Intl Science & Tech v. Inacom Communication ( 1997 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
INTERNATIONAL SCIENCE &
TECHNOLOGY INSTITUTE,
INCORPORATED,
Plaintiff-Appellant,
No. 96-1142
v.
INACOM COMMUNICATIONS,
INCORPORATED,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CA-95-1229-A)
Argued: October 29, 1996
Decided: February 11, 1997
Before NIEMEYER, WILLIAMS, and MOTZ, Circuit Judges.
_________________________________________________________________
Affirmed by published opinion. Judge Niemeyer wrote the opinion,
in which Judge Williams and Judge Motz joined.
_________________________________________________________________
COUNSEL
ARGUED: John Thomas Ward, WARD, KERSHAW & MINTON,
Baltimore, Maryland, for Appellant. John Patrick Passarelli,
MCGRATH, NORTH, MULLIN & KRATZ, P.C., Omaha, Nebraska,
for Appellee. ON BRIEF: Thomas J. Minton, WARD, KERSHAW
& MINTON, Baltimore, Maryland; Mark Rollinson, Leesburg, Vir-
ginia, for Appellant. Patrick E. Brookhouser, Jr., MCGRATH,
NORTH, MULLIN & KRATZ, P.C., Omaha, Nebraska; Scott A.
Fenske, THOMPSON, HINE & FLORY, Washington, D.C., for
Appellee.
_________________________________________________________________
OPINION
NIEMEYER, Circuit Judge:
We today reach the somewhat unusual conclusion that state courts
have exclusive jurisdiction over a cause of action created by federal
law. Holding that the states have been given, subject to their consent,
exclusive subject matter jurisdiction over private actions authorized
by the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227,
we affirm the district court's ruling dismissing this case.
I
In 1991, Congress amended the Communications Act of 1934, 47
U.S.C. § 201 et seq., with the enactment of the Telephone Consumer
Protection Act of 1991 ("TCPA"), Pub. L. No. 102-243, 105 Stat.
2394 (1991) (codified at 47 U.S.C. § 227). The TCPA was enacted to
"protect the privacy interests of residential telephone subscribers by
placing restrictions on unsolicited, automated telephone calls to the
home and to facilitate interstate commerce by restricting certain uses
of facsimile ([f]ax) machines and automatic dialers." S. Rep. No. 102-
178, at 1 (1991), reprinted in 1991 U.S.C.C.A.N. 1968.
The relevant section of the TCPA provides, "It shall be unlawful
for any person within the United States . . . to use any telephone fac-
simile machine, computer, or other device to send an unsolicited
advertisement to a telephone facsimile machine." 47 U.S.C. § 227(b)
(1)(C).
The TCPA creates a private right of action to obtain an injunction,
47 U.S.C. § 227(b)(3)(A), and to recover the actual monetary dam-
ages or $500, whichever is greater. 47 U.S.C. § 227(b)(3)(B). If the
2
court finds that the defendant "willfully or knowingly" violated the
TCPA, it may treble the damage award. 47 U.S.C.§ 227(b)(3). In cre-
ating a private right of action, the TCPA authorizes a plaintiff to file
suit "if otherwise permitted by the laws or rules of court of a State . . .
in an appropriate court of that State." 47 U.S.C.§ 227(b)(3). The
TCPA also authorizes state attorneys general to bring civil actions on
behalf of their state's residents to obtain an injunction against such
calls and to recover monetary damages. 47 U.S.C.§ 227(f)(1). The
TCPA provides that the federal district courts have"exclusive juris-
diction" over actions brought by state attorneys general. 47 U.S.C.
§ 227(f)(2). Finally, the TCPA also authorizes the Federal Communi-
cations Commission to intervene as of right in any state attorney gen-
eral's action. 47 U.S.C. § 227(f)(3).
II
During the summer months of 1995, International Science & Tech-
nology Institute, Inc. ("International Science") received at its fax
machine several unsolicited advertisements for discount long-distance
telephone service from Inacom Communications, Inc. ("Inacom").
International Science claims that Inacom sent "thousands of such
unsolicited advertisements to small business enterprises throughout
the United States in knowing and willful violation of the [TCPA]."
