Mims v. Arrow Financial Services, LLC (10-1195)

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LII note: The U.S. Supreme Court has now decided Mims v. Arrow Financial Services, LLC (10-1195).

Oral argument: Nov. 28, 2011

Appealed from: United States Court of Appeals for the Eleventh Circuit (Nov. 30, 2010)

Petitioner Marcus Mims alleges that Respondent Arrow Financial Services violated the Telephone Consumer Protection Act (“TCPA”) by leaving numerous voice mail messages on his cellular phone using an automatic dialer and a prerecorded message. Mims argues that federal jurisdiction exists over private claims under the TCPA because federal courts have broad jurisdiction when questions arise under federal law. Arrow counters that Congress divested federal courts of jurisdiction for private TCPA claims based on the language of the statute. The Eleventh Circuit affirmed a district court decision to dismiss Mims's TCPA claims for lack of subject-matter jurisdiction. The Supreme Court will determine whether Mims may bring a private claim in federal court for alleged violations of the TCPA. The decision will impact the ways in which individuals and businesses can counter abusive telemarketing.

Question presented

Did Congress divest the federal district courts of their federal-question jurisdiction under 28 U.S.C. § 1331 over private actions brought under the Telephone Consumer Protection Act?



Can an individual bring a private claim in a federal court for violations of the Telephone Consumer Protection Act?



Petitioner Marcus Mims alleges that Respondent Arrow Financial Services, LLC ("Arrow”) violated state and federal laws regarding debt collection practices and the federal Telephone Consumer Protection Act ("TCPA”). The TCPA prohibits automatic or prerecorded calls to cellular phones where the called party is charged for the call. Mims claims that Arrow violated the TCPA by calling his cellular phone multiple times using an automatic telephone dialing system and leaving prerecorded messages on his voice mail without his consent. Accordingly, Mims brought a claim against Arrow in the United States District Court for the Southern District of Florida.

Mims sought damages and equitable relief under the federal Fair Debt Collection Practices Act ("FDCPA”) and the Florida Consumer Collection Practices Act ("FCCPA”). . He also asked the court for a permanent injunction to prohibit Arrow from future actions vioating these laws and the TCPA. Arrow and Mims agreed to dismiss the claims under the FDCPA and the FCCPA.

Arrow then moved to dismiss Mims’ claim for violations of the TCPA, citing a lack of subject-matter jurisdiction for the district court under Federal Rule of Civil Procedure 12(b)(1). The district court granted the motion to dismiss. The court ruled that Congress gave jurisdiction over the TCPA exclusively to state courts, so there was neither a federal question under Section 1331 to establish jurisdiction in a federal court nor any other basis for jurisdiction.

Mims appealed the district court’s decision to the United States Court of Appeals for the Eleventh Circuit. The Eleventh Circuit affirmed the district court on the grounds that federal courts lack subject-matter jurisdiction for private claims brought under the TCPA. On June 27, 2011, the Supreme Court granted certiorari to determine whether federal courts can hear TCPA claims.

Petitioner Mims argues that federal courts have jurisdiction over private claims brought under the Telephone Consumer Protection Act ("TCPA”), because federal courts have broad jurisdiction over federal law claims and the Act does not require private claims to be brought in state court. Respondent Arrow counters that Congress limited the federal courts' jurisdiction over the TCPA by including language in the Act that expressly limits private actions to state courts.

Petitioner Mims argues that the Supreme Court should interpret the TCPA as granting federal jurisdiction over private actions because there is a federal interest in protecting consumers from unwanted phone calls like those Mims received. According to Mims, telemarketing can be "intrusive and costly,” and states have had difficulty regulating telemarketers on their own. Mims further claims that Congress enacted the TCPA, rather than relying on state statutes, because it wanted to ensure that freedom of speech was still protected. Therefore, Mims argues that federal courts should have jurisdiction over private claims under the TCPA to ensure that federal law is interpreted uniformly to protect consumers throughout the country.

