Wisniewski v. Rodale Inc ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
12-13-2007
Wisniewski v. Rodale Inc
Precedential or Non-Precedential: Precedential
Docket No. 06-1305
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-1305
DAVID WISNIEWSKI,
ON BEHALF OF HIMSELF
AND ALL OTHERS
SIMILARLY SITUATED
v.
RODALE, INC.
David Wisniewski,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 03-cv-00742
District Judge: The Honorable Paul S. Diamond
Argued September 18, 2007
Before: SLOVITER, SMITH, and WEIS, Circuit Judges.
(Filed: December 13, 2007)
Daniel B. Allanoff (argued)
Meredith, Cohen, Greenfogel & Skirnich
117 South 17th Street
22nd Floor
Philadelphia, PA 19103
Counsel for Appellant
Susan E. Wild
Gross, McGinley, LaBarre & Eaton
33 South 7th Street
P.O. Box 4060
Allentown, PA 18105
Lara M. Krieger
Manatt, Phelps & Phillips
11355 West Olympic Boulevard
Los Angeles, CA 90064
Gregory A. Clarick (argued)
Manatt, Phelps & Phillips
7 Times Square
New York, NY 10036
Counsel for Appellee
2
OPINION OF THE COURT
SMITH, Circuit Judge.
This appeal requires us to determine whether § 3009 of
the Postal Reorganization Act, 39 U.S.C. § 3009 (2000), which
regulates the shipment of unordered merchandise, provides an
implied private right of action. The District Court dismissed
David Wisniewski’s § 3009 claim on the ground that no implied
private right of action exists under this statute. Based on our
review of the statute and applicable Supreme Court
jurisprudence, we will affirm.
I.
This litigation began in February 2003 when then-
plaintiff Michael Karnuth sued Rodale, Inc. in the United States
District Court for the Eastern District of Pennsylvania, alleging
that Rodale violated the Postal Reorganization Act’s unordered
merchandise statute, 39 U.S.C. § 3009,1 and various
1
Section 3009 provides:
(a) Except for (1) free samples clearly and
conspicuously marked as such, and (2)
merchandise mailed by a charitable organization
3
soliciting contributions, the mailing of unordered
merchandise or of communications prohibited by
subsection (c) of this section constitutes an unfair
method of competition and an unfair trade
practice in violation of section 45(a)(1) of title 15.
(b) Any merchandise mailed in violation of
subsection (a) of this section, or within the
exceptions contained therein, 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. All such merchandise shall have
attached to it a clear and conspicuous statement
informing the recipient that he may treat the
merchandise as a gift to him and has the right to
retain, use, discard, or dispose of it in any manner
he sees fit without any obligation whatsoever to
the sender.
(c) No mailer of any merchandise mailed in
violation of subsection (a) of this section, or
within the exceptions contained therein, shall mail
to any recipient of such merchandise a bill for
s u c h me r c h a n d i s e o r a n y d u n n i n g
communications.
(d) For the purposes of this section, “unordered
merchandise” means merchandise mailed without
the prior expressed request or consent of the
4
Pennsylvania state laws. Specifically, Karnuth alleged that
Rodale sent him books that he had never ordered and demanded
payment for them, and that he paid Rodale for one of the books
to avoid damage to his credit rating. Karnuth moved to certify
the case as a class action on behalf of all those to whom Rodale
had sent unsolicited products and payment demands, with a
subclass consisting of those who had paid in whole or in part for
the unsolicited products. The court denied the motion without
prejudice after Rodale alleged that Karnuth had consented to
receive the books. See Karnuth v. Rodale, Inc., No. 03-00742
(E.D. Pa. July 2, 2003). After Karnuth filed an amended
complaint, the District Court again denied his motion for class
certification in March 2005 on the ground that inconsistencies
in Karnuth’s two complaints could damage his credibility and
thereby harm the other class members. See Karnuth v. Rodale,
Inc., No. 03-00742 (E.D. Pa. Mar. 30, 2005).
Subsequently, David Wisniewski replaced Karnuth as
class representative. Like Karnuth, Wisniewski alleged that
Rodale had sent him unsolicited books and that he had paid
Rodale to avoid damage to his credit rating. Rodale argued that
Wisniewski consented when he sent Rodale an order card that
enrolled Wisniewski in a “negative option” plan, under which
Rodale would ship books and bill any recipients who did not
recipient.
39 U.S.C. § 3009.
5
return the books within a specified time period. Wisniewski
responded that the order cards failed to meet objective
disclosure standards and thus were inadequate as a source of
consent. Without addressing the merits of these claims, the
District Court granted class certification in July 2005 with
respect to the § 3009 claim and denied certification with respect
to the state law claims. See Karnuth v. Rodale, Inc., No. 03-
00742 (E.D. Pa. July 18, 2005). Both parties moved for
summary judgment on the federal and state claims, agreeing that
any ruling would bind only the named parties and not the class.
See Wisniewski v. Rodale, 405 F. Supp. 2d 550, 553 (E.D. Pa.
2005). In December 2005, the District Court dismissed the
§ 3009 claim on the ground that this provision does not confer
an implied private right of action, and it dismissed the state law
claims for lack of jurisdiction. Id. at 557–58. Wisniewski
timely appealed.
On appeal, the only issue before us is whether an implied
private right of action exists under § 3009.2 Because this is a
question of law, we exercise plenary review over the District
Court’s summary judgment order. Am. Trucking v. Del. Toll
Bridge Comm’n, 458 F.3d 291, 295 (3d Cir. 2006).
II.
2
The District Court had jurisdiction over the § 3009 claim
under 28 U.S.C. § 1331. We have jurisdiction over this appeal
under 28 U.S.C. §§ 1291 and 1294.