Proceeding under the TCPA and invoking federal-question jurisdic-
tion granted by 28 U.S.C. § 1331, International Science filed a class
action suit in the district court, demanding $500 for each violation --
or $1,500 if the court were to find the violation willful -- and praying
for injunctive relief against future unsolicited advertising. On Ina-
com's motion, the district court dismissed International Science's
complaint for lack of subject matter jurisdiction, ruling that private
actions authorized by the TCPA may be filed only in state courts. The
court explained:
The language in § 227(b)(3) is unambiguous. The statute
clearly places jurisdiction for a private right of action in the
state courts, just as it places jurisdiction for actions brought
by the State or the FCC in the District Courts of the United
States. Contrary to plaintiff's assertion, there is no ambigu-
ity created because Congress omitted the phrase"exclusive
jurisdiction" from § 227(b)(3).
3
In response to International Science's argument that the statute did
not make state jurisdiction exclusive and that federal jurisdiction
could therefore be implied, the district court ruled that it could not
imply a federal right of action when Congress had expressed an intent
to create only a right of action in state courts.
On appeal, International Science makes three arguments: (1) that
the permissive language of 47 U.S.C. § 227(b)(3) that a private action
may be brought in state courts does not make state court jurisdiction
exclusive; (2) that a federally created cause of action "arises under"
federal law within the meaning of 28 U.S.C. § 1331 granting district
courts federal-question jurisdiction; and (3) that an exclusive jurisdic-
tional grant to state courts would violate both the Equal Protection
Clause of the Fourteenth Amendment and the Tenth Amendment.
III
To discern whether Congress intended to authorize jurisdiction
over private actions exclusively in state courts, we first turn, as we
must, to the TCPA's text. See, e.g., New York State Conf. of Blue
Cross and Blue Shield Plans v. Travelers Insurance Co., 115 S. Ct.
1671, 1677 (1995) (in determining congressional intent, analysis
begins with interpretation of the statutory text and"move[s] on, as
need be, to the structure and purpose of the Act in which it occurs").
In relevant part, the TCPA provides that "a person or entity may, if
otherwise permitted by the laws or rules of court of a State, bring in
an appropriate court of that State" an action for violation of the
TCPA's ban on unsolicited fax-advertising. 47 U.S.C.§ 227(b)(3)
(emphasis added). In providing that a private person"may bring" a
TCPA action in an appropriate state court, Congress authorized state
courts to enforce the right it created. In using the customary "may"
language for conferring jurisdiction,1 Congress did not prescribe that
_________________________________________________________________
1 See, e.g., Age Discrimination in Employment Act, 29 U.S.C.
§ 626(c)(1) ("Any person aggrieved may bring a civil action in any court
of competent jurisdiction" (emphasis added)); Clean Water Act, 33
U.S.C. § 1319(b) ("Any action under this subsection may be brought in
the district court of the United States" (emphasis added)); Federal
Employees Liability Act, 45 U.S.C. § 56 ("an action may be brought in
a district court of the United States" (emphasis added)); Racketeer Influ-
4
an action must be brought in court; rather it authorizes jurisdiction by
stating that an action may be brought there. As International Science
observes, it cannot be disputed that the term "may bring" is permis-
sive, simply authorizing suit in state court by a person who elects to
enforce the federal right. Use of the term "may" does not itself confer
exclusive jurisdiction on the court mentioned. See, e.g., Tafflin v.
Levitt, 493 U.S. 455, 460-61 (1990) (the grant of jurisdiction to fed-
eral courts through the phrase, "suits of a kind described `may' be
brought in federal district courts," "does not operate to oust a state
court from concurrent jurisdiction over the cause of action").
When, however, the permissive authorization extends only to
courts of general jurisdiction, that authorization cannot confer juris-
diction on unmentioned courts of limited jurisdiction, which require
a specific grant. If a federal statute permissively authorizes suit in fed-
eral court, that authorization does not of necessity preclude suit in
state courts of general jurisdiction, which are presumed competent
unless otherwise stated. See Tafflin, id . But the contrary assertion can-
not be true. If a statute authorizes suit in state courts of general juris-
diction through the use of the term "may," that authorization cannot
confer jurisdiction on a federal court because federal courts are com-
petent to hear only those cases specifically authorized. See Sheldon
v. Sill, 49 U.S. (8 How.) 441, 449 (1850) (inferior federal courts only
have jurisdiction which Congress confers).
