Charvat v. NMP, LLC

Citations: 703 F. Supp. 2d 735; 2010 WL 1257589; 2010 U.S. Dist. LEXIS 31983Docket: 2:09-mj-00209

Court: District Court, S.D. Ohio; March 31, 2010; Federal District Court

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Philip Charvat filed a lawsuit against NMP, LLC and Media Synergy Groups, LLC, claiming unlawful telemarketing practices due to 31 calls received at his residence, violating the Telephone Consumer Protection Act (TCPA) and the Ohio Consumer Sales Practice Act (CSPA). Charvat alleges 276 violations, including failures to obtain consent, identify the caller, maintain do-not-call records, and state the purpose of calls. He asserts 123 TCPA claims with total damages of $184,500 and 153 CSPA claims for $30,600, along with attorney's fees of at least $50,000 and damages for invasion of privacy.

The court, presided over by District Judge Edmund A. Sargus, Jr., addressed the defendants' motion to dismiss under Rules 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim. The defendants argued that the plaintiff did not meet the amount in controversy requirement for diversity jurisdiction, which necessitates exceeding $75,000. The court noted that while the TCPA allows for state court actions, it does not clarify whether federal courts have jurisdiction under these claims. Ultimately, the court concluded it lacked jurisdiction over the case and granted the defendants' motion to dismiss.

In 2004, the Sixth Circuit unanimously established that federal question jurisdiction over TCPA claims is 'well-settled.' However, in a 2009 published opinion, the Sixth Circuit questioned this stance, stating that the issue is not settled and chose not to address it since it was not raised. At least six federal circuit courts have concluded that federal question jurisdiction is lacking for private TCPA claims. Nevertheless, the Sixth Circuit acknowledged in dicta that the Seventh Circuit's decision in Brill and then-Judge Alito's dissent in ErieNet raised significant doubts about this majority view.

In Brill, the Seventh Circuit recognized the consensus among six appellate courts against federal question jurisdiction for TCPA claims but posited that this consensus conflicted with Supreme Court rulings in Grable and Breuer. The court in Grable determined that federal question jurisdiction does not require a private right of action under federal law when a federal tax issue is present, emphasizing the national importance of federal tax litigation. The court found that the current case is distinguishable from Grable as it does not involve federal statutes or a national interest. In Breuer, the Supreme Court addressed the question of removal under the FLSA, highlighting that actions may be maintained in both federal and state courts, further supporting the notion that TCPA claims do not invoke federal jurisdiction. Overall, the court agrees with earlier findings that no federal question jurisdiction exists for TCPA claims, noting that neither Brill nor Alito's dissent supports a contrary conclusion.

The plaintiff argued that the term 'maintained' should be interpreted as an explicit exception to the removal authority under 28 U.S.C. § 1441(a), but the Supreme Court rejected this view, asserting that the language in the Fair Labor Standards Act (FLSA) does not represent such an exception. The Brill court referenced the Supreme Court's ruling in Breuer, clarifying that the ability to litigate a federal claim in state court does not preclude removal based on federal-question jurisdiction. However, the Brill court noted that the nuances of Breuer's ruling do not directly resolve the issue at hand.

Additionally, the Sixth Circuit highlighted then-Judge Alito's dissent in ErieNet, which questioned the prevailing opinion that Telephone Consumer Protection Act (TCPA) claims lack federal question jurisdiction. Alito argued that the Supreme Court's decision in Tafflin v. Levitt, which confirmed that a permissive grant of federal jurisdiction does not eliminate state court concurrent jurisdiction, should apply here. Tafflin determined that the RICO statute’s language allowing claims in federal court did not exclude state courts from adjudicating such claims. Alito contended that similar reasoning applies to the TCPA's language, allowing actions in state courts if permitted by state law.

However, the ErieNet majority declined to adopt Alito's view, noting that Tafflin dealt with state court jurisdiction while ErieNet addressed federal court jurisdiction. The Tafflin Court emphasized the presumption of state court competence in federal claims, which can only be rebutted by explicit statutory language or significant legislative history. Conversely, the ErieNet majority asserted that federal courts, unlike state courts of general jurisdiction, operate under limited jurisdiction and require specific constitutional or statutory authority to hear cases. Federal jurisdiction is solely derived from Congressional authority, which can be adjusted within constitutional limits.

The Court cannot extend the jurisdictional principles established in Tafflin to the current case, aligning instead with the Sixth Circuit's unanimous ruling in Dun-Rite and similar decisions from several other Circuits, which assert that the TCPA provides a private right of action only in state courts. Regarding diversity jurisdiction, dismissal is warranted if it is legally certain that the claim does not meet the required jurisdictional amount. Attorney's fees are generally not included in this calculation unless stipulated by contract or statute. 