In support of Arrow, DBA International ("DBA”), an association for debt purchasers, argues that permitting federal jurisdiction would be harmful to consumers and defendants because litigating in a federal court is costly and complicated. ACA International and DBA contend that state small claims courts are cheaper, more efficient, and faster than federal courts because state small claims courts have a smaller court filing fee, often do not permit discovery, do not always permit attorney representation, limit the right to appeal, and are not required to follow the Federal Rules of Civil Procedure. DBA also claims that state courts are more accessible to consumers because there are far more state court facilities than federal courts. The National Federation of Independent Business's Small Business Legal Center further asserts that federal court jurisdiction and its associated costs and time will harm small businesses, which will often be unable to afford to defend against frivolous claims.

Mims contends that the TCPA's damages provisions will lose strength, and that some private plaintiffs will be left without a remedy, if there is no federal jurisdiction over private claims. He argues that plaintiffs could then only bring actions in state courts, but notes that not every state allows private plaintiffs to bring TCPA actions. Mims claims that, because the government is only explicitly authorized to take action where a pattern of violations is established, prohibiting federal courts from hearing private claims could reduce the number of total claims, hindering the government's ability to establish a pattern of TCPA violations and leaving consumers without a judicial remedy.

Respondent Arrow argues that, because there is no minimum monetary amount that must be pleaded when a claim is brought under federal-question jurisdiction, federal jurisdiction over private TCPA claims would be burdensome and inefficient because it would flood the federal courts with claims for nominal amounts that are better suited for small claims court. In support, DBA contends that, even if only a small percentage of telemarketing transactions were illegal and resulted in lawsuits each year, the federal courts would be overwhelmed with millions of private claims due to the high volume of calls made annually.



At issue in this case is whether the TCPA allows a private plaintiff to bring an action in federal district court under 28 U.S.C. § 1331. The TCPA states that a private plaintiff “may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State . . . an action.” The federal-question jurisdiction statute, 28 U.S.C. § 1331, confers on federal courts “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.”

Petitioner Mims argues that 28 U.S.C. § 1331 was written by Congress to confer broad jurisdiction on federal courts. He contends that, as long as a plaintiff’s complaint asserts a “colorable right of action” under federal law, § 1331 federal-question jurisdiction is available. Jurisdiction under § 1331, he argues, is available unless affirmatively removed by Congress. Mims points out that the Court has only once held that a federally-created right of action did not “arise under” federal law, and that exception is not applicable to the TCPA.

On the other hand, Respondent Arrow asserts that federal courts have only limited jurisdiction. Arrow agrees with Petitioner Mims that federal-question jurisdiction is generally available for claims that “arise under” federal laws. However, Arrow contends, Congress makes exceptions to the broad statutes, such as § 1331, that grant jurisdiction to federal courts. Arrow argues that Congress made such an exception in the TCPA, which Arrow claims permits only state courts to hear private claims.

Congressional Intent behind the Telephone Consumer Protection Act

Mims argues that Congress does not need to expressly grant subject-matter jurisdiction when it creates a federal right of action. He contends that, when Congress legislates without specifically addressing the issue of federal jurisdiction, as long as there is a plausible claim that Congress intended to create a federal right of action, the statute should be interpreted to grant § 1331 jurisdiction. Mims argues that the TCPA clearly created a federal right of action because it is a federal statute that can only give rise to private rights of action if there is a violation of federal law. Mims further argues that the legislative history does not support reading a § 1331 limitation into the TCPA.He claims that the legislative history is silent about exclusive jurisdiction; Mims argues this silence suggests that Congress did not intend to confer exclusive state jurisdiction.

