § 227(b)(1)(C).             The Act

creates a private right of action to obtain injunctive

relief as well as to recover actual damages or $500.00,

whichever is greater, for each violation.                47 U.S.C. §

227(b)(3).       The private right of action may be filed "if

otherwise permitted by the laws or rules of court of a

State,...in an appropriate court of that State."                    Id.

       Nicholson filed a complaint in the Superior Court of

Richmond County, Georgia, alleging that Hooters violated

the     Telephone    Consumer      Protection     Act       by     sending

unsolicited advertisements to his facsimile machine. The

state    court     entered    a    temporary    restraining          order

enjoining Hooters from sending further advertisements by

facsimile.

       Hooters    removed    the   case   to    the    United       States

District Court for the Southern District of Georgia.

                                   -3-
Hooters then filed a motion to dismiss for failure to

state a claim upon which relief could be granted, arguing

that the Act did not apply to intrastate facsimiles, and

that an individual could not bring a private right of

action.   The district court granted Hooters' motion to

dismiss, ruling first that Nicholson could not maintain

a private right of action.      The court reasoned that the

language in the Act providing that a private right of

action could be brought "if otherwise permitted by the

laws or rules of the court of a State," authorized a

private right of action only if state law specifically

authorized   a   private   action.     Because   there   was   no

specific provision for private actions under Georgia law,

the court held there could be no private action in

federal court.    The court rejected Nicholson's argument

that the Act provides for concurrent jurisdiction of

private actions in state and federal courts.         The court

also held that the Telephone Consumer Protection Act

applied   only   to   interstate     facsimile   transmissions.

Because Nicholson received an intrastate facsimile, the

court held there could be no claim under the Act.

                              -4-
      Nicholson    appealed.         After       the    district      court's

decision, the Fourth Circuit considered a similar action,

International Science & Tech. Inst. Inc. v. Inacom Comm.,

Inc., 106 F.3d 1146 (4th Cir. 1997).                   The Fourth Circuit

affirmed the district court's dismissal of the case for

lack of subject matter jurisdiction.                   Id. At 1150.       The

Fourth Circuit reached the "somewhat unusual conclusion"

that the Act vests jurisdiction only in state courts.

Id. at 1150-1152.

      Because   the    Act    is    silent       as    to   federal     court

jurisdiction,      the   Fourth       Circuit         relied    on    several

sources    to   determine       whether      the      federal    court    had

subject matter jurisdiction. The Fourth Circuit rejected

the     argument       that     section          227(b)(3)       conferred

jurisdiction to both the federal and state courts.                        The

court     determined     that      the     permissive       authorization

contained in section 227(b)(3) did not confer federal

court   jurisdiction         because       the    language      was    not   a

specific grant of authorization.                  Id. at 1151-52.         The

court   interpreted      the       silence       as    to   federal     court

jurisdiction and the express grant of jurisdiction to

                                     -5-
state courts as telling for several reasons.                The court

found it "meaningful" that Congress explicitly mentioned

only state courts because, in general, it is unnecessary

to vest state courts with concurrent jurisdiction.                   Id.

at   1152.         The    court     found    confirmation     of     its

interpretation by the fact that section 227(f)(2) of the

Act while authorizing state court jurisdiction for a

private right of action, conferred exclusive federal

jurisdiction over an action brought by a state attorney

general.     Id.    "We find it significant that in enacting

the [Telephone Consumer Protection Act], Congress wrote

precisely, making jurisdictional distinctions in the very

same section of the Act by providing that private actions

may be brought in appropriate state courts and that

actions by the states must be brought in the federal

courts."     Id.     Also observing that other parts of the

Communications      Act    of     1934    gave   specific   grants    of

jurisdiction, the court concluded that Congress would

have authorized federal jurisdiction, if it so intended.

See id.

