Thursday, March 15, 2007

Tenth Circuit Holds Federal Diversity Jurisdiction Available for Telephone Consumer Protection Act

Per US Fax Law Center, Inc. v. IHIRE, Inc., 2007 WL 404696 (10th Cir. Feb. 07, 2007):

Diversity jurisdiction is based on a grant of jurisdictional authority from Congress. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 167, 60 S.Ct. 153, 84 L.Ed. 167 (1939). Furthermore, it constitutes an independent basis for jurisdiction, regardless of whether the underlying claim is federal in nature. See 28 U.S.C. § 1332(a)(1) (conferring jurisdiction based only on complete diversity of the parties and a minimum amount in controversy). Thus, where some other basis for federal jurisdiction is proscribed, diversity jurisdiction may still exist. See Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 352, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961) (noting that eliminating removal jurisdiction does not preclude diversity jurisdiction). Accordingly, absent an explicit indication that Congress intended to create an exception to diversity jurisdiction, one may not be created by implication. Ankenbrandt v. Richards, 504 U.S. 689, 700, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992). This is different from general federal question jurisdiction, which gives district courts original jurisdiction unless a specific statute places jurisdiction elsewhere. Inacom Commc'n, 106 F.3d at 1154.

As the Second Circuit noted in Gottlieb, “[n]othing in § 227(b)(3), or in any other provision of the statute, expressly divests federal courts of diversity jurisdiction over private actions under the TCPA.” Gottlieb, 426 F.3d at 338. This fact alone is probably sufficient to demonstrate the presence of diversity jurisdiction because “[diversity jurisdiction] is an independent grant of federal jurisdiction · · · [that] is presumed to exist for all causes of action so long as the statutory requirements are satisfied.” Id. at 340. Thus, diversity jurisdiction must “be explicitly abrogated by Congress,” id., unless the diversity jurisdiction statute and the TCPA are “irreconcilable,” see Colo. River Water Conserv. Dist. v. United States, 424 U.S. 800, 808, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976).

The diversity statute and the TCPA are not irreconcilable. In fact, eliminating diversity jurisdiction over TCPA claims would produce odd results. For example, holding that the TCPA vests exclusive and total jurisdiction in state courts would “create the anomalous result that state law claims based on unlawful telephone calls could be brought in federal court, while federal TCPA claims based on those same calls could be heard only in state court.” Kinder v. Citibank, No. 99-CV-2500, 2000 WL 1409762, at *4 (S.D .Cal. Sept. 14, 2000) (noting that this undermines the objective of supplemental jurisdiction).

We agree with the reasoning in Gottlieb and Brill on this point and reject the contrary conclusion of Fairon. Because there is no express congressional intent to preempt diversity jurisdiction, and because the diversity jurisdiction statute and the TCPA are not irreconcilable, the district court erred in finding that Congress intended to preclude federal diversity jurisdiction over TCPA claims.


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