10/31. The U.S. Court of Appeals (2ndCir) issued its opinion [15 pages in PDF] in Bonime v. Avaya, affirming the dismissal of a putative class action alleging violation of the Telephone Consumer Protection Act (TCPA), which is codified at 47 U.S.C § 227.

This case involves application of two federal statutes both of which pervert normal principles of subject matter jurisdiction. Ordinarily, jurisdiction lies in federal court if the cases arises under federal law, such as a federal statute, or there is diversity of citizenship (that is, the parties are from different states). The former is also known as federal question jurisdiction. The latter is also known as diversity jurisdiction.

Subject matter jurisdiction can be a tricky subject. But, when the Congress plays fast and loose on a statute by statute basis with basic jurisdictional principles, determining subject matter jurisdiction, and substantive and procedural applicable law, becomes even murkier.

This case involves application of the Telephone Consumer Protection Act (TCPA), which is codified at 47 U.S.C § 227, and the Class Action Fairness Act (CAFA), which is codified at 28 U.S.C. § 1332(d)(2). The CAFA was S 5 in the 109th Congress. It is now Public Law No. 109-2.

There is some irony here. The Congress enacted the CAFA, over the strenuous objections of plaintiff's trial lawyers, to limit abusive class action litigation of inherently meritless claims. Yet, in the present case, a class action lawyer invoked the CAFA in an attempt to maintain an abusive class action TCPA suit that would have otherwise been barred.

The TCPA is a federal statute that provides that actions for its violation jurisdiction lie in the state courts. The CAFA provides that certain large class actions with class diversity brought in state court alleging violation of state law can be removed to federal court.

Subsection 227(b)(1)(C), which contains the relevant prohibition, provides that "It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States ... (C) to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless (i) the unsolicited advertisement is from a sender with an established business relationship with the recipient ..."

Subsection 227(b)(3), which provides the relevant cause of action, provides that "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."

New York statute provides, at N.Y. C.P.L.R. 901(b), that "Unless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action."

Thus, the TCPA appears to create exclusive state jurisdiction over a federally created cause of action. But, what if the parties are diverse? General diversity jurisdiction is in the Constitution, and is codified by federal statute (28 U.S.C. § 1332(a)(1)). And, if general diversity can put a TCPA action back in federal court, do the procedural rules of the state or federal courts apply? What of the Supreme Court's 1938 landmark opinion in Erie v. Tompkins, 304 U.S. 64? Is a TCPA action state or federal? Moreover, can the CAFA and its class diversity put a TCPA action back in federal court?

In the present case, Harold Bonime alleges that he received a fax message from an agent of Avaya, Inc., without his permission. He filed a complaint in U.S. District Court (EDNY) against Avaya alleging violation of Subsection 227(b)(1)(C).

Bonime (and the class actions attorneys who brought this action) also sought class action status. They brought the action in federal court, arguing that the amount in controversy exceeds $5 Million and the parties meet the CAFA's definition of class diversity, and hence, under the CAFA, subject matter jurisdiction lies in federal court.

The District Court dismissed the complaint, writing that "Bonime may not assert a class action for statutory damages under the TCPA in New York state and therefore may not utilize CAFA to establish diversity jurisdiction". That is, it applies the TCPA's state procedure clause ("if otherwise permitted by the laws or rules of court of a State") and concluded that the action can only proceed in federal court if the action would have been permitted under New York law. It concluded that a TCPA action could not proceed as a class action in New York courts, and hence, dismissed.

The Court of Appeals affirmed the judgment of the District Court. Judge Barrington Parker, Jr. wrote the opinion of the Court of Appeals, in which Judge Stefan Underhill (USCD/DConn, sitting by designation) joined. Judge Guido Calabresi wrote a concurring opinion. He concurred in affirming the judgment of the District Court, but rejected much of the analysis of the majority.

The majority opinion noted that previously the 2nd Circuit held in Gottlieb v. Carnival Corp., 436 F.3d 335 (2006), that the federal courts lack federal question jurisdiction in TCPA cases, but that the Congress did not divest the federal courts of diversity jurisdiction under 28 U.S.C. § 1332(a) over private actions under the TCPA. The majority opinion did not disturb these holdings.

