Petition for Writ of Certiorari — Wisniewiewski v. Rodale, Inc. (No. 07-1350)
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Supreme Court, U.S.
“CP : FILED
ne NO ILLS APR 2 3 2008
| INTHE OFFICE OF THE CLERK
Supreme Court of the Hnited States
DAVID WISNIEWSKI, ON BEHALF OF HIMSELF AND ALL
OTHERS SIMILARLY SITUATED, PETITIONER
Vv.
RODALE, INC.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
PETITION FOR WRIT OF CERTIORARI
BRUCE K. COHEN
Counsel of Record
DANIEL B. ALLANOFF
Meredith Cohen Greenfogel &
Skirnick, P.C.
1521 Locust Street
8” Floor
Philadelphia, PA 19102
(215) 564-5182
Attorneys for Petitioner
RR i BT
CURRY & TAYLOR @ (202) 393-4141
1
QUESTION PRESENTED
The Third Circuit affirmed the district court’s
holding that there is no implied private right of action
under 39 U.S.C. § 3009, which prohibits the sending,
billing for and/or collecting on merchandise without first
obtaining the express request or consent of recipients.
The statute specifically provides that recipients “shall
have the right” to keep unsolicited merchandise “without
any obligation whatsoever” to the sender. The rights-
creating language in the statute is phrased in mandatory
terms, with a clear focus on the persons benefited, as
opposed to the persons regulated. While this type of
statutory language has been traditionally found to imply
Congress’s intent to create a private cause of action, the
Third Circuit gave it weight only in determining whether
Congress intended to create private rights, but believed
that separate evidence is required to show Congress’s
intent to create a private remedy.
The question presented for review:
Whether the rights-creating language ofa statute,
phrased in terms of the persons benefited with an
unmistakable focus on the benefited class, is still “the
most accurate indicator of the propriety of implication ofa
cause of action,” Cannon v. University of Chicago, 441
U.S. 677, 692 n. 13 (1979), which may itself establish
Congress’s intent to create a private right of action as it
did in Transamerica Mortgage Advisors v. Lewis, 444
U.S. 11 (1979), or whether the Third Circuit decision in
Wisniewski v. Rodale, Inc., 510 F.3d 294 (3d Cir. 2007)
(App. la) is correct in interpreting this Court’s decision in
Alexander v. Sandoval, 532 U.S. 275 (2001) as having
changed the test for determining implied right of action
i
cases such that rights-creating language in a statute is no
longer accorded great weight and can no longer itself
fairly imply statutory intent to create a private remedy?
iti
TABLE OF CONTENTS
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APPENDIX
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TABLE OF AUTHORITIES
Page
CASES
ALEXANDER V. SANDOVAL, 582 U.S. 275 (2001)........... passim
CANNON V. UNIVERSITY OF CHICAGO, 441 U.S. 677
CIFTD) «00... <select cia tchahaa aie amiareacidaptonsoioesuslsbatons i
IN RE MOORE, 310 BANKR. 795 (BANKR. N.D.MISS.
TE saieitii science ladatiiinensaelinleilghac ili diaitepeaaas thie ade apedicannnesenanaiosevicdieies 13
KIPPERMAN V. ACADEMY LIFE INSURANCE
COMPANY, 554 F.2D. 377 (OTH CIR. 1979).............ccccsssserees 5, 6
PITTMAN V. OREGON, EMPLOYMENT DEPARTMENT,
OD FD DGD COTE CUR, FICE oc cccceveciccesstasioneserscesesocsvvescooness 13
THOMPSON V. THOMPSON, 484 U.S. 174 (1988)..........:eeseseeeeees 6
TOUCHE Ross & Co. V. REDINGTON, 422 U.S. 560
I he esha icta tea ccattae caine Ae chiehon inne Revaidine nadcdcnencctahciias 7
TRANSAMERICA MORTGAGE: ADVISORS V. LEWIS, 444
Rt Otani ncttaisieecedaasancecdiaannbtbien passim
WALKER V. CITY OF LAKEWOOD, 272 F.3D 1114
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STATUTES
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ae an aac IID bd chicicsdcnrocsnsnssecnccoestenaceianincesdientinibabimammnniios 12
OTHER AUTHORITIES
HAS SANDOVAL DOOMED PRIVATE RIGHT OF ACTION
UNDER THE NATIONAL HISTORIC PRESERVATION ACT?,
CE BER i Bs oa Fe MC: | | RRR rien n ENR RR NCES 13
LEADING CASES, 115 HARV.L.R. 306, 506 (2001-02).............. 13
]
OPINIONS BELOW
The opinion of the United States Court of
Appeals for the Third Circuit is reported at 510 F.3d
294 (3d Cir. 2007). (App. la) The opinion of the United
States District Court for the Eastern District of
Pennsylvania is reported at 406 F.Supp.2d 550 (2005).
(App. 45a)
JURISDICTION
The decision of the United States Court of
Appeals for the Third Circuit, affirming the district
court’s judgment, was handed down on December 13,
2007. A timely petition for rehearing en banc was
denied on January 24, 2008. This Court has jurisdiction
under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS INVOLVED
Title 39 United States Code, Section 3009.
Mailing of Unordered Merchandise.
(a) Except for (1) free samples clearly and
conspicuously marked as_ such, and (2)
merchandise mailed by a charitable organization
soliciting contributions, the mailing of unordered
merchandise or of communications prohibited by
subsection (c) of this section constitutes an
unfair method of competition and an unfair trade
practice in violation of section 45(a)(1) of title 15.
(b) Any merchandise mailed in violation § of
subsection (a) of this section, or within the
2
exceptions contained therein, may be treated as
a gift by the recipient, who shall have the right
to retain, use, discard, or dispose of it in any
manner he sees fit without any obligation
All such merchandise
shall have attached to it a clear and conspicuous
statement informing the recipient that he may
treat the merchandise as a gift to him and has
the right to retain, use, discard, or dispose of it
in any manner he sees fit without any obligation
whatsoever to the sender.
No mailer of any merchandise mailed in violation
of subsection (a) of this section, or within the
exceptions contained therein, shall mail to any
recipient of such merchandise a bill for such
merchandise or any dunning communications.
) For the purposes of this section, “unordered
merchandise” means merchandise mailed
without the prior expressed request or consent
of the recipient.
STATEMENT
This case raises important questions as to what
evidence may sufficiently demonstrate Congress’s
intent to create a private remedy. Respondent Rodale,
Ine. engages in a marketing practice that involves
sending, billing for and collecting on merchandise
without first obtaining the express request or consent
of recipients. Section 3009(a) of the _ Postal
Reorganization Act declares the practice illegal and §
3009(b) provides that recipients “shall have the right”
to keep unsolicited merchandise “without any
3
obligation whatsoever” to the sender. 39 U.S.C. § 3009.
The statute also specifically requires that mailers
clearly and conspicuously inform recipients of their
right to retain unsolicited merchandise and prohibits
senders from engaging in collection efforts. Petitioner
Wisniewski, on behalf of himself and all others who
remitted payment to Respondent for unordered
merchandise, seeks return of such monies paid to
Respondent.
While § 3009 does not expressly provide for a
private right of action, the statute bears the hallmarks
of this Court’s usual test for an implied private right of
action. Subsection (b)’s language that recipients “shall
have the right to retain, use, discard, or dispose of
[unordered merchandise] in any manner he sees fit
without any obligation whatsoever to the sender”
created new, specific rights for individuals. The statute
is phrased in terms of the persons benefited with an
unmistakable focus on the benefited class.
The structure and limited history of the statute
reflect Congress’s dual aims of (1) stopping the
unlawful practice and (2) ensuring that recipients do
not suffer financial harm from violations of the statute.
Consistent with this intent to “control the
unconscionable practice of persons who ship unordered
merchandise to consumers and then trick or bully them
into paying for it,” 116 Cong.Rec. at 22314 (June 30,
1970), subsection (a) addresses the former purpose in
declaring the practice an “unfair method of competition
and an unfair trade practice” under the FTC Act.
Subsection (b) is directed towards the latter purpose in
giving recipients the right to be free from any
obligation to violators of the statute. The FTC had no
4
power to obtain restitution for recipients who were
“tricked or bullied into paying for [unordered
merchandise ].”
The United States District Court for the
Eastern District of Pennsylvania, after certifying a
class of recipients of Rodale’s books, gvanted summary
judgment for Respondent, holding that there is no
implied private right of action under § 3009. (App. 45a)
On appeal, the Third Circuit Court of Appeals affirmed
in a 2-1 decision. (Sloviter, J. dissenting). (App. la) The
Majority interpreted Alexander v. Sandoval, 532 U.S.
275 (2001) as requiring separate analyses of two distinct
legislative intentions, intent to create a private right
and intent to create a private remedy. (App. 10a)
Under this framework, the Third Cireuit confined its
analysis of the critical rights-creating language to the
former, recognizing the obvious conclusion that such
language established Congress’s intent to create rights.
(App. lla-12a) With respect to the second inquiry, the
Majority stated “...the Court has not provided a test
for discerning this intent.” (App. 12a) The Majority did
not consider Congress’s creation of individual rights in
§ 3009(b) or accord the critical language with any
weight in determining whether Congress implicitly
intended that those rights be enforceable. (App. 13a)
Since § 3009(a) makes reference to the FTC Act, the
Majority held that Congress must have intended that
the statute be enforced exclusively by the FTC, which
had no power to recover monies obtained from
recipients in violation of the statute. (See App. 13a,
25a)
A timely Petition for Rehearing En Bane was
also denied. (App. 62a) This Court should now consider
5
Petitioner’s claim that rights-creating language is still
the most accurate indicator of an implied private right
of action after Sandoval. The Court is now presented
with the opportunity to reverse the Third Circuit’s
opinion in Rodale, which conflicts with settled Supreme
Court precedent on the standard for determining
implied private rights of action and creates a conflict
with the Ninth Circuit decision in Kipperman v.
Academy Life Insurance Company, 554 F.2d. 377 (9"
Cir. 1979), which found a limited implied private right
of action under § 3009.
REASONS FOR GRANTING THE PETITION
A. The Third Circuit’s Decision In
Wisniewski v. Rodale Is in Conflict With
The Ninth Circuit’s Decision in Kipperman
v. Academy Life Insurance Company
There is a disagreement amongst the Circuit
Courts of Apneal on whether there is an implied private
right of action under §. 3009 of the Postal
Recrganization Act. The Ninth Circuit Court of
Appeals in Kipperman v. Academy Life Insurance
Company, 554 F.2d. 377 (9 Cir. 1979), held that the
language of § 3009(b) implies that beneficiaries of that
statute may vindicate their rights in a limited cause of
action for, inter alia, restitution. (See also App. 23a
(Sioviter, J. dissenting)) In contrast, the Third Circuit
Court of Appeals in this case held that there is no
implied private right of action under the statute.
The Third Circuit found <Kipperman
unpersuasive because it was decided prior to this
Court’s decisions that “restructured the implied private
6
right of action test to focus solely on legislative intent.”
(App. 19a) Principally because the Ninth Circuit stated
“we believe Congress did not consider the question of a
private right of action under § 3009,” 554 F.2d at 380,
Rodale found that Kipperman did not find the requisite
statutory intent and, thus, would have come out
differently today. (App. 19a) odale’s reasoning
conflicts with this Court’s teaching in Transamerica
Mortgage Advisors v. Lewis, 444 U.S. 11, 18 (1979)
(“TAMA”), that “the failure of Congress to expressly to
consider a private remedy is not inevitably inconsistent
with an intent on its part to make such a remedy
available.” See also Thompson v. Thompson, 484 U.S.
174, 179 (1988) (Congress’s “intent may appear
implicitly in the language or structure of the statute, or
in the circumstances of its enactment.” (quoting TAMA,
444 U.S. 11, 18 (1979))). Moreover, as demonstrated
more fully infra, Rodale’s conclusion is based on an
erroneous view of the implied right of action test.
B. The Decision Below Incorrectly Fails
To Apply This Court’s Standard Test For
Discerning Implied Private Causes Of Action
And Establishes A Standard That De Facto
Eliminates The Doctrine
The Rodale Majority applied a test for
discerning Congress’s intent to create a private remedy
that neuters the most critical evidence of such intent —
Congress’s explicit creation of private rights in the
statute. This approach conflicts with Supreme Court
precedent.
The starting point for interpreting a statute
“begin[s] with the language of the statute itself.”
7
Touche Ross & Co. v. Redington, 422 U.S. 560, 568
(1979) (citing Cannon v. University of Chicago, 441
U.S. 677, 689 (1979) and others); see also Alexander v.
Sandoval, 532 U.S. 275, 288 (2001). In Cannon, this
Court stated
Not surprisingly, the right- or duty-creating
language of the statue has generally been the
most accurate indicator of the propriety of
implication of a cause of action. With the
exception of one case, in which the relevant
statute reflected a special policy against judicial
interference, this Court has never refused to
imply a cause of action where the language of a
statute explicitly conferred a right directly on a
class of persons that included the plaintiff in the
case.
441 U.S. 677, 692 n.13 (1979) (emphasis added).
Cannon’s reference to the “implication of a cause
of action” confirms that a statute’s right- or duty-
creating language is the most critical indicator of both a
right and a remedy, i.e. together a cause of action.
Transamerica Mortgage Advisors v. Lewis, 444 U.S. 11
(1979) (“TAMA”), relying on Cannon, applied this
principle explicitly and held that rights-creating
language itself can display Congress’s intent to create a
private remedy. Moreover, it did so in analyzing the
language of a statute remarkably similar to § 3009.
