R.A. Ponte Architects, Ltd. v. Investors' Alert, Inc.

BARBERA, J. In this appeal we decide a question of first impression— whether a private cause of action may be brought in Maryland to enforce the prohibition in the Telephone Consumer Protection Act of 1991 (“the TCPA” or “the Act”), against the transmission of unsolicited commercial facsimiles. We hold that the General Assembly has not accepted the jurisdiction conferred upon the states by the TCPA, and, thus, such private actions may not be brought in Maryland state courts. The underlying facts of this case are not in dispute. On several occasions during the summer of 2000, appellant, R.A. Ponte Architects, Ltd., received on its fax machine unsolicited copies of an investment newsletter entitled “Investors’ Alert.” The transmissions were sent free of charge, and encouraged the purchase of stock in select corporations and solicited subscription to future issues of the newsletter.

On October 24, 2000, appellant filed a class action complaint in the Circuit Court for Montgomery County, naming as defendants appellees, Investors’ Alert, Inc. and Access Financial Consulting, Inc. Appellant alleged that appellees had ²²¹ violated the TCP A, which prohibits, inter alia, the use of a telephone fax machine to send unsolicited advertising to another fax machine. 47 U.S.C. § 227 (b)(1)(C) (1991). Appellees thereafter filed a motion to dismiss and a supporting memorandum of law, arguing that appellant’s complaint failed to state a claim upon which relief can be granted. Appellees specified that Maryland law “does not provide for a private cause of action,” and that, had the Maryland General Assembly intended a private cause of action to exist, its intent would be reflected in the language of Maryland’s law prohibiting the intentional electronic or telephonic transmission to a fax machine for the purpose of commercial solicitation. See Md.Code (1975, 2000 Repl.Vol.), § 14-1313 of the Commercial Law Article (“CL”).

Appellant opposed the motion to dismiss. Appellant mounted three arguments in support of the validity of its claim under the TCPA: (1) the Supremacy Clause of the United States Constitution vests jurisdiction over private causes of action in state courts; (2) statutory language enabling a private cause of action is not required in order for a plaintiff to file suit; and (3) CL § 14-1313 cannot be construed to mean that no private cause of action exists when the statute is silent on the issue. The instant case was one of two such cases then pending in the Circuit Court for Montgomery County. 1 The cases presented identical motions to dismiss, which, at the request of appellant, were jointly heard. At the hearing’s conclusion, the court granted appellees’ motion to dismiss, stating: In each of these cases [i.e., the instant case and the Nixon case], the Plaintiffs are bringing private causes of action under the Telephone Consumer Protection Act.. . . ²²² The Defendants have moved to dismiss on the basis that no private cause of action exists within the State of Maryland to allow these claims to proceed.

The language in the [TCPA] that [counsel for appellant] has referred to ... states that “Private right of action, a person or entity may, if otherwise permitted by the laws or rules of the Court of a State, bring in an appropriate Court of that state and [sic] action,” and that is the basis for bringing the action in these cases. Commercial law article Section 14-1313 addresses the basis for bringing causes of action that the Plaintiffs seek to bring in these lawsuits. The attorney general is empowered to bring the causes of action that exist under the state of the law in Maryland. There is no private cause of action with respect to these claims.

From the dismissal of its case, appellant has appealed, 2 and presents the following question: Do Maryland courts have subject matter jurisdiction over private suits for unsolicited faxes under the TCPA [Telephone Consumer Protection Act]? DISCUSSION The issue presented by this case is, at its core, an issue of statutory construction. Its resolution requires that we examine not only the TCPA itself, but Maryland’s Consumer Protection Act, particularly CL § 14-1313, which prohibits the sending of unsolicited commercial advertisements by facsimile. We therefore begin our analysis with a discussion of the TCPA and CL § 14-1313, as well as other commercial law provisions relevant to the decision in this case. ²²³ I. The Telephone Communications Protection Act In 1991, Congress amended the Communications Act of 1934 with enactment of the TCPA, codified at 47 U.S.C. § 201 et seq.