6
A private right of action3 is the right of an individual to
bring suit to remedy or prevent an injury that results from
another party’s actual or threatened violation of a legal
requirement.4 Although the legal requirement can be established
3
Courts have used the terms “private right of action” and
“private cause of action” interchangeably. See, e.g., Alexander
v. Sandoval, 532 U.S. 275, 291 (2001) (using the terms
interchangeably in the same paragraph); Touche Ross & Co. v.
Redington, 442 U.S. 560, 575–76 (1979) (same). Throughout
this opinion, we use the term “private right of action” except
when quoting an opinion that uses “private cause of action.”
4
One commentator provides a description of a typical
implied private right of action scenario:
[T]he plaintiff institutes a civil action to prevent
an injury or to recover damages, and he alleges
that he is entitled to relief because of something
contained in a legislative text. He says the
defendant has acted or proposes to act in a manner
contrary to the text. He relies upon the legislation
even though the words of the text do not actually
state that he has a right to bring an action of this
kind, and here the defendant raises a defense. The
defendant argues that the legislation does not
support the plaintiff's claim because it does not
state that the plaintiff is entitled to maintain an
action upon it. The court must then decide the
issue.
H. Miles Foy III, Some Reflections on Legislation, Adjudication,
and Implied Private Actions in the State and Federal Courts, 71
7
by a number of sources, our focus is on statutory duties created
by acts of Congress. Many federal statutes provide a private
right of action through their express terms.5 Other federal
statutes, however, merely define rights and duties, and are silent
about whether an individual may bring suit to enforce them. For
some statutes in this latter category, courts have held that
“implied” private rights of action exist. Since neither party in
the present case contends that the text of § 3009 provides an
express private right of action, the only question before us is
whether the statute confers an implied private right of action.
No consensus exists regarding when the Supreme Court
first began recognizing implied private rights of action under
federal statutes. In Cannon v. University of Chicago, 441 U.S.
677 (1979), the majority contends that the Court’s “earliest”
CORNELL L. REV. 501, 503 (1986).
5
For example, Title II of the Civil Rights Act of 1964
provides a private right of action with the following language:
Whenever any person has engaged or there are
reasonable grounds to believe that any person is
about to engage in any act or practice prohibited
by section 2000a-2 of this title, a civil action for
preventive relief, including an application for a
permanent or temporary injunction, restraining
order, or other order, may be instituted by the
person aggrieved . . . .
42 U.S.C. § 2000a-3 (2000).
8
case recognizing an implied private right of action was Texas &
Pacific Railway Co. v. Rigsby, 241 U.S. 33 (1916). See Cannon,
441 U.S. at 689 (citing Rigsby, 241 U.S. at 39).6 In Rigsby, the
Court unanimously held that the Federal Safety Appliance acts
provided an implied private right of action to an injured railroad
employee against his employer. 241 U.S. at 39. Others argue
that the idea of an implied private right of action existed in
English common law7 and appeared in early U.S. cases such as
Marbury v. Madison, 5 U.S. 137 (1803).8
At all events, over the past fifty years, the Supreme Court
has substantially modified its test for determining whether a
federal statute provides an implied private right of action. The
Court’s opinions have not always announced explicitly when
they are overruling (or limiting to their facts) old precedents in
this area. Therefore, it can be difficult to discern to what degree
the Court has repudiated old tests as opposed to applying them
6
Justice Powell’s dissent in Cannon rejects this contention,
arguing that Rigsby did not establish a genuine implied private
right of action. He describes it as merely “judicial reference to
legislatively determined standards of care . . . to establish the
existence of negligence.” See Cannon, 441 U.S. at 732 (Powell,
J., dissenting).
7
See Foy, supra note 4, at 524–33.
8
See Merrill Lynch v. Curran, 456 U.S. 353, 376 & n.54
(1982); Foy, supra note 4, at 534–35.
9
in a different way to different statutes. We trace these changes
below, explaining how the implied private right of action test
has developed and where we believe it stands today.
A. J.I. Case Co. v. Borak
We begin our review with J.I. Case Co. v. Borak, 377
U.S. 426 (1964), because this case exemplifies the Court’s older
and less restrictive approach to implied private rights of action.
In Borak, the Court unanimously held that the Securities
Exchange Act of 1934 implicitly authorizes a private right of
action for rescission or damages to stockholders who alleged
that they were injured by a consummated merger authorized
with a false or misleading proxy statement in violation of
§ 14(a) of the Act. See 377 U.S. at 428, 435. The Court
explained its holding by emphasizing that “it is the duty of the
courts to be alert to provide such remedies as are necessary to
make effective the congressional purpose.” Id. at 433. Based
on language in § 14(a) explicitly granting the Securities and
Exchange Commission (“SEC”) the authority to make rules “in
the public interest or for the protection of investors,” the Court
deemed “the protection of investors” to be among the section’s
primary purposes. Id. at 432. Noting that the SEC admits that
it does not have enough time to examine every proxy statement
for false and misleading statements, the Court stated that private
enforcement is a “necessary supplement” to the SEC’s efforts to
protect investors. Id. at 432–33. Finally, the Court asserted that
a federal right of action was necessary because state law might
not be adequate to protect the federally-created “rights” in the
10
statute. Id. at 434–35. At no point in its opinion did the Borak
Court purport to discern Congress’s intent regarding a private
right of action (as opposed to Congress’s general purposes in
enacting the statute).
B. Cort v. Ash
The Supreme Court’s unanimous opinion in Cort v. Ash,
422 U.S. 68 (1975), replaced the relatively loose standards of
Borak with a four-factor test for determining whether an implied
private right of action exists.9 Using this test, the Court
determined that 18 U.S.C. § 610 (1970 & Supp. III), a criminal
statute (later repealed) that prohibited corporations from making
contributions to presidential campaigns, does not provide an
implied private right of action for stockholders to sue corporate
directors who violate the statute. 422 U.S. at 68–70. The Court
described its test as follows:
In determining whether a private remedy is
implicit in a statute not expressly providing one,
several factors are relevant. First, is the plaintiff
9
The Cort opinion never explicitly acknowledges that it is
rejecting the Borak approach. In fact, it cites Borak several
times in a manner suggesting that it is merely distinguishing the
statute at issue in Borak from the one addressed in Cort. See
Cort, 422 U.S. at 79–80 & n.11, 84, 85. Later cases recognize
that Cort effectively overruled Borak. See, e.g., Alexander v.