In TAMA, the Court held that a limited private
right of action was properly inferred from statutory
language in the text of § 215 of the Investment
Advisors Act (“IAA”), which declared certain contracts
8
in violation of the act void: “In the case of § 215, we
conclude that the statutory language itself fairly
implies a right to specific and limited relief in a federal
court.” 444 U.S. at 18. The Court reasoned that by
declaring certain contracts “shall be void,” Congress
manifested its intent that the “legal incidents of
voidness” would follow, including, inter alia, the ability
to sue for restitution. /d. at 19. This Court noted that
“the federal courts in general have viewed such
language as implying an equitable cause of action for
rescission or similar relief.” Jd.
The statutes at issue in 7 AMA and Rodale are
analogous. (See App. 15a, 22a (Sloviter, J. dissenting))
In declaring in § 215 of the IAA that “contracts shall be
void,” Congress gave investment advisor customers the
right to be free from any obligation to investment
advisors who violate the Act. Congress did the same
thing in § 3009(b) when it provided that recipients have
the right to keep unordered merchandise “without any
obligation whatsoever” to violators. Similarly, in each
case, the statutes permit an agency to enforce the
provisions prohibiting the unlawful conduct.
The Rodale decision is predicated on a
misreading of Alexander v. Sandoval, 582 U.S. 275
(2001), as having nullified the two principles set forth
above from Cannon and TAMA. First, Rodale viewed
a “Sandoval test” as having: emerged, which requires
“two steps: (1) Did Congress intend to create a personal
right’; and, (2) Did Congress intend to create a private
remedy?” (App. 10a) As applied in Rodale, this “new
test” treats the critical rights-creating language not as
the “most accurate indicator” of an implied right of
action as in Cannon, nor as evidence that could itself
9
demonstrate legislative intent to create a private
remedy as in TAMA, but rather confines such evidence
to the first issue of whether Congress intended to
create rights. (App. lla-17a) Thus, Rodale recognizes
the truism that Congress’s creation of individual rights
demonstrates its intent to create such rights. However,
its analysis of intent to create a private remedy does
not give any weight to this critical evidence. (App. 12a-
17a; see also App. 36a, n. 17 (“[The proposition that]
demonstrating legislative intent to create a personal
right eliminates or reduces the need to demonstrate
legislative intent to create a private remedy [is]
inconsistent with our reading of Sandoval.”) (emphasis
in original)).
Focused only on the language in § 3009(a),
Rodale thus concluded that the reference to the FT'C
Act creates a strong presumption of exclusive
enforcement by the FTC. (See App. 18a) However, the
reference to the FTC Act in § 3009(a) is logical as that
section praoscribes conduct of mailers of unordered
merchandise, enforcement of which falls on the agency.
In contrast, there is no reference to the FTC in
§3009(b), which separately creates rights for recipients.
The FTC had no power to seek restitution and enforce
the rights created in subsection (b). (See App. 25a)
Rodale’s conclusion contradicts Congress’s intent that
recipients not suffer financially from violations of the
statute and renders the rights created for recipients
meaningless. Moreover, the presumption of exclusive
FTC enforcement disregards that private rights of
action have been implied from statutes that also
provide for agency enforcement. (See App. 18a-14a)
Indeed, this Court found no presumption of exclusive
agency enforcement in the Investment Advisors Act in
10
TAMA, which, in addition to implying private remedies
for aggrieved investors, authorizes the Department of
Justice to pursue investment advisors who violate the
Act.
Far from undermining Cannon, Sandoval
actually made clear that the most important evidence
necessary to establish an implied right of action is still
the rights-creating language itself. At the center of
Sandoval was § 602 of the Civil Rights Act. That
section contains no rights-creating language; rather, it
directs the Department of Justice to enact regulations
to further the purposes of § 601 of the Act, which was
previously found to have an implied private right of
action for intentional discrimination. The issue for the
Court was whether an agency’s regulations could
create a cause of action for acts (disparate impact
discrimination) that the statute itself permitted.
Sandoval began its analysis of legislative intent
displayed in § 602 by stating, “({I]t is immediately clear
that the ‘rights-creating’ language so critical to the
Court’s analysis in Cannon of § 601 (citation omitted) is
completely absent from § 602.” 532 U.S. at 288. The
Court held that language of § 602 did not display
Congress’s intent to create a private remedy and rights
created in the DOJ regulations could not do so
independently. /d. at 291. Since § 602 was directed to
the regulating agency and did not create personal
rights, there could be no implied private cause of action
under the statute.
Sandoval found no implied right in the statute
there most significantly because of the absence of rights
creating text. Accordingly, Rodale should have
1]
followed Cannon and given proper consideration to the
strong inferences flowing from § 3009(b)’s language as
an indicator of Congress’s intent that the rights it
created have meaning.
Similarly, Sandoval did not undermine TAMA’s
teachings. The test Rodale found to have emerged
from Sandoval is based on a sentence there: “The
judicial task is to interpret the statute Congress has
passed to determine whether it displays not just a
private right but also a private remedy.” (App. 9a
(quoting Sandoval, 532 U.S. at 286-87)) But, the Court
in Sandoval cited TAMA as the authority for that
proposition. 532 U.S. at 286, citing TAMA, 444 U.S. at
15. Moreover, the Court further confirmed that it was
not establishing a new test as interpreted in Rodale,
stating “... we reach this conclusion applying our
standard test for discerning private causes of action....”
532 U.S. at 298.
Given Sandoval’s context, its citation to TAMA
and its reference to having applied its “standard test,”
it is plain that, while there may be circumstances where
the creation of rights is not enough as in Sandoval, the
Court did not create a new test under which rights-
creating language may never by itself demonstrate
Congress’s intent to create privately enforceable rights.
The rights-creating language in Sandoval was
insufficient because it appeared in a regulation, not the
statute, and it created rights beyond those provided by
the statute. Rodale was plainly wrong in failing to
credit the critical language in 3009(b) as implying
Congress’s intent to create a private remedy, broadly
stating: “As Sandoval tells us, creation of a right is not
enough to establish Congressional intent to create a
12
private right of action to vindicate that right.” (App.
16a-17a)
Rodale’s erroneous reading and application of
Sandoval establishes a standard that effectively
eliminates the doctrine of implied private rights o1
action. No statute could meet the Rodale test, which
eviscerates the most powerful expression of Congress’s
intent to create a private remedy - its own words used
in enacting a statute. Secondary, more speculative
indications of intent that are considered will never be
adequate by themselves. Rodale strays far beyond the
analysis contemplated by Sandoval, which did not
eliminate implied rights of action all together.
C. Sandoval Is Being Misread By Other
Courts As Having Eliminated Implied
Private Rights Of Action
Other courts have also erroneously interpreted
the breadth of Sandoval’s holding as_ eliminating
implied rights of action. Walker v. City of Lakewood,
272 F.3d 1114 (9" Cir. 2001), cert. denied sub nom., 535
U.S. 1017 (2002). typifies the confusion engendered by
Sandoval’s private remedy language. In Walker, a
California municipality contested a housing services
provider’s ability to sue by arguing that it was akin to a
challenge under the Housing and Community
Development Act, 42 U.S.C. $$5301-5321 (HCDA), a
statutory scheme that does not provide expressly for a
private right of action. The Ninth Circuit found that
the HCDA’s failure to provide a remedy did not
preclude the housing service provider’s prosecution of a
claim under another federal statute, which did
expressly provide for a private right of action.
13
Significantly, in reaching this conclusion, Walker
summarized Sandoval as “holding that federal courts
may not create private rights of action in statutes that
do not otherwise provide for private suit.” 272 F.3d at
1126-27 (italics added). See also Pittman v. Oregon,
Employment Department, 509 F.3d 1065, 1073-1074 (9
Cir. 2007) (Stating that rights-creating language was
insufficient for implying private cause of action); In re
Moore, 310 Bankr. 795, 799-800 (Bankr. N.D.Miss. 2004)
(relying on Sandoval, court found no private remedy
based only on an examination of express statutory
provisions).
The confusion about the proper breadth of the
inquiry on the private remedy analysis is not an
aberration inimical only to federal jurists. Legal
commentators have misinterpreted Sandoval as in
essence holding that private remedies will not be
implied unless a statutory scheme expressly provides or
authorizes thera. See Leading Cases, 115 Harv.L.R.
306, 506 (2001-02) (“ ... the standard applied by the
Sandoval Court is more akin to a clear statement rule,
which demands explicit authorization in the statutory
text for a right of action.”); see also Has Sandoval
Doomed Private Right Of Action Under The National
Historic Preservation Act?, 16 B.U.Pub.Int.L.J. 73
(2006) (“Sandoval...held that a private right of action
exists only where there is explicit and unambiguous
statutory intent to create one.’’).
This Court should clarify this important area of
implied private r.ght of action jurisprudence.
14
CONCLUSION
For the foregoing reasons, a writ of certiorari
should be granted.
Respectfully submitted,
BRUCE K. COHEN
Counsel of Record
DANIEL B. ALLANOFF
Meredith Cohen Greenfogel &
Skirnick, P.C.
1521 Locust Street
8” Floor
Philadelphia, PA 19102
(215) 564-5182
MICHAEL HENSLEY
ROBERT J. STEIN III
TUYET T. TRAN
Adorno Yoss Alvado & Smith
1 MacArthur Place
Suite 200
Santa Ana, CA 92707
(714) 852-6800
JONATHAN NACHSIN
Jonathan Nachsin, P.C.
105 West Adams Street
Suite 3000
Chicago, IL 60603
(312)-327-1777
la
(any footnotes trail end of each document)
No. 06-1305
UNITED STATES COURT OF APPEALS FOR THE
THIRD CIRCUIT
DAVID WISNIEWSKI, ON BEHALF OF HIMSELF
AND ALL OTHERS SIMILARLY SITUATED
v.
RODALE, INC. David Wisniewski, Appellant
September 18, 2007, Argued
December 13, 2007, Filed
On Appeal from the United States District Court for
the Eastern District of Pennsylvania. District Court
No. 03-cv-00742. District Judge: The Honorable Paul 8.
Diamond.
JUDGES: Before: SLOVITER, SMITH, and WEIS,
Circuit Judges. SLOVITER, Circuit Judge, dissenting.
OPINION OF THE COURT
SMITH, Circuit Judge.
This appeal requires us to determine whether § 3009 of
the Postal Reorganization Act, 39 U.S.C. § 3009 (2000),
which regulates the shipment of unordered
merchandise, provides an implied private right of
action. The’ District Court dismissed David
2a
Wisniewski's § 3009 claim on the ground that no implied
private right of action exists under this statute. Based
on our review of the statute and applicable Supreme
Court jurisprudence, we will affirm.
I.
This litigation began in February 2003 when then-
plaintiff Michael Karnuth sued Rodale, Inc. in the
United States District Court for the Eastern District of
Pennsylvania, alleging that Rodale violated the Postal
Reorganization Act's unordered merchandise statute,
39 U.S.C. § 3009,' and various Pennsylvania state laws.
Specifically, Karnuth alleged that Rodale sent him
books that he had never ordered and demanded
payment for them, and that he paid Rodale for one of
the books to avoid damage to his credit rating. Karnuth
moved to certify the case as a class action on behalf of
all those to whom Rodale had sent unsolicited products
and payment demands, with a subclass consisting of
those who had paid in whole or in part for the
unsolicited products. The court denied the motion
without prejudice after Rodale alleged that Karnuth
had consented to receive the books. See Karnuth v.
Rodale, Inc., No. 08-00742, 2003 U.S. Dist. LEXIS
12095 (E.D. Pa. July 2, 2003). After Karnuth filed an
amended complaint, the District Court again denied his
motion for class certification in March 2005 on the
ground that inconsistencies in Karnuth's’ two
complaints could damage his credibility and thereby
harm the other class members. See Karnuth v. Rodale,
Inc., No. 03-00742, 2005 U.S. Dist. LEXIS 5241 (E.D.
Pa. Mar. 30, 2005).
3a
Subsequently, David Wisniewski replaced Karnuth as
class representative. Like Karnuth, Wisniewski alleged
that Rodale had sent him unsolicited books and that he
had paid Rodale to avoid damage to his credit rating.
Rodale argued that Wisniewski consented when he sent
Rodale an order card that enrolled Wisniewski in a
"negative option" plan, under which Rodale would ship
books and bill any recipients who did not return the
books within a specified time period. Wisniewski
responded that the order cards failed to meet objective
disclosure standards and thus were inadequate as a
source of consent. Without addressing the merits of
these claims, the District Court granted class
certification in July 2005 with respect to the § 3009
claim and denied certification with respect to the state
law claims. See Karnuth v. Rodale, Inc., No. 03-00742,
2005 U.S. Dist. LEXIS 14426 (E.D. Pa. July 18, 2005).
Both parties moved for summary judgment on the
federal and state claims, agreeing that any ruling would
bind only the named parties and not the class. See
Wisniewski v. Rodale, 406 F. Supp. 2d 550, 553 (E.D.
Pa. 2005). In December 2005, the District Court
dismissed the § 3009 claim on the ground that this
provision does not confer an implied private right of
action, and it dismissed tlte state law claims for lack of
jurisdiction. /d. at 557-58. Wisniewski timely appealed.
On appeal, the only issue before us is whether an
implied private right of action exists under § 3009.’
Because this is a question of law, we exercise plenary
review over the District Court's summary judgment
order. Am. Trucking v. Del. Toll Bridge Comm'n, 458
F.3d 291, 295 (8d Cir. 2006).
II.
