The Telephone Consumer Protection Act ("TCPA") was enacted to protect consumers from the nagging calls from telemarketers and debt collectors. The Act provided that suit could be filed in any state court of competent jurisdiction. On January 18, 2012, the U.S. Supreme Court in Mims v. Arrow Financial Services, LLC held that federal courts could also have jurisdiction over TCPA cases.
Up until the Mims decision, the majority of circuits held that federal courts lacked jurisdiction over TCPA cases. And attorneys for debt collectors and telemarketers argued that TCPA cases filed in federal court must be dismissed. Prior to Mims debt collectors and telemarketers removed cases based only on diversity (if the amount in controversy met the threshold) or if the case was filed as a class action and met the requirements of the Class Action Fairness Act.
Now attorneys for debt collectors and telemarketers are removing TCPA cases filed in state court to federal court as a defense tactic. State courts generally have different pleading requirements than federal courts. For instance, most state courts require a "barebones" complaint that puts the defendant on notice of the allegations that it will have to defend. But federal courts apply a heightened standard.
Two major decisions changed the pleading standard. In Bell Atlantic v. Twombly in 2007 and Ashcroft v. Iqbal in 2009, the Supreme Court announced a new pleading standard that shook the foundations of federal litigation. The decisions allow district court judges to dismiss a complaint if it does not set out a “plausible” claim—a departure from the rule established in the 1957 case Conley v. Gibson that a court cannot dismiss a complaint unless it is apparent that the plaintiff could prove “no set of facts” that would entitle him to relief. In short, these decisions empowered district court judges to weigh whether sufficient facts have been pled to support the allegations in the complaint. And if the judge finds the facts pled insufficient to support the allegations, the complaint can be dismissed.
Defense counsel for debt collectors and telemarketers are now using the combination of federal jurisdiction and its heightened pleading requirement to remove state court TCPA complaints to federal court and then to move to dismiss the complaint because it did not meet the federal pleading standard. These complaints met the state court pleading requirements where they were filed, but may or may not meet the federal standard. This is a type of forum shopping that the federal courts should reject.
But, not to be outdone, we have begun addressing the motions to dismiss and simultaneously filing an amended complaint that meets the heightened pleading standard. At some point we hope to find a federal judge who will see the forum shopping and who will send the case back to state court. But that hasn't happened yet.
Stay tuned.
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