Thus, when International Science argues that the Supreme Court's
holding in Tafflin has foreclosed our finding exclusive jurisdiction in
state court for private TCPA actions, it fails to recognize that the cir-
cumstances in Tafflin are the reverse of those in the case before us.
While state courts are presumed to have jurisdiction over federally
created causes of action unless Congress indicates otherwise, see
Tafflin, 493 U.S. at 461 ("mere grant of jurisdiction to a federal court
does not operate to oust a state court from concurrent jurisdiction"),
federal courts require a specific grant of jurisdiction, see Sheldon, 49
_________________________________________________________________
enced and Corrupt Organizations Act, 18 U.S.C. § 1964(c) ("Any person
injured in his business or property by reason of a violation of section
1962 of this chapter may sue therefor in any appropriate United States
district court" (emphasis added)).
5
U.S. (8 How.) at 449. In light of this difference between the federal
and state courts, it is meaningful that Congress explicitly mentioned
only state courts in 47 U.S.C. § 227(b)(3) because under usual cir-
cumstances, mentioning state courts is unnecessary to vest them with
concurrent jurisdiction.
Accordingly, we conclude that when, in § 227(b)(3) of the TCPA,
Congress authorized jurisdiction over private actions in state courts
without mentioning federal courts, it did not intend to grant jurisdic-
tion over TCPA claims in federal district courts.
We are further confirmed in this construction of§ 227(b)(3) by the
fact that the TCPA, while authorizing state court jurisdiction for pri-
vate rights of action, confers exclusive federal jurisdiction over
actions by states attorneys general. See 47 U.S.C. § 227(f)(2) ("the
district courts of the United States . . . shall have exclusive
jurisdiction over all civil actions brought under this subsection"
(emphasis added)). We find it significant that in enacting the TCPA,
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. These jurisdictional distinctions are
even more significant in light of the rest of the Communications Act
where Congress provided explicitly for concurrent jurisdiction when
it so intended. See 47 U.S.C. § 214(c) (authorizing injunction by any
court of general jurisdiction for extension of lines or discontinuation
of services contrary to certificates of public convenience and neces-
sity); 47 U.S.C. § 407 (authorizing suit in federal court or state court
of general jurisdiction for common carrier's failure to comply with
order of payment); 47 U.S.C. § 415(f) (establishing one-year limita-
tion on suits brought in federal or state courts to enforce Commission
order for payment of money); 47 U.S.C. § 553(c)(1) (authorizing suit
in federal court or any other court of competent jurisdiction for unau-
thorized cable reception); 47 U.S.C. § 555(a) (authorizing suit in fed-
eral court or state court of general jurisdiction to review actions by
franchising authority); 47 U.S.C. § 605(e)(3)(A) (authorizing civil
action in federal court or any other court of competent jurisdiction for
unauthorized publication). Thus while Congress has in the Communi-
cations Act explicitly expressed its intent to provide concurrent juris-
diction, it did not do so in 47 U.S.C. § 227(b)(3).
6
Finally, the legislative history of the TCPA supports our interpreta-
tion that Congress intended that private actions under 47 U.S.C.
§ 227(b)(3) be treated as small claims best resolved in state courts
designed to handle them, so long as the states allow such actions. Sen-
ator Hollings, the sponsor of the bill, explained the relatively late
addition of the § 227 private right of action as follows:
The substitute bill contains a private right-of-action provi-
sion that will make it easier for consumers to recover dam-
ages from receiving these computerized calls. The provision
would allow consumers to bring an action in State court
against any entity that violates the bill. The bill does not,
because of constitutional constraints, dictate to the States
which court in each State shall be the proper venue for such
an action, as this is a matter for State legislators to deter-
mine. Nevertheless, it is my hope that States will make it as
easy as possible for consumers to bring such actions, prefer-
ably in small claims court. . . .
Small claims court or a similar court would allow the con-
sumer to appear before the court without an attorney. The
amount of damages in this legislation is set to be fair to both
the consumer and the telemarketer. However, it would
defeat the purposes of the bill if the attorneys' costs to con-
sumers of bringing an action were greater than the potential
damages. I thus expect that the States will act reasonably in
permitting their citizens to go to court to enforce this bill.
