WILLIAM F. KUNTZ, II, District Judge.
Todd C. Bank ("Plaintiff") initiated this action as a class action on his own behalf and on behalf of all persons to whose residential telephone lines Independence Energy Group LLC and/or Independence Energy Alliance LLC ("Defendants") placed one or more telephone calls using an artificial or prerecorded voice to advertise Defendants' commercial goods or services (the "Class") within the four years preceding initiation of this lawsuit (the "Class Period," from March 19, 2008 to March 19, 2012). Plaintiff's claims arose under the Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(1)(B), and its accompanying rules and regulations, 47 C.F.R. § 64.1200(a)(2) (collectively referred to herein as "TCPA" unless otherwise indicated). On March 12, 2013, this Court dismissed Plaintiff's claims for lack of subject matter jurisdiction. Plaintiff now moves for reconsideration pursuant to Rules 60(b)(1) and 60(b)(6) of the Federal Rules of Civil Procedure. Familiarity with the facts underlying the case and the Court's order dismissing the case is assumed. For the reasons discussed below, Plaintiff's motion is denied.
Pursuant to Federal Rule of Civil Procedure 60, a party may move for reconsideration of an order on the basis of "mistake, inadvertence, surprise, or excusable neglect," or "for any other reason justifying relief from the operation of the judgment. Fed.R.Civ.P. 60(b)(1), (6).
As this Court previously noted in its Order dismissing Plaintiff's action for lack of subject matter jurisdiction, "[t]he Second Circuit has ... unequivocally held that § 901(b) of New York Civil Practice Law and Rules ("Section 901(b)") bars TCPA class actions in federal court." Bank v. Indep. Energy Grp. LLC, 12-cv-1369 (E.D.N.Y. Mar. 12, 2013) (Kuntz, J.) (Dkt. No. 16) (citing Holster III v. Gatco, Inc., 618 F.3d 214, 217-18 (2d Cir.2010) cert. denied, ___ U.S. ___, 131 S.Ct. 2151, 179 L.Ed.2d 952 (2011)). Contrary to Plaintiffs argument, discussed infra, this assertion remains good law and Plaintiff's class action is barred from proceeding in this Court.
Plaintiff argues the Supreme Court's holding in Mims v. Arrow Fin. Servs., LLC, ___ U.S. ___, 132 S.Ct. 740, 181 L.Ed.2d 881 (2012) abrogates the Second Circuit case law holding that TCPA cases are subject to certain state law restrictions, including Section 901(b). Pl.'s Br. at 6-17; Pl.'s Rep. at 2-7. In support of this argument, Plaintiff refers to the Mims case itself and to a litany of mostly-out-of-Circuit district court opinions, which have adopted his proposed interpretation of Mims. The Court will address each in turn.
In Mims, the Supreme Court held: "federal and state courts have concurrent
Plaintiff argues, in light of this holding, that Mims requires this Court to apply the Federal Rules of Civil Procedure, and disregard Section 901(b), to determine whether a class action is permissible. See generally Pl.'s Br. Plaintiff's argument relies primarily on the following two statements, excerpted from Mims: (1) "the TCPA is a federal law that ... supplies the substantive rules that will govern the case;" and (2) the TCPA "furnishes the substantive rules of decision." Id. at 745, 749; see also Pl.'s Br. at 6-8. Defendants correctly point out that these statements are dicta, and that the Supreme Court's decision was limited to the jurisdictional question before it. See Def.'s Br. at 6. In any event, this Court construes these general statements to refer to the substantive rules specifically asserted within 47 U.S.C. § 227. For example, the statute prohibits "using an artificial or prerecorded voice to deliver a message" via telephone, and enumerates three possible private causes of action — for injunctive relief, for money damages, or for both — and also permits treble damages where a Defendants' violation is found to be "willful[] or knowing[]." 47 U.S.C. § 227(b)(1), (3). This Court interprets the Supreme Court's language to refer to these substantive rules, which are directly "furnished" and "supplied" by the relevant statute, rather than to the Federal Rules of Civil Procedure, as Plaintiff contends.
Moreover, the Mims decision did not interpret or consider the effect on federal courts of the limiting statutory language on which the Second Circuit relied in Holster III. The Court finds this omission significant. The TCPA creates a private right of action with the following statutory language:
47 U.S.C. § 227(b)(3) (emphasis added). In Mims, respondent argued, "Congress would have had no reason to provide for a private action "in an appropriate [state] court." if it did not mean to make the state forum exclusive." Mims, 132 S.Ct. at 750. Put another way, being courts of general jurisdiction, state courts would have had concurrent jurisdiction over private TCPA claims even without the statutory language. Therefore, respondent argued, by including the statutory language, Congress implied exclusive state court jurisdiction. The Mims Court rejected respondent's argument, concluding that by including the limiting statutory language, "Congress may simply have wanted to avoid any argument that in private actions, as in [TCPA] actions brought by State Attorneys General, `federal jurisdiction is exclusive." Id. (citations omitted).