A private right of action® is the right of an individual to
bring suit to remedy or prevent an injury that results
from another party's actual or threatened violation of a
legal requirement.’ Although the legal requirement can
be established by a number of sources, our focus is on
statutory duties created by acts of Congress. Many
federal statutes provide a private right of action
through their express terms.° Other federal statutes,
however, merely define rights and duties, and are silent
about whether an individual may bring suit to enforce
them. For some statutes in this latter category, courts
have held that "implied" private rights of action exist.
Since neither party in the present case contends that
the text of § 3009 provides an express private right of
action, the only question before us is whether the
statute confers an implied private right of action.
No consensus exists regarding when the Supreme
Court first began recognizing implied private rights of
action under federal statutes. In Cannon v. University
of Chicago, 441 U.S. 677, 99 S. Ct. 1946, 60 L. Ed. 2d 560
(1979), the majority contends that the Court's "earliest"
case recognizing an implied private right of action was
Texas & Pacific Railway Co. v. Rigsby, 241 U.S. 338, 36
S. Ct. 482, 60 L. Ed. 874 (1916). See Cannon, 441 U.S. at
689 (citing Rigsby, 241 U.S. at 39).° In Rigsby, the
Court unanimously held that the Federal Safety
Appliance acts provided an implied private right of
action to an injured railroad employee against his
employer. 241 U.S. at 39. Others argue that the idea of
an implied private right of action existed in English
common law’ and appeared in early U.S. cases such as
Marbury v. Madison, 5 U.S. 137, 2 L. Ed. 60 (1803).8
Da
At all events, over the past fifty years, the Supreme
Court has substantially modified its test for
determining whether a federal statute provides an
implied private right of action. The Court's opinions
have not always announced explicitly when they are
overruling (or limiting to their facts) old precedents in
this area. Therefore, it can be difficult to discern to
what degree the Court has repudiated old tests as
opposed to applying them in a different way to different
statutes. We trace these changes below, explaining how
the implied private right of action test has developed
and where we believe it stands today.
A. J.J. Case Co. v. Borak
We begin our review with J./. Case Co. v. Borak, 377
U.S. 426, 84 S. Ct. 1555, 12 L. Ed. 2d 423 (1964), because
this case exemplifies the Court's older and less
restrictive approach to implied private rights of action.
In Borak, the Court unanimously held that the
Securities Exchange Act of 1934 implicitly authorizes a
private right of action for rescission or damages to
stockholders who alleged that they were injured by a
consummated merger authorized with a false or
misleading proxy statement in violation of § 14(a) of the
Act. See 377 U.S. at 428, 435. The Court explained its
holding by emphasizing that "it is the duty of the courts
to be alert to provide such remedies as are necessary to
make effective the congressional purpose." /d. at 435.
Based on language in § 14(a) explicitly granting the
Securities and Exchange Commission ("SEC") the
authority to make rules "in the public interest or for the
protection of investors," the Court deemed "the
protection of investors" to be among the section's
primary purposes. /d. at 432. Noting that the SEC
6a
admits that it does not have enough time to examine
every proxy statement for false and misleading
statements, the Court stated that private enforcement
is a "necessary supplement" to the SEC's efforts to
protect investors. /d. at 482-33. Finally, the Court
asserted that a federal right of action was necessary
because state law might not be adequate to protect the
federally-created "rights" in the statute. /d. at 434-35.
At no point in its opinion did the Borak Court purport
to discern Congress's intent regarding a private right
of action (as opposed to Congress's general purposes in
enacting the statute).
B. Cort v. Ash
The Supreme Court's unanimous opinion in Cort v. Ash,
422 U.S. 68, 95 S. Ct. 2080, 45 L. Ed. 2d 26 (1975),
replaced the relatively loose standards of Borak with a
four-factor test for determining whether an implied
private right of action exists.’ Using this test, the Court
determined that 18 U.S.C. § 610 (1970 & Supp. IID), a
criminal statute (later repealed) that prohibited
corporations from making contributions to presidential
campaigns, does not provide an implied private right of
action for stockholders to sue corporate directors who
violate the statute. 422 U.S. at 68-70. The Court
described its test as follows:
In determining whether a private remedy is
implicit in a statute not expressly providing one,
several factors are relevant. First, is the plaintiff
"one of the class for whose especial benefit the
statute was enacted"--that is, does the statute
create a federal right in favor of the plaintiff?
Second, is there any indication of legislative
Ta
intent, explicit or implicit, either to create such a
remedy or to deny one? Third, is it consistent
with the underlying purposes of the legislative
scheme to imply such a remedy for the plaintiff?
And finally, is the cause of action one
traditionally relegated to state law, in an area
basically the concern of the States, so that it
would be inappropriate to infer a cause of action
based solely on federal law?
Id. at 78 (emphasis in original) (citations omitted).
Explaining the second prong of this test, the Court said
that when federal law grants certain rights to a class of
people (and thereby satisfies the first prong), "it is not
necessary to show an intention to create a private cause
of action, although an explicit purpose to deny such
cause of action would be controlling." Jd. at 82
(emphasis in original). Thus, the test articulated in Cort
allowed courts to recognize an implied private right of
action even in the absence of any affirmative
congressional intent to create this remedy.
C. Post-Cort Developments
Although Cort has never been formally overruled,
subsequent decisions have altered it virtually beyond
recognition.” In Cannon v. University of Chicago, 441
U.S. 677, 99 S. Ct. 1946, 60 L. Ed. 2d 560 (1979), the
Court framed the implied private right of action
question as one of "statutory construction" in which the
Court's task is to determine whether "Congress
intended to make a remedy available." 441 U.S. at 688.
The Cannon Court nonetheless relied on the four Cort
factors because they were "indicative of such intent.""
Id. Thus, Congress's intent to create a private right of
Ra
action--virtually ignored in Borak and described in Cort
v. Ash merely as one of four factors--emerged as the
primary factor in Cannon. The Court in Touche Ross &
Co. v. Redington, 442 U.S. 560, 99 8S. Ct. 2479, 61 L. Ed.
2d 82 (1979), established that congressional intent is the
exclusive factor, declaring that the task of courts is
"limited solely to whether Congress intended to create
the private right of action," 442 U.S. at 568 (emphasis
added), and instructing that courts should use the Cort
factors only to the extent that they help to determine
legislative intent, zd. at 575-76. See also Transamerica
Mortg. Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11,
15-16, 100 S. Ct. 242, 62 L. Ed. 2d 146 (1979) ("what
must ultimately be determined is whether Congress
intended to create the private remedy asserted, as our
recent decisions have made clear."). Although the
Supreme Court continued to recite the Cort factors in
later implied private right of action opinions, its
attempts to discern legislative intent went well beyond
these factors. As the Court's opinion in 7’hompson v.
Thompson, 484 U.S. 174, 108 S. Ct. 518, 98 L. Ed. 2d 512
(1988), observed, the Court has used "other tools of
statutory construction" in addition to the Cort factors as
"guides to discerning" Congress's intent. 484 U.S. at
179.
D. Alexander v. Sandoval
The Supreme Court's decision in Alexander v.
Sandoval, 5382 U.S. 275, 121 S. Ct. 1511, 149 L.
Ed. 2d 517 (2001), strongly suggests that the
Court has abandoned the Cort v. Ash test.'!* In
Sandoval, the Court held that Title VI of the
Civil Rights Act does not provide an implied
private right of action to enforce disparate-
9a
impact regulations promulgated under § 602 of
the Act (42 U.S.C. § 2000d-1 (2000)). Although
the Sandoval Court did not expressly reject the
Cort v. Ash factors, it did not use them at all to
guide its inquiry." Instead, the Court set out the
following test for discerning whether an implied
private right of action exists:
Like substantive federal law itself, private rights
of action to enforce federal law must be created
by Congress. .. . The judicial task is to interpret
the statute Congress has passed to determine
whether it displays an intent to create not just a
private right but also a private remedy. ...
Statutory intent on this latter point is
determinative. . .. Without it, a cause of action
does not exist and courts may not create one, no
matter how desirable that might be as a policy
matter, or how compatible with the statute.
532 U.S. at 286-87 (citations omitted). The Court
concluded that the "text and structure" of § 602 did not
show that Congress intended to create a personal
right,’ in light of the absence of "rights-creating
language" that focuses on the protected individuals. 532
U.S. at 288-89. Next, the Court concluded that nothing
in the text of § 602 demonstrated that Congress
intended to create a private remedy and that the
statute's provision of a remedial scheme suggests that
Congress "intended to preclude" any other remedy. Jd.
at 290-91. The Court rejected the Government's
argument that Congress had "ratified" an implied
private right of action under § 602 by failing to address
this issue when it amended Title VI.'° Having applied
what the Court called its "standard test for discerning
10a
private causes of action" and having found no
congressional intent to create a personal right or
private remedy in the statute's text or structure, the
Court ended its inquiry. /d. at 293.
EK}. The State of the Law Today
After Sandoval, the relevant inquiry for determining
whether a private right of action exists appears to have
two steps: (1) Did Congress intend to create a personal
right?; and (2) Did Congress intend to create a private
remedy? Only if the answer to both of these questions
is "yes" may a court hold that an implied private right of
action exists under a federal statute. See, e.g., Three
Rivers Ctr. v. Hous. Auth. of the City of Pittsburgh, 382
F.3d 412, 421 (8d Cir. 2004) ("Put succinctly, for an
implied right of action to exist, a statute must manifest
Congress's intent to create (1) a personal right, and (2)
a private remedy" (citing Sandoval, 532 U.S. at 286)).
Even when we invoked the Cort test in American
Trucking v. Delaware Toll Bridge Commission, 458
F.3d 291 (8d Cir. 2006), our analysis paralleled the
Sandoval test. Focusing only on the first two "critical"
Cort factors, 458 F.3d at 297, the American Trucking
opinion treated the first Cort factor as an inquiry into
legislative intent to create a personal right, 458 F.3d at
297, and the second Cort factor as an inquiry into
legislative intent to create a private remedy, 458 F.3d
at 303."
III.
Applying the Sandoval test to § 3009, we conclude that
this statute provides no implied private right of action.
lla
A. Did Congress Intend to Provide a Personal Right in
§ 3009?
To determine whether a personal right existed under §
602 of Title VI, the Sandoval Court began by reviewing
the "text and structure" of the statute to determine
whether the _ statute contained ‘"rights-creating"
language that focuses on the "individual protected"
rather than "the person regulated." 532 U.S. at 288-89.'*
Accordingly, we examine the text and structure of §
3009 to see if rights-creating language exists. The only
part of the statute that explicitly establishes a "right" is
§ 3009(b):
Any merchandise mailed in_ violation of
subsection (a) of this section, or within the _
exceptions contained therein, may be treated as
a gift by the recipient, who shall have the right to
retain, use, discard, or dispose of it in any
manner he sees fit without any obligation
whatsoever to the sender.
39 U.S.C. § 3009(b) (emphasis added). With an explicit
reference to a right and a. focus on the individual
protected, this language suffices to demonstrate
Congress's intent to create a personal right for
recipients to treat unsolicited merchandise as a gift.
Indeed, Rodale concedes that § 3009(b)'s language is
"rights-creating." (See Appelice's Br. at 30.)
"Rights-creating" language is not as obviously present
in other sections of the statute. Section 3009(b) requires
that mailers of unsolicited merchandise attach a "clear
and conspicuous statement" informing the recipient of
his or her right to treat the merchandise as a gift.
12a
Section 3009(c) forbids mailers of unsolicited
merchandise from sending a recipient a bill or any
dunning communications. These provisions do not
necessarily create "personal rights" for recipients to
receive clear and conspicuous statements and to be free
from bilis and dunning communications. Congress
worded them as prohibitions on the person regulated
rather than entitlements for the person protected.’ The
provisions' failure to identify "rights" (to receive notices
and not to receive bills) contrasts with the explicit
identification of a "right" to keep the merchandise as a
gift.” Even assuming arguendo that Congress intended.
these provisions to create personal rights, the
distinction is largely academic because we can ind no
legislative intent to create a private remedy, for the
reasons discussed below.
B. Did Congress Intend to Provide a Private Remedy
for Violations of § 3009?
In the generation since the Supreme Court declared
that legislative intent to create an implied private right
of action is the sole touchstone of our inquiry, the Court
has not provided a test for discerning this intent. Most
of its decisions have relied on whatever indicators of
legislative intent appear to be useful in the context of a
given statute. The Court frequently has examined
factors related to the text and-structure of the statute
in question, including the existence of a comprehensive
remedial scheme in the statute*! and the explicit
creation of a private right of action elsewhere in the
same statute.” The Court has also relied upon various
aspects of the statute's legisletive history,” the
"customary legal incidents" that follow directly from a
statutory provision,“ Congress's explicit creation of
13a
private rights of action in similar statutes enacted at
roughly the same time,” and an assortment of other
factors.” To provide some boundaries to our inquiry
into congressional intent, we will confine ourselves to
those purported signals of legislative intent that the
parties have raised and that are consistent with current
doctrine.
1. Text and Structure of § 3009
The express language of § 3009 provides only for
Federal Trade Commission ("FTC") enforcement. By
declaring the shipment of unsolicited merchandise and
the resulting bills to be a violation of 15 U.S.C. §
45(a)(1) (and therefore unlawful), § 3009(a) authorizes
the FTC to use any of the Federal Trade Commission
Act's ("FTC Act") applicable enforcement mechanisms
in response to this behavior. *’ The FTC Act allows the
FTC to obtain a variety of remedies” for violations of §
45(a)(1), including injunctions” and civil penalties. The
rest of § 3009 builds on § 3009(a) by explaining what
rights a recipient possesses when confronted with an
unlawful merchandise shipment and by imposing
additional duties on shippers of merchandise who have
either chosen to disregard § 3009(a) or are subject to
one of its exceptions.