137 Cong. Rec. S16205-06 (daily ed. Nov. 7, 1991) (statement of
Sen. Hollings). While Senator Hollings did not explicitly say that only
state court jurisdiction was appropriate, we believe the clear thrust of
his statement was consistent with the bill's text that state courts were
the intended fora for private TCPA actions.
International Science argues, notwithstanding, that a congressional
intent to establish concurrent jurisdiction for private civil actions in
both state and federal courts is manifested through its preemptive
occupation of the field of interstate telecommunications. International
Science states, "federal courts have exclusive jurisdiction in respect
of essentially all matters arising under chapter 5" of the Communica-
7
tions Act, citing Harrison Higgins, Inc. v. AT&T Communications,
Inc., 697 F. Supp. 220, 222 (E.D. Va. 1988). International Science's
reliance on the preemption principles of Harrison Higgins, however,
is misplaced. The district court in Harrison Higgins decided that state
substantive claims were preempted by the Communications Act, not
that such preemption affected state court jurisdiction. Indeed, unless
Congress provides that federal jurisdiction shall be exclusive, claims
based on substantive federal law may be brought in state court even
though the substantive federal law preempts state law. See Dowd Box
Co. v. Courtney, 368 U.S. 502 (1962). In short, regardless of whether
the Communications Act preempts substantive state law, state courts
may hear cases arising under the Act except where a contrary con-
gressional intent appears. No such intent appears in the TCPA.
Indeed, it explicitly says that state courts may hear private actions
based on substantive federal rights. See 47 U.S.C. § 227(b)(3). In any
event, International Science's preemption argument must be rejected
at its beginning because Congress stated that state law is not pre-
empted by the TCPA. See 47 U.S.C. § 227(e) ("nothing in this section
. . . shall preempt any State law that imposes more restrictive intra-
state requirements . . . or which prohibits" certain enumerated prac-
tices (emphasis added)).
Accordingly, when Congress provided in § 227(b)(3) of the TCPA
that private civil actions "may" be brought in the appropriate courts
of the states, it did not intend to confer concurrent jurisdiction on the
United States district courts.
IV
International Science contends that, even if the TCPA does not
itself provide for federal jurisdiction over private actions, the general
federal-question jurisdictional statute, 28 U.S.C.§ 1331, is sufficient
to confer jurisdiction on the district court because a TCPA claim
"arises under" federal law. To resolve this question, we need to deter-
mine the scope of 28 U.S.C. § 1331 and its relationship to specific
jurisdictional statutes such as that involved here, 47 U.S.C.
§ 227(b)(3).
While Article III of the Constitution authorizes judicial power of
"cases, in law and equity, arising under" (emphasis added) the Con-
8
stitution, laws, and treaties of the United States, the district courts
have only that jurisdiction that Congress grants through statute. See
Sheldon, 49 U.S. (8 How.) at 449. Even though Congress has con-
ferred general federal-question jurisdiction on the district courts under
28 U.S.C. § 1331 in terms similar to the constitutional provision --
"The district courts shall have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States"
-- the term "arising under" in the statute is narrower than the simi-
larly defined constitutional power. See Verlindin B.V. v. Central Bank
of Nigeria, 461 U.S. 480, 495 (1983). Because federal-question juris-
diction ultimately depends on an act of Congress, the scope of the dis-
trict courts' jurisdiction depends on that congressional intent
manifested in statute.
Congress gave federal-question jurisdiction to district courts under
28 U.S.C. § 1331 to hear "only those cases in which a well-pleaded
complaint establishes either [1] that federal law creates the cause of
action or [2] that the plaintiff's right to relief necessarily depends on
resolution of a substantial question of federal law." Franchise Tax
Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28
(1983); see also Ormet Corp. v. Ohio Power Co. , 98 F.3d 799, 806
(4th Cir. 1996). But in the "vast majority" of cases where federal-
question jurisdiction exists, federal law creates the plaintiff's right of
action. See Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478
U.S. 804, 808 (1986). International Science maintains that this case
is among that "vast majority" because federal law creates the cause
of action which it now asserts. See American Well Works Co. v.
