Antitrust Law Daily Wrap Up, PRIVACY—SDNY: Telephone Consumer Protection Act Does Not Preempt New York Telemarketing Law, (Mar 8, 2013)

By Tobias J. Gillett, J.D., LLM.

The Telephone Consumer Protection Act does not preempt a New York individual’s claims against a Minnesota debt collection company under a New York statute regulating telemarketing calls, the federal district court in White Plains, New York has ruled (Sussman v. I.C. System, Inc., March 6, 2012, Ramos, E.).

I.C. System, Inc. is a Minnesota-based debt collection company. David Sussman, a New York individual, alleged that I.C. System called his residence over 50 times, seeking to collect payment on a telephone bill that he did not owe. Despite informing I.C. System in writing that he did not owe money and requesting that I.C. System cease the calls, I.C. System continued to call his residential line. The calls were placed by an automatic device, and did not identify the person making the call, the person on whose behalf the calls were made, or the address or telephone number of that person.

Sussman filed suit against I.C. System, alleging that the telephone calls, and over 100,000 calls like them made to thousands of other New York persons, violated New York General Business Law § 399-p, among other claims. That provision requires calls made using an automatic dialing-announcing device to state “the nature of the call and the name, address and telephone number of the person on whose behalf the message is being transmitted.” In response, I.C. System contended that the § 399-p claims were preempted by the federal Telephone Consumer Protection Act (TCPA).

Presumption against preemption. The court initially addressed the question whether the presumption against preemption, under which preemption would not occur “unless it was the clear and manifest purpose of Congress,” applied in the present case. The presumption ordinarily did not apply “where there has been a history of significant federal presence.” Although Congress had regulated certain telemarketing practices, the court observed that the presumption “does not rely on the absence of federal regulation.” The court found that Congress had intended the TCPA to “regulate the telecommunications industry concurrently with the states,” which had a long history of regulation in that area, with the TCPA filling in perceived jurisdictional gaps in state law. Therefore, the presumption against preemption applied.

Express preemption. Under the TCPA, state laws that impose more restrictive requirements on intrastate calls are generally not preempted. However, although I.C. System conceded that the § 399-p was not expressly preempted by the TCPA, it contended that § 399-p was preempted because it imposed more restrictive requirements on interstate calls, and that because the TCPA included a clause saving particular state actions, other actions not specifically saved should be considered preempted.

The court disagreed, initially observing that nothing in the TCPA expressly preempted state laws regulating interstate communications. Moreover, the fact that the TCPA saved certain state law actions did not mean that other actions were preempted “by negative implication.” The legislative history of the TCPA “indicate[d] that Congress did not intend to preempt state law through the passage of the TCPA,” but rather “to provide interstitial law preventing evasion of state law by [telemarketers] calling across state lines.” As Congress had included a clause saving particular state actions, it could have just as easily expressed its intent to preempt other state actions. Therefore, the TCPA did not preempt § 399-p.

Implied preemption. The court noted two circumstances under which federal law will preempt state law in the absence of express statutory language: (1) “where Congress has manifested an intent to ‘occupy the field’ in a certain area,” and (2) “where the state law actually conflicts with the federal law.” Since nothing indicated that a party could not comply with both the TCPA and § 399-p, and since § 399-p conformed to Congress’s apparent plan to establish a “uniform minimum” while permitting states to regulate above that minimum, conflict preemption did not apply. Furthermore, Congress did not intend to “occupy the field” through the TCPA, but rather to provide “interstitial law” preventing evasion of state law, and thus field preemption also did not apply.

Finally, the court rejected I.C. System’s argument that, although its claimed preemption did not fall within any of the three established forms of preemption, the court should still find § 399-p to be preempted. I.C. Systems based this contention on “Congress’s apparent belief in passing the TCPA that because states do not have jurisdiction over interstate calls, a federal law was needed to regulate interstate communication.” The court observed that even I.C. Systems had admitted that Congress’s belief had been “since found to be in error.” Therefore, the court declined to dismiss the § 399-p claim on preemption grounds.

The court also denied I.C. System’s motion to dismiss with respect to Sussman’s claims under the federal Fair Debt Collection Practices Act (FDCPA) §§ 1692c(c), d(5), d(6), and e(11), but granted it with respect to claims under FDCPA §§ 1692e(2)(A), e(10), and f.

The case is No. 12-CV-0181 (ER).

Attorneys: Aytan Yehoshua Bellin (Petroff & Bellin, LLP) for David Sussman. Kenneth A. Elan for I.C. System, Inc.

Companies: I.C. System, Inc.

Cases: NewYorkNews