     The court also decided that the legislative history

                                    -6-
of the Act supported its interpretation that Congress

intended private actions to be treated as "small claims

best resolved in state courts ... so long as the states

allow such actions."               Id.    The Fourth Circuit rejected

the    argument          that     Congress      intended     to     establish

concurrent jurisdiction manifested through its preemptive

occupation         of    interstate       telecommunications         for     two

reasons.     Id. at 1153.          First, it determined that even if

the    Act    preempted          substantive         state   law,    the    Act

specifically provided for state courts to hear cases

under the Act unless there was a contrary congressional

intent.      Id.    Second, it noted that the Act specifically

held that it did not preempt any state law that imposed

more     restrictive            intrastate      requirements        or     which

prohibited certain practices.                  Id.

       Finally,         the   Fourth     Circuit     determined     that    its

decision     that        Congress      intended      to   confer    exclusive

jurisdiction upon state courts was consistent with the

Act's history and purpose, which was to allow consumers

to easily and inexpensively enforce the Act.                             Id. at

1152-53.

                                         -7-
    In light of this decision, we requested additional

briefing from the parties.       After the parties submitted

their supplemental briefs, the Fifth Circuit also held

that Congress granted state courts exclusive subject

matter   jurisdiction   over    private   actions     under   the

Telephone Consumer Protection Act.1       Chair King, Inc. v.

Houston Cellular Corp., 131 F.3d 507 (5th Cir. 1997).

    Like this case, the plaintiffs in Chair King brought

a private suit under the Act.        Id. at 509.    The district

court dismissed the claims brought under the Act, holding

that the Act only regulates interstate telemarketing

activity.   Id.   Following the lead of the Fourth Circuit,

the Fifth Circuit vacated the judgment of the district

court and remanded with directions to dismiss the case

for lack of subject matter jurisdiction.           Id. at 514.

    1
     The district court for the Southern District of New
York adopted the Fourth Circuit's approach in Foxhall
Realty Law Offices, Inc. v. Telecommunications Premium
Services, Ltd., 975 F. Supp. 329 (S.D.N.Y. 1997). The
district court of Indiana, however, ruled that the Act
confers subject matter jurisdiction of private actions
upon both state and federal courts. See Kenro, Inc. v.
Fax Daily, Inc., 904 F. Supp. 912 (S.D. Ind. 1995), on
reconsideration, 962 F. Supp. 1162 (S.D. Ind. 1997).
                               -8-
      We have carefully examined the reasoning of the

Fourth and Fifth Circuits and, we too, are persuaded that

federal    courts     lack       subject        matter    jurisdiction        of

private actions under the Act.

      Like the Fourth and Fifth Circuits, we also reject

Hooters's      argument     that    federal-question             jurisdiction

exists under 28 U.S.C. § 1331 (1994) because Nicholson's

complaint      clearly     presents        a    federal    question      as   it

alleges a violation of federal law.                      See International

Science, 106 F.3d at 1154; Chair King, 131 F.3d at 510.

We recognize that "as a general matter, a cause of action

created by federal law will properly be brought in the

district courts."         106 F.3d at 1154.              Nevertheless, the

general jurisdictional grant of section 1331 does not

apply     if   a   specific        statute        assigns        jurisdiction

elsewhere.      Id.       Here, the text of the Act, including

the   specific     grant     of    federal       jurisdiction       to   state

attorneys      general,     as    well     as    the     Act's    legislative

history, demonstrate that Congress intended to assign the

private right of action to state courts exclusively.

      Relying on Kenro, Inc. v. Fax Daily, Inc., 904 F.

                                     -9-
Supp. 912 (S.D. Ind. 1995), on reconsideration, 962 F.

Supp. 1162 (S.D. Ind. 1997), Hooters contends that the

use of the permissive word "may" in section 227(b)(3)

does    nothing    more   than   provide       concurrent   state    and

federal court jurisdiction. The Fourth Circuit, however,

rejected    this     argument,    reiterating       that    courts   of

limited    jurisdiction      require       a     specific   grant    of

jurisdiction, and that it could not imply a grant of

jurisdiction in light of the language of the Act, its

history, and its purpose.           International Science, 106

F.3d at 1151-52.          For these same reasons, we cannot

accept    Hooters'    argument    that     the    federal   court    has

concurrent jurisdiction.

       Accordingly, we VACATE the judgment of the district

court and REMAND the case to the district court with

directions to dismiss this cause for lack of subject

matter jurisdiction.

                                 -10-