Wayne & Bowler Co., 241 U.S. 257, 260 (1916) ("A suit arises under
the law that creates the cause of action").
It is true that, as a general matter, a cause of action created by fed-
eral law will properly be brought in the district courts. But "despite
the usual reliability of the [principle that`a suit arises under the law
that creates the cause of action,' the Supreme] Court has sometimes
found that formally federal causes of action were not properly brought
under federal-question jurisdiction." Merrell Dow, 478 U.S. at 815
n.12. For example, in Shoshone Mining Co. v. Rutter, 177 U.S. 505
(1900), the Supreme Court held that there was no federal-question
jurisdiction over suits authorized by federal statute to determine min-
ing claims. The Court found that, notwithstanding the federal statu-
9
tory basis, Congress intended that because of the predominance of
state issues the cases be litigated in state courts unless there was
diversity of citizenship. Id. at 511; see also Blackburn v. Portland
Gold Mining Co., 175 U.S. 571, 578-79, 587 (1900). We have simi-
larly concluded that Congress intended that private TCPA cases be lit-
igated in state courts, if the state consents.
Moreover, the dominant reason that Congress created a private
TCPA action at all was out of solicitude for states which were
thwarted in their attempts to stop unwanted telemarketing. Congress
found in the statute:
Over half the States now have statutes restricting various
uses of the telephone for marketing, but telemarketers can
evade their prohibitions through interstate operations; there-
fore, Federal law is needed to control residential telemarket-
ing practices.
Pub. L. No. 102-243, § 2(7), 105 Stat. 2394 (1991). See also Sen. R.
No. 102-178, at 3 (1991), reprinted in 1991 U.S.C.C.A.N. at 1970
("States do not have jurisdiction over interstate calls. Many States
have expressed a desire for Federal legislation to regulate interstate
telemarketing calls to supplement their restrictions on intrastate
calls"); id. at 5, reprinted in 1991 U.S.C.C.A.N. at 1973 ("Federal
action is necessary because States do not have the jurisdiction to pro-
tect their citizens against those who use these machines to place inter-
state telephone calls"). Thus, although Congress created the private
TCPA action, it was from the beginning a cause of action in the
states' interest.
International Science argues, nevertheless, that to construe 47
U.S.C. § 227(b)(3) to lodge private causes of action only in state
courts is repugnant to the language of § 1331, which provides that
"[t]he district courts shall have original jurisdiction of all civil actions
arising under the Constitution [or] laws . . . of the United States."
(Emphasis added). It is clear, however, that § 1331 is a general
federal-question statute, which gives the district courts original juris-
diction unless a specific statute assigns jurisdiction elsewhere. For
example, "takings" claims in excess of $10,000-- undoubtedly "aris-
ing under the Constitution" as the term is used in § 1331 -- have been
10
assigned exclusively to the Court of Federal Claims. See 28 U.S.C.
§ 1491(a)(1) (granting Court of Federal Claims jurisdiction) and 28
U.S.C. § 1346(a)(2) (granting district courts concurrent jurisdiction if
the claim does not exceed $10,000);2 see also 28 U.S.C. § 1498(a)
(patent and copyright claims against United States). And suits "com-
menced under" § 516 of the Tariff Act of 1930, 19 U.S.C. § 1516, can
be brought only in the Court of International Trade. See 28 U.S.C.
§ 1581. See also 33 U.S.C. § 921(c) (vesting federal courts of appeals
with original jurisdiction to review agency orders under Longshore
and Harbor Workers' Compensation Act, 33 U.S.C.§ 901 et seq., and
the Black Lung Benefits program, 30 U.S.C. § 901 et seq.); 29 U.S.C.
§ 160(f) (vesting federal courts of appeals with original jurisdiction
to review agency orders under National Labor Relations Act). Thus,
the federal law that creates a cause of action may also manifest a par-
ticular intent to assign the cause of action to courts other than district
courts, notwithstanding the general principle announced in § 1331.
