In Italia Foods, the Illinois Supreme Court found that the federal junk-fax statute is enforceable by private litigants in Illinois.
Despite the ascendancy of mobile devices and the omnipresence of email, lots of communication still takes place by way of fax. And everyone with a fax number is familiar with junk faxes.
To combat this irritating and costly scourge, which is part of the larger problem of automated telephone calls, Congress enacted the Telephone Consumer Protection Act of 1991 (TCPA), 47 USC section 227. In Italia Foods, Inc v Sun Tours, Inc, No 110350, 2011 WL 2163718 (Ill Sup Ct), the Illinois Supreme Court found that this federal statute is enforceable by private entities in the circuit courts of this state.
A private right of action?
The TCPA provides in relevant part that it shall be unlawful for anyone to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine. Section 227(b)(1)(C). It also provides for a private right of action for enforcement:
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.
If the court finds that the defendant's violation was willful or knowing, the statute gives the court discretion to award up to three times the amount stated above.
Eclipse Manufacturing Company filed a class action complaint against Sun Tours, Inc., doing business as Hobbit Travel, in June 2003. In amended complaints, Eclipse added Sun Tours' president and sole shareholder as a party defendant and replaced itself with its own president and sole shareholder, Robert Hinman. Ultimately, the circuit court granted Italia Foods, Inc., leave to substitute itself for Hinman.
Before the court was the third amended complaint, in which Italia alleged that the defendants faxed it 28 unsolicited advertisements for discount travel over a period of less than two years and that they faxed the same and similar advertisements to more than 39 other recipients without prior permission or invitation, in violation of the TCPA. Italia also included claims for common law conversion based on those facts.
The circuit court denied the defendants' motion to dismiss but certified questions for interlocutory review under SCR 308, as follows:
I. Does the language and purpose of the federal Telephone Consumer Protection Act ('TCPA') require that the Illinois General Assembly enact enabling legislation before private TCPA claims can be brought and enforced in Illinois state courts?
II. Are the TCPA claims alleged in this case 'statutory penalties' under Illinois law? And if so:
(a) Are those claims assignable under Illinois law?
(b) Does Illinois' two-year statutory penalty limitations period [citation] apply to such claims, as opposed to [the federal limitations period for civil actions]?
III. If the claim is not assignable, then should absent class members' putative claims against defendants be treated as tolled when no class representative with proper standing represented the putative class for a 27-month period?
After the appellate court answered "no" to the first question and "yes" to question II(a), it found that answering questions II(b) and III was unnecessary. The supreme court allowed the defendants' petition for leave to appeal.
No enabling legislation required
The supreme court found it necessary to answer only the first question. Finding that the statutory phrase "if otherwise permitted by the laws or rules of court of a State" was ambiguous, the court considered two alternative interpretations.
First, the court noted that under the "acknowledgment" approach, the phrase would be construed to mean that states have the right to structure their own court systems, that neutral state laws and court rules regarding state court jurisdiction and procedure apply to TCPA claims, and that states are not obligated to change their procedural rules to accommodate TCPA claims. Under that approach, states would not be required to enact enabling legislation for parties to assert private TCPA claims in state courts, nor could state tribunals refuse to entertain those claims because they are based on a federal right of action.
Second, the court discussed the "opt in" approach, under which the phrase would be construed to mean that Congress intended that states would have jurisdiction over private TCPA actions only after enacting legislation or adopting court rules permitting them to exercise jurisdiction.
The court noted that the former approach was grounded in the Supremacy Clause of the United States Constitution. It quoted the statute's legislative history in which its sponsoring senator expressed the hope that states would make it easy for consumers to bring TCPA actions in, for example, small claims court.
The "opt-in" approach, in contrast, seemed dissonant with both the federal and state constitutions, the court said. Finding the acknowledgment approach more persuasive, the court concluded that the TCPA is enforceable in Illinois state courts without any need for the enactment of enabling legislation by the general assembly.
Because the plaintiff alleged TCPA claims based on junk faxes that the plaintiff itself received from defendants in its third amended complaint, the court found that the appellate court's discussion of assignability was merely advisory. It said that the lower court need not and should not have discussed that issue and therefore vacated that portion of the appellate opinion. The court also remanded the matter to the appellate court to answer question II(b), whether the federal four-year limitations period (28 USC section 1658) or the Illinois two-year limitations period (735 ILCS 5/13-202) applied to the third amended complaint, and for consideration of any other remaining issues.