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Bell v. Money Resource Corp.

February 12, 2009


The opinion of the court was delivered by: Kauffman, J.


Now before the Court is Defendant Money Resource Corp.'s Motion to Dismiss the Complaint (the "Motion"). For the reasons discussed below, the Motion will be denied.


This putative class action arises from a series of "junk faxes" received by Plaintiff Christine M. Bell ("Plaintiff"), a loan correspondent doing business under the name of Allegiance Mortgage Services. According to the Complaint, Plaintiff received two "unsolicited advertisements" via her facsimile machine on June 13, 2007 and June 21, 2007. Compl. ¶ 8. Plaintiff alleges that these faxes were sent by or on behalf of Defendant Money Resource Corp. ("Defendant") and that "Defendant continued to transmit unsolicited faxes in December, 2007 and January, 2008 and, upon information and belief, is continuing to transmit unsolicited faxes." Id. ¶¶ 8-9. She alleges further that Defendant did not have permission to transmit faxed advertisements to her, that she has no prior business relationship with Defendant, and that none of the faxes from Defendant contained an opt-out notice required by law. Id. ¶¶ 10-12.

Plaintiff's Complaint raises two causes of action. First, she alleges that Defendant's actions violate the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227(b)(1)(C), which prohibits the use of a telephone facsimile machine or other device to send an unsolicited advertisement to another facsimile machine. Second, she raises a common-law claim for conversion under Pennsylvania law, alleging that "Defendant improperly and unlawfully converted Plaintiff and the class members' fax machine, toner, paper and time to its own use, and caused undue wear and tear on Plaintiff and the class members' fax machines." Compl. ¶ 32.

In addition to her individual claims, Plaintiff seeks to represent a class of persons or entities that received faxes from Defendant at any time between February 12, 2004 and the present. She alleges that the Court has jurisdiction over this putative class action pursuant to the Class Action Fairness Act ("CAFA") because the total amount in controversy exceeds $5,000,000 and because she and Defendant are diverse.*fn1 See 28 U.S.C. § 1332(d)(2)(A) (permitting jurisdiction over a class action where the aggregate amount in controversy exceeds $5,000,000 and where "any member of a class of plaintiffs is a citizen of a State different from any defendant"). Plaintiff alleges that "Defendant has been sending unsolicited advertisements for at least eight (8) months and it is believed, and therefore averred, that more than 3,333 faxes have been sent to persons and entities nationwide." Compl. ¶ 6. Based on alleged statutory damages of $1,500 per fax for violation of the TCPA, damages for conversion, and the value of any injunctive relief the class can obtain, Plaintiff claims that the total amount in controversy exceeds the $5,000,000 threshold.

On April 10, 2008, Defendant filed the instant Motion, arguing that the action should be dismissed on two grounds. First, Defendant seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that the Court lacks subject matter jurisdiction over the action because it may not be maintained as a class action. Second, Defendant seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Plaintiff's conversion claim fails as a matter of law.


A. Legal Standard

"Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of jurisdiction over the subject matter, or if the plaintiff lacks standing to bring his claim." Samsung Elecs. Co. v. ON Semiconductor Corp., 541 F. Supp. 2d 645, 648 (D. Del. 2008). When considering a motion to dismiss pursuant to Rule 12(b)(1), the Court must first consider whether the defendant is presenting a "facial attack" or a "factual attack" to subject matter jurisdiction. When considering a "facial attack," in which the defendant argues that the facts alleged in the pleadings fail to establish jurisdiction, the Court "looks only at the allegations in the pleadings and does so in the light most favorable to the plaintiff." United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2007) (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). In contrast, when considering a "factual attack," in which the defendant challenges the factual assertions made in the plaintiff's pleadings, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Mortensen, 549 F.2d at 891.

Defendant's Motion does not attempt to refute factual allegations made in the Complaint but instead argues that, as a matter of law, the Court lacks jurisdiction over the action. Accordingly, the Court will consider the challenge to be a facial challenge and will examine the allegations in the light most favorable to Plaintiff.

B. Discussion

Defendant first argues that all claims under the TCPA must be brought in state court. In support of this argument, it relies on the decision in ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 519 (3d Cir. 1998), in which the Third Circuit concluded "that because the TCPA reflects Congress' intent to authorize consumer suits in state courts only, and because it is 'a more specific statutory provision conferring exclusive jurisdiction elsewhere,' appellants cannot rely on the general federal question jurisdiction of § 1331." The ErieNet Court explained that the TCPA, which explicitly provides that litigants may bring TCPA claims in state court, reflects Congressional intent "to authorize private causes of action only in state courts, and to withhold federal jurisdiction." Id. at 517. Defendant contends that based on the absence of federal question jurisdiction, the Complaint must be dismissed for lack of subject matter jurisdiction.

The ErieNet decision, however, did not address the question of whether diversity jurisdiction over TCPA claims can exist, and numerous courts have found that the absence of federal question jurisdiction does not preclude a federal court from hearing TCPA cases founded upon diversity jurisdiction. See, e.g., US Fax Law Ctr., Inc. v. iHire, Inc., 476 F.3d 1112, 1118 (10th Cir. 2007) ("Because there is no express congressional intent to preempt diversity jurisdiction, and because the diversity jurisdiction statute and the TCPA are not irreconcilable, the district court erred in finding that Congress intended to preclude federal diversity jurisdiction over TCPA claims."); Gottlieb v. Carnival Corp., 436 F.3d 335, 343 (2d Cir. 2006) ("Having considered the statute's text, structure, history, and purpose, we conclude that Congress did not intend to divest the federal courts of diversity jurisdiction over private causes of action under the TCPA.").*fn2 In other words, although TCPA does not confer federal question jurisdiction, nothing in the statute prevents a TCPA claim from being litigated in federal court where some other statute, such as CAFA, confers subject matter jurisdiction. See, e.g., Watson v. NCO Group, Inc. 462 F. Supp. 2d 641, 647 (E.D. Pa. 2006) ("This Court is convinced that diversity of citizenship remains a viable means to establish subject matter jurisdiction over a TCPA claim. To conclude otherwise would create the anomaly in which a plaintiff asserting state law claims for abusive phone practices could bring those claims in federal court based on diversity, while plaintiff's parallel TCPA claim could only be filed in state court." (citing Gottlieb, 436 F.3d at 342)); Clean Air Council v. Dragon Int'l Group, 2006 U.S. Dist. LEXIS 52292, at *12 (M.D. Pa. July 28, 2006) (finding that, in the case of a TCPA class action, "CAFA provides an independent ...

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