Supreme Court: TCPA Violators Can Be Sued in Federal Court

Late 2011, an important Federal statute – the Telephone Consumer Protection Act (TCPA) - began to receive a lot of attention, when Members of Congress sought to weaken the TCPA by removing important consumer protections.  The bill, HR 3035, would have made significant changes to the Telephone Consumer Protection Act (TCPA); the most significant of which would have permitted businesses, including debt collectors, to use automatic telephone dialing systems (auto-dialers; robodialers) to call a person’s cellular telephone regardless of whether the person had given “prior express consent” or even provided their cell phone number to these businesses. Thankfully, Consumer Advocates were successful in defeating the measure and this year will continue to fight any measure to weaken the TCPA.

Notably, consumers obtained another victory recently when, on January 18, 2012, the United States Supreme Court issued an important decision in Mims v. Arrow Financial Services, Inc., __ S.Ct. __ (2012). In Mims v. Arrow, the court held that federal question subject matter jurisdiction exists for cases brought pursuant to the Telephone Consumer Protection Act, 47 U.S.C. §227(b), (“TCPA”) despite unique language in the statue that arguably vested exclusive jurisdiction for such cases in state court.  In other words, consumers who have suffered abusive use of telephone technology will now be able to bring claims in federal court and potentially avail themselves of increased consumer protections if they live in a state whose laws do not provide them sufficient protections.   

Writing for a unanimous Court, Justice Ginsberg overruled the Third, Second, Fifth and Fourth Circuits and adopted the Seventh and Circuits’ reasoning, that the TCPA was no exception to the general rule in 28 U.S.C. § 1331 that cases that “arising under the . . . laws . . . of the United States,” can be brought in federal court. Justice Ginsberg went on to note that concurrent jurisdiction exists for TCPA claims so that plaintiffs may bring claims in state court federal.

The TCPA broadly prohibits use of any automatic telephone dialing system or artificial or prerecorded voice to call any cell phone. There is a “prior express consent” affirmative defense available to defendants if they can show that the plaintiff provided that cell number to the caller with regard to the specific account that the call concerned.

“Any person or entity,” not just consumers, may sue for damages and injunctive relief. 47 U.S.C. § 227(b)(3). Damages are substantial: $500 per violation, strict liability, and up to $1,500 per violation for “willful or knowing” violations. Because the type of calls covered by the TCPA are made by equipment designed to efficiently, systematically and rapid-fire make these “robo-calls,” violations (and damages) add up quickly.  Thus, the minimum damages for a prevailing plaintiff with 100 calls is $50,000; the maximum damages for that plaintiff would be $150,000. Plaintiffs are also entitled to obtain injunctive relief, i.e. an order enjoining defendant from calling in violation of the Act. The TCPA is not fee-shifting, although many complimentary state auto-dialer statutes are.

Some practical law practice take-aways from Mims v. Arrow Financial:


  1. The obvious: standalone TCPA plaintiffs may now sue in federal court. In many jurisdictions, plaintiffs in federal court are entitled to more discovery than in state court. This will likely lead to more verdicts for willful violations, because discovery from defendant (e.g. warnings not to violate the Act from trade organizations) helps a plaintiff prove the defendant’s state of mind.


  1. Although the decision does not expressly decide the issue, Mims suggests, consistent with Federal Communications Commission orders, that the TCPA’s cell phone prohibitions applies regardless of the content of calls. For example, the Mims case was filed by a debtor against a debt collection agency. This Supreme Court decision holding that a debtor may sue a debt collector in federal court will make quick work of debt collector defendants’ previously frequent arguments that the TCPA applies only to telemarketers.


  1. TCPA cases are often filed hand-in-hand with Fair Debt Collection Practices Act (“FDCPA”) claims. Previously, a favorite tactic of debt collector defendants in jurisdictions where courts held there was no independent federal subject matter jurisdiction for TCPA claims was to send a Fed. R. Civ. P. 68 offer of judgment sufficient to moot all claims but the TCPA claims (which were the most valuable), and then move to dismiss the remainder of the case for want of subject matter jurisdiction.


  1. The opinion highlights a few quote-able quotations from congressional testimony that many practitioners may have previously overlooked:

 -In enacting the TCPA, Congress made several findings relevant here. “Unrestricted telemarketing,” Congress determined, “can be an intrusive invasion of privacy.”TCPA, 105 Stat. 2394, note following 47 U. S. C. §227 (Congressional Findings) (internal quotation marks omitted). In particular, Congress reported, “[m]any consumers are outraged over the proliferation of intrusive, nuisance [telemarketing] calls to their homes.” Ibid. (internal quotation marks omitted). “[A]utomated or prerecorded telephone calls” made to private residences, Congress found, were rightly regarded by recipients as “an invasion of privacy.” Slip Op at 3.

-Computerized calls are the scourge of modern civilization. They wake us up in the morning; they interrupt our dinner at night; they force the sick and elderly out of bed; they hound us until we want to rip the telephone right out of the wall. Slip Op. at 15.

-"The amount of damages in this legislation is set to be fair to both the consumer and the telemarketer.”  Slip Op. at 15.

Of course, although they appear in the opinion, these quotes are NOT attributable to the Supreme Court -- persons who cite these quotes need to read the opinion to make sure that they are properly attributed, for example to Senator Hollings, the TCPA’s sponsor.

There is not much negative for consumers to take away from this unanimous decision. This author is hopeful to see more consumer-friendly Supreme Court jurisprudence in the future. Consumer protection laws such as the TCPA and FDCPA not only help down-and-out consumers maintain a sense of personal dignity and privacy by providing them a choice as to when and how they wish to be contacted, they also turn the tables through giving consumers the power to sue. My hope is that TCPA actions against companies that decide to “take their chances” and use dialers to call cell phones also helps level the playing field by giving a competitive advantage to companies that maintain strict compliance.


Written by: Alex Burke of Burke Law Offices, LLC (Chicago, IL)