WATSON v. NCO GROUP, INC. (E.D.Pa. 11-28-2006)

LEGROME DAVIS, District Judge

AND NOW this 28th day of November 2006, it is hereby ORDERED that Defendants' motion for reconsideration (Doc. No. 21) is DENIED.

The complaint asserts multiple causes of actions seeking redress for hundreds of annoying prerecorded or mechanical telephone calls allegedly made by Defendants to Plaintiff in an attempt to recover a debt that Defendants mistakenly believed Plaintiff owed. In its October 3, 2006 Order (Doc. No. 20), this Court granted in part and denied in part Defendants' motion to dismiss the complaint. The Court dismissed Plaintiff's claim under the Federal Communications Act, 47 U.S.C. § 151, et seq, and denied Defendants' motion to dismiss the cause of action under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. Defendants made no motion with respect to Plaintiff's claim alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. Thereafter Defendants filed a motion for reconsideration asserting for the first time that the Court lacks subject matter jurisdiction to hear Plaintiff's TCPA claim.

Though Defendants failed to include their subject matter jurisdiction defense in the original motion to dismiss, it is proper for the Court to consider the issue in this motion. The allegation that the Court lacks subject matter jurisdiction is a defense that can never be waived or forfeited. U.S. v. Cotton, 535 U.S. 625, 630 (2002).

In relevant part, the TCPA reads:

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 — (A) an action based on a violation of this subsection or the regulations prescribed under this subsection to enjoin such violation, (B) an action to recover for actual monetary loss from such a violation, or to receive $500 in damages for each such violation, whichever is greater, or (C) both such actions.

47 U.S.C. § 227(b)(3)(A-C). In Erienet, Inc. v. Velocity Net, Inc. the Court of Appeals for the Third Circuit interpreted this portion of the statute to mean that "Congress intended to authorize private causes of action only in state courts and to withhold federal jurisdiction." 156 F.3d 513, 516 (3d Cir. 1998) (emphasis in original). Many other appellate courts have concluded similarly. See e.g. Murphy v. Lanier, 204 F.3d 911, 915 (9th Cir. 2000); International Science Technology Institute, Inc. v. Inacom Communications, Inc., 106 F.3d. 1146, 1152 (4th Cir. 1997); Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507, 510 (5th Cir. 1997); but see Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 451 (7th Cir. 2005). Plaintiff argues that Erienet only forecloses federal question jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, and that both supplemental and diversity jurisdiction are viable under Erienet and the facts of this case.

It must be noted from the outset that original jurisdiction pursuant to sections 1331 and 1337 were the only types of jurisdiction at issue in Erienet. 156 F.3d at 516. The court did not discuss the effects of its holding on supplemental or diversity jurisdiction.

Plaintiff's interpretation of Erienet is correct and this Court has supplemental jurisdiction over Plaintiff's TCPA claim. The Court has supplemental jurisdiction over any cause of action that is of the same "case or controversy" as a claim for which the Court has original jurisdiction. 28 U.S.C. § 1367(a); see also Arbaugh v. Y H Corp., 126 S.Ct. 1235, 1240 (2006). The case or controversy requirement is met and supplemental jurisdiction is established where the claims arise from a "common nucleus of operative fact" and the "plaintiff's claims are such that he would ordinarily be expected to try them in one judicial proceeding." United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1996); see also DaimlerChrysler Corp. v. Cuno, 126 S.Ct. 1854, 1858 (2006). To interpret Erienet to foreclose supplemental jurisdiction would produce a result that is unsupported by the language and intent of the TCPA, and is inconsistent with the purpose of supplemental jurisdiction. In this case, the Court has original jurisdiction over Plaintiff's FDCPA claim and the facts supporting that cause of action are identical to those supporting the TCPA claim. If the Court dismissed the TCPA claim for lack of jurisdiction, Plaintiff would refile in state court, thus creating parallel actions based on the same facts in two different fora. This would promote a needless waste of resources through duplicative discovery and motion practice, and would create the possibility of conflicting factual findings and legal holdings. See Klein v. Vision Lab Telecommunications, Inc., 399 F.Supp.2d 528, 534 (S.D.N.Y 2005) ("Such an interpretation would also undermine the purposes of supplemental jurisdiction by requiring parties who bring TCPA claims along with other federal claims to maintain separate parallel actions in state and federal court."); see also Turner v. Crawford Apartment III, L.P., 449 F.3d 542, 551 (3d Cir. 2006);

