MLC MORTGAGE CORP. v. SUN AMERICA MORTGAGE CO.

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MLC MORTGAGE CORP. v. SUN AMERICA MORTGAGE CO.
2009 OK 37
212 P.3d 1199
Case Number: 105732; Consol. w/105448
Decided: 05/26/2009

THE SUPREME COURT OF THE STATE OF OKLAHOMA

MLC MORTGAGE CORPORATION, an Oklahoma corporation, on behalf of Themselves and All Others Similarly Situated, Plaintiff/Appellant,
v.
SUN AMERICA MORTGAGE COMPANY, an Arizona corporation, Defendant/Appellee.
and
ADAMS & ASSOCIATES, P.C., on Behalf of Themselves and All Others Similarly Situated, Plaintiffs/Appellants,
v.
HELENA'S ADVENTURES IN TRAVEL, INC., an Oklahoma corporation, Defendant/Appellee.

CERTIORARI TO THE COURT OF CIVIL APPEALS,
DIVISION II

¶0 In the styled and numbered causes, the plaintiffs/appellants, MLC Mortgage Corporation and Adams and Associates, P.C. [collectively, private parties/consumers], filed actions alleging they received unrequested solicitations via fax machine from the defendants/appellees, Sun America Mortgage Company and Helena's Adventures in Travel, Inc. [collectively, solicitors/advertisers], in violation of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. §227 (2005). The solicitors filed motions for summary judgment arguing that the district courts had no authority to proceed in a private action for damages under the TCPA. The trial court granted the summary judgment motions. The Court of Civil Appeals reversed and remanded determining that a private cause of action could be pursued and that there were unresolved factual issues regarding the circumstances of the contacts made. We granted certiorari to issue a precedential pronouncement on an issue of first impression in Oklahoma. We hold that private parties may pursue violations of the Telecommunications Consumer Protection Act (TCPA), 47 U.S.C. §227 (2005), in Oklahoma courts.

CERTIORARI PREVIOUSLY GRANTED;
COURT OF CIVIL APPEALS' OPINION VACATED;
TRIAL COURT REVERSED AND CAUSE REMANDED.

Joe Brett Reynolds, JOE BRETT REYNOLDS, P.C., Oklahoma City, Oklahoma, for Plaintiffs/Appellants, MLC Mortgage Corporation and Adams & Associates, P.C.
Mack J. Morgan III, Charles Goodwin, CROW & DUNLEAVY, Oklahoma City, Oklahoma, and David A. Selden, Jodi Hill, BALLARD, SPAHR, ANDREWS & INGERSOLL, LLP, Phoenix, Arizona, for Defendant/Appellee, Sun America Mortgage Co.
Kris Ted Ledford, Patrick H. Kernan, KERNAN & LEDFORD, Tulsa, Oklahoma, and Maurice G. Woods, II, McATEE & WOODS, P.C., Oklahoma City, Oklahoma, for Defendant/Appellee, Helena's Adventures in Travel, Inc.

WATT, J.:

¶1 The above styled and numbered causes are consolidated for disposition by a single opinion.

¶2 We join the almost unanimous pronouncements of extant federal and state courts having decided the issue

RELEVANT FACTS

¶3 Suit was filed on behalf of the consumers and all others similarly situated

¶4 On December 31st of the same year, the Court of Civil Appeals issued two opinions, identical in their reasoning. The appellate court reversed the trial court and remanded the causes. It determined that a private cause of action could be maintained in Oklahoma courts and that remand was necessary for the determination of material facts concerning circumstances surrounding the transmission of the faxed materials. Petitions for certiorari were filed on January 20, 2009. On March 31, 2009, the Court granted certiorari in both causes.

