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Federal courts can entertain suits by individuals who receive unsolicited faxes, the 2nd U.S. Circuit Court of Appeals has determined in a ruling of first impression. The unanimous decision, which reversed a ruling by an Eastern District judge, clarified the circuit’s view of the Telephone Consumer Protection Act (TCPA) and its holding in Foxhall Realty Law Offices, Inc. v. Telecommunications Premium Services, Ltd., 156 F.3d 432 (1998). Writing for the circuit in Gottlieb v. Carnival Corp., 05-cv-2733, 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 Telephone Consumer Protection Act 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 on Staten Island. From 2001 to 2004, Gottlieb received more than 1,000 unsolicited fax advertisements from Carnival Corporation, the cruise company. 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 New York General Business Law, �396-aa, a parallel state statute. Eastern District Judge I. Leo 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 circuit’s 1998 ruling in Foxhall, which held that state courts have “exclusive” jurisdiction over private actions under the act. In its ruling last week on the matter, however, the circuit said the holding in Foxhall was more narrow. While it held that federal courts did not have federal question jurisdiction over these claims, it did not say the same of federal diversity jurisdiction. 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,” the judge 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 of Edwards Angell Palmer & Dodge represented Gottlieb. Joseph J. Saltarelli of Hunton & Williams represented Carnival.

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