Sandoval, 532 U.S. 275, 287 (2001).
11
“one of the class for whose especial benefit the
statute was enacted”—that is, does the statute
create a federal right in favor of the plaintiff?
Second, is there any indication of legislative
intent, explicit or implicit, either to create such a
remedy or to deny one? Third, is it consistent
with the underlying purposes of the legislative
scheme to imply such a remedy for the plaintiff?
And finally, is the cause of action one
traditionally relegated to state law, in an area
basically the concern of the States, so that it
would be inappropriate to infer a cause of action
based solely on federal law?
Id. at 78 (emphasis in original) (citations omitted). Explaining
the second prong of this test, the Court said that when federal
law grants certain rights to a class of people (and thereby
satisfies the first prong), “it is not necessary to show an intention
to create a private cause of action, although an explicit purpose
to deny such cause of action would be controlling.” Id. at 82
(emphasis in original). Thus, the test articulated in Cort allowed
courts to recognize an implied private right of action even in the
absence of any affirmative congressional intent to create this
remedy.
C. Post-Cort Developments
Although Cort has never been formally overruled,
subsequent decisions have altered it virtually beyond
12
recognition.10 In Cannon v. University of Chicago, 441 U.S. 675(1979), the Court framed the implied private right of action
question as one of “statutory construction” in which the Court’s
task is to determine whether “Congress intended to make a
remedy available.” 441 U.S. at 688. The Cannon Court
nonetheless relied on the four Cort factors because they were
“indicative of such intent.”11 Id. Thus, Congress’s intent to
create a private right of action—virtually ignored in Borak and
described in Cort v. Ash merely as one of four factors—emerged
as the primary factor in Cannon. The Court in Touche Ross &
Co. v. Redington, 442 U.S. 560 (1979), established that
congressional intent is the exclusive factor, declaring that the
task of courts is “limited solely to whether Congress intended to
create the private right of action,” 442 U.S. at 568 (emphasis
10
Justice Scalia observed in a 1988 concurrence that Cort’s
analysis was “effectively overruled” by later Supreme Court
opinions. See Thompson v. Thompson, 484 U.S. 174, 188
(Scalia, J., concurring).
11
Of the Justices involved in Cannon, only Justice Powell
called for the outright abandonment of the Cort test, claiming
that the test is unconstitutional because it permits judicial
lawmaking in violation of the separation of powers. See
Cannon, 441 U.S. at 742–43 (Powell, J., dissenting). Justice
Powell declared that courts should refuse to recognize implied
private rights of action “absent the most compelling evidence
that Congress in fact intended such an action to exist,” and that
they should be “especially reluctant” to recognize them when
the statute provides an alternative mechanism for enforcing the
rights it creates. Id. at 749 (Powell, J., dissenting).
13
added), and instructing that courts should use the Cort factors
only to the extent that they help to determine legislative intent,
id. at 575–76. See also Transamerica Mortg. Advisors, Inc.
(TAMA) v. Lewis, 444 U.S. 11, 15–16 (1979) (“what must
ultimately be determined is whether Congress intended to create
the private remedy asserted, as our recent decisions have made
clear.”). Although the Supreme Court continued to recite the
Cort factors in later implied private right of action opinions, its
attempts to discern legislative intent went well beyond these
factors. As the Court’s opinion in Thompson v. Thompson, 484
U.S. 174 (1988), observed, the Court has used “other tools of
statutory construction” in addition to the Cort factors as “guides
to discerning” Congress’s intent. 484 U.S. at 179.
D. Alexander v. Sandoval
The Supreme Court’s decision in Alexander v. Sandoval,
532 U.S. 275 (2001), strongly suggests that the Court has
abandoned the Cort v. Ash test.12 In Sandoval, the Court held
12
Commentators have noted that Sandoval implicitly affirms
Justice Powell’s dissenting view in Cannon that Cort should be
discarded in favor of a pure focus on congressional intent. See,
e.g., Matthew C. Stephenson, Public Regulation of Private
Enforcement: The Case for Expanding the Role of
Administrative Agencies, 91 VA. L. REV. 93, 105 (2005) (“The
Sandoval Court thus seems to have adopted Justice Powell’s
view that the multifactor Cort analysis ‘too easily may be used
to deflect inquiry away from the intent of Congress, and to
permit a court instead to substitute its own views as to the
desirability of private enforcement.’” (quoting Cannon, 441 U.S.
14that Title VI of the Civil Rights Act does not provide an implied
private right of action to enforce disparate-impact regulations
promulgated under § 602 of the Act (42 U.S.C. § 2000d-1
(2000)).13 Although the Sandoval Court did not expressly reject
the Cort v. Ash factors, it did not use them at all to guide its
inquiry.14 Instead, the Court set out the following test for
at 740 (Powell, J., dissenting))).
13
Section 601 of Title VI provides that no person shall be
denied, on the basis of race, color, or national origin, the
benefits of federally-funded programs. 42 U.S.C. § 2000d
(2000). Section 602 authorizes federal agencies “to effectuate
the provisions” of § 601 of Title VI through regulations. 42
U.S.C. § 2000d-1 (2000). As the Sandoval Court noted, § 601
prohibits only intentional discrimination, but the regulations
promulgated under § 602 prohibit not only intentional
discrimination but also activities that have a disparate impact on
racial groups. 532 U.S. at 280–82. Because no party had
challenged the agencies’ authority to promulgate disparate-
impact regulations, the Court assumed for the purposes of the
case that the regulations were valid. Id. at 281–82. Also, the
Court did not challenge the existence of an implied private right
of action to enforce § 601 directly, which it deemed to have
been ratified by Congress. See id. at 279–80.
