Supreme Court Rules That Automated Phone Call Lawsuits May Be Brought In Federal Or State Courts

The United States Supreme Court recently held that a person who receives an automated debt-collection call on his cellular phone in violation of the federal Telephone Consumer Protection Act ("TCPA") can choose to file a lawsuit in state or federal court.1 The unanimous ruling resolved a split among the federal courts. The Mims decision is important because it may portend additional litigation under the TCPA given that plaintiffs and defendants will have increased access to federal courts.

TCPA

The TCPA2 was enacted in 1991 after consumer complaints about abuses of telephone technology. According to the Court, "Congress determined that federal legislation was needed because telemarketers, by operating interstate, were escaping state-law prohibitions on intrusive nuisance calls."3 The TCPA bans certain invasive telemarketing practices, including:

Placing automated calls to private residences or cellular telephones without prior authorization; Sending unsolicited facsimile transmittals without a preexisting business relationship; and Using auto-dialers to call simultaneously more than one of a business's phone lines. The statute authorizes state attorneys general to bring civil actions to enjoin prohibited practices and recover damages on residents' behalf.4 The statute also allows lawsuits by individuals for statutory violations or violations of Federal Communications Commission regulations.5 In actions by private litigants, the statute provides for damages of $500 or actual monetary loss incurred, whichever is greater, for each violation of the Act or the regulations promulgated pursuant to the Act.6

The Litigation

Plaintiff Mims sued a debt-collection agency (Arrow Financial Services, LLC) in federal court in Florida. Mims alleged that the agency repeatedly used an automatic telephone dialing system or prerecorded or artificial voice to call his cellular phone without his consent. Mims invoked federal-question jurisdiction under 28 U.S.C. § 1331, which provides that federal courts may hear claims "arising under the ... laws ... of the United States." The United States District Court for the Southern District of Florida dismissed the lawsuit for lack of subject matter jurisdiction in light of the TCPA's statement that a private litigant "may" seek redress "in an appropriate court of [a] State," "if [such action is] otherwise permitted by the laws or rules of court of [that] state."7 The United States Court of Appeals for the Eleventh Circuit affirmed the dismissal. This holding aligned the Eleventh Circuit Court with federal appellate courts from the Second, Third, Fourth, Fifth, and Ninth Circuits, which had all previously held that federal courts lacked federal-question jurisdiction over private TCPA actions.8

The Supreme Court's Analysis

The Supreme Court explained that "[t]he question presented is whether Congress' provision for private actions to enforce the TCPA renders state courts the exclusive arbiters of such actions."9 The Court concluded that there was "no convincing reason to read into the TCPA's permissive grant of jurisdiction to state courts any barrier to the U.S. district courts' exercise of the general...