In the present case, Bonime relied not on the general diversity provision of 28 U.S.C. § 1332(a), but rather the CAFA, which includes a class diversity provision. Hence, Gottlieb cannot be used to resolved this case.

Erie v. Tompkins is often cited for the proposition that when federal courts exercise diversity jurisdiction, substantive state law governs. Bonime argued that Erie does not compel application in the federal court of the New York bar on TCPA class actions. He argued that the Erie doctrine only applies to state substantive law, and the state statute at issue is procedural. He also argued that the Erie doctrine does not apply because the underlying claim is not state law -- the Congress wrote it.

The Court of Appeals rejected both arguments. It stated that "Bonime's argument is essentially beside the point, however, because Congress directed that the TCPA be applied as if it were a state law."

It added, "In other words, Congress drafted the TCPA so that it would interact with the federal and state judicial systems as would a state law. While the TCPA is not state law, Congress has clearly indicated that the courts should treat it as though it were."

Actually, it might have been more accurate to state that the Congress could have written language directing that the courts treat the TCPA as though it were state law. But, it did not. The majority opinion gives effect to a Congressional unexpressed intent that the court presumes from the actual language of the statute.

The Court of Appeals continued, "so, for our purposes, it behaves like state law. Because the TCPA functionally operates as state law, we must apply the Erie doctrine to the TCPA, though the requirement to do so derives from Congressional instruction, and not from the Supreme Court's decision in Erie."

Then, "Applying Erie leads to the conclusion that federal courts must apply C.P.L.R. 901(b) when faced with putative New York class actions brought under the TCPA even when a plaintiff has invoked federal diversity jurisdiction."

Finally, the Court of Appeals wrote that it would also affirm simply on the basis of the plain meaning of the clause "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 ..."

Judge Calabresi wrote in his concurring opinion that he does not accept the majority's reasoning regarding Erie. He concluded that "Bonime is correct that Erie does not apply to his claim".

He wrote, "Instead, I would focus our attention to the language of the statute and what it says about this federal cause of action. The TCPA, in relevant part, describes the private right of action it created as follows: a person or entity ``may, if otherwise permitted by the laws or rules of court of a State,´´ bring ``an action.´´"

After some discussion of this language, he concluded that "when a state refuses to recognize a cause of action, there remains no cause of action to which any grant of federal court jurisdiction could attach. It follows that Bonime's suit must fail because Bonime lacks a cause of action on which to bring suit."

Back in 1938, Justice Louis Brandeis, writing for the majority in Erie, concluded that "Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. And whether the law of the state shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a state whether they be local in their nature or 'general,' be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts."

This case is Harold Bonime v. Avaya, Inc., U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 07-1136-cv, an appeal from the U.S. District Court for the Eastern District of New York.

10/31. The U.S. District Court (DC) issued a Memorandum Opinion and Order [27 pages in PDF] in EPIC v. DOJ and ACLU v. DOJ, a FOIA action. The Court granted summary judgment to the government as to many records, but ordered in camera review by the court as to some others.

This long running litigation is two consolidated actions brought by the Electronic Privacy Information Center (EPIC) and the American Civil Liberties Union (ACLU) and others under the federal Freedom of Information Act (FOIA), which is codified at 5 U.S.C. § 552.

The plaintiffs seek records from the Department of Justice (DOJ) related to surveillance of domestic communications without the prior authorization of the Foreign Intelligence Surveillance Court.

In this latest order the District Court granted in part, and denied in part, the DOJ's motion for summary judgment. The District Court granted in part, and denied in part, the plaintiffs' motions for in camera review of records.

The District Court wrote that an "in camera review is necessary with respect to all documents that have not been subject to this court's summary judgment determination. DOJ has now had two opportunities to provide this court with sufficiently detailed affidavits to describe why the documents at issue are subject to the claimed exemptions, and why many documents must be withheld in full."

However, the Court added, the "DOJ's declarations are still lacking with respect to some of the withheld documents."

See also, stories titled "EPIC Files FOIA Complaint Against DOJ for Records Related to NSA Domestic Terrorist E-Surveillance" in TLJ Daily E-Mail Alert No. 1,295, January 24, 2006; "District Court Issues Order Regarding FOIA Request for DOJ/NSA Records" in TLJ Daily E-Mail Alert No. 1,314, February 21, 2006; and "DC Court Rules Against EPIC and ACLU on FOIA Requests of DOJs Records Regarding Electronic Surveillance" in TLJ Daily E-Mail Alert No. 1,635, September 6, 2007.