14
The Sandoval majority opinion cites Cort only to point out
that Cort marked the demise of the Borak approach. See
Sandoval, 532 U.S. at 287. The Sandoval dissent, however,
suggests that Cort should remain viable. See Sandoval, 532
U.S. at 311 (Stevens, J., dissenting).
15
discerning whether an implied private right of action exists:
Like substantive federal law itself, private rights
of action to enforce federal law must be created
by Congress. . . . The judicial task is to interpret
the statute Congress has passed to determine
whether it displays an intent to create not just a
private right but also a private remedy. . . .
Statutory intent on this latter point is
determinative. . . . Without it, a cause of action
does not exist and courts may not create one, no
matter how desirable that might be as a policy
matter, or how compatible with the statute.
532 U.S. at 286–87 (citations omitted). The Court concluded
that the “text and structure” of § 602 did not show that Congress
intended to create a personal right,15 in light of the absence of
“rights-creating language” that focuses on the protected
individuals. 532 U.S. at 288–89. Next, the Court concluded
that nothing in the text of § 602 demonstrated that Congress
intended to create a private remedy and that the statute’s
provision of a remedial scheme suggests that Congress
15
To avoid confusion between the terms “private right” and
“private right of action,” we follow the approach of Three Rivers
Center v. Housing Authority of the City of Pittsburgh by
referring to substantive rights granted in statutes as “personal
rights” rather than “private rights.” See 382 F.3d 412, 419 n.9
(3d Cir. 2004). The Supreme Court has used the term “personal
right” in the same manner. See id. (citing Gonzaga Univ. v.
Doe, 536 U.S. 273, 285 (2002)).
16
“intended to preclude” any other remedy. Id. at 290–91. The
Court rejected the Government’s argument that Congress had
“ratified” an implied private right of action under § 602 by
failing to address this issue when it amended Title VI.16 Having
applied what the Court called its “standard test for discerning
private causes of action” and having found no congressional
intent to create a personal right or private remedy in the statute’s
text or structure, the Court ended its inquiry. Id. at 293.
E. The State of the Law Today
After Sandoval, the relevant inquiry for determining
whether a private right of action exists appears to have two
steps: (1) Did Congress intend to create a personal right?; and
16
Although we have acknowledged that Justice Scalia, the
author of the Sandoval majority opinion, disapproves of the use
of legislative history, see American Trucking, 458 F.3d at 298
n.5 (quoting Blanchard v. Bergeron, 489 U.S. 87, 98–99 (1989)
(Scalia, J., concurring)), nothing in Sandoval expressly
condemns its use. Sandoval criticizes consideration of
“expectations that the enacting Congress had formed in light of
the contemporary legal context,” 532 U.S. at 287–88 (quotation
omitted), as well as “reliance on congressional inaction” to infer
“congressional intent to ratify lower court decisions regarding
a particular statutory provision,” id. at 291–92, but stops short
of condemning all judicial inquiry into legislative history.
Although the Sandoval Court “find[s] that [it] can end” its
inquiry into congressional intent with the text and structure of
Title VI, id. at 288, it does not state that the inquiry in all cases
must end with text and structure.
17
(2) Did Congress intend to create a private remedy? Only if the
answer to both of these questions is “yes” may a court hold that
an implied private right of action exists under a federal statute.
See, e.g., Three Rivers Ctr. v. Hous. Auth. of the City of
Pittsburgh, 382 F.3d 412, 421 (3d Cir. 2004) (“Put succinctly,
for an implied right of action to exist, a statute must manifest
Congress’s intent to create (1) a personal right, and (2) a private
remedy” (citing Sandoval, 532 U.S. at 286)). Even when we
invoked the Cort test in American Trucking v. Delaware Toll
Bridge Commission, 458 F.3d 291 (3d Cir. 2006), our analysis
paralleled the Sandoval test. Focusing only on the first two
“critical” Cort factors, 458 F.3d at 297, the American Trucking
opinion treated the first Cort factor as an inquiry into legislative
intent to create a personal right, 458 F.3d at 297, and the second
Cort factor as an inquiry into legislative intent to create a private
remedy, 458 F.3d at 303.17
17
We observe that under circumstances different from
American Trucking, however, reliance on Cort could lead to
results that are inconsistent with Sandoval. As noted above,
Cort v. Ash said that when a statute contains strong right-
creating language, “it is not necessary to show an intention to
create a private cause of action . . . .” 422 U.S. at 82. American
Trucking expresses a related idea when it says “[w]here, as here,
a statute is devoid of any right-creating language, there need be
a more compelling indication in the legislative history before
this court can recognize a right of action.” 458 F.3d at 303. To
the extent that one could interpret this statement to mean that
demonstrating legislative intent to create a personal right
eliminates or reduces the need to demonstrate legislative intent
to create a private remedy, it is inconsistent with our reading of
18
III.
Applying the Sandoval test to § 3009, we conclude that
this statute provides no implied private right of action.
A. Did Congress Intend to Provide a Personal Right in
§ 3009?
To determine whether a personal right existed under
§ 602 of Title VI, the Sandoval Court began by reviewing the
“text and structure” of the statute to determine whether the
statute contained “rights-creating” language that focuses on the
“individual protected” rather than “the person regulated.” 532
U.S. at 288–89.18 Accordingly, we examine the text and
structure of § 3009 to see if rights-creating language exists. The
only part of the statute that explicitly establishes a “right” is
§ 3009(b):
Any merchandise mailed in violation of
subsection (a) of this section, or within the
exceptions contained therein, may be treated as a
gift by the recipient, who shall have the right to
Sandoval.