The only other court to address the issue before us found federal juris-
diction by ignoring that principle. See Kenro, Inc. v. Fax Daily, Inc.,
904 F. Supp. 912 (S.D. Ind. 1995).
International Science also argues, based on a misreading of Merrell
Dow, that "federal courts [whether the district courts or other federal
courts] always have jurisdiction of cases arising under federal law, if
a private right of action is intended at all." Contrary to International
Science's argument, the focus of Merrell Dow was not on such a prin-
ciple but on the intent of Congress. After determining that "Congress
did not intend a private federal remedy for violations of the statute
that it enacted," 478 U.S. at 811, the Court in Merrell Dow concluded:
_________________________________________________________________
2 Notably, these statutes do not explicitly say that the Court of Federal
Claims has exclusive jurisdiction over cases involving more than
$10,000. One might conclude that district courts had concurrent jurisdic-
tion by virtue of 28 U.S.C. § 1331. But Congress' explicit announcement
of concurrent jurisdiction in 28 U.S.C. § 1346-- which would be super-
fluous if § 1331 already conferred concurrent jurisdiction -- leads quite
naturally to the conclusion that jurisdiction of cases involving more than
$10,000 lies exclusively in the Court of Federal Claims by virtue of 28
U.S.C. § 1491. Similarly, as we noted above, the fact that state courts are
presumed to have concurrent jurisdiction to enforce federal laws leads
naturally to the conclusion that the TCPA's explicit provision for state
jurisdiction creates exclusive jurisdiction in state courts.
11
[I]t would flout congressional intent to provide a private
federal remedy for the violation of the federal statute. We
think it would similarly flout, or at least undermine, con-
gressional intent to conclude that the federal courts might
nevertheless exercise federal-question jurisdiction and pro-
vide remedies for violations of that federal statute solely
because the violation of the federal statute is said to be a "re-
buttable presumption" or a "proximate cause" under state
law, rather than a federal action under federal law.
Id. at 812.
In the TCPA, Congress made explicit provision not only for federal
actions by state attorneys general but also for state actions by private
individuals. Had it not done so, we might be left with a question
under Cort v. Ash, 422 U.S. 66 (1975), of whether the TCPA created
an implied federal right of action cognizable as specified in 28 U.S.C.
§ 1331. But of course, in the TCPA Congress did manifest its specific
intent that private TCPA actions should be brought in the state courts.
As in Merrell Dow, "it would flout congressional intent [here] . . . to
conclude that the federal courts might nevertheless exercise federal-
question jurisdiction." 422 U.S. at 812. The particularized congressio-
nal intent manifested in 47 U.S.C. § 227(b)(3) governs, not the gen-
eral proposition announced in § 1331.3
V
International Science argues finally that we should avoid finding
exclusive state jurisdiction for private actions under 47 U.S.C.
§ 227(b)(3) because to do so raises constitutional questions. In partic-
ular, International Science argues that (1) finding exclusive state juris-
diction would result in a violation of the Equal Protection Clause of
the Fourteenth Amendment and (2) interpreting the statute as creating
_________________________________________________________________
3 For precisely the same reason, we find no merit in International Sci-
ence's argument, made first on appeal, that jurisdiction lies by virtue of
28 U.S.C. § 1337(a) which provides that "[t]he district courts shall have
original jurisdiction of any civil action or proceeding arising under any
Act of Congress regulating commerce. . . ." We also reject it because
§ 1337 was not asserted as a basis for jurisdiction in the district court.
12
exclusive state jurisdiction would infringe "the Tenth Amendment
rights of states to govern without meddling from the federal govern-
ment."
We agree with International Science's general assertion that courts
should favor an otherwise permissible interpretation of a statute to
avoid serious constitutional questions. See, e.g., Public Citizen v.
Dept. of Justice, 491 U.S. 440, 466-67 (1989). But that axiom of stat-
utory interpretation neither commands nor permits us to construe a
statute in a way "plainly contrary to the intent of Congress."
DeBartolo Corp. v. Florida Gulf Coast Trades Council , 485 U.S. 568,
575 (1988). As we have already concluded, Congress intended that
private TCPA actions be brought, if at all, in state courts. Having
reached that conclusion, we must address International Science's con-
stitutional challenges.