The reference to FTC enforcement combined with the
absence of other enforcement provisions creates a
presumption that FTC enfc.vement of the statute is
exclusive. As the Sandoval Court held, "[t]he express
provision of one method of enforcing a substantive rule
suggests that Congress intended to preclude others."
532 U.S. at 290. Wisniewski correctly points out that
"private rights of action have been implied from
14a
statutes that provide for agency enforcement"
(Appellant's Br. at 23), but this does not change the fact
that agency enforcement creates a strong presumption
against implied private rights of action that must be
overcome.?! |
Wisniewski's strongest argument for overcoming the
presumption of exclusive FTC enforcement is based on
an analogy between § 3009 and § 215 of the Investment
Advisers Act ("IAA"), the statutory provision under
which the Supreme Court recognized an implied private
right of action in TAMA. (See Appellant's Br. at 16.)
Section 215 provides that every contract whose
formation or performance would violate the [AA "shall
be void .. . as regards the rights of any person" who
violated the statute or knew of the facts underlying its
violation. 444 U.S. at 16-17 (quoting 54 Stat. 856, as set
forth in 15 U.S.C. § 80b-15).* The Court concluded that
the statutory text showed congressional intent to
create a private remedy, stating:
By declaring certain contracts void, § 215 by its
terms necessarily contemplates that the issue of
voidness under its criteria may be litigated
somewhere. At the very least Congress must
have assumed that § 215 could be raised
defensively in private litigation to preclude the
enforcement of an investment advisers contract.
But the legal consequences of voidness are
typically not so limited. A person with the power
to void a contract ordinarily may resort to a
court to have the contract rescinded and to
obtain restitution of consideration paid. ... For
these reasons we conclude that when Congress
declared in § 215 that certain contracts are void,
15a
it intended that the customary legal incidents of
voidness would follow, including the availability
of a suit for rescission or for an injunction against
continued operation of the contract, and for
restitution.
444 US. at 18-19 (citations omitted). The Court noted in
a footnote that Congress might have intended that
private litigants raise § 215 claims only in state court,
but that "we decline to adopt such an anomalous
construction without some indication that Congress in
fact wished to remit the litigation of a federal right to
the state courts." /d. at 19 n.8.
Sections 3009 and 215 do have some similarities. Both
provisions define the rights of those affected by a
violation of the statute. Section 215 establishes that the
wronged party to a purported contract entered in
violation of the [AA is under no obligation to perform.
Section 3009 establishes that the recipient of
merchandise sent in violation of the unordered
merchandise statute is under no obligation to return or
pay for the merchandise. The TAMA Court concluded
that, through the statute's explicit declaration of
voidness, Congress indicated its intent to allow the
wronged party to bring an action under § 215 to rescind
the void contract and to obtain restitution for
consideration paid. Wisniewski argues that Congress
likewise intended to create a private right of action
under § 3009 that would allow recipients to obtain
restitution for expenses incurred because of the
sender's misrepresentations regarding their rights.
Although the 7AMA analogy is apposite, it is not
convincing. We believe that the statutes in question are
loa
too different to allow an interpretation that Congress
intended to create a private right of action under §
3009. We note that the private right of action allowed in
TAMA was very limited. It allowed the wronged party
to bring an action for "limited equitable relief," 444 U.S.
at 22, which includes only those remedies closely
associated with the contract's voidness: rescission of the
contract, an injunction against the _ contract's
enforcement, or restitution of consideration paid, 444
U.S. at 18-19. The TAMA Court explicitly stated that a
party could not obtain "compensation for any
diminution in the value of the rescinding party's
investment alleged to have resulted from the adviser's
action or inaction." /d. at 24 n.14. Also, TAMA makes
clear that a party has no private right of action to
recover amounts lost to an investment adviser who
engaged in the fraudulent activities prohibited by § 206,
except those amounts given as consideration under a
void advisory contract. Jd. at 24-25 & n.14. In other
words, TAMA does not create a general presumption
that Congress intended to create a private right of
action for restitution whenever one party obtains a
benefit from another by violating the latter party's
statutory rights. Instead, its analysis is linked closely to
the explicit declaration of voidness in the statute and
the "customary legal incidents" that follow from such a
declaration according to established contract law
principles. See zd. at 19.
In contrast, § 3009 does not explicitly declare any
agreement to be void. Although it creates a right for
recipients to keep unsolicited merchandise, it says
nothing about the consequences if a mailer violates the
statute and thereby induces a recipient to disregard
this right.* As Sandoval tells us, creation of a right is
17a
not enough to establish congressional intent to create a
private right of action to vindicate that right.
Wisniewski points to no "customary legal incidents"
that follow from a declaration that an individual has the
personal right to keep unordered merchandise as a gift.
Accordingly, we conclude that the creation of a right to
keep merchandise in § 3009, unlike § 215's voidness
declaration, is not’ sufficient to demonstrate
congressional intent to create a private right of action.
Rodale points out that Congress expressly provided
private rights of action in two other provisions of the
Postal Reorganization Act, suggesting that it knew how
to create private rights of action when it wished.
(Appeilee's Br. at 18.) Sections 3017(e)(1) and (e)(2)
provide private rights of action to enforce Sections
3001(1) and 3017(d), respectively. Wisniewski counters
that Congress enacted § 3017 in 1999 and that this
amendment therefore cannot shed any light on the
meaning of the original act. (Appellant's Br. at 24-25.)
Rodale concedes that these amendments do _ not
necessarily prove Congress's lack of intent to provide a
private right of action under § 3009, but claims that
they "buttress" the case already made that no such
intent exists. (Appellee's Br. at 20.) We need not decide
whether to place any weight on these amendments,
because they certainly cannot help Wisniewski, and
other arguments independently support Rodale's case
against an implied private right of action.
In short, the text and structure of § 3009 strongly
suggest that Congress did not intend to supplement
FTC enforcement with a parallel system of private
litigation but "absentmindedly forgot to mention an
intended private action." See TAMA, 444 U.S. at 20
18a
(quoting Cannon, 441 U.S. at 742 (Powell, J.,
dissenting)).*4
2. Legislative History *
Both parties concede that the congressional record is
"silent" with regard to the existence of a private right of
action in § 3009. (See Appellant's Br. at 26-27;
Appellee's Br. at 17.) In Touche Ross, the Court noted
that the legislative history of § 17(a) of the Securities
Exchange Act was silent and observed that "implying a
private right of action on the basis of congressional
silence is a hazardous enterprise, at best." 442 US. at
571. But this silence does not "automatically undermine"
Wisniewski's claim that an implied private right of
action exists, since Congress might express its intent
"in the language or structure of the statute, or in the
circumstances of its enactment." See TAMA, 444 U.S. at
18. As we have already explained, however, the
language and structure of the statute provide no
support for a private right of action, and Wisniewski
has not pointed to anything in the circumstances of the
statute's enactment or any other factors that express
the requisite intent.
3. Kipperman v. Academy Life Insurance Co.
In their briefs, the parties debate the meaning and
relevance of Kipperman v. Academy Life Ins. Co., 554
F.2d 377 (9th Cir. 1977), the only federal appellate
opinion that has addressed whether an implied private
right of action exists under } 3009. In Kipperman, the
Ninth Circuit applied the Cort test to § 3009 and
concluded that the statute provides an implied private
right of action for declaratory and restitutionary relief.
19a
See 554 F.2d at 380.°%° Kipperman is not persuasive
authority for us because its analysis is inconsistent with
the Supreme Court's subsequent decisions in Cannon,
Touche Ross, and TAMA, which restructured the
implied private right of action test to focus solely on
legislative intent. The Kipperman opinion appears to
weigh the four Cort factors roughly equally, providing
no evidence that the court recognizes legislative intent
as the sole determinative factor. See 554 F.2d at 380.
Moreover, in its analysis of legislative intent, the
Kipperman court states that "we believe Congress did
not consider the question of a private right of action
under section 3009," and it provides no evidence that
Congress intended that the statute be enforced through
a private right of action. 554 F.2d at 380. Lack of
evidence of intent probably would have presented no
obstacle under Cort, which says that congressional
intent to create a private right of action is unnecessary
as long as Congress conveyed no explicit intent to deny
one. See Cort, 422 U.S. at 82. But Supreme Court cases
decided since Cort and Kipperman have established
that congressional intent to create a private right of
action is critical, and the Kipperman court's failure to
find such intent would dictate a different result in that
case today.
IV.
In sum, we see no indication that Congress intended to
create a private right of action under § 3009.
According!;, we will affirm the judgment of the District
Court.
Wisniewski v. Rodale, Inc., No. 06-1305
20a
DISSENT BY: SLOVITER
DISSENT
SLOVITER, Circuit Judge, dissenting.
There is a Wonderland quality about the majority's
enunciation of the inquiry before us: only if Congress
intended to create a personal right and a private
remedy, may a court hold that an implied right of action
exists under a federal statute. I do not suggest that the
majority misconstrues the recent Supreme Court
precedent. Quite the contrary. The majority
scrupulously reviews the relevant decisions in
articulating its version of our task. The fact that I
arrive at a different conclusion should not obscure the
inescapable truth that we are both engaged in an
illusory errand. The search is to determine whether
Congress, the Congress that enacted the statute, also
intended to create a private right of action. Do we
really believe that Congress, with its legislative aides,
lawyers, paralegals and assorted staff, is unable to state
in simple declarative language that anyone injured by a
violation of that statute may file suit in federal court?
Do we really believe that it simply forgot? But
whatever the reason Congress chose to remain silent,
the Supreme Court set our course decades ago and we
have the responsibility to follow by looking for clues
that Congress intended that which it did not say.
Unlike the majority, I conclude that when Congress
enacted § 3009(b) expressly creating a _ personal
property right in recipients of unordered merchandise,
it also enabled those recipients to take the action
Zila
necessary to exercise that right, or, in the parlance of
the precedents, effect a remedy.
Section 3009(b) states that unordered merchandise
"may be treated as a gift by the recipient, who shall
have the right to retain, use, discard, or dispose of it in
any manner he sees fit without any obligation
whatsoever to the sender." 39 U.S.C. § 3009(b)
(emphasis added). As the majority recognizes, "the
'rights-creating' language so critical to the Court's
analysis" is unquestionably present here. Alexander v.
Sandoval, 5382 U.S. 275, 288, 121 S. Ct. 1511, 149 L. Ed.
2d 517 (2001) (citing Cannon v. Univ. of Chicago, 441
U.S. 677, 690 n.13, 99S. Ct. 1946, 60 L. Ed. 2d 560 (1979)
(asserting that "the right- or duty-creating language of
the statute has generally been the most accurate
indicator of the propriety of implication of a cause of
action")). We shift, then, to Congress’ intent to create a
remedy, with primary focus on the statute's text and
structure.
Congress expressly defined the legal status of
unordered merchandise, deeming it "a gift" to the
recipient. Recognizing that the senders of unordered
merchandise would likely attempt to "trick or bully"
recipients into paying for that merchandise, 116 Cong.
Rec. 22,314 (1970), Congress confirmed the recipient's
right of possession by providing that the receipt of the
merchandise was to be free of any obligation to the
sender. Therefore, the functional effect of Congress'
language was to vest in the recipient unencumbered
title to the merchandise. See Ray Andrews Brown, The
Law of Personal Property §§ 2.6, 7.12 (8d ed. 1975). The
creation of this property right implies that Congress
contemplated that a_ recipient of unordered
22a
merchandise would be entitled to the attendant rights
of ownership, including the ability to enforce his or her
right to title.
The Supreme Court has upheld a limited right of action
in analogous circumstances. In Transamerica Mortgage
Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 12-13, 100
S. Ct. 242, 62 L. Ed. 2d 146 (1979), the Court considered
whether a private right of action could be implied from
certain provisions of the Investment Advisers Act of
1940 ("IAA"). Section 215 of the IAA provided "that
contracts whose formation or performance would
violate the Act ‘shall be void ... as regards the rights
of the violator and knowing successors in interest." Id.
at 16-17 (quoting 15 U.S.C. 8 80b-15). The Court
reasoned that "[b]y declaring certain contracts void, §
215 by its terms necessarily contemplates that the issue
of voidness under its criteria may be litigated
somewhere." Id. at 18. The Court then reasoned that
Congress must not only have assumed that
beneficiaries of § 215 would be able to raise the statute
"defensively in private litigation," but that Congress
must also have envisioned that a beneficiary would be
able to "resort to a court to have the contract rescinded
and to obtain restitution of consideration paid." Id.
Therefore, the Court concluded, "when Congress
declared in § 215 that certain contracts are void, it
intended that the customary legal incidents of voidness
would follow, including the availability of a suit for
rescission or for an injunction against continued
operation of the contract, and for restitution." /d. at 19.
Just as the voidness of a contract is accompanied by
"customary legal incidents," so is the passage of title
resulting from delivery of the "gift" created by §
23a
3009(b).” "By putting the donee in possession of the
property, physical delivery usually obviates the need
for the donee to seek judicial enforcement of the gift."
Restatement (Third) of Property: Wills and Other
Donative Transfers § 6.2 cmt. c (2003); see also
Farrington v. Tennessee, 95 U.S. 679, 683, 24 L. Ed. 558
(1877) ("A gift consummated is as valid in law as any
thing else."). Of course, judicial enforcement remains
available where the recipient requires vindication of his
or her right to title. Indeed, federal courts have long
recognized that the possession of a gift gives rise to an
enforceable right. See, eg., Comm'r of Internal
Revenue v. Copley's Estate, 194 F.2d 364, 369 (7th Cir.