18
Sandoval appears to have left untouched the Court’s
jurisprudence on how to determine whether statutory language
creates a personal right. See 532 U.S. at 288–89 (citing
California v. Sierra Club, 451 U.S. 287, 294 (1981); Univs.
Research Assn., Inc. v. Coutu, 450 U.S. 754 (1981); Cannon,
441 U.S. at 690).
19
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). With an explicit
reference to a right and a focus on the individual protected, this
language suffices to demonstrate Congress’s intent to create a
personal right for recipients to treat unsolicited merchandise as
a gift. Indeed, Rodale concedes that § 3009(b)’s language is
“rights-creating.” (See Appellee’s Br. at 30.)
“Rights-creating” language is not as obviously present in
other sections of the statute. Section 3009(b) requires that
mailers of unsolicited merchandise attach a “clear and
conspicuous statement” informing the recipient of his or her
right to treat the merchandise as a gift. Section 3009(c) forbids
mailers of unsolicited merchandise from sending a recipient a
bill or any dunning communications. These provisions do not
necessarily create “personal rights” for recipients to receive
clear and conspicuous statements and to be free from bills and
dunning communications. Congress worded them as
prohibitions on the person regulated rather than entitlements for
the person protected.19 The provisions’ failure to identify
19
Even though Sandoval suggests that the distinction
between a statute focusing on the person regulated and one
focusing on the person protected is still significant, see 532 U.S.
at 289, we would be reluctant to place dispositive weight on this
factor. The apparent “focus” of a statute might have more to do
with Congress’s writing style than its intent. See RICHARD H.
FALLON, JR. ET AL., HART AND WECHSLER’S THE FEDERAL
20
“rights” (to receive notices and not to receive bills) contrasts
with the explicit identification of a “right” to keep the
merchandise as a gift.20 Even assuming arguendo that Congress
intended these provisions to create personal rights, the
distinction is largely academic because we can find no
legislative intent to create a private remedy, for the reasons
discussed below.
B. Did Congress Intend to Provide a Private Remedy for
Violations of § 3009?
In the generation since the Supreme Court declared that
COURTS AND THE FEDERAL SYSTEM 785 (5th ed. 2003) (“Does
the appropriateness of a private right of action depend on
whether a statute says ‘no person shall be subjected to
discrimination in a federally funded program’ rather than ‘no
federally funded program shall discriminate’?”). In the present
case, for example, § 3009(c) might have appeared to “focus”
more on the individual protected if Congress had written “No
recipient shall be mailed a bill for such merchandise . . . ,” but
the meaning would be identical. We do not consider Congress’s
use of the passive voice a reliable guide to its intent to create
personal rights.
20
We also note that the provisions requiring mailers to notify
recipients of their rights and to refrain from billing them are
ancillary to the recipients’ right to keep the merchandise as a
gift. These provisions ensure that recipients are aware of this
right, but provide no independent benefit to a recipient who is
fully aware that he or she has a right to keep the merchandise.
21
legislative intent to create an implied private right of action is
the sole touchstone of our inquiry, the Court has not provided a
test for discerning this intent. Most of its decisions have relied
on whatever indicators of legislative intent appear to be useful
in the context of a given statute. The Court frequently has
examined factors related to the text and structure of the statute
in question, including the existence of a comprehensive remedial
scheme in the statute21 and the explicit creation of a private right
of action elsewhere in the same statute.22 The Court has also
21
See, e.g., Sandoval, 532 U.S. at 290 (“The express
provision of one method of enforcing a substantive rule suggests
that Congress intended to preclude others.”); Russell, 473 U.S.
at 146 (“The six carefully integrated civil enforcement
provisions . . . provide strong evidence that Congress did not
intend to authorize other remedies that it simply forgot to
incorporate expressly.”); TAMA, 444 U.S. at 19–20 (“It is an
elemental canon of statutory construction that where a statute
expressly provides a particular remedy or remedies, a court must
be chary of reading others into it.”).
22
See, e.g., Coutu, 450 U.S. at 773 (highlighting another
provision of the same Act explicitly conferring a private right of
action); Touche Ross, 442 U.S. at 571–72 (pointing out that
several other provisions of the same act explicitly provide a
private right of action, showing that “when Congress wished to
provide a private damage remedy, it knew how to do so and did
so expressly”).
22
relied upon various aspects of the statute’s legislative history,23
the “customary legal incidents” that follow directly from a
statutory provision,24 Congress’s explicit creation of private
23
Among the aspects of legislative history that the Court has
considered in the past are statements of intent in the
congressional record associated with the original enactment, see,
e.g., Thompson, 484 U.S. at 184–85; National Sea Clammers,
453 U.S. at 17–18; Coutu, 450 U.S. at 773–75, and statements
of intent in the congressional record associated with later
amendments, see, e.g., Daily Income Fund, Inc. v. Fox, 464 U.S.
523, 538–40 (1984); Merrill Lynch, 456 U.S. at 383–84; Coutu,
450 U.S. at 778–79. In certain contexts, the Court has inferred
a private right of action from Congress’s enactment of a statute
containing language similar to that of a statute in which courts
had previously found an implied private right of action. See,
e.g., Jackson v. Birmingham Bd. of Educ., 544 U.S. 167, 176–77
(2005); Cannon, 441 U.S. at 694–96. In the past, the Court had
inferred that Congress intended to ratify a private right of action
when it amended a statute while leaving unchanged a provision
that federal courts had interpreted to confer a private right of
action, see, e.g., Merrill Lynch, 456 U.S. at 381–82, but later
Court opinions have foreclosed this option, see Sandoval, 532
at 291–92; Cent. Bank of Denver v. First Interstate Bank of
Denver, 511 U.S. 164, 186 (1994). As the Sandoval opinion
demonstrates, the Court is willing to dispense entirely with an
inquiry into legislative history when the text and structure of the
statute are clear. See supra note 16.
