Date: 10-06-2007

Case Style: Edward W. Sznyter v. Robert J. Malone, D.D.S.

Case Number: D050584

Judge: Huffman

Court: California Court of Appeal, Fouth Appellate District on appeal from the Superior Court of San Diego County

Plaintiff's Attorney:

Edward W. Sznyter, in pro. per., for plaintiff and appellant.

Defendant's Attorney:

Koeller, Nebeker, Carlson & Haluck, Robert W. Harrison, Patrick J. Kearns; Neil, Dymott, Frank, Harrison & McFall and James A. McFall, for defendant and respondent.

Description:

In this limited civil action arising under 47 United States Code section 227, commonly known as the Telephone Consumer Protection Act of 1991 ("TCPA" or the Act), we must determine whether a state or federal statute of limitations correctly applies, where plaintiff is asserting a private right of action for damages for violations of the Act. The matter was certified for transfer to this Court on the motion of the Superior Court's Appellate Division, after it affirmed the trial court's judgment on the pleadings in favor of the defendant and respondent, the sender of the disputed communications from whom the plaintiff seeks damages under the Act. Both courts determined that the action was timebarred under California law. (Code Civ. Proc.,1 § 338, subd. (a); Cal. Rules of Court, rule 8.1005.)

Plaintiff Edward W. Sznyter, in propria persona (appellant), alleges he incurred $12,000 damages due to his receipt in 2001-2002 of two sets of two advertising faxes sent to him by the defendant and respondent, Robert J. Malone, D.D.S., a professional corporation (respondent). Appellant's complaint was dismissed after the trial court granted a defense motion for judgment on the pleadings, finding that the action was filed too late under the three-year limitations period applicable to a statutory cause of action pursuant to section 338, subdivision (a).

Appellant argues the trial court erred in failing to apply the four-year limitations period set forth in 28 United States Code section 1658, which is a federal catchall statute of limitations that applies to cases in which the federal statute giving rise to the action was enacted after 1990 and does not specify its own limitations rules. He further contends supplemental discovery was erroneously denied.

We agree with appellant that the federal provision controls, for the reasons specified below. Since we will reverse on that issue, we find it unnecessary to address the alleged discovery errors, and direct that the trial court conduct further appropriate proceedings.

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The complaint was filed as a limited civil action on May 6, 2005, in San Diego Superior Court. Appellant alleges he received four facsimile transmissions from respondent between May 7, 2001 and January 29, 2002, in violation of the TCPA. He claims he had two telephone numbers and there were eight violations, for which he sought $4,000 in damages, along with treble damages, for a total of $12,000 for the receipt of those advertising transmissions. (42 U.S.C. § 227(b)(3)(B), (C).)

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To resolve the question of which statute of limitations should apply to this case, we first outline the relevant statutory language and previous interpretations of the TCPA on related procedural points. We then refer to the policies generally applicable to California limitations rules, and also, due to the 1991 date of enactment of the TCPA, we consider the applicability of the 1990 federal "catchall" statute of limitations found in 28 United States Code section 1658. In Jones, supra, 541 U.S. 369, the United States Supreme Court analyzed the policies promoted by the federal catchall statute of limitations, such as uniformity of decision, in the comparable context of civil rights cases arising under recent amendments to 42 United States Code section 1981 that postdated the federal catchall provision.

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The TCPA is one section of chapter 5 of title 47 of the United States Code, found at 47 United States Code section 151 et seq. (wire and radio communication). Under the TCPA (47 U.S.C. § 227), and specifically subdivision (b)(3), a private right of action to seek damages for violations may be pursued as follows: "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 . . . . (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 . . . . If the court finds that the defendant willfully or knowingly violated this subsection or the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B) of this paragraph."

This subdivision, 47 United States Code section 227(b)(3), was interpreted in Kaufman, supra, 110 Cal.App.4th 886, for purposes of clarifying that individuals who were recipients of unsolicited facsimile advertisements were allowed to bring either class actions against companies sending the faxes, or individual complaints on their own private rights of action in state court. Other constitutional issues involving free speech and due process were also extensively addressed, but those problems are not presented in the case before us. (Id. at p. 895.)

In Adler v. Vision Lab Telecommunications, Inc. (D.D.C. 2005) 393 F.Supp.2d 35, 37, the court characterized the statutory phrase in 47 United States Code section 227(b)(3), if "otherwise permitted by the laws of a State;" as "ambiguous." In its ruling, the district court adhered to the reasoning of other cited cases, e.g., Kaufman, supra, 110 Cal.App.4th 886, in rejecting "the notion that states must take affirmative action to provide their citizens with a forum for TCPA claims." (Adler, supra, at p. 38.) Instead, the district court recognized that a private right of action is authorized under 47 United States Code section 227(b). The court said that the weight of the authority held that this "term simply acknowledges the principle that states have the right to structure their own court systems and that state courts are not obligated to change their procedural rules to accommodate TCPA claims." (Adler, supra, at p. 37.)