1952) (noting that a completed gift "conferred upon the
donee an enforceable right"); First Nat'l Bank of
Boston v. Comm'r of Internal Revenue, 63 F.2d 685, 691
(1st Cir. 1933) (stating that "delivery and acceptance
with intent to make a completed gift passes an
enforceable title").
Thus, the language of § 3009(b) implies’ that
beneficiaries of that statute may vindicate their right to
possession in a limited cause of action for declaratory
relief or, if the owner has been fraudulently induced to
pay for the merchandise as is alleged here, restitution.
See Kipperman v. Acad. Life Ins. Co., 554 F.2d 377, 380
(9th Cir. 1977) (concluding that a private right of action
under § 3009 should be limited to the extent that it does
not overlap with the Federal Trade Commission's
enforcement authority). Moreover, absent a contrary
indication, courts should assume that this statutory
right may be litigated in federal court. TAMA, 444 U.S.
at 19 n.8.
24a
The structure of § 3009 also supports a private right of
action. Section 3009 is comprised of four subsections.
Subsection (a) declares that the mailing of unordered
merchandise and related communications, as defined in
subsection (c), "constitutes an unfair method of
competition and an unfair trade practice in violation of
section 45(a)(1) of title 15 [the Federal Trade
Commission Act ("FTCA")]." Subsection (b) creates the
property right at issue in this litigation and requires
the senders of unordered merchandise to mark all
merchandise with a message notifying the recipients of
that right. Subsection (c) prohibits senders of
unordered merchandise to "mail to any recipient of such
merchandise a bill for such merchandise or any dunning
communications." Finally, subsection (d) defines
"unordered merchandise." In summary, the statute
defines the prohibited activities in subsections (c) and
(d), declares that those activities are violative of the
FTCA in subsection (a), and then provides a property
right for the parties impacted by the _ prohibited
activities in subsection (b).
Although subsection (a) implies that Congress intended
the Federal Trade Commission ("FTC") to enforce those
proscriptions, there is no suggestion in the statutory
language that the beneficiaries of § 3009(b) must rely on
that overworked agency for the vindication of their
distinct property right. This analysis is congruent with
the reasoning of TAMA. In that case, the Court
distinguished between § 215 of the IAA, where it
implied a private right of action, and § 206 of that Act,
where it did not. It explained that "[uJnlike § 215, § 206
simp:,, proscribes certain conduct, and does not in
terms create or alter any civil liabilities." TAMA, 444
U.S. at 19. Of course, § 3009 does more than just
25a
proscribe conduct undertaken by the senders of
unordered merchandise; it alters the legal obligations of
the relevant parties regarding the ownership of, and
hability for, that merchandise.
Moreover, while 15 U.S.C. § 45(b) authorizes the FTC
to enjoin parties employing unfair trade practices, that
provision does not provide a method for parties harmed
by such acts to obtain relief through the FTC. In fact,
although the majority mentions that the FTCA
provides for restitution to the victims of unfair trade
practices, see 15 U.S.C. § 45(a)(4)(B), that provision was
not added to the FTCA until 2006, thirty-six years after
§ 3009 was enacted, see Pub. L. No. 109-455, 120 Stat.
3372 (Dec. 22, 2006). Thus, a remedy of restitution, as
Wisniewski seeks under the distinct property right
created by § 3009(»), has not traditionally been within
the scope of the FTC's enforcement power and was not
within the FTC's power at the time § 3009 was enacted.
Furthermore, parallel en.orcement by the FTC and
yrivate parties is commonly used to reduce the burden
on the FTC. See Jeter v. Credit Bureau, Inc., 760 F.2d
1168, 1174 n.5 (11th Cir. 1985) (noting the existence of
private enforcement under the Fair Debt Collection
Practices Act for actions that are also enforced by the
FTC); FTC v. TRW, Inc., 628 F.2d 207, 209 (D.C. Cir.
1980) (parallel private enforcement under the Federal
Credit Reporting Act); Stephanie Kanwit, 1 Fed. Trade
Comm'n § 1:7 (2007) (noting that "several statutes
enforced by the [FTC], such as the Truth in Lending
Act, permit private suits" and that the FTC "is
increasingly encouraging private parties to supplement
its limited resources and assist in policing the
marketplace").
26a
I recognize, as the majority emphasizes, that the
Supreme Court has observed that the “express
provision of one method of enforcing a substantive rule
suggests that Congress intended to preclude others."
Sandoval, 532 U.S. at 290. Distinguished from the
proscription in § 3009(a), the property right created in §
3009(b) does not refer to the FTCA, nor did the 1970
version of the FTCA _ provide an_ enforcement
mechanism for that right. Notably, the Court in TAMA
implied a private right of action, albeit limited to
rescission or restitution, despite the existence of a
separate provision of the IAA permitting the Securities
and Exchange Commission "to bring suit in a federal
district court to enjoin violations of the [IAA] or the
rules promulgated viuer it." 444 U.S. at 14. The FTC's
powers were similarly limited at the time § 3009 was
enacted. Therefore, Wisniewski's ability to obtain the
limited remedy of restitution is a necessary corollary to
the distinct right created by the statute.
It is important to focus on the remedy Wisniewski
seeks. He claims that, in violation of the Act, Rodale
pressured him to pay for books he contends he did not
order. The express language of § 3009(c) provides that
no mailer of unordered merchandise "shall mail... a bill
for such merchandise or any dunning communication."
Wisniewski's right to recover the funds exacted from
him in violation of that provision would provide
"specific and limited relief," 444 U.S. at 18, comparable
to the suit for rescission in TAMA.
The Postal Reorganization Act of 1970 ("PRA") effected
a major reorganization of the federal postal service. See
Postal Reorganization Act, Pub. L. No. 91-875, 84 Stat.
719 (Aug. 12, 1970). Section 3009 was included as part of
27a
the newly created Chapter 30 ("Nonmailable Matter"),
positioned between the prohibition on pandering
advertisements in § 3008 and the regulations governing
the mailing of sexually oriented advertisements in §
3010. As none of the other provisions in this chapter of
Title 39 created 2 property right similar to that created
by § 3009, the lack of an overarching citizen suit
provision is not unexpected.
Rodale argued, and the District Court found
persuasive, that Congress' explicit creation of a private
right of action in "another section of the Postal
Reorganization Act . . . strongly suggests that its
failure to create this right in § 3009 was intentional."
Wisniewski v. Rodale, Inc., 406 F. Supp. 2d 550, 557
(E.D. Pa. 2005) (citing 39 U.S.C. § 3017(e)(1)-(2)).
However, § 3017 was not enacted along with § 3009 as
part of the PRA. Rather, § 3017 was passed twenty-
nine years later, as part of the Deceptive Mail
Prevention and Enforcement Act. Pub. L. No. 106-168,
113 Stat. 1806, 1814 (Dec. 12, 1999). By 1999, the
Supreme Court's implied private right of action
jurisprudence, along with its tendency to reject implied
rights of action, was well-established. The fact that
Congress took care to include a private right of action
in an unrelated section of Title 39 in 1999 has little
bearing on Congress’ silence when it enacted § 3009 in
1970.
Thus, the text and structure of § 3009 imply that
Congress intended to create a private right of action to
enforce the property right created in § 3009(b), while
the placement of § 3009 in the statutory scheme does
not undermine that conclusion. To the extent that
legislative history may aid this’ inquiry into
28a
Congressional intent, the parties concede that there is
no evidence in that history directly supporting or
opposing the existence of a private right of action. Of
course, the absence of legislative history is not
unexpected in this context and certainly does not defeat
the inference created by the text and structure of §
3009. See TAMA, 444 US. at 18 ("[T]he legislative
history of the Act is entirely silent-a state of affairs not
surprising when it is remembered that the Act
concededly does not explicitly provide any private
remedies whatever."); Cannon, 441 U.S. at 694 ("[T]Jhe
legislative histery of a statute that does not expressly
create or deny a private remedy will typically be
equally silent or ambiguous on the question.").
Although the final two factors set forth in Cort v. Ash,
422 U.S. 66, 78, 95 S. Ct. 2080, 45 L. Ed. 2d 26 (1975),
whether the right of action is consistent with legislative
purpose and appropriate under federal law, are neither
necessary nor sufficient to infer the existence of a
private right of action, they may still aid a court's
analysis of whether Congress intended to create such a
right. See Thompson v. Thompson, 484 U.S. 174, 183,
108 S. Ct. 513, 98 L. Ed. 2d 512 (1988); Three Rivers Ctr.
for Indep. Living, Inc. v. Housing Auth. of Pittsburgh,
382 F.3d 412, 421 (3d Cir. 2004).
Therefore, to the extent that the majority's opinion
may be read for the proposition that Cort has no
further interpretive value following Sandoval, I
disagree. In Sandoval, the Court had no occasion to
consult the remaining Cort factors once it had
concluded that the text and structure of the relevant
regulation did not imply that Congress intended to
create a private right of action. Sez Sandoval, 582 U.S.
29a
at 288 (finding "that we can end... [the] search for
Congress's intent with the text and structure" of the
statute when those sources did not reveal any such
intent). However, where the text and structure are
either ambiguous or support the existence of a private
right of action, as here, other methods of statutory
interpretation, including the Cort factors, may continue
to inform a court's analysis. See 7d. at 312 (Stevens, J.,
dissenting) (acknowledging that Cort lays out viable
rules and strategies to aid a court's private right of
action analysis). Thus, Sandoval did not create an
exclusive test for analyzine the existence of an implied
private right of action any more than Cannon or
Thompson created a new test upon recognizing that
Congressional intent is fundamental to this inquiry.*
As the only other court of appeals to have considered
this issue found the latter two Cort factors relevant to
its conclusion that § 3009 included a private right of
action, I address those factors briefly. Specifically, the
Court of Anpeals for the Ninth Circuit found that a
limited right of action for declaratory relief and
restitution, and excluding the ability to seek injunctive
relief, "would be entirely consistent with the purpose of
the statute." Kipperman, 554 F.2d at 380. That court
also concluded that, although "the practice with which
section 3009 is concerned traditionally has been
governed by state law .. . subjecting it to national law
is within the power of Congress and the limited private
right we recognize will further the purposes Congress
sought to serve by enacting the section." Id. Therefore,
the final two factors can at least be viewed as providing
some support for the inference derived from the text
and structure of § 3009 that Congress intended to
create both a right and a remedy when it enacted the
30a
statute.
For the foregoing reasons, I would reverse the
judgment of the District Court and hold that § 3009
includes a limited implied right of action for the
restitution that Wisniewski now seeks.
Footnotes
' Section 3009 provides:
(a) Except for (1) free samples clearly and
conspicuously marked as_ such, and (2)
merchandise mailed by a charitable organization
soliciting contributions, the mailing of unordered
merchandise or of communications prohibited by
subsection (c) of this section constitutes an unfair
method of competition and an unfair trade
practice in violation of section 45(a)(1) of title 15.
(b) Any merchandise mailed in violation of
subsection (a) of this section, or within the
exceptions contained therein, may be treated as
a gift by the recipient, who shall have the right
to retain, use, discard, or dispose of it in any
manner he sees fit without any obligation
whatsoever to the sender. All such merchandise
shall have attached to it a clear and conspicuous
statement informing the recipient that he may
treat the merchandise as a gift to him and has
the right to retain, use, discard, or dispose of it in
any manner he sees fit without any obligation
whatsoever to the sender.
3la
(c) No mailer of any merchandise mailed in
violation of subsection (a) of this section, or
within the exceptions contained therein, shall
mail to any recipient of such merchandise a bill
for such merchandise or any dunning
communications.
(d) For the purposes of this section, "unordered
merchandise" means merchandise mailed without
the prior expressed request or consent of the
recipient.
39 U.S.C. § 3009.
2The District Court had jurisdiction over the § 3009
claim under 28 U.S.C. § 13831. We have jurisdiction over
this appeal under 28 U.S.C. §§ 1291 and 1294.
’3Courts have used the terms "private right of action"
and "private cause of action" interchangeably. See, e.g.,
Alexander v. Sandoval, 582 U.S. 275, 291. 121 S. Ct.
1511, 149 L. Ed. 2d 517 (2001) (using the terms
interchangeably in the same paragraph); Touche Ross
& Co. v. Redington, 442 U.S. 560, 575-76, 99 S. Ct. 2479,
61 L. Ed. 2d 82 (1979) (same). Throughout this opinion,
we use the term "private right of action" except when
quoting an opinion that uses "private cause of action."
‘One commentator provides a description of a typical
implied private right of action scenario:
[T}he plaintiff institutes a civil action to prevent
an injury or to recover damages, and he alleges
that he is entitled to relief because of something
contained in a legislative text. He says the
32a
defendant has acted or proposes to act in a
manner contrary to the text. He relies upon the
legislation even though the words of the text do
not actually state that he has a right to bring an
action of this kind, and here the defendant raises
a defense. The defendant argues that the
legislation does not support the plaintiff's claim
because it does not state that the plaintiff is
entitled to maintain an action upon it. The court
must then decide the issue.
H. Miles Foy III, Some Reflections on Legislation,
Adjudication, and Implied Private Actions in the State
and Federal Courts, 71 CORNELL L. REV. 501, 503
(1986).