Without interpreting how this limiting language would apply in federal forums, the Supreme Court in Mims did not abrogate the Holster III holding, on which this Court relied. The Holster III Court explicitly clarified that its holding did not rely on the Erie doctrine when it stated, "[t]his is not a question that implicates the relationship between the Federal Rules and state rules; it is a standard question of statutory interpretation." Holster III, 618 F.3d at 217 (emphasis added).
The Holster III holding followed the Supreme Court's remand in light of Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010). In Shady Grove, the Supreme Court was asked to decide whether Section 901(b) precludes a federal district court sitting in diversity from entertaining a class action under Rule 23 of the Federal Rules of Civil Procedure. Id. The Second Circuit had held that Section 901(b) and Rule 23 were not in conflict because Section 901(b) created a substantive right and, therefore, failure to apply Section 901(b) in a federal forum would encourage forum-shopping to avoid enforcement of that right, which would contravene Erie. Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 549 F.3d 137, 144-45 (2d Cir.2008) (citing Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). The Supreme Court reversed and held that Section 901(b) was preempted by the Rules Enabling Act because Rule 23 regulates procedure, not substantive law, and it therefore applies "regardless of its incidental effect upon state-created rights." 130 S.Ct. at 1444 (citing 28 U.S.C. § 2072). In other words, the Shady Grove Court held Rule 23 applies to federal diversity actions pursuant to the Rules Enabling Act solely because it regulates procedure, regardless of the substantive nature or purpose of Section 901(b). Id.
As the Second Circuit later recognized, the Supreme Court in Shady Grove "said nothing at all about the TCPA, and what that statute requires for a federal cause of action to lie." Holster III, 618 F.3d at 217. Therefore, following remand in consideration of Shady Grove, the Second Circuit in Holster III went on to reaffirm its holding while explicitly rejecting any reliance on or reference to the substantive nature of Section 901(b) or the Rules Enabling Act. Id. The Second Circuit reasoned that the limiting language of the statute — "if otherwise permitted by the laws or rules of court of a State," 47 U.S.C. § 227(b)(3) — alone requires federal courts located within New York to apply "some, but not necessarily all, state rules of court to define what causes of action lie under the TCPA." Id. The Court reaffirmed its conclusion that Section 901(b) prohibits class action suits brought under the TCPA in either New York's state or federal courts, because the TCPA explicitly limits private actions to those "otherwise permitted by the laws or rules of the court of
Finally, the Court notes that the Mims action was not brought as a TCPA class action, nor did the Supreme Court consider the interplay between state and federal rules regulating TCPA class actions. See Mims, 132 S.Ct. at 746-47. By contrast, this Court's prior decision dismissed Plaintiffs case on the specific basis that it cannot be maintained as a class action in light of the TCPA's limiting language and Section 901(b). That holding remains good law under Holster III. Therefore, until further notice, the Supreme Court's decision in Mims does not require reconsideration of this action.
Plaintiff attempts to bolster his argument by citing to a series of recent, post-Mims district court cases, which hold that state procedural rules regulating class actions do not apply to TCPA claims brought under federal question jurisdiction. See, e.g., Pl.'s Br. at 8. Only one of these comes from within the Second Circuit.
In Bais Yaakov of Spring Valley v. Alloy, Inc., No. 12-CV-581, 936 F.Supp.2d 272, 2013 WL 1285408 (S.D.N.Y. Mar. 28, 2013) (Seibel, J.), the Court denied the defendants' motion to strike the plaintiff's class allegations, rejecting the defendants' argument that Section 901(b) prevents the maintenance of a TCPA claim as a class action, in light of the TCPA's "if otherwise permitted," language. See id. at 279, at *4. The Court noted, in reaching its conclusion, "[t]he Second Circuit has previously agreed with Defendants' contention." Id. Crediting the plaintiff's argument that "Giovanniello is no longer good law in light of the Supreme Court's decisions in Mims and Shady Grove," and citing several of the same out-of-Circuit district court cases referenced by Plaintiff in this action, Judge Seibel concluded, "I am persuaded that the Second Circuit will likely depart from its prior decision in Giovanniello and conclude that Mims ... support[s] the contention that the TCPA should not be interpreted as requiring a federal court to follow state law." Id. at 280, at *5.
The Second Circuit may depart from a prior decision when that earlier decision's "rationale is overruled, implicitly or expressly, by the Supreme Court." In re Sokolowski, 205 F.3d 532, 535 (2d Cir. 2000). However, the Second Circuit has not yet so departed. Therefore, Holster III remains the binding law of this Circuit. And, in any event, district court cases, even those within the Second Circuit, do
Because the Court's decision relies on Holster III, and Holster III remains the binding law within this court will not now reverse its dismissal. For this reason, as discussed above, this court denies Plaintiff's motion for reconsideration.