24
See TAMA, 444 U.S. at 18–20 (holding that Congress
intended that “customary legal incidents” of contract voidness,
23
rights of action in similar statutes enacted at roughly the same
time,25 and an assortment of other factors.26 To provide some
including a private right to sue for rescission, an injunction, or
restitution, would follow from its statutory declaration that
certain contracts “shall be void”).
25
See, e.g., Cent. Bank of Denver, 511 U.S. at 184–85
(declining to find an implied private cause of action for aiding
and abetting under the Securities Exchange Act of 1934 because
Congress had acted against the “backdrop” of a 1929 federal
securities law and securities laws in eleven states that had
provided explicitly for such a cause of action); Northwest
Airlines, Inc. v. Transport Workers Union of America, 451 U.S.
77, 92 & n.24 (1981) (declining to find an implied private right
of action for contribution under the Equal Pay Act and Title VII
and noting that it was “significant” but “not dispositive” that
Congress had expressly provided for a right to contribution in
certain securities acts); TAMA, 444 U.S. at 248 (noting that
Congress expressly authorized private suits for damages in other
securities-related statutes enacted at around the same time as the
IAA).
26
For example, the Court has examined the extent to which
state law remedies are available, see Daily Income Fund, 464
U.S. at 542 (noting that the subject matter of the proposed
private cause of action is “generally governed” by state law),
and even the provision’s location in the United States Code, see
Thompson, 484 U.S. at 183 (stating that the placement of the
provision as an addendum to the full faith and credit statute is
“strong proof” that Congress did not intend to create a private
24
boundaries to our inquiry into congressional intent, we will
confine ourselves to those purported signals of legislative intent
that the parties have raised and that are consistent with current
doctrine.
1. Text and Structure of § 3009
The express language of § 3009 provides only for Federal
Trade Commission (“FTC”) enforcement. By declaring the
shipment of unsolicited merchandise and the resulting bills to be
a violation of 15 U.S.C. § 45(a)(1) (and therefore unlawful),
§ 3009(a) authorizes the FTC to use any of the Federal Trade
Commission Act’s (“FTC Act”) applicable enforcement
mechanisms in response to this behavior.27 The FTC Act allows
the FTC to obtain a variety of remedies28 for violations of
right of action).
27
We see no merit in Wisniewski’s argument that “[n]owhere
does the statute specifically refer to enforcement by the FTC . .
. .” (Appellant’s Br. at 23 (emphasis in original)). For all
practical purposes, the reference to “section 45(a)(1)” is a
reference to FTC enforcement.
28
One of the remedies in the current FTC Act is restitution.
See 15 U.S.C.A. § 45(a)(4)(B) (West 2007) (“All remedies
available to the Commission with respect to unfair and deceptive
acts or practices shall be available for acts and practices
described in this paragraph, including restitution to domestic or
foreign victims.”). Congress added this remedy to the FTC Act
in 2006, however, so it was not part of the FTC’s arsenal at the
25
§ 45(a)(1), including injunctions29 and civil penalties.30 The rest
of § 3009 builds on § 3009(a) by explaining what rights a
recipient possesses when confronted with an unlawful
merchandise shipment and by imposing additional duties on
shippers of merchandise who have either chosen to disregard
§ 3009(a) or are subject to one of its exceptions.
The reference to FTC enforcement combined with the
absence of other enforcement provisions creates a presumption
that FTC enforcement of the statute is exclusive. As the
Sandoval Court held, “[t]he express provision of one method of
enforcing a substantive rule suggests that Congress intended to
preclude others.” 532 U.S. at 290. Wisniewski correctly points
time § 3009 was enacted. See Pub. L. No. 109-455, 120 Stat.
3372 (Dec. 22, 2006).
29
See 15 U.S.C. § 45(a)(2) (2000) (“The Commission is
hereby empowered and directed to prevent persons,
partnerships, and corporations . . . from using unfair methods of
competition in or affecting commerce and unfair or deceptive
acts or practices in or affecting commerce.”).
30
See 15 U.S.C. § 45(m)(1)(A) (2000) (“The Commission
may commence a civil action to recover a civil penalty in a
district court of the United States against any person,
partnership, or corporation which violates any rule under this
chapter respecting unfair or deceptive acts or practices . . . with
actual knowledge or knowledge fairly implied on the basis of
objective circumstances that such act is unfair or deceptive and
is prohibited by such rule.”).
26
out that “private rights of action have been implied from statutes
that provide for agency enforcement” (Appellant’s Br. at 23),
but this does not change the fact that agency enforcement
creates a strong presumption against implied private rights of
action that must be overcome.31
Wisniewski’s strongest argument for overcoming the
presumption of exclusive FTC enforcement is based on an
analogy between § 3009 and § 215 of the Investment Advisers
31
Since the demise of Borak, the Supreme Court has
generally been unwilling to find implied private rights of action
in statutes that expressly provide for agency or other
enforcement. The Court has made exceptions for certain
securities and anti-discrimination statutes, but it has done so
primarily because of longstanding precedent interpreting the
same or similar language to create a private right of action. See
Jackson, 544 U.S. at 176 (private retaliation actions under Title
IX); Huddleston, 459 U.S. at 380–81 (private actions based on
registration statement fraud under Section 10(b) of Securities
Exchange Act); Merrill Lynch, 456 U.S. at 378–82 (private
actions under Commodities Exchange Act); Cannon, 441 U.S.
at 694–98 (private actions under Title IX); Superintendent of
Ins. v. Bankers Life & Cas. Co., 404 U.S. 6 (1971) (approving
with virtually no analysis a private right of action under Section
10(b)). Moreover, the Court has taken a stricter approach in
recent years to both securities and anti-discrimination statutes
despite longstanding interpretations. See Sandoval, 532 U.S. at
293 (finding no private action under § 602 of Title VI); Cent.