°For example, Title II of the Civil Rights Act of 1964
provides a private right of action with the following
language:
Whenever any person has engaged or there are
reasonable grounds to believe that any person is about
to engage in any act or practice prohibited by section
2000a-2 of this title, a civil action for preventive relief,
including an application for a permanent or temporary
injunction, restraining order, or other order, may be
instituted by the person aggrieved ....
42 U.S.C. § 2000a-3 (2000).
‘Justice Powell's dissent in Cannon rejects this
contention, arguing that Rigsby did not establish a
genuine implied private right of action. He describes it
as merely "judicial reference to legislatively determined
standards of care . .. to establish the existence of
33a
negligence." See Cannon, 441. U.S. at 732 (Powell, J.,
dissenting).
7See Foy, supra note 4, at 524-33.
8See Merrill Lynch v. Curran, 456 U.S. 353, 376, 102 S.
Ct. 1825, 72 L. Ed. 2d 182 & n.54 (1982); Foy, supra
note 4, at 534-35.
°The Cort opinion never explicitly acknowledges that it
is rejecting the Borak approach. In fact, it cites Borak
several times in a manner suggesting that it is merely
distinguishing the statute at issue in Borak from the
one addressed in Cort. See Cort, 422 U.S. at 79-80 &
n.11, 84, 85. Later cases recognize that Cort effectively
overruled Borak. See, e.g., Aiecander v. Sandoval, 532
U.S. 275, 287, 121 S. Ct. 1511, 149 L. Ed. 2d 517 (2001).
Justice Scalia observed in a 1988 concurrence that
Cort's analysis was "effectively overruled" by later
Supreme Court opinions. See Thompson v. Thompson,
484 U.S. 174, 188, 108 S. Ct. 513, 98 L. Ed. 2d 512
(Scalia, J., concurring).
NOf the Justices involved in Cannon, only Justice
Powell called for the outright abandonment of the Cort
test, claiming that the test is unconstitutional because it
permits judicial lawmaking in violation of the
separation of powers. See Cannon, 441 U.S. at 742-43
(Powell, J., dissenting). Justice Powell declared that
courts should refuse to recognize implied private rights
of action "absent the most compelling evidence that
Congress in fact intended such an action to exist," and
that they should be "especially reluctant" to recognize
them when the statute provides an alternative
34a
mechanism for enforcing the rights it creates. Id. at 749
(Powell, J., dissenting).
Commentators have noted that Sandoval implicitly
affirms Justice Powell's dissenting view in Cannon that
Cort should be discarded in favor of a pure focus on
congressional intent. See, e.g., Matthew C. Stephenson,
Public Regulation of Private Enforcement: The Case
for Expanding the Role of Administrative Agencies, 91
VA. L. REV. 93, 105 (2005) ("The Sandoval Court thus
seems to have adopted Justice Powell's view that the
multifactor Cort analysis ‘too easily may be used to
deflect inquiry away from the intent of Congress, and
to permit a court instead to substitute its own views as
to the desirability of private enforcement." (quoting
Cannon, 441 U.S. at 740 (Powell, J., dissenting))).
'SSection 601 of Title VI provides that no person shall
be denied, on the basis of race, color, or national origin,
the benefits of federally-funded programs. 42 U.S.C. §
2000d (2000). Section 602 authorizes federal agencies “to
effectuate the provisions" of § 601 of Title VI through
regulations. 42 U.S.C. § 2000d-1 (2000). As the
Sandoval Court noted, § 601 prohibits only intentional
discrimination, but the regulations promulgated under
§ 602 prohibit not only intentional discrimination but
also activities that have a disparate impact on racial
groups. 532 U.S. at 280-82. Because no party had
challenged the agencies' authority to promulgate
disparate-impact regulations, the Court assumed for
the purposes of the case that the regulations were
valid. Jd. at 281-82. Also, the Court did not challenge
the existence of an implied private right of action to
enforce § 601 directly, which it deemed to have been
ratified by Congress. See id. at 279-80.
30a
“The Sandoval majority opinion cites Cort only to point
out that Cort marked the demise of the Borak
approach. See Sandoval, 532 U.S. at 287. The Sandoval
dissent, however, suggests that Cort should remain
viable. See Sandoval, 5382 U.S. at 311 (Stevens, J.,
dissenting).
“To avoid confusion between the terms "private right"
and "private right of action,” we follow the approach of
Three Rivers Center v. Housing Authority of the City of
Pittsburgh by referring to substantive rights granted in
statutes as "personal rights" rather than “private
rights." See 382 F.3d 412, 419 n.9 (8d Cir. 2004). The
Supreme Court has used the term "personal right" in
the same manner. See id. (citing Gonzaga Univ. v. Doe,
536 U.S. 273, 285, 122 S. Ct. 2268, 153 L. Ed. 2d 309
(2002)).
Although we have acknowledged that Justice Scalia,
the author of the Sandoval majority opinion,
disapproves of the use of legislative history, see
American Trucking, 458 F.3d at 298 n.5 (quoting
Blanchard v. Bergeron, 489 U.S. 87, 98-99, 109 S. Ct.
939, 103 L. Ed. 2d 67 (1989) (Scalia, J., concurring)),
nothing in Sandoval expressly condemns its use.
Sandoval criticizes consideration of "expectations that
the enacting Congress had formed in light of the
contemporary legal context," 532 U.S. at 287-88
(quotation omitted), as well as _ "reliance on
congressional inaction" to infer "congressional intent to
ratify lower court decisions regarding a particular
statutory provision,” id. at 291-92, but stops short of
condemning all judicial inquiry into legislative history.
Although the Sandoval Court "find{s] that [it] can end"
its inquiry into congressional intent with the text and
36a
structure of Title VI, zd. at 288, it does not state that
the inquiry in all cases must end with text and
structure.
‘We observe that under circumstances different from
American Trucking, however, reliance on Cort could
lead to results that are inconsistent with Sandoval. As
noted above, Cort v. Ash said that when a statute
contains strong right-creating language, “it is not
necessary to show an intention to create a private cause
of action... ." 422 U.S. at 82. American Trucking
expresses a related idea when it says "[w]here, as here,
a Statute is devoid of any right-creating language, there
need be a more compelling indication in the legislative
history before this court can recognize a right of action."
458 F.3d at 303. To the extent that one could interpret
this statement to mean that demonstrating legislative
intent to create a personal right eliminates or reduces
the need to demonstrate legislative intent to create a
private remedy, it is inconsistent with our reading of
Sandoval.
'8Sandoval appears to have left untouched the Court's
jurisprudence on how to determine whether statutory
language creates a personal right. See 532 U.S. at 288-
89 (citing California v. Sierra Club, 451 U.S. 287, 294,
101 S. Ct. 1775, 68 L. Ed. 2d 101 (1981); Univs.
Research Assn., Inc. v. Coutu, 450 U.S. 754, 101 S. Ct.
1451, 67 L. Ed. 2d 662 (1981); Cannon, 441 U.S. at 690).
"Even though Sandoval suggests that the distinction
between a statute focusing on the person regulated and
one focusing on the person protected is still significant,
see 582 U.S. at 289, we would be reluctant to place
dispositive weight on this factor. The apparent "focus"
37a
of a statute might have more to do with Congress's
writing style than its intent. See RICHARD H.
FALLON, JR. ET AL., HART AND WECHSLER'S
THE FEDERAL COURTS AND THE FEDERAL
SYSTEM 785 (5th ed. 2003) ("Does the appropriateness
of a private right of action depend on whether a statute
says 'no person shall be subjected to discrimination in a
federally funded program' rather than 'no federally
funded program shall discriminate’?"). In the present
case, for example, § 3009(c) might have appeared to
"focus" more on the individual protected if Congress
had written "No recipient shall be mailed a bill for such
merchandise ... ," but the meaning would be identical.
We do not consider Congress's use of the passive voice
a reliable guide to its intent to create personal rights.
“We also note that the provisions requiring mailers to
notify recipients of their rights and to refrain from
billing them are ancillary to the recipients’ right to keep
the merchandise as a gift. These provisions ensure that
recipients are aware of this right, but provide no
independent benefit to a recipient who is fully aware
that he or she has a right to keep the merchandise.
1See, e.g., Sandoval, 5382 U.S. at 290 ("The express
provision of one method of enforcing a substantive rule
suggests that Congress intended to preclude others.");
Russell, 473 U.S. at 146, 105 S. Ct. 3085, 87 L. Ed. 2d 96
("The six carefully integrated civil enforcement
provisions .. . provide strong evidence that Congress
did not intend to authorize other remedies that it
simply forgot to incorporate expressly."); TAMA, 444
U.S. at 19-20 ("It is an elemental canon of statutory
construction that where a statute expressly provides a
38a
particular remedy or remedies, a court must be chary of
reading others into it.").
See, e.g., Coutu, 450 U.S. at 773 (highlighting another
provision of the same Act explicit'y conferring a private
right of action); Touche Ross, 442 U.S. at 571-72
(pointing out that several other provisions of the same
act explicitly provide a private right of action, showing
that "when Congress wished to provide a private
damage remedy, it knew how to do so and did so
expressly").
Among the aspects of legislative history that the
Court has considered in the past are statements of
intent in the congressional record associated with the
original enactment, see, e.g., Thompson, 484 U.S. at 184-
85; National Sea Clammers, 453 ~].S. at 17-18, 101 S.
Ct. 2615, 69 L. Ed. 2d 435; Coutu, 450 U.S. at 773-75,
and statements of intent in the congressional record
associated with later amendments, see, e.g., Daily
Income Fund, Inc. v. Fox, 464 U.S. 528, 538-40, 104 S.
Ct. 831, 78 L. Ed. 2d 645 (1984); Merrill Lynch, 456 U.S.
at 383-84; Coutu, 450 U.S. at 778-79. In certain
contexts, the Court has inferred a private right of
action from Congress's enactment of a_ statute
containing language similar to that of a statute in which
courts had previously found an implied private right of
action. See, e.g., Jackson v. Birmingham Bd. of Fduc.,
544 U.S. 167, 176-77, 125 S. Ct. 1497, 161 L. Ed. 2d 361
(2005); Cannon, 441 U.S. at 694-96. In the past, the
Court had inferred that Congress intended to ratify a
private right of action when it amended a statute while
leaving unchanged a provision that federal courts had
interpreted to confer a private right of action, see, ¢.g.,
Merrill Lynch, 456 U.S. at 381-82, but later Court
39a
opinions have foreclosed this option, see Sandoval, 532
at 291-92; Cent Bax. of Denver v. First Interstate
Bank of Denver, 511 U.S. 164, 186, 114 S. Ct. 1439, 128
L. Ed. 2d 119 (1994). As the Sandoval opinion
demonstrates, the Court is willing to dispense entirely
with an inquiry into legislative history when the text
and structure of the statute are clear. See supra note
16.
4See TAMA, 444 U.S. at 18-20 (holding that Congress
intended that "customary legal incidents" of contract
voidness, including a private right to sue for rescission,
an injunction, or restitution, would follow from its
statutory declaration that certain contracts "shall be
void").
See, e.g., Cent. Bank of Denver, 511 U.S. at 184-85
(declining to find an implied private cause of action for
aiding and abetting under the Securities Exchange Act
of 1934 because Congress had acted against the
"backdrop" of a 1929 federal securities law and
securities laws in eleven states that had provided
explicitly for such a cause of action); Northwest
Airlines, Inc. v. Transport Workers Union of America,
451 U.S. 77, 92, 101 S. Ct. 1571, 67 L. Ed. 2d 750 & n.24
(1981) (declining to find an implied private right of
action for contribution under the Equal Pay Act and
Title VII and noting that it was "significant" but “not
dispositive" that Congress had expressly provided for a
right to contribution in certain securities acts); TAMA,
444 US. at 21 (noting that Congress expressly
authorized private suits for damages in _ other
securities-reiated statutes enacted at around the same
time as the [AA).
40a
*°h'or example, the Court has examined the extent to
which state law remedies are available, see Daily
Income Fund, 464 U.S. at 542 (noting that the subject
matter of the proposed private cause of action is
"generally governed" by state law), and even the
provision's location in the United States Code, see
Thompson, 484 U.S. at 183 (stating that the placement
of the provision as an addendum to the full faith and
credit statute is "strong proof" that Congress did not
intend to create a private right of action).
27We see no merit in Wisniewski's argument that
"[nlowhere does the statute specifically refer to
enforcement by the FTC... ." (Appellant's Br. at 23
(emphasis in original)). For all practical purposes, the
reference to "section 45(a)(1)" is a reference to FTC
enforcement.
One of the remedies in the current FTC Act is
restitution. See 15 U.S.C.A. § 45(a)(4)(B) (West 2007)
("All remedies available to the Commission with respect
to unfair and deceptive acts or practices shall be
available for acts and practices described in this
paragraph, including restitution to domestic or foreign
victims."). Congress added this remedy to the FTC Act
in 2006, however, so it was not part of the FTC's
arsenal at the time § 3009 was enacted. See Pub. L. No.
109-455, 120 Stat. 3372 (Dec. 22, 2006).
*2See 15 U.S.C. § 45(a)(2) (2000) ("The Commission is
hereby empowered and directed to prevent persons,
partnerships, and corporations . . . from using unfair
methods of competition in or affecting commerce and
unfair or deceptive acts or practices in or affecting
commerce.").
Ala
30See 15 U.S.C. § 45(m)(1)(A) (2000) ("The Commission
may commence a civil action to recover a civil penalty
in a district court of the United States against any
person, partnership, or corporation which violates any
rule under this chapter respecting unfair or deceptive
acts or practices . . . with actual knowledge or
knowledge fairly implied on the basis of objective
circumstances that such act is unfair or deceptive and is
prohibited by such rule.").