This case is EPIC v. DOJ and ACLU, et al. v. DOJ, U.S. District Court for the District of Columbia, D.C. Nos. 06-00096 (HHK) and 06-00214 (HHK), Judge Henry Kennedy presiding.

10/31. The U.S. Court of Appeals (DCCir) issued its opinion [6 pages in PDF] in Core Communications v. FCC, a petition for review of a final order of the Federal Communications Commission (FCC) denying Core's petition for forbearance from rate regulation under 47 U.S.C. § 251(g) and rate averaging and integration under 47 U.S.C. § 254(g).

The Court of Appeals dismissed the petition for lack of standing.

It wrote that "Core failed to explain how it was being injured by the application of §§ 251(g) and 254(g). It did not reveal what services it offered or planned to offer that are or would be affected by these statutory provisions. Nor, to the extent that the services might be in markets that Core might enter, did Core say anything to indicate the seriousness of its plans, which might range from a gleam in management’s eye to a well-developed business plan."

This case is Core Communications, Inc. v. FCC and USA, U.S. Court of Appeals for the District of Columbia, App. Ct. No. 07-1381, a petition for review of a final order of the FCC.

This issue contains the following items:
 • 2nd Circuit Affirms Dismissal of TCPA Fax Case
 • District Court Issues Another Order Regarding Surveillance Records FOIA Action
 • DC Circuit Dismisses in Core v. FCC

The House will not meet.

The Senate will meet in pro forma session.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in ClearValue v. Pearl River Polymers, Inc., App. Ct. No. 2007-1487, a patent infringement case. See, Federal Circuit oral argument calendar. Location: Courtroom 201, Federal Circuit courthouse, LaFayette Square, 717 Madison Place, NW.

Deadline to submit to the Office of the U.S. Trade Representative's (OUSTR) post hearing briefs in connection with the 2008 Generalized System of Preferences (GSP) Annual Review. See, notice in the Federal Register, September 12, 2008, Vol. 73, No 178, at Pages 53054-53056.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Third Further Notice of Proposed Rulemaking (3rdFNPRM) regarding its failed D block auction and its efforts to facilitate a nationwide interoperable broadband wireless network for public safety entities. The FCC adopted and released this 3rdFNPRM [237 pages in PDF] on September 25, 2008. See, story titled "FCC Adopts Further NPRM Regarding Public Safety Broadband Network" in TLJ Daily E-Mail Alert No. 1,832, September 25, 2008. This item is FCC 08-230 in WT Docket No. 06-150 and PS Docket No. 06-229. See, notice in the Federal Register, October 3, 2008, Vol. 73, No. 193, at Pages 57749-57851.

Election Day.

The Supreme Court will hear oral argument in FCC v. Fox Television Stations, Sup. Ct. No. 07-582. See, story titled "Supreme Court Grants Certiorari in FCC Fleeting Expletives Case" in TLJ Daily E-Mail Alert No. 1,732, March 18, 2008. This is a petition for writ of certiorari to the U.S. Court of Appeals (2ndCir). On June 4, 2007, Court of Appeals issued its divided opinion [53 pages in PDF], which is also reported at 489 F.3d 444, holding that the FCC's new policy sanctioning "fleeting expletives" is arbitrary and capricious. See, story titled "2nd Circuit Vacates and Remands FCC Profanity Order" in TLJ Daily E-Mail Alert No. 1,590, June 4, 2007. See also, Supreme Court docket. Location: Supreme Court, 1 First St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Sumitomo Mitsubishi Silicon Corporation v. Memc Electronic Materials, Inc., App. Ct. No. 2007-1578. See, Federal Circuit oral argument calendar. Location: Courtroom 201, Federal Circuit courthouse, LaFayette Square, 717 Madison Place, NW.

11:00 AM. The Federal Communications Commission (FCC) may meet. See, agenda [PDF]. Location: FCC, 445 12th St., SW.