This Court's decision is in accord with the views of the Second Circuit Court of Appeals in Gottlieb v. Carnival Corp.. 436 F.3d 335, 343 (2d Cir. 2006). After specifically considering whether a federal court could exercise supplemental jurisdiction over a TCPA claim, the Second Circuit concluded that the TCPA did not confer the authority, nor did the court have the inclination, to deny supplemental jurisdiction for TCPA claims. Id. Federal courts prior to Gottlieb have reached the same conclusion. See Klein, 399 F.Supp.2d at 534; Kinder v. Citibank, 2000 WL 1409762, at * 3 (S.D. Cal. Sept. 14, 2000) ("Nothing in the Ninth Circuit's analysis suggests that TCPA precludes district courts from hearing private TCPA claims where some other independent basis for jurisdiction exists, such as diversity of citizenship or supplemental jurisdiction.").

Like supplemental jurisdiction, diversity jurisdiction is not addressed in the language of the TCPA or in the Third Circuit'sErienet opinion. See Erienet, 156 F.3d 513. And as was the case with supplemental jurisdiction, the majority of courts considering the issue have determined that the TCPA does not foreclose a federal district court's exercise of diversity jurisdiction over private claims. See Gottlieb, 436 F.3d at 340;Klein 399 F.Supp.2d at 534; Kinder, 2000 WL 1409762, at *3; Adler v. Vision Lab Telecommunications, Inc., 393 F.Supp.2d 35, 37 (D.D.C. 2005); Kopff v. World Research Group, LLC, 298 F.Supp.2d 50, 55 (D.D.C. 2003); see also Clear Air Council v. Dragon Intern. Group, 2006 WL 2136246, at *4 (M.D. Pa. July 28, 2006) (citing Gottlieb and finding that the Class Action Fairness Act, 28 U.S.C 1332(d)(2), provides an independent basis for TCPA jurisdiction). This Court is convinced that diversity of citizenship remains a viable means to establish subject matter jurisdiction over a TCPA claim. To conclude otherwise would create the anomaly in which a plaintiff asserting state law claims for abusive phone practices could bring those claims in federal court based on diversity, while plaintiff's parallel TCPA claim could only be filed in state court. See Gottleib, 436 F.3d at 342. As stated above, such a bifurcation of related cases should be avoided. See Klein, 399 F.Supp.2d at 534. Furthermore, diversity jurisdiction was established, at least in part, to ensure a fair trial by protecting non-citizens from local prejudices potentially encountered in state court. See id. at 340; Baltimore Bank for Cooperatives v. Farmers Cheese Co-op, 583 F.2d 104, 112 (3d Cir. 1978); Corwin Jeep Sales Services, Inc. v. American Motor Sales Corp., 670 F.Supp. 591, 595 (M.D. Pa. 1986). There is nothing to indicate either in fact or in Congress's perception that TCPA claims are uniquely free from these prejudices such that the protections afforded to non-citizens by diversity jurisdiction can or should be abrogated.

Diversity jurisdiction is established in an action between citizens of different states where the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). TCPA § 227(b)(3) entitles Plaintiff to recover at least $500 for each call received from Defendants, and Plaintiff alleges that more than 200 calls were received. Therefore, Plaintiff has met the statutory minimum for diversity jurisdiction notwithstanding actual and statutory damages he may recover for claims brought under FDCPA. Furthermore, complete diversity of citizenship exists because Plaintiff is a citizen of Florida and all Defendants are citizens of other states. Pl.'s Resp. at 11.

In sum, the Court finds that although not pled in the original complaint, the Court has subject matter jurisdiction over Plaintiff's TCPA claims either through supplemental or diversity jurisdiction. Therefore, Defendants' motion for reconsideration (Doc. No. 21) is DENIED.

In this motion for reconsideration, Defendants also argue that the Court conducted a flawed legal analysis and erred in denying the original motion to dismiss the TCPA claim. Under Local Rule of Civil Procedure 7.1, however, reconsideration is proper only where there has been an intervening change in controlling law, when new evidence has become available, when there is a need to correct a clear error, or to prevent manifest injustice. Defendants have presented no new evidence or identified any change in controlling law or clear legal error. Defendants ask only that the court "rethink what it had already thought through" — a request which is improper under our Local Rules. See Glendon Energy Co. v. Borough of Glendon, 836 F.Supp. 1109, 1122 (E.D. Pa. 1993) (internal quotations omitted).