A
International Science first contends that to read the statute as autho-
rizing exclusive state jurisdiction over private causes of action would
violate the Fourteenth Amendment guarantee of "equal protection of
the laws." U.S. Const. amend. XIV, § 1. As a technical matter, how-
ever, any equal protection challenge to a federal law must arise under
the equal protection component of the Fifth Amendment's Due Pro-
cess Clause, not the Fourteenth Amendment which applies only to
states. Regardless of whether the argument is made under the Four-
teenth Amendment or the Fifth Amendment, however, the standard
for defining the equal protection guarantee is the same. See, e.g.,
Adarand Constructors, Inc. v. Pena, 115 S. Ct. 2097, 2106-08 (1995)
(reaffirming cases holding that Fifth Amendment equal protection
component is substantively equivalent to Fourteenth Amendment's
Equal Protection Clause).
International Science argues that interpreting 47 U.S.C. § 227(b)(3)
to authorize jurisdiction exclusively in state courts would violate
equal protection because the authorization is conditioned by the
phrase, "if otherwise permitted by the laws or rules of a court of [that]
State." Interpreting that clause to allow a private cause of action only
where state law duplicates the TCPA's substantive prohibitions, Inter-
national Science argues that where a state, as Virginia, for example,
13
has no statutory prohibition against unsolicited fax transmissions, citi-
zens of that state would not have the benefit of the federal right,
whereas citizens of other states would.
We believe that this argument is based on a misconstruction of the
nature of the federal right. The clause in 47 U.S.C.§ 227(b)(3) "if
otherwise permitted by the laws or rules of court of a State" does not
condition the substantive right to be free from unsolicited faxes on
state approval. Indeed, that substantive right is enforceable by state
attorneys general or the Federal Communications Commission irre-
spective of the availability of a private action in state court. Rather,
the clause recognizes that states may refuse to exercise the jurisdic-
tion authorized by the statute. Thus, a state could decide to prevent
its courts from hearing private actions to enforce the TCPA's substan-
tive rights. To that extent, the existence of a private right of action
under the TCPA could vary from state to state. That inequality, how-
ever, touches only a statutory permission to enforce privately the
same substantive rights which both the state and the federal govern-
ment can enforce in federal court through other mechanisms. More-
over, because the inequality arises from a classification that is not
based on a fundamental right or impermissible characteristic such as
race, religion, or natural origin, our review of the statutory provision
under the Equal Protection Clause is narrow:
The question is simply whether the legislative classification
is rationally related to a legitimate governmental interest.
Under this standard, the Act is entitled to a strong presump-
tion of validity, and must be sustained if there is any reason-
ably conceivable state of facts that could provide a rational
basis for the classification.
Thomasson v. Perry, 80 F.3d 915, 928 (4th Cir. 1996) (citations,
internal quotes, and emphasis omitted).
We believe that it is readily apparent from the congressional find-
ings contained in the TCPA itself that Congress considered the effect
that a newly created private right of action would have on judicial
administration. Specifically finding that 18 million telemarketing calls
are made daily, Pub. L. No. 102-243, § 2(3), 105 Stat. 2394 (1991),
Congress understandably avoided opening federal courts to the mil-
14
lions of potential private TCPA claims by authorizing private actions
only in state courts, presumably in the small claims courts. Similarly
concerned over the potential impact of private actions on the adminis-
tration of state courts, Congress included a provision to allow the
states to prohibit private TCPA actions in their courts. We have no
doubt that Congress has a legitimate interest in not overburdening
state and federal courts. Nor can it be doubted that Congress has a
legitimate interest in respecting the states' judgments about when
their courts are overburdened. With those interests in mind and recog-
nizing that other enforcement mechanisms are available in the TCPA,
we believe Congress acted rationally in both closing federal courts
and allowing states to close theirs to the millions of private actions
that could be filed if only a small portion of each year's 6.57 billion
telemarketing transmissions were illegal under the TCPA.
The fact that private actions under the TCPA may be permitted in
some state courts and prohibited in others, as determined by the
states, does not render the TCPA violative of the equal protection
component of the Fifth Amendment's Due Process Clause.
B
International Science also argues that to interpret 47 U.S.C.
§ 227(b)(3) as providing for exclusive state court jurisdiction would
"interfere with the Tenth Amendment rights of states to govern with-
out meddling from the federal government." It argues that in creating
exclusive state jurisdiction over private TCPA actions, Congress
impermissibly has commandeered state courts. See New York v.
