District Court (N.J.) Says Mims Requires Federal Courts to Follow Federal Law, not State Law, under the TCPA

In Bais Yaakov of Spring Valley v. Peterson’s Nelnet, LLC, 2012 WL 4903269 (D.N.J.), defendant in a TCPA class action moved to dismiss, arguing that New York Civil Practice Law § 901(b) prevents the maintenance of Plaintiff’s TCPA claim as a class action. Defendant argued that the language of § 227(b) (3)—“A person or entity may, if otherwise permitted by the laws or rules of court of a state”—required the application of state law.  A choice-of-law analysis in this case, said Defendant, would dictate application of New York law. New York Civil Practice Law § 901(b) provides in relevant part that “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.” New York Civil Practice Law § 901(b) (McKinney 2012). Since Plaintiff’s class action seeks relief under a penalty-imposing statute that does not explicitly authorize class action recovery, Defendant argues Plaintiff cannot proceed. Judge Thompson disagreed, holding that Mims changed everything, and the Federal Rules of Civil Procedure control over state law.

If Shady Grove remained the only authority on this case, Defendant might have a winning position. But the recent decision in Mims has changed the landscape. See, e.g., Landsman, 2012 WL 2052685 at * 1 (remanding question of whether TCPA required application of state law in light of Shady Grove and Mims); Giovanniello v. Alm Media, LLC., No. 11–1411, 2012 WL 1884741, *1 (U.S. Oct. 1, 2012) (vacating judgment that TCPA required application of state statute of limitations and remanding for further consideration in light of Mims ); Hawk Valley, Inc., v. Taylor, No. 10–CV–00804, 2012 WL 1079965, * 10 (E.D.Pa. Mar. 30, 2012) (finding Mims an additional support for rejecting argument that state statute of limitations applied to TCPA claim); American Copper & Brass, Inc. v. Lake City Indus. Prods., No. 1:09–CV–1162, 2012 WL 3027953, *2 (W.D.Mich. July 24, 2012) (finding Shady Grove and Mims controlled when determining that a Michigan law barring class actions did not apply to TCPA claim); Jackson’s Five Star Catering v. Beason, No. 10–10010, 2012 WL 3205526, *4 (E.D.Mich. July 26, 2012) (using Mims holding as basis for finding Michigan state law prohibiting class actions did not apply to TCPA claim); Bank v. Spark Energy Holdings, LLC, No. 4:11–CV–4082, 2012 WL 4097749, *2–3 (S.D. Tex. Sept 13, 2012) (basing decision to deny application of § 901(b) to TCPA claim on Mims); Bailey v. Domino’s Pizza, LLC., No. 11–4, 2012 WL 1150882, *3 (E.D.La. Apr. 5, 2012) (stating that “Mims has changed the landscape of TCPA claims such that federal rather than state prescriptive law applies to TCPA claims filed in federal court”). ¶ . . . In light of Mims, a case bolstering the previous Shady Grove opinion favoring application of Rule 23 in federal court unless specifically barred by Congress, this Court does not believe it appropriate to interpret the text of § 227(b)(3) as requiring a federal court to follow state law. A growing number of lower courts have also decided likewise. See, e. g., Hawk Valley, Inc., v. Taylor, No. 10–CV–00804, 2012 WL 1079965, * 10 (E.D.Pa. Mar. 30, 2012); American Copper & Brass, Inc. v. Lake City Indust. Prods., No. 1:09–CV–1162, 2012 WL 3027953, * 2 (W.D.Mich. July 24, 2012); Jackson’s Five Star Catering v. Beason, No. 10–10010, 2012 WL 3205526, *4 (E.D.Mich. July 26, 2012); Bank v. Spark Energy Holdings, LLC, No. 4:11–CV4082, 2012 WL 4097749, * 2–3 (S.D. Tex. Sept 13, 2012); Bailey v. Domino’s Pizza, LLC., No. 11–4, 2012 WL 1150882, *3 (E.D.La. Apr. 5, 2012).