Its purpose “is to protect residential telephone subscriber privacy rights by restricting certain commercial solicitation and advertising uses of the telephone and related telecommunications equipment.” H.R.Rep. No. 102-317, at 5 (1991), reprinted in 14082 U.S. Congressional Serial Set, 102d Cong. 1st Sess.1991; see also Int’l Science & Tech. Inst., Inc. v. Inacom Comm., Inc., 106 F.3d 1146, 1150 (4th Cir.1997). At the time of the TCPA’s enactment, over half the states had enacted statutes restricting marketing uses of the telephone.

See 47 U.S.C. § 227 , Congressional finding No. 7. Congress recognized, however, that “telemarketers can evade [state] prohibitions through interstate operation; therefore, Federal law is needed to control residential telemarketing practices.” Id.; see also S.Rep. No. 102-178, at 5 (1991), reprinted in 1991 U.S.C.C.A.N.1968, 1972-73 (noting that “Federal legislation is necessary to protect the public from automated telephone calls [and that] Federal action is necessary because States do not have the jurisdiction to protect their citizens against those who use these machines to place interstate telephone calls”). The Act was enacted for the benefit of the states, not the federal government.

As the Court of Appeals for the Third Circuit commented, the Act “does not appear to reflect any significant federal interest, or one that is uniquely federal. It does not reflect an attempt by Congress to occupy this field of interstate communication or to promote national uniformity of regulation.” Erienet, Inc. v. Velocity Net, Inc., 156 F.3d 513, 515 (3d Cir.1998). The TCPA proscribes, in general, both unsolicited telephone calls made for a commercial purpose and the transmission of unsolicited facsimiles for the same purpose. With respect to faxes in particular, the House Report recognized that “the proliferation of facsimile machines has been accompanied by ²²⁴ explosive growth in unsolicited facsimile advertising, or ‘junk fax.’ ” H.R.Rep.

No. 102-317, at 10 (1991), reprinted in 14082 U.S. Congressional Serial Set, 102d Cong. 1st Sess.1991. The House Report identified two problems with this sort of telemarketing: “First, it shifts some of the costs of advertising from the sender to the recipient. Second, it occupies the recipient’s facsimile machine so that it is unavailable for legitimate business messages while processing and printing the junk fax.” Id. To remedy this situation, Congress included the following prohibition in the TCPA: (b) Restrictions on use of automated telephone equipment (1) Prohibitions It shall be unlawful for any person within the United States— (C) to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine[.] 47 U.S.C. § 227 (b)(1)(C).

An “unsolicited advertisement” is defined as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission.” 47 U.S.C. § 227 (a)(4). The TCPA authorizes state attorneys general to bring civil actions on behalf of the residents of their respective states for an injunction or money damages or • both. 47 U.S.C. § 227 (f)(1). In these actions, the Act gives the federal district courts exclusive jurisdiction. 47 U.S.C. § 227 (f)(2). The Act also authorizes the Federal Communications Commission to intervene as of right in any state attorney general’s action. 47 U.S.C. § 227 (f)(3).

In addition, and of particular relevance to the instant case, the Act creates a private cause of action to obtain an injunc ²²⁵ tion and to recover $500.00 or actual monetary damages, whichever is greater. 47 U.S.C. § 227 (b)(3). This subsection reads: (b) Restrictions on use of automated telephone equipment (3) Private right of action 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 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 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. Id.

A similar private right of action is created for violations of the unsolicited telephone call provisions. See 47 U.S.C. § 227 (c)(5) (providing that: “A person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under [the TCPA] 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 the regulations prescribed under this subsection to enjoin such violation, (B) an action to recover for actual monetary loss 3 ²²⁶ The provisions authorizing a private right of action for unsolicited faxes and telephone calls apparently were relatively late additions to the Act. Int’l Science, 106 F.3d at 1152 . Senator Ernest (Fritz) Hollings, the bill’s sponsor in the Senate, discussed the rationale for allowing consumers to bring suit in state court: “The substitute bill contains a private right-of-action provision that will make it easier for consumers to recover damages from receiving these computerized calls.

The provision would allow consumers to bring an action in State court against any entity that violates the bill. The bill 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. Nevertheless, it is my hope that States will make it as easy as possible for consumers to bring such actions, preferably in small claims court.... Small claims court or a similar court would allow the consumer to appear before the court without an attorney.

