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Zelma v. Konikow


August 8, 2005


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County, DC-23204-03.

The opinion of the court was delivered by: Grall, J.A.D.



Submitted January 4, 2005

Before Judges Skillman, Parrillo and Grall.

Plaintiff Richard M. Zelma appeals from an order of the Special Civil Part of the Law Division dismissing his complaint under the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C.A. § 227, as untimely because it was not filed within the two-year limitation provided for pursuant to N.J.S.A. 2A:14-10. We conclude that such actions must be filed within the four-year limitation period provided in 28 U.S.C.A. § 1658(a) and reverse.*fn1

Plaintiff alleged that defendants Richard Konikow and Konikow Associates transmitted twelve unsolicited advertisements by telephone facsimile machine between January 1 and April 30, 2000, contrary to 47 U.S.C.A. § 227(b)(1)(C). He also claimed that the facsimiles did not include required information identifying the source of the transmission, contrary to 47 U.S.C.A. § 227(d)(1). He sought statutorily authorized damages of $500 per violation, trebled. 47 U.S.C.A. § 227(b)(3)(B). Zelma filed the complaint on October 29, 2003, more than three years after the claimed violations.

A "state court must apply federal law in determining when a litigant may assert a claim or defense originating in a federal statute. . . . Thus, a state court hearing a cause of action arising under a federal statute must apply the relevant federal statute of limitations." Beneficial Fin. Co. of Atlantic City v. Swaggerty, 86 N.J. 602, 607-08 (1981).

Two federal statutes are relevant to the question of federal law presented here. The statutes are 28 U.S.C.A. § 1658(a), which supplies "a general, 4-year limitations period for any federal statute . . . enacted [after December 1, 1990] without one of its own," N. Star Steel Co. v. Thomas, 515 U.S. 29, 34 n., 115 S.Ct. 1927, 1930 n., 132 L.Ed. 2d 27, 32 n. (1995); see Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 380 n.14, 124 S.Ct. 1836, 1844 n.14, 158 L.Ed. 2d 645, 655 n.14 (2004), and the TCPA, which was enacted in 1991 and gives state courts exclusive subject matter jurisdiction over private claims based on violations such as the prohibited facsimile transmissions alleged here, 47 U.S.C.A. § 227(b)(1)(C), (b)(3);*fn2 see Zelma v. Market U.S.A., 343 N.J. Super. 356, 359-60, 364 (App. Div. 2001).

Read together, the statutes raise the question whether Congress intended to apply the "catchall" four-year limitation period provided in 28 U.S.C.A. § 1658(a) to private actions arising under the TCPA or to defer to local limitation periods. Section 1658 provides:

Except as otherwise provided by law, a civil action arising under an Act of Congress enacted after the date of the enactment of this section may not be commenced later than 4 years after the cause of action accrues.

[28 U.S.C.A. § 1658(a) (emphasis added).] The TCPA provides:

A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring [an action to enjoin or recovery damages for a violation of the TCPA or specified regulations promulgated pursuant to the Act] in an appropriate court of that State . . . .

[47 U.S.C.A. § 227(b)(3) (emphasis added).]

The ambiguity is apparent. In making the TCPA's cause of action available "if otherwise permitted by the laws or rules of court of a State," did Congress intend to include or exclude "permissibility" under the limitation period of each state. Stated differently, did Congress intend to "provide" an "exception" to application of § 1658's four-year period, which would "otherwise" govern the civil action established in this post-1990 Act of Congress, in order to permit state courts to apply a state period of limitation.

Resolution of the ambiguity requires us to consider the purpose of both statutes. See Jones, supra, 541 U.S. at 375-76, 124 S.Ct. at 1841-42, 158 L.Ed. 2d at 652-53; Wilson v. Garcia, 471 U.S. 261, 266-75, 105 S.Ct. 1938, 1943-46, 85 L.Ed. 2d 254, 260-66 (1985). In Jones, supra, 541 U.S. at 380, 124 S.Ct. at 1844, 158 L.Ed. 2d at 655, the United States Supreme Court concluded that 28 U.S.C.A. § 1658 should be construed to apply broadly. The Court reasoned that the "central purpose of § 1658" is to minimize the complex legal issues and uncertainty for litigants created when Congress establishes a federal cause of action without specifying a limitation period, leaving courts adjudicating federal claims to select the most analogous state law claim and borrow that claim's limitation period. See id. at 376-79, 124 S.Ct. at 1842-44, 158 L.Ed. 2d at 653-55. The Court reviewed the difficulties inherent in such "limitation borrowing" that led Congress to enact the "catchall" limitation period:

