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Federal courts can entertain suits by individuals who receive unsolicited faxes, the 2d U.S. Circuit Court of Appeals has determined in a ruling of first impression. Gottlieb v. Carnival Corp., No. 05-cv-2733. The unanimous decision, reversing a ruling by U.S. Judge I. Leo Glasser of the Eastern District of New York, clarified the circuit’s view of the Telephone Consumer Protection Act (TCPA) of 1991 and, in particular, its ruling in Foxhall Realty Law Offices Inc. v. Telecommunications Premium Services Ltd., 156 F.3d 432 (1998). Writing on behalf of the 2d Circuit, Judge Sonia Sotomayor said that “Congress did not intend to divest the federal courts of diversity jurisdiction over private causes of action” under the act. “In the absence of a clear expression of congressional intent that federal courts under no circumstances are to hear private TCPA claims, we have neither the authority nor the inclination to countenance such a result,” she wrote. To qualify for federal diversity jurisdiction, a plaintiff must allege in excess of $75,000 in damages. The TCPA fixes damages at $500 per unsolicited fax, and allows treble damages-$1,500 per fax-if the faxes are sent willfully. Plaintiffs would need to receive more than 150 unsolicited faxes, or allege more than 50 willful faxes, to sue in federal court. The suit in question involves Sherman Gottlieb, a travel agent who works from his home in Staten Island, N.Y. From 2001 to 2004, Gottlieb received more than 1,000 unsolicited fax advertisements from cruise company Carnival Corp. He sent the company written instructions asking it to stop sending the advertisements and made the same request via telephone, to no avail. Gottlieb sued in federal court, seeking treble damages for each unsolicited fax. He also sought an additional $100 for each fax sent in violation of N.Y. Gen. Bus. Law, � 396-aa, a parallel state statute to the TCPA. Glasser dismissed both claims, saying Gottlieb lacked subject-matter jurisdiction for his claim under the Telephone Consumer Protection Act, and supplemental jurisdiction for his state law claim. Glasser’s ruling hinged on the 2d Circuit’s 1998 ruling in Foxhall, which held that state courts have “exclusive” jurisdiction over private actions under the act. However, according to Sotomayor, the Foxhall ruling is more narrow. While federal courts do not have federal-question jurisdiction over these claims, that is not the case as far as federal diversity jurisdiction is concerned. Nothing in the TCPA expressly divested federal courts of diversity jurisdiction over private actions under the TCPA. Because the district court erred in finding a lack of jurisdiction under the TCPA, a refusal to exercise supplemental jurisdiction was improper as well. Sotomayor suggested that the legislative history of the act, which makes plain that small claims courts would be the best place for these claims, simply did not conceive that a private claim under the act could meet the $75,000 requirement of diversity jurisdiction. “Moreover, if Congress divested the federal courts of federal question jurisdiction because it did not want federal courts to hear cases involving small claims, that concern is not implicated when the amount-in-controversy requirement for diversity jurisdiction is met,” Sotomayor wrote. The court also vacated the trial court’s ruling on the state law claim. It returned the case to Glasser for further proceedings. Judges James L. Oakes and Richard C. Wesley concurred on the ruling. Andre K. Cizmarik and Anthony J. Viola from the New York office of Boston’s Edwards Angell Palmer & Dodge represented Gottlieb. Joseph J. Saltarelli from the New York office of Richmond, Va.-based Hunton & Williams represented Carnival.

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