United States, 505 U.S. 144 (1992).
While we agree that we must be sensitive to any effort by Congress
to commandeer state resources, see New York, 505 U.S. at 155, we
conclude that, in enacting the TCPA, Congress went out of its way
to avoid overstepping the limits of the Tenth Amendment by explic-
itly recognizing the states' power to reject enforcement in their courts
of the federally created right.
An act of Congress may violate the Tenth Amendment if it exceeds
the scope of delegated powers or "invades the province of state sover-
eignty reserved by the Tenth Amendment." New York, 505 U.S. at
15
155. "If a power is delegated to Congress in the Constitution, the
Tenth Amendment expressly disclaims any reservation of that power
to the States; if a power is an attribute of state sovereignty reserved
by the Tenth Amendment, it is necessarily a power the Constitution
has not conferred on Congress." Id. at 156.
In this case, Congress has not commanded state legislatures to leg-
islate, as found impermissible in New York. See 505 U.S. at 178-79.
Rather, it has, at most, directed that state courts enforce federal law,
a requirement imposed on the states directly by the Supremacy Clause
of Article VI, which provides that "the Laws of the United States
which shall be made in Pursuance [of the Constitution] . . . shall be
the supreme Law of the Land; and the Judges in every State shall be
bound thereby, any Thing in the Constitution or Laws of any State to
the Contrary notwithstanding." U.S. Const. art. VI. Indeed, since
Testa v. Katt, 330 U.S. 386 (1947), it has been clear that state courts
may not refuse to enforce federal claims which are similar to state
claims enforced in the same courts, at least where the federal enact-
ment provides for concurrent jurisdiction in state and federal courts.
See also Federal Energy Regulatory Comm'n v. Mississippi, 456 U.S.
742, 760 (1982) (extending Testa to state regulatory body with adju-
dicatory functions).
It is true that in the case before us, we do not have the ameliorating
fact that the TCPA provides for concurrent federal jurisdiction over
private civil actions. To the contrary, in the TCPA Congress took the
unusual step of making state court jurisdiction exclusive. Apparently
recognizing that the exclusivity of state court jurisdiction could create
a problem potentially left unresolved by Testa , Congress avoided any
constitutional issue by refusing to coerce states to hear private TCPA
actions, providing instead that a person or entity may, "if otherwise
permitted by the laws or rules of court of a State," bring a TCPA
action in an appropriate court of that state. 47 U.S.C. § 227(b)(3).
States thus retain the ultimate decision of whether private TCPA
actions will be cognizable in their courts. Indeed, if the state attorneys
general refuse to bring action in federal court, enforcement of the
TCPA will depend entirely on the Federal Communications Commis-
sion. Thus, under the TCPA, Congress respected the balance
demanded by our system of federalism:
16
If state residents would prefer their government to devote its
attention and resources to problems other than those deemed
important by Congress, they may choose to have the Federal
Government rather than the State bear the expense[and
administrative burden] of [the TCPA], and they may con-
tinue to supplement that program to the extent state law is
not pre-empted. Where Congress [thus] encourages state
regulation rather than compelling it, state governments
remain responsive to the local electorate's preferences; state
officials remain accountable to the people.
New York, 505 U.S. at 168. In creating a conditional right of action
to enforce the TCPA in state courts, Congress neither exceeded its
delegated powers nor invaded the province of state sovereignty,
which may still be exercised to prohibit the action. Indeed, from top
to bottom, the private TCPA action reflects Congress' intent to
enhance state sovereignty. Congress enacted the TCPA to assist states
where they lacked jurisdiction; it empowered states themselves to
enforce the TCPA in federal court; it authorized private enforcement
exclusively in state courts; and it recognized state power to reject
Congress' authorization.
VI
While Congress created, in the TCPA, an individual right to be free
from unsolicited fax advertising, it provided for private actions to
enforce the right exclusively in state courts. Accordingly, jurisdiction
of the United States district courts over private TCPA actions may not
be premised on the general federal-question jurisdiction conferred by
28 U.S.C. § 1331. We affirm the ruling of the district court dismissing
this action for lack of subject matter jurisdiction.
AFFIRMED
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