Exclusively Cats Veterinary Hosp. v. Thomas Veterinary Drug, Inc., No. 10-106252010, WL 3611531 (E.D. Mich. Sep 15, 2010).

No wonder people continue to seek tort reform.  Here, we have a vet clinic that treats nothing but cats.  This vet clinic receives a single unsolicited fax from a vet drug company.  Instead of being mad at themselves for selecting a profession that involves shoving thermometers up cats’ rectums all day, the vets decides to take it out on the vet drug company that sent the single unsolicited fax.  The rage associated with the cost of receipt of this single unsolicited fax was so great, the cat only vet clinic filed a class action pursuant to CAFA and alleged that the amount in controversy was in excess of $5 million. 

A District Court in Michigan, apparently thinking that the litter box needs to be changed more often, dismissed the plaintiff’s complaint for lack of subject matter jurisdiction holding that although TCPA is a federal statute, there was no federal question subject matter jurisdiction; thus, CAFA’s jurisdictional requirements shall be established to maintain the action before a federal court.

The plaintiff, Exclusively Cats Veterinary Hospital,  brought a class action in the District Court pursuant to CAFA alleging that the defendant, Thomas Veterinary Drug, Inc., sent an unsolicited  advertisement to the plaintiff’s facsimile machine in violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. 

The complaint asserted that the District Court had subject matter jurisdiction pursuant to CAFA, 28 U.S.C. §1332, because there was more than $5 million in controversy and more than two-thirds of the class were residents of states other than Michigan. The complaint averred that the defendant had sent similar unsolicited facsimile advertisements to at least 39 other recipients.  

The complaint also alleged that the Court had jurisdiction under 28 U.S.C. §1331 because the claim arose pursuant to the TCPA, a federal statute.  

The defendant filed a motion to dismiss based on lack of subject matter jurisdiction, which the District Court granted.

While holding so, the Court first found that although the case involved an alleged violation of TCPA–a federal statute– there was no federal question subject matter jurisdiction. The TCPA provides that a private right of action may be brought in any state court if otherwise permitted by the laws or rules of the state court.  This court in APB Assocs, Inc. v. Bronco’s Saloon, No. 09-14959, 2010 U.S. Dist. LEXIS 19301 (E.D. Mich. March 4, 2010), as well as nearly every federal court that had so far addressed the issue, had held that no federal question subject matter jurisdiction existed, the Court explained.

Second, the Court observed that the complaint averred that the plaintiff and 39 other recipients received the similar unsolicited facsimiles from the defendant. The TCPA provides for damages in the amount of $500 for each violation.  Thus, the Court remarked that even if the court was to use its discretion to impose treble damages, the amount in controversy alleged would be only $60,000 ($1,500 times 40 violations)–an amount far less than the $5 million required under CAFA. Furthermore, the Court found that the existence of a 40 member class fell short of CAFA’s 100 member requirement to establish jurisdiction. 

Finally, the Court concluded that, the courts including the court in Freedman v. Advanced Wireless Cellular Commc’ns, Inc., 2005 WL 2122304, at *2 (N.J. Super. 2005), have opined that a class action under the TCPA may be invalid.