The Federal Communications Commission (FCC) will begin Auction 85, regarding LPTV and TV Translator Digital Companion Channels. See, notice in the Federal Register, September 12, 2008, Vol. 73, No. 178, at Pages 53020-53025.

9:00 AM. The Bureau of Industry and Security's (BIS) Information Systems Technical Advisory Committee (ISTAC) will meet. The agenda includes "Digital Forensics", "Industry Encryption Presentation", "Future Microprocessor Technologies", and "Discussion of Wassenaar Proposals for 2009". See, notice in the Federal Register, October 22, 2008, Vol. 73, No. 205, at Page 62951. Location: Room 3884, Hoover Building, 14th St., between Constitution and Pennsylvania Aves., NW.

9:00 AM - 4:00 PM. Day one of a two day meeting of the National Archives and Records Administration's (NARA) Advisory Committee on the Electronic Records Archives (ACERA). This meeting is free and open to the public. See, notice in the Federal Register, October 14, 2008, Vol. 73, No. 199, at Page 60721. Location: 700 Pennsylvania Ave., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Wavetronix v. EIS Electronic, App. Ct. No. 2008-1129. See, Federal Circuit oral argument calendar. Location: Courtroom 201, Federal Circuit courthouse, LaFayette Square, 717 Madison Place, NW.

6:00 - 8:15 PM. The DC Bar Association will host the first of two parts of a program titled "Export Control Courses". This first part is titled "Introduction to Export Controls". The speakers will be Thomas Scott and Carol Kalinoski. The total price to attend ranges from $140 to $210. For more information, contact 202-626-3488. See, notice. This event qualifies for continuing legal education (CLE) credits. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

Deadline to submit comments to the Securities and Exchange Commission (SEC) in response to its interpretive release regarding the use of company web sites under the Exchange Act and the antifraud provisions of the federal securities laws, and the use of technology generally in providing information to investors. See, notice in the Federal Register, August 7, 2008, Vol. 73, No. 153, at Pages 45862-45874.

9:00 AM. The Bureau of Industry and Security's (BIS) Information Systems Technical Advisory Committee (ISTAC) will hold a closed meeting. See, notice in the Federal Register, October 22, 2008, Vol. 73, No. 205, at Page 62951. Location: Room 6087B, Hoover Building, 14th St., between Constitution and Pennsylvania Aves., NW.

9:00 AM - 4:00 PM. Day two of a two day meeting of the National Archives and Records Administration's (NARA) Advisory Committee on the Electronic Records Archives (ACERA). This meeting is free and open to the public. See, notice in the Federal Register, October 14, 2008, Vol. 73, No. 199, at Page 60721. Location: 700 Pennsylvania Ave., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Biltmore Forest Broadcasting v. US, App. Ct. No. 2008-5055. See, Federal Circuit oral argument calendar. Location: Courtroom 201, Federal Circuit courthouse, LaFayette Square, 717 Madison Place, NW.

12:00 NOON. The Cato Institute will host a discussion of the book [Amazon] titled "Future Imperfect: Technology and Freedom in an Uncertain World". The speaker will be David Friedman (author). See, notice and registration page. This event is free and open to the public. Lunch will be served after the program. The Cato will web cast this event. Location: Cato, 1000 Massachusetts Ave., NW.

1:30 - 3:00 PM. George Washington University's (GWU) law school's IP Speaker Series will host a lecture by Jeanne Fromer (Fordham University law school) titled "Claiming Intellectual Property". See, notice. Location: Student Conference Center (LIS201), GWU law school.

2:00 - 3:00 PM. The President's National Security Telecommunications Advisory Committee (PNSTAC) will hold a partially closed meeting by teleconference. The open portion of the meeting will be from 2:00 to 2:30 PM. It will include consideration of the "national security/emergency preparedness internet protocol-based traffic report". The closed portion of the meeting will be from 2:30 to 3:00 PM. It will cover "core network assurance, cyber collaboration and internet identity". See, notice in the Federal Register, October 16, 2008, Vol. 73, No. 201, at Page 61433.

RESCHEDULED FROM OCTOBER 8. 2:00 - 4:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee will meet to prepare for the International Telecommunication Union (ITU) Council Meeting to be held on November 12-21, 2008, in Geneva, Switzerland. See, original notice in the Federal Register, September 22, 2008, Vol. 73, No. 184, at Page 54655. Location: 10th floor, 1120 20th St., NW. See, rescheduling notice in the Federal Register, September 26, 2008, Vol. 73, No. 188, at Pages 55891-55892.