Prior to the enactment of § 1658, the settled practice was to adopt a local time limitation as federal law if it [was] not inconsistent with federal law or policy to do so. Such limitation borrowing generated a host of issues that required resolution on a statute-by-statute basis. For example, it often was difficult to determine which of the forum State's statutes of limitations was the most appropriate to apply to the federal claim. We wrestled with that issue in Wilson v. Garcia, in which we considered which state statute provided the most appropriate limitation principle for claims arising under 42 U.S.C. § 1983. [That decision] resolv[ed the] split of authority over whether the closest state analogue to an action brought under § 1983 was an action for tortious injury to the rights of another, an action on an unwritten contract, or an action for a liability on a statute . . . . Two years later . . . we answered the same three questions for claims arising under § 1981. Both decisions provoked dissent and further litigation.

. . . Even when courts were able to identify the appropriate state statute, limitation borrowing resulted in uncertainty for both plaintiffs and defendants, as a plaintiff alleging a federal claim in State A would find herself barred by the local statute of limitations while a plaintiff raising precisely the same claim in State B would be permitted to proceed. [Id. at 377-79, 124 S.Ct. at 1842-43, 158 L.Ed. 2d at 654 (citations, internal quotations and footnotes omitted).]

In a case decided prior to the enactment of § 1658, the Court had noted that the difficult practice of "borrowing" limitation periods was also inherently unlikely to produce results that further the purposes of limitation periods. Wilson, supra, 471 U.S. at 271, 105 S.Ct. at 1944, 85 L.Ed. 2d at 653-54. The Court explained that when a federal claim "differs from [existing] state cause[s] of action in fundamental respects, the State's choice of a specific period of limitation is, at best, only a rough approximation of the point at which the interests in favor of protecting valid claims are outweighed by the interests in prohibiting the prosecution of stale ones." Ibid. (internal quotations omitted).

In Jones, after considering the historical background and the reform efforts that led to the enactment of § 1658, the Court concluded that the context in which "catchall" limitation period was enacted "strongly support[ed] an interpretation that fills more rather than less of the void that has created so much unnecessary work for federal judges." 541 U.S. at 380, 124 S.Ct. at 1844, 158 L.Ed. 2d at 655. For that reason, the Court held that an amendment supplementing an existing statute with a new cause of action, which amendment was "enacted after the date of enactment" of 28 U.S.C.A. § 1658, was subject to § 1658's four-year limitation period even though causes of action established under the same statute prior to the enactment of § 1658 were not. Id. at 382-83, 124 S.Ct. at 1845-46, 158 L.Ed. 2d at 657-58. Thus, the Court construed section 1658's "after the date of enactment" to include as many causes of action as the statutory language reasonably permits.

We conclude that Jones requires a narrow reading of the phrase "[e]xcept as otherwise provided by law" included in § 1658 and a similarly narrow reading of language of "exception" included in statutes like the TCPA that were enacted after § 1658. Consistent with Jones, we hesitate to read general language of exception to infer that Congress intended to create new "voids" in federal law governing limitation periods and reintroduce the difficulties and confusion that § 1658 was designed to eliminate. Absent a clear indication of an alternate limitation period, language of exception in post-1990 federal enactments should not be read as intended to override the limitation period provided in § 1658. Any other approach would undercut the remedial purposes of § 1658 in favor of application of a period of limitations that "is, at best, only a rough approximation" of a state's view of a proper balance of the interests furthered by limitation periods. See Wilson, supra, 471 U.S. at 271, 105 S.Ct. at 1944, 85 L.Ed. 2d at 653-54.

The provisions of the TCPA that make its civil action available only "if otherwise permitted by the laws or rules of court of a State," 47 U.S.C.A. § 227(b)(2), (c)(5), provide no clear indication of intent to exclude TCPA claims from the scope of § 1658. In Zelma we held that the phrase "if otherwise permitted by" state law and court rules was intended to provide states an opportunity to "opt-out" of the TCPA and to recognize that states may apply neutral rules and procedures to foreclose TCPA actions. Zelma, supra, 343 N.J. Super. at 360-61, 363-64.*fn3

In reaching that conclusion, we considered the purpose of the phrase as explained by federal courts. See id. at 366. "Congress understandably avoided opening federal courts to the millions of potential private TCPA claims . . . . Similarly concerned over the potential impact of private actions on the administration of state courts, Congress included a provision to allow the states to prohibit private TCPA actions . . . ."

