The U.S. Court of Appeals for the Third Circuit has ruled, 2-1, in Landsman & Funk, PC v. Skinder-Strauss Associates that federal district courts have diversity jurisdiction over “junk fax” class actions brought under the federal Telephone Consumer Protection Act (TCPA).
Previously, in ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir. 1998), the Third Circuit held that private TCPA claims do not present a federal question, but ErieNet did not address the issue of diversity jurisdiction.
The TCPA declares it unlawful under federal law “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” It provides for enforcement by both private parties and state attorneys general. Section 227(b)(3), titled “Private right of action,” states that actions may be brought in state court and is silent as to possible federal court jurisdiction.
In ErieNet, the Third Circuit held that Congress did not intend to grant federal question jurisdiction over private TCPA claims to federal courts, but the diversity jurisdiction issue was not before it. With Landsman, the Court joins the majority of courts in holding that “Congress did not intend for exclusive state court jurisdiction. The TCPA does not strip federal courts of diversity jurisdiction over actions brought under Section 227(b)(3).”
Because the Class Action Fairness Act (28 U.S.C. §1332(d)) permits class actions in federal court if there is at least minimal diversity and an aggregate amount of at least $5 million in controversy, diversity jurisdiction is presumed to exist unless Congress intended to take it away in the TCPA. The Third Circuit concluded that “nothing in the statutory text or legislative history of the TCPA expressly indicates that Congress intended to strip federal courts of their diversity jurisdiction under §1332 over TCPA claims.”