History and Purpose of the Telephone Consumer Protection Act (TCPA)

¶5 In 1991, the United States Congress conducted hearings on several bills related to the regulation of telemarketing

De Novo

¶6 The trial court granted summary judgment based on a legal determination that the private parties could not proceed on a cause of action for violation of the TCPA. Jurisdictional issues present questions of law.13 Therefore, our review is de novo.14

¶7 a. Private Parties may Pursue Violations of the Telecommunications
Consumer Protection Act (TCPA), 47 U.S.C. §227 (2005),
in Oklahoma Courts.

¶8 The language relating to the consumers' private right of action is found in §227(b)(3) of title 47 of the United States Code providing in pertinent part:

"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, or

(C) both such actions. . . ." [Emphasis provided.]

The issue here is whether the phrase, "if otherwise permitted by the laws or rules of court of a State," allows consumers to bring a private right of action in Oklahoma courts for violation of the federal statutory provision.

¶9 The solicitors contend that the language in question requires the Oklahoma Legislature to affirmatively enable courts of this state to hear private claims arising under the TCPA. Because the Legislature has not passed a statutory provision specifically allowing private parties to file suit against violators of the TCPA, they argue that such actions may not be heard in our courts. The private parties assert that there is no need for legislative action before they may proceed to recover the statutorily provided recovery. We agree that legislative intervention is not a condition precedent to consumers recovering for violations of the TCPA in Oklahoma courts.

¶10 1)

¶11 The overwhelming majority of courts considering the issue of whether private parties may sue for TCPA violations in state court have determined that citizens should be allowed to proceed.

¶12 The "acknowledgment" approach is grounded in the Supremacy Clause of the United States Constitution.

¶13 The "opt out" interpretation construes the TCPA to immediately authorize private rights of action in state court without the necessity of affirmative state action. In order that a state's courts not entertain such claims, there must be affirmative action through legislation or court rule specifically refusing to entertain a private TCPA claim.

¶14 The third standard, and the one the solicitors urge us to adopt, looks at the language of the TCPA and concludes that Congress intended to deprive state courts of jurisdiction over private TCPA actions. Under this approach, the language "otherwise permitted" is said to indicate that the TCPA does not create an immediately enforceable right.

¶15 In contrast to the reasoning of the overwhelming majority of jurisdictions, only one state has unequivocally espoused the "opt in" theory. In The Chair King, Inc. v. GTE Mobilnet of Houston, Inc., 184 S.W.3d 707, 718 (Tex. 2006), the Texas Supreme Court held that the TCPA did not create an immediately enforceable private right of action for unsolicited faxes and that such a cause of action would not be recognized in Texas courts until the Legislature amended the state's business and commerce code to provide for such a suit by private parties. Such a provision was added by Texas' 80th Legislature in 2007 with an effective date of April 1st of this year.

¶16 2) Oklahoma's jurisprudence allowing the enforcement
of federal rights in state courts along with
constitutional provisions requiring open access
to the court system and defining the system's jurisdictional
sweep aligns us with those jurisdictions
adopting the "acknowledgment" approach to TCPA claims.

¶17 Our jurisprudence recognizes that the Supremacy Clause of the United States Constitution

¶18 The judiciary is the independent department of government charged with the responsibility of protecting constitutional rights.

¶19 The "acknowledgment" approach to TCPA claims requires no legislative intervention before private parties may proceed in state courts to protect themselves from unsolicited facsimile transmission. The Oklahoma Legislature has previously recognized that an analogous state-law claim may be criminally prosecuted. Oklahoma's Constitution recognizes federal supremacy while guaranteeing Oklahoma citizens the right to open access to the judicial system with a jurisdictional sweep that does not depend on legislative grant. We join the almost unanimous pronouncements of extant federal and state courts having decided the issue

CONCLUSION

¶20 We express no opinion as to whether the private parties will succeed in their attempt to collect damages from the solicitors for violation of the TCPA. There remain questions of material fact to be resolved on the issue of whether the faxes sent by the solicitors were either with the permission or at the request of the private parties. Therefore, we hold only that private parties may pursue violation of the TCPA in Oklahoma courts.