The private right of action issue is settled, and for our purposes, Kaufman is mainly instructive in its reference to the legislative history of the TCPA. The court rejected arguments against permitting class actions under the Act, by citing to remarks by the sponsor of the Act, Senator Hollings, to the effect that he hoped that: " 'States will make it as easy as possible for consumers to bring [TCPA] actions, preferably in small claims court.' [Citation.] But the senator also said, 'The [Act] does not, because of constitutional constraints, dictate to the States which court in each State shall be the proper venue for such an action, as this is a matter for State legislators to determine.' [Citation.] The senator 'expect[ed] that the States [would] act reasonably in permitting their citizens to go to court to enforce this [Act].' [Citation.]" (Kaufman, supra, 110 Cal.App.4th 886, 924.)

Further, in Kaufman, supra, 110 Cal.App.4th 886 at pages 924 to 925, the court referred to a law review article also discussed by the parties here, Biggerstaff, State Court and the Telephone Consumer Protection Act of 1991: Must States Opt-In? Can States Opt-Out? (2001) 33 Conn. L.Rev. 407, 431 (Biggerstaff).) That article addressed a different procedural question than is presented here (whether enabling legislation was required by the states to facilitate pursuing a private right of action under the TCPA). Regarding that point, the article states: "[W]hen a state court hears a case brought under a federal law, local laws control procedure, jurisdiction, administration, and venue. It is often said that 'federal law takes the state courts as it finds them,' . . . [] The particulars of a TCPA case (jurisdiction, venue, residency, amount in controversy, etc.) must fit the administrative and jurisdictional rules of the state court hearing the case. The Supremacy Clause does not reach these administrative and procedural issues. . . . Congress cannot command which court in a state has jurisdiction over TCPA claims. Nor can it mandate the 'modes of procedure'. . . ." (Biggerstaff, supra at p. 431, fns. omitted.)

The Biggerstaff article took the "modes of procedure" term from the early case of Mondou v. New York, N.H. & H.R. Co. (1912) 223 U.S. 1, 56-57, representing the concept that when federal law is enforced in state courts, federal law does not normally operate to "enlarge or regulate the jurisdiction of state courts, or to control or affect their modes of procedure." (Id. at p. 56.) Rather, where a state court's ordinary jurisdiction, "as prescribed by local laws," is appropriately invoked in conformity with those laws, then the federal law may be enforced and is "susceptible of adjudication according to the prevailing rules of procedure. " (Id. at p. 57; Biggerstaff, supra, at pp. 407, 431 [referringto that case as "Second Employers' Liability Cases"; also citing to Howlett v. Rose (1990) 496 U.S. 356, 367 ["Federal law is enforceable in state courts not because Congress has determined that federal courts would otherwise be burdened or that state courts might provide a more convenient forum-although both might well be true-but because the Constitution and laws passed pursuant to it are as much laws in the States as laws passed by the state legislature. The Supremacy Clause makes those laws 'the supreme Law of the Land,' and charges state courts with a coordinate responsibility to enforce that law according to their regular modes of procedure."].)

In our case, there is no dispute that California courts may have jurisdiction over a timely filed case asserting a private right of action under the TCPA, but that does not answer the limitations question.

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In Bunnell v. Department of Corrections (1998) 64 Cal.App.4th 1360, 1369-1371 (Bunnell), in the course of outlining the rules applicable to establishing limitations periods for federal claims, for which no federal statute of limitations had been supplied, the court relied on the supremacy clause of the United States Constitution (art. VI, cl. 2), for the rule that state law may not impede or burden valid laws enacted by Congress. However, " 'the general rule is that where an action founded on a federal statute is properly brought in the state courts, the law of the state, in the absence of any contrary provisions in the federal statute, controls in matters of practice and procedure. [Citation.]' [Citation.]" (Bunnell, supra, 64 Cal.App.4th at p. 1369.) In Bunnell, the main problem before the court was whether any state tolling provisions should apply to the plaintiff's federal cause of action, where there was also an applicable federal wiretap law that expressly contained a two-year limitations period without any tolling provision. The court concluded those state tolling provisions did not prevail over the federal law. (Id. at pp. 1368-1372; see 51 Am.Jur., Limitation of Actions (2000) § 121, pp. 527-528 ["If a federally created right has no specific period of limitations, state courts, like federal courts, apply the most analogous state period of limitations, including the state tolling provision, as long as [it] is not inconsistent with the purpose of the federal statute." (Fns. omitted; citing Bunnell, supra, 64 Cal.App.4th 1360)].)