Bank of Denver, 511 U.S. at 183–88 (finding no private right of
action for aiding and abetting under Section 10(b)).
27
Act (“IAA”), the statutory provision under which the Supreme
Court recognized an implied private right of action in TAMA.
(See Appellant’s Br. at 16.) Section 215 provides that every
contract whose formation or performance would violate the IAA
“shall be void . . . as regards the rights of any person” who
violated the statute or knew of the facts underlying its violation.
444 U.S. at 16–17 (quoting 54 Stat. 856, as set forth in 15
U.S.C. § 80b-15).32 The Court concluded that the statutory text
showed congressional intent to create a private remedy, stating:
By declaring certain contracts void, § 215 by its
terms necessarily contemplates that the issue of
voidness under its criteria may be litigated
somewhere. At the very least Congress must have
assumed that § 215 could be raised defensively in
private litigation to preclude the enforcement of
an investment advisers contract. But the legal
consequences of voidness are typically not so
limited. A person with the power to void a
32
Section 215 declares the contract to be “void,” a term
typically used in contract law to describe contracts that create no
enforceable rights or obligations for either party. See
RESTATEMENT (SECOND) OF CONTRACTS § 7, cmt. a. Under
§ 215, the contract is only void “as regards the rights” of a
wrongdoer, which suggests that the contract is merely
“voidable” at the innocent party’s option. In another case, the
Supreme Court concluded that “void,” as used in § 29(b) of the
Securities Exchange Act, really meant “voidable,” and noted
that § 215 of the IAA is a parallel provision. See Mills v. Elec.
Auto-Lite Co., 396 U.S. 375, 387 (1970).
28
contract ordinarily may resort to a court to have
the contract rescinded and to obtain restitution of
consideration paid. . . . For these reasons we
conclude that 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.
444 U.S. at 18–19 (citations omitted). The Court noted in a
footnote that Congress might have intended that private litigants
raise § 215 claims only in state court, but that “we decline to
adopt such an anomalous construction without some indication
that Congress in fact wished to remit the litigation of a federal
right to the state courts.” Id. at 19 n.8.
Sections 3009 and 215 do have some similarities. Both
provisions define the rights of those affected by a violation of
the statute. Section 215 establishes that the wronged party to a
purported contract entered in violation of the IAA is under no
obligation to perform. Section 3009 establishes that the
recipient of merchandise sent in violation of the unordered
merchandise statute is under no obligation to return or pay for
the merchandise. The TAMA Court concluded that, through the
statute’s explicit declaration of voidness, Congress indicated its
intent to allow the wronged party to bring an action under § 215
to rescind the void contract and to obtain restitution for
consideration paid. Wisniewski argues that Congress likewise
intended to create a private right of action under § 3009 that
would allow recipients to obtain restitution for expenses
29
incurred because of the sender’s misrepresentations regarding
their rights.
Although the TAMA analogy is apposite, it is not
convincing. We believe that the statutes in question are too
different to allow an interpretation that Congress intended to
create a private right of action under § 3009. We note that the
private right of action allowed in TAMA was very limited. It
allowed the wronged party to bring an action for “limited
equitable relief,” 444 U.S. at 22, which includes only those
remedies closely associated with the contract’s voidness:
rescission of the contract, an injunction against the contract’s
enforcement, or restitution of consideration paid, 444 U.S. at18–19. The TAMA Court explicitly stated that a party could not
obtain “compensation for any diminution in the value of the
rescinding party’s investment alleged to have resulted from the
adviser’s action or inaction.” Id. at 24 n.14. Also, TAMA makes
clear that a party has no private right of action to recover
amounts lost to an investment adviser who engaged in the
fraudulent activities prohibited by § 206, except those amounts
given as consideration under a void advisory contract. Id. at
24–25 & n.14. In other words, TAMA does not create a general
presumption that Congress intended to create a private right of
action for restitution whenever one party obtains a benefit from
another by violating the latter party’s statutory rights. Instead,
its analysis is linked closely to the explicit declaration of
voidness in the statute and the “customary legal incidents” that
follow from such a declaration according to established contract
law principles. See id. at 19.
In contrast, § 3009 does not explicitly declare any
30
agreement to be void. Although it creates a right for recipients
to keep unsolicited merchandise, it says nothing about the
consequences if a mailer violates the statute and thereby induces
a recipient to disregard this right.33 As Sandoval tells us,
creation of a right is not enough to establish congressional intent
to create a private right of action to vindicate that right.
Wisniewski points to no “customary legal incidents” that follow
from a declaration that an individual has the personal right to
keep unordered merchandise as a gift. Accordingly, we
conclude that the creation of a right to keep merchandise in
33
At most, Wisniewski could contend that his payment to
Rodale for the unordered merchandise created a faux-contractual
relationship between the two parties, with Rodale’s shipment of
merchandise as the “offer” and Wisniewski’s payment as the
“acceptance.” Under this reasoning, if Rodale obtained
Wisniewski’s acceptance in a manner that violated the statute
(e.g., by failing to inform him of his rights), then the acceptance
would be invalid and the contract voidable. Thus, the
declaration that Wisniewski has a right to keep the merchandise
would be equivalent to a declaration that any contract that
disregarded this right shall be void, which under TAMA would
entitle Wisniewski to the “customary legal incidents” of a void
contract (including restitution). This line of reasoning is too
speculative to be convincing, however. It requires us to make
an assumption not present in TAMA: that statutory recognition
of a right automatically carries with it the power to void any
purported contracts that arise when a wrongdoer ignores this
right. Given the absence of any direct or indirect reference in
§ 3009 to any contract, we are not willing to make such an
assumption.