In this case, the Plaintiff claims TCPA damages totaling $184,500, calculated by identifying multiple violations for each phone call, with requests for treble damages. For instance, one alleged automated call from September 30, 2008, is said to involve five separate violations, potentially yielding $7,500 in damages. The Plaintiff argues that with 31 calls made over three months, the total damages could exceed the jurisdictional threshold under § 1332 if multiple violations per call are recognized. However, if the Court considers only one violation per call, the damages would be significantly lower. The Sixth Circuit has previously determined that TCPA violations are assessed on a per-call basis but the Plaintiff contends that his claims under § 227(b) differ from those under § 227(c). Both subsections allow recovery for actual losses or statutory damages per violation, with treble damages available for willful violations.

Plaintiff argues that there is a distinction between § 227(b)(3)(B), which he interprets as relating to automated calls, and § 227(c)(5), which allows recovery on a per-call basis. He cites an Ohio appellate court ruling in Charvat v. Ryan, which supports recovery per violation under TCPA § 227(b)(3) for automated calls that impede enforcement of TCPA rights. However, the current court has determined that damages under § 227(b)(3)(B) should be assessed on a per-call basis, limiting recovery to one amount per call regardless of multiple violations. The absence of the term 'call' in § 227(b) does not warrant a different interpretation than § 227(c), as § 227(b) encompasses more than just phone calls, including fax transmissions. Legislative intent, as expressed by Senator Hollings, indicates that the TCPA was not intended to provide excessive damages for automated calls compared to live calls. Thus, damages for the Plaintiff total $46,500, calculated at $1,500 per call for 31 calls.

Additionally, Plaintiff seeks damages under the Ohio Consumer Sales Practices Act (CSPA), which allows $200 for each violation. He claims $30,600 for 153 violations. Ohio courts permit recovery for multiple violations per call if they stem from separate acts, but if the violations arise from a single transaction, recovery is limited to $200. Although Plaintiff alleges multiple violations per call, if those violations are linked to one transaction, his recovery is restricted to one amount per call, as established in Charvat, where the court limited statutory damages to one recovery for each telemarketing call.

Plaintiff claims damages of up to $6,200 based on 31 telemarketing calls. Additionally, Plaintiff alleges invasion of privacy under Ohio law, which Defendants seek to dismiss under Rule 12(b)(6), arguing the frequency of calls does not constitute an invasion of privacy. The Court, lacking jurisdiction, does not address this dismissal but must evaluate damages for diversity jurisdiction. Under Ohio law, invasion of privacy can occur through unwarranted appropriation of personality, publicizing private affairs, or wrongful intrusion causing emotional distress. In *Housh v. Peth*, the court found harassment through daily calls constituted an invasion of privacy, while in *Irvine v. Akron Beacon Journal*, an appellate court upheld a jury's finding of invasion based on persistent hang-up calls. Plaintiff asserts that 31 automated calls over three months, especially after requesting to be removed from the list, constitute intentional intrusion and harassment, causing significant emotional distress including agitation and frustration.

Defendants argue that the alleged telemarketing calls do not constitute a valid claim for invasion of privacy under Ohio law, distinguishing this case from Housh and Irvine, which involved more egregious circumstances. The Court notes that the plaintiff's claims of 31 telemarketing calls over three months, while potentially annoying, do not meet the threshold for causing significant emotional distress or being highly offensive. Consequently, the Court rules that the plaintiff's state law claim fails legally, and he cannot in good faith seek damages for invasion of privacy.

Regarding attorney's fees under the Consumer Sales Practices Act (CSPA), the Court states that fees may be awarded to the prevailing party if the consumer's action is groundless or if the supplier knowingly violated the CSPA. The plaintiff requests at least $50,000 in attorney's fees for the defendants' alleged violations. Defendants contend that these fees should not count toward the amount in controversy, as a post-judgment determination would be required. They reference Torres v. State Farm, where attorney's fees were excluded from the amount in controversy. However, the Court finds this case distinguishable, as no additional determination is necessary to award fees under the CSPA. The Ohio Supreme Court has clarified that a plaintiff only needs to show a violation of the CSPA, not that the defendant knowingly violated the law, to claim attorney's fees. Therefore, the Court concludes that the plaintiff's claim for attorney's fees should be included in the amount in controversy, affirming that the jurisdictional threshold has not been definitively undermined.

Statutory attorney's fees can be included in the amount in controversy, but courts differ in their requirements for calculating these fees. Some courts mandate that fees be calculated at the time of filing, while others allow for estimates of likely fees or require proof of fees to a legal certainty. Fees that have not yet been incurred cannot be considered "in controversy." The court cannot speculate on potential future fees. Under the most favorable standard for the plaintiff, the court concluded that even the estimated reasonable attorney's fees would not reach the required $75,000 threshold for diversity jurisdiction, determining that the plaintiff’s claims are likely for less than that amount, thus lacking jurisdiction. Consequently, the court granted the defendant's motion to dismiss the case. The court also noted that the absence of federal question jurisdiction over TCPA claims does not eliminate the possibility of diversity jurisdiction, which was not ultimately relevant in this case. Additionally, the court acknowledged that TCPA damages could be included in the amount in controversy but determined that this inclusion did not alter the outcome of the motion. The court calculated treble damages based on statutory damages and highlighted a gap between the $75,000 requirement and the plaintiff's maximum potential damages under the TCPA and CSPA.