Landsman & Funk, P.C. v. Skinder-Strauss Associates, 2009 WL 1916316 (D.N.J. June 20, 2009)

This incredibly confusing case started with an unsolicited advertisement faxed from a New Jersey partnership, Skinder-Strauss Associates (“Skinder”) to a New York law firm, Landsman & Funk, P.C. (“Funk”). (Yeah, it should really be “Landsman,” but geez, we need material here.) Funk sued Skinder in New Jersey federal court for violations of the Telephone Consumer Protection Act (“TCPA”), and Skinder moved to dismiss for lack of jurisdiction.

The New Jersey district court first found that it did not have federal question jurisdiction, because the Third Circuit had held that 47 U.S.C. § 227(b)(3) confers exclusive jurisdiction over TCPA suits to state courts. Ok, so far so good.

However, the court held it could still (potentially) have diversity of citizenship jurisdiction under CAFA, and found that the CAFA requirements were “purportedly” met on the face of the complaint – at least 100 class members, diversity between the defendant and the named plaintiff, and $500 sought in statutory penalties per unsolicited fax (alleged to be well over ten-thousand sent). Ok, that makes sense, and that’s the end of the CAFA discussion. Now on to the fun part.

Although the complaint met the amount in controversy requirement on its face, depending on what state’s law applied, well……………

The TCPA creates a private right of action only if permitted by the law or rules of court of a state. New York does not allow class actions for TCPA claims. New Jersey doesn’t give a rat’s ass. 

Funk, which was domiciled in New York and filed suit in New Jersey, said New Jersey law applied. Skinder, which was domiciled in New Jersey, said New York law applied. Surprised?

The New Jersey federal court had to apply New Jersey choice of law rules to decide whether New York or New Jersey law applied. Under the significant relationship test applied under New Jersey’s choice of law rules, the law of the state where the injury occurred is applied unless the other state has a more significant relationship. Because the fax was received in New York, over a New York fax line, the injury occurred in New York. 

Skinder’s principal place of business was in New Jersey, but the purpose of the fax was to sell advertising space to New York attorneys in a publication circulated in New York about New York law. New York’s interests would be frustrated by allowing a TCPA class action. New Jersey, as we’ve said, doesn’t care. Therefore, New York law should apply. Therefore, Funk could not recover anything in a TCPA class action applying New York law. Therefore, the amount in controversy was not met. Therefore, get the Funk out.

Do you need us to go over that one more time? Tough, we’re not reading the case again. 

Are you still there?