The amount of damages in this legislation is set to be fair to both the consumer and the telemarketer. However, it would defeat the purposes of the bill if the attorneys’ costs to consumers of bringing an action were greater than the potential damages. I thus expect that the States will act reasonably in permitting their citizens to go to court to enforce this bill.” ²²⁷ Id. at 1152-53 (quoting 137 Cong. Rec.

S16205-06 (daily ed. Nov. 7, 1991)(statement of Sen. Hollings)). The federal courts of appeal that have examined the private cause of action provisions of the TCPA have uniformly held that they place exclusive jurisdiction for a private right of action in state courts; there is no implicit concurrent jurisdiction in the federal courts.

Murphey v. Lanier, 204 F.3d 911, 915 (9th Cir.2000); Foxhall Realty Law Offices, Inc. v. Telecomms. Premium Servs., Ltd., 156 F.3d 432 , 434 (2d Cir.1998); ErieNet, 156 F.3d at 518 ; Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287, 1289 , modified, 140 F.3d 898 (11th Cir. 1998); Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507, 510 (5th Cir.1997); Int’l Science, 106 F.3d at 1152, 1158 . See also Compoli v. AVT Corp., 116 F.Supp.2d 926, 928 (N.D.Ohio 2000). Writing for the court in Int’l Science (the leading case on the subject), Judge Niemeyer was careful to emphasize that, although Congress intended that private actions under the TCPA be brought in state courts, Congress did not mandate and, because of constitutional concerns, could not mandate such suits. 106 F.3d at 1156 .

Instead, such suits may be filed so long as the states allow them to be brought. Id. Judge Niemeyer noted Congress’s concern about the burden on court administration of “the millions of potential private TCPA claims.” Id. at 1157 . As Judge Niemeyer pointed out, Congress addressed this concern by eliminating such suits in federal courts and including a provision in the Act permitting the states to decline jurisdiction over such private suits. “[W]e believe Congress acted rationally in both closing federal courts and allowing states to close theirs to the millions of private actions that could be filed if only a small portion of each year’s 6.57 billion telemarketing transmissions were illegal under the TCPA.” Id.

Addressing 47 U.S.C. § 227 (b)(3) of the Act in particular, Judge Niemeyer explained: The clause in 47 U.S.C. § 227 (b)(3) “if otherwise permitted by the laws or rules of court of a State” does not condition ²²⁸ the substantive right to be free from unsolicited faxes on state approval. Indeed, that substantive right is enforceable by state attorneys general or the Federal Communications Commission irrespective of the availability of a private action in state court. Rather, the clause recognizes that states may refuse, to exercise the jurisdiction authorized by the statute. Thus, a state could decide to prevent its courts from hearing private actions to enforce the TCPA’s substantive rights.

To that extent, the existence of a private right of action under the TCPA could vary from state to state. That inequality, however, touches only a statutory permission to enforce privately the same substantive rights which both the state and the federal government can enforce in federal court through other mechanisms. Id. at 1156 . 4 Rejecting the argument that Congress impermissibly commandeered state resources by creating exclusive state jurisdiction over private actions in the TCPA, Judge Niemeyer stated: In this case, Congress has not commanded state legislatures to legislate, as found impermissible in New York [v. United States, 505 U.S. 144, 178-79 , 112 S.Ct. 2408 , 120 L.Ed.2d 120 (1992)]. Rather, it has, at most, directed that state courts enforce federal law, a requirement imposed on the states directly by the Supremacy Clause of Article VI, which provides that “the Laws of the United States which shall be made in Pursuance [of the Constitution] ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” ²²⁹ U.S. Const. art.

VI

Indeed, since Testa v. Katt, 330 U.S. 386 , 67 S.Ct. 810 , 91 L.Ed. 967 (1947), it has been clear that state courts may not refuse to enforce federal claims which are similar to state claims enforced in the same courts, at least where the federal enactment provides for concurrent jurisdiction in state and federal courts. It is true that in the case before us, we do not have the ameliorating fact that the TCPA provides for concurrent federal jurisdiction over private civil actions. To the contrary, in the TCPA Congress took the unusual step of making state court jurisdiction exclusive. Apparently recognizing that the exclusivity of state court jurisdiction could create a problem potentially left unresolved by Testa, Congress avoided any constitutional issue by refusing to coerce states to hear private TCPA actions, providing instead that a person or entity may, “if otherwise permitted by the laws or rules of court of a State,” bring a TCPA action in an appropriate court of that state.