3:30 PM. The New America Foundation (NAF) may host an event titled "Is Success Killing the Internet? A Web of Wide Open Innovation ... Or Closed Appliances?" The speakers will be Jonathan Zittrain (Harvard Law School), Adam Thierer (Progress & Freedom Foundation), Michael Calabrese (NAF), and David Gray (NAF). See, notice and registration page. Location: NAF, 7th floor, 1630 Connecticut Ave., NW.

6:00 - 8:15 PM. The DC Bar Association will host a program titled "How to Litigate a Patent Infringement Case". The speakers will be Patrick Coyne and Jerry Ivey of Finnegan Henderson. The price to attend ranges from $80 to $115. For more information, contact 202-626-3488. See, notice. This event qualifies for continuing legal education (CLE) credits. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

7:00 - 9:30 PM. The Federal Communications Bar Association (FCBA) will host an event titled "19th Annual FCBA Charity Auction". See, event web site. Location: Capital Hilton, 1001 16th St., NW.

Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) to assist it in prepared its annual National Trade Estimate Report on Foreign Trade Barriers (NTE). This report is required by 19 U.S.C. § 2241. The NTE report is due annually by March 31. See, notice in the Federal Register, July 31, 2008, Vol. 73, No. 148, at Pages 44785-44786.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding its proposed changes to its Rules of Practice regarding its adjudicative proceedings. See, notice in the Federal Register, October 7, 2008, Vol. 73, No. 195, at Pages 58831-58858.

Deadline to submit comments to the Office of Management and Budget (OMB) regarding the Department of Homeland Security's (DHS) National Cyber Security Division's information collection request titled "1670-NEW, US-CERT Incident Reporting". The DHS announced this request for comments in a notice in the Federal Register, October 7, 2008, Vol. 73, No. 195, at Pages 58608-58609. The DHS announced this information collection request in a notice in the Federal Register, June 11, 2008, Vol. 73, No. 113, at Pages 33101-33102.

9:00 AM - 3:30 PM. The Bureau of Economic Analysis's (BEA) BEA Advisory Committee (BEAAC) will meet. The meeting will address ways in which the national economic accounts can be presented more effectively for current economic analysis and recent statistical developments in national accounting. The BEAAC focuses on activities arising from innovative and advancing technologies. See, notice in the Federal Register, September 29, 2008, Vol. 73, No. 189, at Page 56548. Location: BEA, 1441 L St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Synthes (USA) v. GM Dos Reis, App. Ct. No. 2008-1279, a patent infringement case involving the issue of personal jurisdiction. See, Federal Circuit oral argument calendar. Location: Courtroom 201, Federal Circuit courthouse, LaFayette Square, 717 Madison Place, NW.

2:00 - 3:00 PM. The U.S. Patent and Trademark Office's (USPTO) Patent Public Advisory Committee (TPAC) will meet. See, agenda. Location: USPTO, Madison East 2nd Floor, 600 Dulany St., Alexandria, VA.

12:00 NOON. The Cato Institute will host a discussion of the book [Amazon] titled "Against Intellectual Monopoly". The speakers will be Michele Boldrin (co-author), Robert Atkinson (Information Technology and Innovation Foundation) and Jim Harper (Cato). See, notice and registration page. This event is free and open to the public. Lunch will be served after the program. The Cato Institute will web cast this event. Location: Cato, 1000 Massachusetts Ave., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) regarding requiring devices capable of receiving Satellite Digital Audio Radio Service (SDARS) to include digital audio broadcast (DAB), HD Radio, or other technologies capable of providing audio entertainment services. This is a part of the FCC's proceeding on the merger of XM and Sirius. See, story titled "FCC Approves XM Sirius Merger" in TLJ Daily E-Mail Alert No. 1,800, July 25, 2008. The FCC adopted this NOI on August 22, 2008, and released the text [9 pages in PDF] on August 25, 2008. It is FCC 08-196 in MB Docket No. 08-172. See, notice in the Federal Register, September 10, 2008, Vol. 73, No. 176, at Pages 52657-52660.

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