CERTIORARI PREVIOUSLY GRANTED;
COURT OF CIVIL APPEALS' OPINION VACATED;
TRIAL COURT REVERSED AND CAUSE REMANDED.

EDMONDSON, C.J., OPALA, KAUGER, WATT, WINCHESTER, COLBERT, REIF, JJ. concur.

TAYLOR, V.C.J. , HARGRAVE, J. dissent.

FOOTNOTES

1 Rule 1.27(d), Supreme Court Rules, 12 O.S. Supp. 2008 providing in pertinent part:

". . . The appellate court has the discretion sua sponte, or upon motion of a party, to consider any appeals including one or more appeals governed by Rule 1.36 as companion or consolidated appeals." [Emphasis in original.]

In re

(1) Prohibitions

It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States ---

. . . (C) to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement . . .

(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 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 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."

In Lampkin v. GGH, Inc.,

"The courts of justice of the State shall be open to every person, and speedy and certain remedy afforded for every wrong and for every injury to person, property, or reputation; and right and justice shall be administered without sale, denial, delay, or prejudice."

". . . The District Court shall have unlimited original jurisdiction of all justiciable matters, except as otherwise provided in this Article . . ."

See also, Reeds v. Walker,

"The term 'unsolicited advertisement' means 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, in writing or otherwise."

"Actions by states

(1) Authority of the States

(1) Whenever the attorney general of a State . . . has reason to believe that any person has engaged or is engaging in a pattern or practice of telephone calls or other transmissions to residents of that State in violation of this section or the regulations prescribed under this section, the State may bring a civil action on behalf of its residents to enjoin such calls . . .

(2) Exclusive jurisdiction in Federal courts

The district courts of the United States, the United States courts of any territory, and the District Court of the United States for the District of Columbia shall have exclusive jurisdiction over all civil actions brought under this subsection. . . ."

"This Constitution, and the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in Every State shall be bound thereby. . . ."

Oklahoma recognizes the supremacy of the United States Constitution. Okla. Const. art. 1, §1 providing:

"The State of Oklahoma is an inseparable part of the Federal Union, and the Constitution of the United States is the supreme law of the land."

See, Portuguese American Leadership Council of The United States, Inc. v. Investors' Alert, Inc., note 15, supra; Condon v. Office Depot, Inc., note 15, supra; Mulhern v. MacLeod, note 15, supra; First Capital Mortgage Corp. v. Union Federal Bank of Indianapolis, see note 15, supra.

"Reserved powers to states

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Consumer

"(a) A person may bring a civil action based on a violation of subchapter c:

(1) for damages in the amount equal to the greater of:

(A) the person's actual monetary loss from the violation; or

(B) $500 for each violation;

(2) to enjoin the violation; or

(3) for both damages and an injunction.

(b) If the court finds that the defendant wilfully or knowingly violated Subchapter C, the court may increase the amount of the damages awarded to an amount equal to not more than three times the amount of the damages awarded under Subsection (a)(1). . . . "

"A. A person shall not intentionally make an electronic or telephonic transmission to a facsimile device located in this state by means of any connection with a telephone network for the purpose of transmitting a commercial solicitation, as defined by Section 1 of this act. Each commercial solicitation prohibited by this act shall be a separate violation.

B. Any person violating the provisions of this act shall upon conviction be guilty of a misdemeanor punishable by a fine of not less than Five Hundred Dollars ($500.00) or more than One Thousand Dollars ($1,000.00) for each separate violation.

C. A person violating the provisions of this act shall be deemed to have committed the violation either at the place where the electronic or telephonic transmission is made or at the place where the transmission is received."

"The courts of justice of the State shall be open to every person, and speedy and certain remedy afforded for every wrong and for every injury to person, property, or reputation, and right and justice shall be administered without sale, denial, delay or prejudice."

". . . The District Court shall have unlimited original jurisdiction of all justiciable matters, except as otherwise provided in this Article, and such powers of review of administrative action as may be provided by statute. . . ."