States thus retain the ultimate decision of whether private TCPA actions will be cognizable in their courts. Id. at 1157 (citations omitted) (emphasis supplied). Whether Maryland has decided to permit private suits under the TCPA is, as we have said, at the heart of this case. The answer to this question is informed by various legislative enactments of the Maryland General Assembly.

It is to those enactments that we turn next.

II

Maryland’s Unsolicited Fax Statute, CL § 14-1313, and Related Provisions of Maryland’s Consumer Protection Laws. In 1989, two years before Congress’s enactment of the TCPA, the Maryland General Assembly enacted CL § 14-1313. This statute, entitled “Unsolicited facsimile transmissions,” is not unlike the comparable fax provision of the TCPA in that it prohibits the transmission of unsolicited faxes for ²³⁰ commercial solicitation purposes. Subsection (b) of CL § 14-1313 provides: Commercial solicitation prohibited.—A person may not make intentionally an electronic or telephonic transmission to a facsimile device for the purpose of commercial solicitation.

Subsection (c) of the statute authorizes the Attorney General to “initiate a civil action against any person who violates this section to recover for the State a penalty not to exceed $1,000 for each violation.” Md.Code (1975, 2000 Repl.Vol.), § 14-1313(c) of the Commercial Law Article. Notably, neither this statute, nor any other statute in Title 13 or 14 of the Consumer Law Article, provides for a private cause of action for violations of CL § 14-1313. In this respect, CL § 14-1313 stands in stark contrast to numerous other Maryland consumer protection laws, for which private causes of action have been created. CL § 13-408 creates a private cause of action, in addition to any action by the Consumer Protection Division of the Office of the Attorney General or the Attorney General, for violations of Maryland’s Consumer Protection Act, codified in CL § 13-101 et seq.

See Md.Code (1975, 2000 Repl.Vol.), § 13-408(a) of the Commercial Law Article. Private causes of action are provided for violations of other miscellaneous consumer protection statutes, as well. See Md.Code (1975, 2000 Repl.Vol.), § 14-304 of the Commercial Law Article (“Door-to-Door Sales”); Md.Code (1975, 2000 Repl.Vol., 2002 Cum.Supp.), § 14-407 of the Commercial Law Article (“Consumer Products Guaranty Act”); Md.Code (1975, 2000 Repl.Vol.), § 14-505 of the Commercial Law Article (“Fine Prints”); Md.Code (1975, 2000 Repl.Vol.), § 14-1005 of the Commercial Law Article (“Automotive Repair Facilities”); Md.Code (1975, 2000 Repl.Vol.), § 14-1109 of the Commercial Law Article (“Layaway Sales”); Md.Code (1975, 2000 RepLVol.), §§ 14-1213 and 14-1214 of the Commercial Law Article (“Consumer Credit Reporting Agencies”). Violations of the Maryland Telephone Solicitations Act, CL ²³¹ Title 14, Subtitle 22, likewise may be enforced by private cause of action. 5 As we shall explain more fully in Part III, infra, it is not without significance to us, as we resolve the issue presented by this case, that the legislature has expressly created a private cause of action for violations of the telephone solicitations provisions and for a number of other consumer protection laws of our State.

The legislature, however, has not expressly created a private action for violation of Maryland’s unsolicited facsimile law, CL § 14-1313. Instead, the General Assembly has expressly limited to the Attorney General the authority to bring actions for violations of the Maryland unsolicited facsimile law. As we have said, CL § 14-1313(c) provides that the Attorney General “may initiate a civil action against any person who violates” the statute. It is a basic principle of statutory construction that the courts should not read into a statute language that is not there.

Medex v. McCabe, 372 Md. 28, 38-39 , 811 A.2d 297 (2002),; Wyndham v. Haines, 305 Md. 269, 276 , 503 A.2d