In a New Jersey case, Zelma v. Konikow (N.J. Super. A.D. 2005) 879 A.2d 1185, 1188, that court found no indication that the federal catchall limitations provisions should not apply to the TCPA, since the TCPA postdated the enactment of the catchall statute. The state court said: "The provisions of the TCPA that make its civil action available only 'if otherwise permitted by the laws or rules of court of a State,' 47 U.S.C.A. § 227(b)(2), (c)(5), provide no clear indication of intent to exclude TCPA claims from the scope of § 1658. In Zelma [v. Market USA (N.J. Super. A.D. 2001) 778 A.2d 591, a previous opinion], we held that the phrase 'if otherwise permitted by' state law and court rules was intended to provide states an opportunity to 'opt-out' of the TCPA and to recognize that states may apply neutral rules and procedures to foreclose TCPA actions. [Citation.] In reaching that conclusion, we considered the purpose of the phrase as explained by federal courts. [Citation.] 'Congress understandably avoided opening federal courts to the millions of potential private TCPA claims . . . . Similarly concerned over the potential impact of private actions on the administration of state courts, Congress included a provision to allow the states to prohibit private TCPA actions . . . .' [Citation.] The length of a limitation period has no obvious relevance to the volume of litigation or the extent of the burden imposed on courts of this state." (Zelma v. Konikow, supra, 879 A.2d at pp. 485-486, fn. omitted; cf. Edwards v. Emperor's Garden Restaurant (Nev. Sup. Ct. 2006) 130 P.3d 1280, 1287.) Whatever the merits of that latter statement, the fact remains that there are no published California cases choosing between state and federal limitations provisions for a TCPA claim, so this matter of first impression must be decided according to statutory interpretation in light of applicable public policies.

Since it has now been determined by Kaufman, supra, 110 Cal.App.4th 886, that this current action, founded on a federal statute, was properly entertained in state court as a private right of action, we next decide whether the TCPA gives any indication of Congress's intent about utilizing state or federal limitations provisions. On the state side, we should consider not only the language of section 338, subdivision (a), but also the body of law that interprets limitations rules in California, since the TCPA refers to suing "if otherwise permitted by the laws or rules of court of a State." (47 U.S.C. §227(b)(3).) To choose between the federal and state limitations statutes, we can adapt the test set forth in Wilson, supra, 471 U.S. at page 267. We should first look to federal law if it will most likely carry the TCPA into effect; the next step is considering application of " 'state "common law, as modified and changed by the constitution and statutes" of the forum State.' [Citation.]" (Ibid.) Courts are to apply state law under these circumstances only if it is not " 'inconsistent with the Constitution and laws of the United States.' [Citation.]" (Ibid., citing 42 U.S.C. § 1988.)

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We are supported in our decision to apply the federal catchall statute to this state TCPA action by the California authority which instructs us to look to whether the gravamen of the action is federal in nature. "[T]he nature of the right sued upon and not the form of action nor the relief demanded determines the applicability of the statute of limitations under our code. [Citation.]" (Hensler, supra, 8 Cal.4th 1, 22-23.). The purpose of the TCPA is to make it as easy as possible for injured plaintiffs to seek recovery within the terms of the statute, and this policy suggests that a uniform federal limitations period should apply. This does not amount to federal law interfering with state procedure, because state courts have the responsibility to enforce federal law according to their regular modes of procedure, but the TCPA did not clearly incorporate or adopt state rules regarding limitations periods.

Further, by analogy to the three-step process set forth in 42 United States Code section 1988, courts should look to federal law where it is suitable to carry the subject statute into effect. Although the TCPA does not set forth a suitable federal limitations rule, the provisions of 28 United States Code section 1658 do, and it is an accepted practice to construe different federal statutes together to determine limitations rules. (Bunnell, supra, 64 Cal.App.4th 1360 at pp. 1369-1371.)

In Jones, supra, 541 U.S. 369, the United States Supreme Court applied the federal catchall statute to a recent amendment to an existing statute that created a right, under the reasoning that "what matters is the substantive effect of an enactment--the creation of new rights of action and corresponding liabilities--not the format in which it appears in the Code." (Id. at p. 381.) The substantive effect of the TCPA is to create a new right of action, which occurred after the federal catchall statute went into effect, so the federal limitations period should apply, because the TCPA does not clearly indicate otherwise. Moreover, California principles regarding limitation of actions do not necessarily favor utilizing the shorter state statute, as opposed to the longer federal statute, because the policy for disposition on the merits is as strong as the policy favoring disposition of stale claims. (Norgart, supra, at 21 Cal.4th at pp. 396-397.) Because of these conclusions, we need not address the discovery issues that were raised.

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Outcome: UnknownThe order of the Appellate Division affirming the trial court judgment in favor of respondent is reversed, and the case is remanded for the Appellate Division to issue its remittitur and to direct the trial court to enter a different order denying judgment on the pleadings and to conduct such further proceedings as may be appropriate. (Cal. Rules of Court, rule 8.1018.) Each party shall bear its own costs on appeal.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None