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Bonime v. Avaya

December 20, 2006

HAROLD BONIME, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED PLAINTIFF,
v.
AVAYA, INC. DEFENDANT.



The opinion of the court was delivered by: Amon, United States District Judge

OPINION AND ORDER

Before this Court is a motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. Plaintiff Harold Bonime has filed a class action lawsuit against Defendant Avaya, Inc. ("Avaya") based upon alleged violations of the Telephone Consumer Protection Act. For the reasons set forth below, this Court finds that it does not have subject matter jurisdiction over this cause of action.

I. Background

The Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, prohibits sending "unsolicited advertisements" to a telephone facsimile machine and provides a private right of action. See 47 U.S.C. §§ 227(b)(1)(C). Thus, a private party may "if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State . . . 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 . . . ." Id. at § 227(b)(3). If the court finds that the defendant violated the TCPA "willfully or knowingly," it may increase the award to up treble damages. Id.

Bonime, a citizen of New York, alleges that Avaya, a citizen of Delaware and New Jersey, violated the TCPA when it sent him an unsolicited fax advertisement through an agent. Bonime also asserts that Avaya sent unsolicited fax advertisement to upwards of 10,000 potential class members, who are each entitled to statutory damages of between $500 and $1,500. Thus, Bonime claims that this action meets the requirements of the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d), and that this Court has diversity jurisdiction over the case. Avaya argues, however, that under Section 901(b) of New York Civil Practice Law and Rules ("section 901(b)"), 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.

II. Analysis

A. Standard of Review

Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a complaint is subject to dismissal when it does not present a federal question under 28 U.S.C. § 1331 and when the requirements of diversity jurisdiction under 28 U.S.C. § 1332 have not been met. The plaintiff bears the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists. Luckett v. Bure, 290 F.3d 493, 497 (2d. Cir. 2002).

B. This Court does not Have Subject Matter Jurisdiction

The Second Circuit has held that there is no federal question jurisdiction under the TCPA. Gottlieb v. Carnival Corp., 436 F.3d 335, 337 (2d. Cir. 2006); Foxhall Realty Law Offices v. Telecomms. Premium Servs., Ltd., 156 F.3d 432, 435 (2d. Cir. 1998); see also Nicholson v. Hooters of Augusta, Inc., 136 F.3d 1287, 1289 (11th Cir. 1998); Chair King, Inc. v. Houston Cellular Corp., 131 F.3d 507, 509 (5th Cir. 1997); Int'l Sci. & Tech. Inst., Inc. v. Inacom Commc'ns, Inc., 106 F.3d 1146, 1150 (4th Cir. 1997). Nonetheless, a federal court may hear a TCPA claim by exercising diversity jurisdiction if the requirements of the diversity statute are met. Gottlieb, 136 F.3d at 336. The parties agree that Bonime cannot invoke diversity jurisdiction under 28 U.S.C. § 1332(a), as he has not alleged an individual claim for $75,000.

However, Bonime asserts that this Court has diversity jurisdiction under the Class Action Fairness Act. When the TCPA was enacted, a class action could not be brought in federal court under diversity jurisdiction unless every potential plaintiff's claim met the amount in controversy requirement for diversity jurisdiction. See Zahn v. Int'l Paper Co., 414 U.S. 291, 300 (1973). Subsequently, in 2005, Congress passed CAFA, under which members of a putative class may obtain diversity jurisdiction if the aggregate claims exceed $5,000,000 and if any one of the plaintiffs is a citizen of a state different from any one of the defendants. 28 U.S.C. § 1332(d). Bonime asserts that he meets these requirements, as the aggregate statutory damages for the putative 10,000 class members exceed $5,000,000 and the citizenship requirements are met.

Avaya argues, however, that a class action for TCPA statutory damages is not actionable in New York state and is thus not actionable in this Court, sitting in diversity jurisdiction. The parties do not dispute that a class action for statutory damages under the TCPA is not actionable in New York state court. New York limits the invocation of class actions for the recovery of statutory damages to those statutes which specifically allow for class actions. That is, section 901(b) of New York Civil Practice Law and Rules provides:

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.

Because the TCPA does not specifically authorize recovery of statutory damages in a class action, New York state courts have held that class actions may not be maintained for statutory damages for alleged violations of the TCPA. Leyse v. Flagship Capital Servs. Corp., 803 N.Y.S.2d 52, 53 (N.Y. App. Div. 2005); Rudgayzer & Gratt v. Cape Canaveral Tour & Travel, Inc., 799 N.Y.S.2d 795 (N.Y. App. Div. 2005); Weber v. Rainbow Software, Inc., 799 N.Y.S.2d 428 (N.Y. App. Div. 2005); Ganci v. Cape Canaveral Tour & Travel, Inc., 799 N.Y.S.2d 737 (N.Y. App. Div. 2005); Giovanniello v. Hispanic Media Group USA, Inc., 799 N.Y.S.2d 800 (N.Y. App. Div. 2005). Indeed, two TCPA class actions filed by Bonime in New York state court have been dismissed on the basis of section 901(b). See Bonime v. Bridge 21, Inc., 799 N.Y.S.2d 417 (N.Y. App. Div. 2005) (affirming dismissal of class action predicated on the TCPA for failure to state a cause of action); Bonime v. Discount Funding Assocs., Inc., 799 N.Y.S.2d ...


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