31
§ 3009, unlike § 215’s voidness declaration, is not sufficient to
demonstrate congressional intent to create a private right of
action.
Rodale points out that Congress expressly provided
private rights of action in two other provisions of the Postal
Reorganization Act, suggesting that it knew how to create
private rights of action when it wished. (Appellee’s Br. at 18.)
Sections 3017(e)(1) and (e)(2) provide private rights of action
to enforce Sections 3001(l) and 3017(d), respectively.
Wisniewski counters that Congress enacted § 3017 in 1999 and
that this amendment therefore cannot shed any light on the
meaning of the original act. (Appellant’s Br. at 24–25.) Rodale
concedes that these amendments do not necessarily prove
Congress’s lack of intent to provide a private right of action
under § 3009, but claims that they “buttress” the case already
made that no such intent exists. (Appellee’s Br. at 20.) We
need not decide whether to place any weight on these
amendments, because they certainly cannot help Wisniewski,
and other arguments independently support Rodale’s case
against an implied private right of action.
In short, the text and structure of § 3009 strongly suggest
that Congress did not intend to supplement FTC enforcement
with a parallel system of private litigation but “absentmindedly
forgot to mention an intended private action.” See TAMA, 444
U.S. at 20 (quoting Cannon, 441 U.S. at 742 (Powell, J.,
dissenting)).34
34
Our holding will not necessarily deprive individuals of a
remedy in the event that they are unable to attract the interest of
32
2. Legislative History35
Both parties concede that the congressional record is
“silent” with regard to the existence of a private right of action
in § 3009. (See Appellant’s Br. at 26–27; Appellee’s Br. at 17.)
In Touche Ross, the Court noted that the legislative history of
§ 17(a) of the Securities Exchange Act was silent and observed
that “implying a private right of action on the basis of
congressional silence is a hazardous enterprise, at best.” 442
U.S. at 571. But this silence does not “automatically
undermine” Wisniewski’s claim that an implied private right of
action exists, since Congress might express its intent “in the
language or structure of the statute, or in the circumstances of its
enactment.” See TAMA, 444 U.S. at 18. As we have already
explained, however, the language and structure of the statute
provide no support for a private right of action, and Wisniewski
FTC enforcers. Individuals who pay for unordered
merchandise, either out of ignorance of their right or fear of a
negative credit rating, might have recourse to state courts. A
footnote in TAMA says that it would be “anomalous” to assume
that Congress intended “to remit the litigation of a federal right
to the state courts.” 444 U.S. at 19 n.8. In the present case,
however, Congress has authorized litigation by the FTC in
federal court. State court may remain a fallback option for
individuals who believe that the FTC has not been vigorous
enough in enforcing their rights.
35
Regarding the extent to which legislative history is relevant
at all in implied private right of action inquiries, see supra note
16.
33
has not pointed to anything in the circumstances of the statute’s
enactment or any other factors that express the requisite intent.
3. Kipperman v. Academy Life Insurance Co.
In their briefs, the parties debate the meaning and
relevance of Kipperman v. Academy Life Ins. Co., 554 F.2d 377(9th Cir. 1977), the only federal appellate opinion that has
addressed whether an implied private right of action exists under
§ 3009. In Kipperman, the Ninth Circuit applied the Cort test to
§ 3009 and concluded that the statute provides an implied
private right of action for declaratory and restitutionary relief.
See 554 F.2d at 380.36 Kipperman is not persuasive authority for
us because its analysis is inconsistent with the Supreme Court’s
subsequent decisions in Cannon, Touche Ross, and TAMA,
which restructured the implied private right of action test to
focus solely on legislative intent. The Kipperman opinion
appears to weigh the four Cort factors roughly equally,
providing no evidence that the court recognizes legislative intent
as the sole determinative factor. See 554 F.2d at 380.
Moreover, in its analysis of legislative intent, the Kipperman
court states that “we believe Congress did not consider the
question of a private right of action under section 3009,” and it
provides no evidence that Congress intended that the statute be
36
The Ninth Circuit did not extend this implied private right
of action to injunctive relief because it feared that injunctions
would interfere with FTC enforcement of § 3009. See 554 F.2d
at 380. The court ultimately dismissed the restitution claim on
the ground that insurance policies are not “merchandise” within
the meaning of § 3009. See id. at 380–81.
34
enforced through a private right of action. 554 F.2d at 380.
Lack of evidence of intent probably would have presented no
obstacle under Cort, which says that congressional intent to
create a private right of action is unnecessary as long as
Congress conveyed no explicit intent to deny one. See Cort, 422
U.S. at 82. But Supreme Court cases decided since Cort and
Kipperman have established that congressional intent to create
a private right of action is critical, and the Kipperman court’s
failure to find such intent would dictate a different result in that
case today.
IV.
In sum, we see no indication that Congress intended to
create a private right of action under § 3009. Accordingly, we
will affirm the judgment of the District Court.
Wisniewski v. Rodale, Inc., No. 06-1305
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
35
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
errand. 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
36
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 (2001) (citing Cannon v.
Univ. of Chicago, 441 U.S. 677, 690 n.13 (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.
37
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 (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 (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. 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
court 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.
Just as the voidness of a contract is accompanied by
“customary legal incidents,” so is the passage of title resulting
38
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
(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.
37
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.
39
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.
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).
40
Although 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. 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 Wisniewski 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.
41
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. 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. The FTC’s powers were similarly limited at
the time § 3009 was enacted. Therefore, Wisniewski’s ability
42
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 merchandise “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, 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.
43
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)(1)-(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(“[T]he legislative history of the Act is entirely silent–a state
of affairs not surprising when it is remembered that the Act
44
concededly does not explicitly provide any private remedies
whatever.”); Cannon, 441 U.S. at 694 (“[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 (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
(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 value 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 (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
45
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(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 injunctive 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
38
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).
46
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.
47