On the other hand, Arrow contends that Congress enacted the TCPA as a direct response to states’ inability to regulate interstate telephone activity. The state-focused language was written to express an objective to help the states help themselves, Arrow argues. Arrow points out that the law’s sponsor specifically referenced small claims court as the proper location for private actions; Arrow argues this should suggest that Congress believed state court was more appropriate for private TCPA claims than federal court. Arrow further states that Congress conditioned the private right of action in the TCPA not only on the “laws” of the State, but also on “the rules of court of a State,” which Arrow believes suggests that Congress meant for state courts, rather than federal courts, to control the right of action.

Statutory Interpretation of the Telephone Consumer Protection Act

Mims maintains that, under the plain language of the statute, the TCPA does not affirmatively strip away federal jurisdiction. Mims points out that, under the TCPA, an action “may, if otherwise permitted by the laws or rules of court of a State,” be brought in an “appropriate court of that State.” Mims argues that Congress does not need to expressly grant subject-matter jurisdiction to federal courts when it creates a right of action under federal law. In fact, he contends, federal jurisdiction over an action arising under federal law can only be precluded if a statute affirmatively removes the jurisdiction given to federal courts. Thus, Mims claims, federal jurisdiction cannot be defeated by “inferences”, “doubtful constructions”, and the “implications” of the statute and must be present for private claims under the TCPA.

On the other hand, Arrow contends that Mims’ reading of the word “may” and his emphasis on its permissive nature are misguided. See Arrow argues that the way in which “may” is qualified in the statute (by “if otherwise permitted”) makes the plain language of the statute even more state-court focused. Accordingly, Arrow asserts that “may, if otherwise permitted by the laws and rules of court of a state” means a private plaintiff may bring a claim only to the extent the claim is permitted by the state court. Arrow further claims that the language of the provision should be read within the broader context of the TCPA as a whole. Arrow argues that, in other sections of the TCPA, Congress used language that references both federal and state courts whenever it meant to authorize concurrent jurisdiction. Also, Arrow adds, wherever Congress authorized federal jurisdiction elsewhere in the TCPA, Congress also outlined details about venue and service of process. In this context, Arrow asserts, Congress’ silence about federal jurisdiction suggests that Congress’ omission of authorization was deliberate, and that state courts have exclusive jurisdiction over private TCPA claims.

Mims also argues that a statute's provision for one type of judicial authority does not imply that a pre-existing type of jurisdiction is removed or prohibited, barring explicit language to that effect. The TCPA, Mims reiterates, does not say anything to indicate that state courts have exclusive jurisdiction or to remove federal jurisdiction. Mims further maintains that the statute’s reference to state court jurisdiction is not superfluous, simply because federal courts also have jurisdiction. . Mims asserts that, not only does the language reiterate that federal jurisdiction is not exclusive, but it also states the conditions under which a state court must hear a TCPA action by stating that a plaintiff may bring an action “if otherwise permitted by the laws or rules of a State.”

Arrow argues that one of the basic canons of statutory interpretation is to construe the law so that no part of the provision will be “superfluous, void or insignificant.” The language of the TCPA states that a private plaintiff “may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State, an action.” However, state courts already have concurrent jurisdiction over federal causes of action and would not need explicit authorization from the TCPA to hear TCPA cases, Arrow contends; the language would be meaningless if it only existed to restate a pre-existing rule. Thus, Arrow interprets the language as an indication of Congress’ intent for the TCPA to supplement state law and state courts, and to keep private actions exclusively in state court.



In this case, the Supreme Court will consider whether the Telephone Consumer Protection Act allows a private plaintiff to bring an action in federal district court under 28 U.S.C. § 1331. Petitioner Marcus Mims argues that it does, contending that federal-question jurisdiction cannot be removed from a statute, absent affirmative language from Congress. Respondent Arrow Financial Services, on the other hand, asserts that the legislative history of the statute and cannons of statutory interpretation confirm Congress’ intention to permit only state court private claims under the statute. The Supreme Court’s decision will help define the legal options available for the victims of improper telemarketing.



Prepared by: Amy Hsu and Alison Skaife

Edited by: Eric Schulman

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