Ibid. (citation and quotations omitted). The length of a limitation period has no obvious relevance to the volume of litigation or the extent of the burden imposed on courts of this state.

Similarly, the legislative history of the TCPA's private cause of action does not support a reading of the phrase "if otherwise permitted" to favor the pre-1990 practice of "limitation borrowing." The TCPA's sponsor identified the following reasons for making the private cause of action available if "permitted" by state law and court rules: avoidance of constitutional difficulties inherent in congressional attempts to direct the operations of state courts; and facilitation of recovery of TCPA damages in courts that address "small claims" and allow recovery without costly litigation. See R.A. Ponte, supra, 857 A.2d at 13-14 (quoting the Congressional Record and describing the sponsor's statement as constituting "the whole legislative history underlying the private cause of action provision" of the TCPA). Thus, the sponsor's stated purpose was to simplify TCPA litigation.

Absent a state limitation period specifically applicable to TCPA claims, the use of state limitation periods based on analogous causes of action under state law would complicate not facilitate pursuit of the private TCPA remedy. We are mindful of the difficulties that confront state courts and litigants compelled to identify an analogous state cause of action in order to select a limitation period. See, e.g., J.H.R. v. Bd. of Educ. of East Brunswick, 308 N.J. Super. 100, 120 n.10, 120-24 (App. Div. 1998) (noting that § 1658 is inapplicable to a claim under the Individuals with Disabilities Education Act, U.S.C.A. §§ 1400-1491o, because the law was enacted prior to § 1658, and proceeding to survey State and federal law to determine "most analogous local time limitation").

The present case illustrates the difficulty of "limitation borrowing." The most appropriate limitation period for TCPA claims is far from clear. N.J.S.A. 2A:14-1 provides a six-year limitation period for actions based on trespass, tortious injury to real property, replevin, and contract claims other than those involving trade between merchants. Receipt of an unwanted facsimile undoubtedly consumes the recipient's paper and ink, suggesting N.J.S.A. 2A:14-1 could apply. In contrast, receipt of an unwanted phone call made by use of automated dialing might be better characterized as akin to an invasion of privacy, suggesting a two-year limitation period under N.J.S.A. 2A:14-2. And, the availability of fixed and treble damages for violation of the TCPA's prohibitions arguably could support a view of the TCPA's damage awards as forfeitures or penalties for violation of the Act, suggesting application of either the one or two-year limitation period pursuant to N.J.S.A. 2A:14-10.

It is apparent that the attempt to select the most appropriate existing limitation period for TCPA claims will insert complex legal issues in otherwise relatively uncomplicated cases. Equally important, the unnecessary complexity will bring no real benefit to a state, like New Jersey, that has not adopted a specific limitation period for TCPA actions based on a balancing of the interests implicated.*fn4

See Wilson, supra, 471 U.S. at 271, 105 S.Ct. at 1944, 85 L.Ed. 2d at 653-54. In short, the effort to apply an existing limitation period would reintroduce complexity and uncertainty of the sort that 28 U.S.C.A. § 1658 was designed to eliminate without furthering any state interest Congress sought to protect by making the TCPA private cause of action available only "if otherwise permitted" by state law.

We hold that absent adoption of a specific, shorter period of limitations expressly applicable to TCPA claims, the four-year limitation period provided in 28 U.S.C.A. § 1658 applies to a TCPA action in the courts of this State. Absent a law of that sort, a TCPA action initiated within the four-year limitation period of § 1658 is "permitted," not prohibited, by the laws of this State, 47 U.S.C.A. § 277(b)(3), (c)(5), and the limitation period specified in 28 U.S.C.A. § 1658 applies because no law "otherwise provide[s]." See, e.g., Jemiola v. XYZ Corp., 802 N.E.2d 745 (Oh. Ct. Common Pleas 2003) (applying 28 U.S.C.A. § 1658(a) to a TCPA claim without discussion).*fn5

We recognize that the Texas Court of Appeals has considered the issue presented in this case and concluded that the TCPA is a "law" that provides for a limitation period other than the "catchall" four-year period included in § 1658. See Chair King, Inc. v. GTE Mobilenet of Houston, Inc., 135 S.W.2d 365, 391 (Tex. App. 2004). Chair King was decided only three days after the Supreme Court's decision in Jones, and Chair King does not mention Jones or apply the Supreme Court's construction of 28 U.S.C.A. § 1658. For that reason, we do not find Chair King persuasive.

Reversed and remanded for further proceedings. We do not retain jurisdiction.

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