Since the demise of Borak, the Supreme Court has
generally been unwilling to find implied private rights
of action in statutes that expressly provide for agency
or other enforcement. The Court has made exceptions
for certain securities and anti-discrimination statutes,
but it has done so primarily because of longstanding
precedent interpreting the same or similar language to
create a private right of action. See Jackson, 544 U.S. at
176 (private retaliation actions under Title IX);
Huddleston, 459 U.S. at 380-81, 108 S. Ct. 683, 74 L. Ed.
2d 548 (private actions based on registration statement
fraud under Section 10(b) of Securities Exchange Act);
Merrill Lynch, 456 U.S. at 378-82 (private actions
under Commodities Exchange Act); Cannon, 441 U.S.
at 694-98 (private actions under Title IX);
Superintendent of Ins. v. Bankers Life & Cas. Co., 404
U.S. 6, 92 S. Ct. 165, 30 L. Ed. 2d 128 (1971) (approving
with virtually no analysis a private right of action under
Section 10(b)). Moreover, the Court has taken a stricter
approach in recent years to both securities and anti-
discrimination statutes despite longstanding
interpretations. See Sandoval, 532 U.S. at 293 (finding
no private action under § 602 of Title VI); Cent. Bank of
Denver, 511 U.S. at 183-88 (finding no private right of
action for aiding and abetting under Section 10(b)).
42a
32Section 215 declares the contract to be "void," a term
typically used in contract law to describe contracts that
create no enforceable rights or obligations for either
party. See RESTATEMENT (SECOND) OF
CONTRACTS § 7, emt. a. Under § 215, the contract is
only void "as regards the rights" of a wrongdoer, which
suggests that the contract is merely "voidable" at the
innocent party's option. In another case, the Supreme
Court concluded that "void," as used in § 29(b) of the
Securities Exchange Act, really meant "voidable," and
noted that § 215 of the IAA is a parallel provision. See
Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 387, 90 8. Ct.
616, 24 L. Ed. 2d 593 (1970).
At most, Wisniewski could contend that his payment
to Rodale fur the unordered merchandise created a
faux-contractual relationship between the two parties,
with Rodale's shipment of merchandise as the "offer"
and Wisniewski's payment as the "acceptance." Under
this reasoning, if Rodale obtained Wisniewski's
acceptance in a manner that violated the statute (e.g¢.,
by failing to inform him of his rights), then the
acceptance would be invalid and the contract voidable.
Thus, the declaration that Wisniewski has a right to
keep the merchandise would be equivalent to a
declaration that any contract that disregarded this
right shall be void, which under TAMA would entitle
Wisniewski to the "customary legal incidents" of a void
contract (including restitution). This line of reasoning is
too speculative to be convincing, however. It requires
us to make an assumption not present in TAMA: that
statutory recognition of a right automatically carries
with it the power to void any purported contracts that
arise when a wrongdoer ignores this right. Given the
absence of any direct or indirect reference in § 3009 to
43a
any contract, we are not willing to make such an
assumption.
“Our holding will not necessarily deprive individuals of
a remedy in the event that they are unable to attract
the interest of FTC enforcers. Individuals who pay for
unordered merchandise, either out of ignorance of their
right or fear of a negative credit rating, might have
recourse to state courts. A footnote in 7 AMA says that
it would be "anomalous" to assume that Congress
intended "to remit the litigation of a federal right to the
state courts." 444 U.S. at 19 n.8. In the present case,
however, Congress has authorized litigation by the
FTC in federal court. State court may remain a fallback
option for individuals who believe that the FTC has not
been vigorous enough in enforcing their rights.
Regarding the extent to which legislative history is
relevant at all in implied private right of action
inquiries, see supra note 16.
The Ninth Circuit did net extend this implied private
right of action to injunctive relief because it feared that
injunctions would interfere with FTC enforcement of §
3009. See 554 F.2d at 380. The court ultimately
dismissed the restitution claim on the ground that
insurance policies are not "merchandise" within the
meaning of § 3009. See id. at 380-81.
The majority's attempt to analogize to TAMA by
applying a contract analysis to § 3009 fails because §
3009 does not create a contract right, but a property
towards the "customary legal incidents" associated with
the property right created thereby.
44a
38A cursory review of federal case law reveals that only
one other federal court has viewed the Court's decision
as creating a distinct " Sandoval test." That court,
however, concluded that Sandoval created a four-step
test considerably different from the two-step test
discussed in the majority's opinion. See Ruta v. Delta
Airlines, Inc., 322 F. Supp. 2d 391, 402 (S.D.N.Y. 2004).
45a
CIVIL ACTION NO. 08-742
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF
PENNSYLVANIA
DAVID WISNIEWSKI,
Plaintiff
V.
RODALE, Inc.,
Defendant
December 20, 2005, Decided
December 20, 2005, Filed; December 20, 2005, Entered
COUNSEL: MICHAEL KARNUTH, ON BEHALF
OF HIMSELF AND ALL OTHERS SIMILARLY
SITUATED, Plaintiff, Pro se.
For DAVID WISNIEWSKI, ON BEHALF OF
HIMSELF AND ALL OTHERS SIMILARLY
SITUATED, Plaintiff? DANIEL B. ALLANOFF,
MEREDITH COHEN GREENFOGEL &
SKIRNICK, P.C., PHILADELPHIA, PA.
For RODALE, INC., Defendant: ERROL C. DEANS,
JR., GROSS MCGINLEY LABARRE & EATON
LLP, ALLENTOWN, PA. GREGORY A. CLARICK,
MANATT PHELPS & PHILLIPS LLP, NEW YORK,
NY. PAUL A. MCGINLEY, SUSAN ELLIS WILD,
GROSS, MCGINLEY, LABARRE & EATON, LLP,
ALLENTOWN, PA.
OPINION
Diamond, J.
MEMORANDUM
Plaintiff and class representative David Wisniewski
alleges that magazine and book publisher Rodale, Inc.
violated a federal statute and various state laws when it
enrolled him and others in its annual book program.
Rodale has moved for summary judgment, arguing, in
part, that the federal statute provides no private right
of action. I agree and dismiss Wisniewski's federal
claim. I also dismiss Wisniewski's state law claims for
want of jurisdiction.
BACKGROUND AND PROCEDURAL HISTORY
Then-Plaintiff Michael Karnuth began this litigation on
February 25, 2003, alleging that simply because he was
a subscriber to Rodale's "Men's Health" magazine,
Defendant sent him books he had never ordered -- Sex,
a Man's Guide (in 2000), Report 2001: A Man's Guide to
Women (in 2001), and Report 2002: A Man's Guide to
Women (in 2002) -- and then demanded payment.
(Compl. at Ff 1, 12-17). Karnuth charged that Rodale
had violated the Postal MReorganization Act,
Pennsylvania's Unsolicited Merchandise Act,
Pennsylvania's Unfair Trade Practices and Consumer
Protection Law, and unnamed provisions from other
states. See 39 U.S.C. § 3009 (2004), 73 Pa. Cons. Stat. $§
2001, 201-02 et seq. This Court had jurisdiction to hear
Plaintiff's § 3009 claim pursuant to 28 U.S.C. § 1331 and
the state law claims pursuant to 28 U.S.C. § 1367.
47a
Rodale moved to dismiss the Pennsylvania state law
claims only; the Honorable Franklin Van Antwerpen
denied the Motion. See Order of May 16, 2003, at n.1
(Doc. No. 9) (Van Antwerpen, J.).
Karnuth next moved to certify his Complaint as a class
action on behalf of "all persons who, without prior
consent, received books and_ other products
from Defendant and an invoice for payment for such
books and products," as well as a subclass of “all
members of the class who paid, in part or whole, the
invoices for such books and products for personal,
family, or household purposes." (/d. at J 15). Although
Karnuth initially alleged that he had not solicited any of
the Rodale publications, discovery revealed that this
was false: he had ordered and paid for at least one of
the books. Judge Van Antwerpen observed that if
Karnuth had indeed ordered the Rodale books, "then
his claims will be quite distinct than other members of
the proposed class, assuming he has any claims at all."
See Karnuth v. Rodale, Inc., 2003 U.S. Dist. LEXIS
12095, *10 (E.D. Pa. July 2, 2008). Accordingly, Judge
Van Antwerpen denied class certification without
prejudice. See id. at *8-*10.
The case was reassigned to me on July 16, 2004.
Karnuth then filed an Amended Complaint and
renewed his Motion for Class Certification. The
Amended Complaint included allegations that differed
materially from those in Karnuth's Original Complaint.
Karnuth now alleged that in September 2000, he
completed and returned to Rodale a "One Shot Order
Card," allowing him to preview Sex, A Man's Guide and
enrolling him in Karnuth's annual book preview
program. (Amended Compl. at 44 7-8). If Karnuth did
48a
not return the book (at Rodale's expense) within
twenty-one days, he would be required to pay for it.
Karnuth alleged that he kept Sex: A Man's Guide and
sent a $ 39.65 check to Rodale in full payment. Karnuth
also alleged that as part of its preview program, Rodale
sent him two additional books: Report 2001: A Man's
Guide to Women (in 2001) and Report 2002: A Man's
Guide to Women (in 2002).
Karnuth's new allegations directly contradicted his
earlier allegation that “at no time either before or after
Defendant sent Plaintiff and the class the 2001 and 2002
unsolicited books did Plaintiff request or consent to the
mailing or sending to him of the subject books." (Compl.
at ¥ 24). In light of that contradiction, I reasoned that,
as Judge Van Antwerpen anticipated, Karnuth had
unique credibility problems that would prevent him
from adequately protecting the interests of the class.
See Karnuth v. Rodale, Inc., 2005 U.S. Dist. LEXIS
5241, * 8 (E.D. Pa. Mar. 30, 2005). I therefore denied the
Class Certification Motion without prejudice and
allowed Plaintiff's counsel to substitute a new class
representative. /d.; cf. N.T. Mar. 7, 2005 at 45:22-25
(Plaintiffs counsel stating that he could easily find
another class representative).
On April 13, 2005, Plaintiff's counsel filed a notice
substituting David Wisniewski as the new putative
class representative. Wisniewski acknowledged that he,
too, had returned the "One Shot Order Card" and had
thus received Sex: A Man's Guide. Wisniewski further
alleged that he did not understand that by returning
the card, he enrolled in Rodale's annual book preview
program. Thus, he alleged that he did not order the
books Rodale subsequently sent him -- the same Report
49a
2001 and Report 2002 volumes received by Karnuth. He
nonetheless paid for them to preserve his credit rating.
(Notice of Substitution at J] 2, 4-5); (Amended Notice
of Substitution at 9 4-7). Like Karnuth, Wisniewski
sought to represent "all persons who are or have been
enrolled in Rodale's Annual Programs and received
books from Rodale and invoices for payment of such
books, within six years preceding the filing of Plaintiff's
Class Action Complaint." (Amended Compl. at { 36). In
addition, he sought to certify a subclass of "all members
of the class who paid, in part or whole, the invoices for
such books for personal, family or household purposes."
Id.
At the class certification stage, it was apparent that
Plaintiff's theories of liability were problematic. See
Karnuth v. Rodale, 2005 U.S. Dist. LEXIS 14426, at *9-
*10 (E.D. Pa. July 18, 2005). For instance, Wisniewski
admitted in his deposition that he had read very little of
the information Rodale sent to him. Naturally, Rodale
questioned how Wisniewski could credibly allege that
the "One Shot Order Card" misled him if he had not
read it. (N.T. of Oct. 24, 2005, at 14:6-14, 24:13-25:23).
Wisniewski responded that whether or not he read the
card was immaterial. In his view, the Federal Trade
Commission's Prenotification Negative Option Rule
sets forth an _ objective disclosure standard --
enforceable throuzh 39 U.S.C. § 3009 -- that Rodale's
Order—€ard did not meet. /d. at 16:2-19:25; see 16
C.F.R. § 425.1.
As I noted in my previous opinion, I could find no
authority linking the FTC Rule and the Postal
Reorganization Act. See Karnuth, 2005 U.S. Dist.
LEXIS 14426, at *9. As I also noted, however, I could
50a
not then consider this or any other contention that went
to the merits of Wisniewski's Amended Complaint. See
Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
259 F.3d 154, 166-67 (3d Cir. 2001) (court may not
consider merits when deciding class certification under
Rule 23). Accordingly, I granted Wisniewski's Motion
for Class Certification on his federal claim. Karnuth,
2005 U.S. Dist. LEXIS 14426, at *15. Because Plaintiff
had failed to analyze the distinctions among the various
unnamed state statutes, I denied certification on his
state claims.
The parties agree that my ruling on this Motion for
Summary Judgment will bind only the named parties.
Accordingly, they have not notified potential class
members of the Motion. (N.T. of Oct. 24, 2005, at 22:24-
23:18). My ruling on this Motion thus has no preclusive
effect on other class members; rather, it can serve only
as precedent. Cf. Fed. R. Civ. Proc. 23(c)(1)(B) ("For
any class certified under Rule 23(b)(8), the court must
direct to class members the best notice practicable
under the circumstances... .").
STANDARD OF REVIEW
Upon motion of any party, I may grant summary
judgment "if there is no genuine issue as to any
material fact and the moving party is entitled to
judgment as a matter of law." F'ed. R. Civ. P. 56(c). The
moving party must initially show the absence of any
genuine issues of material fact. See Celotex Corp. v.
Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 91 L. Ed. 2d
265 (1986). In its review of the record, "the court must
give the nonmoving party the benefit of all reasonable
inferences." See Sempier v. Johnson & Higgins, 45 F.3d
ola
724, 727 (8d Cir. 1995), cert. denied, 515 U.S. 1159, 182
L. Ed. 2d 854, 115 S. Ct. 2611 (1995). An issue is
material only if it could affect the result of the suit
under governing law. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 106 8S. Ct. 2505, 91 L. Ed. 2d 202
(1986). If, after viewing all reasonable inferences in
favor of the non-moving party, the court determines
that there is no genuine issue of material fact, summary
judgment is appropriate. See Celotex, 477 U.S. at 322;
Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83
(3d Cir. 1987). The court's function is not to weigh the
evidence and determine the facts, but rather to
determine whether there is a genuine issue for trial.
Anderson, 477 U.S. at 249.
DISCUSSION
I. The Law of the Case Does Not Bar this Decision
As a threshold matter, Plaintiff argues that the law of
the case doctrine compels me to conclude that § 3009
provides a private right of action. See Pl. Mem. in Opp.
to Rodale's Mot. for Summ. J. at 2-3. I do not agree.
Rodale initially moved to dismiss Plaintiff's claim under
Pennsylvania's Unsolicited Merchandise Act,
contending that the UMA does not provide a private
right of action. In denying Rodale's Motion, Judge Van
Antwerpen cited Kipperman v. Academy Life Ins. Co.,
in which the Ninth Circuit had found a private right of
action under the “analogous federal statute .. . 39
U.S.C. § 3009." Order of May 16, 2003, at n.1 (Doc. No.
9) (Van Antwerpen, J.) (citing 554 F.2d 377, 380 (9th
Cir. 1977)). Plaintiff argues that in thus holding that
Pa.'s UMA provides a private right of action, Judge
52a
Van Antwerpen necessarily also held that "there is a
private right of action under [§ ] 3009... ." Pl. Mem. in
Opp. to Rodale's Mot. for Summ. J. at 3. To state
Plaintiffs contention is to refute it.
The Supreme Court has held that "when a court decides
upon a rule of law, that decision should continue to
govern the same issues in subsequent stages in the
same case." Arizona v. California, 460 U.S. 605, 618,
103 S. Ct. 1382, 75 L. Ed. 2d 318 (1983). "Courts apply
the law of the case doctrine when their prior decisions
in an ongoing case either expressly resolved an issue or
necessarily resolved it by implication." UA Theatre
Circuit, Inc. v. Twp. of Warrington, PA, 316 F.3d 392,
397-98 (3d Cir. 2003) (quoting Aramony v. United Way
of Am., 254 F.3d 408, 410 (2d Cir. 2001)). I do not
believe the doctrine applies here.
Rodale did not ask Judge Van Antwerpen to determine
whether § 3009 included a private right of action; it
moved to dismiss Plaintiff's state law claims only. See
Answer to Count 1 (Doc. No. 3); Mot. to Dismiss Counts
II and III (Doc. No. 4). Thus, Judge Van Antwerpen
never “explicitly resolved" the issue. Rather, he
explicitly applied Pennsylvania state law in analyzing
whether a private right of action exists under the
Pennsylvania Unsolicited Merchandise Act, and offered
Kipperman as advisory authority. See Order of May 16,
2003, at n.1 (Doc. 9) (Van Antwerpen, J.) (analyzing
whether a private right of action exists under the three
factors discussed in Estate of Witthoeft v. Kiskaddon,
557 Pa. 340, 733 A.2d 623, 626 (Pa. 1999).
Nor does Judge Van Antwerpen's ruling that the UMA
provides a private right of action necessarily imply the
53a
existence of a right of action under § 3009. The
language and structure of the UMA and § 3009 differ
significantly. The UMA is silent with respect to its
enforcement mechanism; § 3009 expressly provides for
enforcement by the FTC. Compare 39 U.S.C. § 3009
with 73 Pa. Cons. Stat. § 2001. A different section of the
Postal Reorganiza-ion Act provides for private
enforcement; the UMA has no such similar provision.
See 39 U.S.C. § 3017; 73 Pa. Cons. Stat. § 2001. In these
circumstances, Judge Van Antwerpen's analysis of the
UMA necessarily had nothing to do with § 3009.
Finally, as the Third Circuit has held, the law of the
case doctrine "does not restrict a court's power but
rather governs its exercise of discretion." In re City of
Philadelphia Litig., 158 F.3d 711, 718 (8d Cir. 1998).
The circumstances presented here strongly militate
against applying the doctrine. Accordingly, I will
proceed to a discussion of the merits of Rodale's
content’ons.
II. Section 3009 Does Not Provide for a Private
Right of Action
Rodale contends that because only the FTC may bring
an action under § 3009, Wisniewski may not seek to
enforce the statute here. If Rodale is correct, then
Plaintiff is without any remaining federal cause of
action.
Congress must create a private right of action, either
expressly or by implication. See Alexander v. Sandoval,
932 U.S. 275, 286, 121 S. Ct. 1511, 149 L. Ed. 2d 517
(2001). Plaintiff has not shown that Congress did either
with respect to § 3009.
54a
First, as Plaintiff acknowledges, the statute's actual
text does not expressly create a private right of action:
(a) Except for (1) free samples clearly and
conspicuously marked as_ such, and (2)
merchandise mailed by a charitable organization
soliciting contributions, the mailing of unordered
merchandise or of communications prohibited by
subsection (c) of this section constitutes an unfair
method of competition and an unfair trade
practice in violation of section 45(a)(1) of Title 15.
(b) Any merchandise mailed in violation of
subsection (a) of this section, or within the
exceptions contained therein, may be treated as
a gift by the recipient, who shall have the right
to retain, use, discard, or dispose of it in any
manner he sees fit without any obligation
whatsoever to the sender. All such merchandise
shall have attached to it a clear and conspicuous
statement informing the recipient that he may
treat the merchandise as a gift to him and has
the right to retain, use, discard, or dispose of it in
any manner he sees fit without any obligation
whatsoever to the sender.
39 U.S.C. § 3009; see Pl. Mem. in Opp. to Rodale's Mot.
for Summ. J at 6. Rather, Plaintiff strenuously contends
that this statutory language creates an implied private
right of action. See zd. at 3-9; Three Rivers Ctr. for
Indep. Living, Inc. v. Housing Auth. of Pittsburgh, 382
F.3d 412, 419 (3d Cir. 2004). I disagree.
The Supreme Court has created a four-factor test to
55a
determine "whether a private remedy is implicit in a
statute not expressly providing one":
First, is the plaintiff "one of the class for whose
especial benefit the statute was enacted," -- that
is, does the statute create a federal right in favor
oi the plaintiff? Second, is there any indication of
legislative intent, explicit or implicit, either to
create such a remedy or to deny one? Third, is it
consistent with the underlying purposes of the
legislative scheme to imply such a remedy for the
plaintiff? [Fourth,] is the cause of action one
traditionally relegated to state law, in an area
basically the concern of the States, so that it
would be inappropriate to infer a cause of action
based solely on federal law?
Cort v. Ash, 422 U.S. 66, 78, 95 S. Ct. 2080, 45 L. Ed. 2d
26 (1975) (citations omitted). The Court subsequently
has heid that "the burden is on [the proponent of a
private right of action] to demonstrate that Congress
intended to make a private remedy." Suter v. Artist M.,
503 U.S. 347, 363-64, 112 8S. Ct. 1860, 118 L.. Fd. 2d 1
(1992). The Court has underscored that merely citing to
the so-called "rights-creating" language of a statute
does not meet this burden. See Gonzaga University v.
Doe, 536 U.S. 278, 284, 122 S. Ct. 2268, 153 L. Ed. 2d 309
(2002) ("Even where a statute is phrased in such
explicit rights-creating terms, a plaintiff suing under an
implied right of action still must show that the statute
manifests an intent 'to create not just a private right
but also a private remedy."); cf. Care Choices HMO v.
Engstrom, 330 F.3d 786, 789 (6th Cir. 2003) (granting of
Medicare-substitute HMOs certain reimbursement
rights "alone [was] not sufficient to imply a private
56a
right of action"). As the Third Circuit has noted, "even
when Congress creates rights or obligations (including
personal rights), it does not necessarily follow that
private parties can enforce them or obtain a direct
remedy through the judicial process." Three Rivers, 382
F.3d at 420. For an implied right of action to exist, "the
statute [must] manifest[] an intent 'to create not just a
private right but also a private remedy.'" See Gonzaga,
536 U.S. at 284 (quoting Sandoval, 532 U.S. at 286).
The Supreme Court has further clarified Cort v. Ash
by holding that "statutory intent" is "determinative,"
and that "without it, a cause of action does not exist and
courts may not create one, no matter how desirable that
might be as a policy matter, or how compatible with the
statute." Alexander v. Sandoval, 532 U.S. at 286. The
Third Circuit has explained that under Sandoval,
"Congress's intent in enacting a statute is always the
‘focal point' in determining whether courts should infer
a private right of action." Three Rivers, 382 F.3d at 421.
Accordingly, I need not "trudge through all four of the
[Cort v. Ash] factors when the dispositive question of
legislative intent has been resolved." Neer v. Pelino,
389 F. Supp. 2d 648, 653 (E.D. Pa. 2005) (citing Merrill
Lynch, Pierce, Fenner & Smith v. Curran, 456 U.S. 353,
888, 102 S. Ct. 1825, 72 L. Ed. 2d 182 (1982)).
Plaintiff ignores this wealth of controlling authority and
instead misstates the law, arguing that "the Supreme
Court has held, without exception, absent a clear
Congressional intent to exclude ‘judicial interference’
with the particular statute, that ... language [such as
that in § 3009(b)]" -- specifically, its provision allowing
a consumer to "treat" unordered merchandise as a "gift"
-- "creates a presumption in favor of a private right of
57a
action to enforce that right." See Pl. Mem. in Opp. to
Rodale's Mot. for Summ. J. at 5-6; see also N.T. of Oct.
24, 2005, at 13:8-20 (Plaintiffs counsel asserting that
"the only way you can show that it's not to be enforced .
..is if... you find specific concrete evidence that
Congress didn't intend there to be a remedy ...."). As I
have already discussed, the law provides exactly the
opposite.
Plaintiff also offers two pre-Sandoval cases,
Kipperman v. Academy Life Ins. Co. and Crosley v.
Lens Express, Inc., in which courts applied the Cort v.
Ash factors and found a private right of action under $
3009. See Kipperman, 554 F.2d 377; Crosley, No.
SADO0CA385EP, 2001 U.S. Dist. LEXIS 25222, at *2-*4
(W.D. Tex. Feb. 12, 20@1). Plaintiff's selection of these
decisions underscores the merit of Rodale's contentions.
I note first that these decisions are not controlling. See,
e.g., Keefe v. Prudential Prop. & Cas. Ins. Co., 203 F.3d
218, 226 (3d Cir. 2000) ("The authority from other
jurisdictions provides some helpful guidelines, but has
no great persuasive effect . .. ."). Moreover, as the
Sandoval Court "abandoned" the earlier practice of
finding private rights of action to "make effective
[statutory] purpose, " these pre-Sandoval cases are
unpersuasive. See Sandoval, 532 U.S. at 287 (calling
this practice part of an “ancien regime."); see also
Correctional Servs. Corp. v. Malesko, 534 U.S. 61, 67 n.
3, 122 S. Ct. 515, 151 L. Ed. 2d 456 (2001) (noting that
the Supreme Court has, in recent years, unambiguously
"retreated from [its] previous willingness to imply a
cause of action where Congress has not provided one").
Indeed, Crosley has been rejected explicitly in the only
post-Sandoval decision to discuss whether § 3009
58a
implies a private right of action. Randolph, 2002 U.S.
Dist. LEXIS 26289, at *6-*7. As for Kipperman, the
Ninth Circuit there acknowledged that it was creating
a private remedy in the absence of Congressional
intent. Kipperman, 554 F.2d at 380. Although such a
decision arguably was appropriate in 1977, it is clearly
not appropriate today.
Applying Sandoval and the related authority discussed
above, I conclude that § 3009 includes no implied
private right of action. Section 3009(a) explicitly refers
to that portion of the Federal Trade Commission Act
giving enforcement authority to the FTC rather than to
consumers. See 39 U.S.C. § 3009; 15 U.S.C. § 45(a)(1).
Congress is presumed to know both the scope of the
enforcement powers it has granted to the F'TC and that
no private right of action exists under the FTC Act.
Randolph v. Oxmoor House, Inc., No. SA01LCA0699,
2002 U.S. Dist. LEXIS 26289, at *25 (W.D. Tex. Sept.
30, 2002); see also Freedman v. Meldy's, Inc., 587 F.
Supp. 658 (E.D. Pa. 1984) (analyzing the repeated
holding that the FTC Act includes no private right of
action). Moreover, Congress explicitly created a private
right of action in another section of the Postal
Reorganization Act. See 39 U.S.C. § 3017(e)(1)-(2). This
strongly suggests that its failure to create this right in
§ 3009 was intentional. See Transamerica Mortgage
Advisors, Inc. v. Lewis, 444 U.S. 11, 20, 100 S. Ct. 242,
62 L. Ed. 2d 146 (1979) (conferred private right of
action in one statutory provision but silence in another
"strongly suggests" that Congress did not intend to
create such a right). Finally, the legislative history is
silent as to whether Congress intended to create a
private right of action. See Randolph, 2002 U.S. Dist.
LEXIS 26289, at *10-*11 (discussing the legislative
history of § 3009).
In these circumstances, the statute's text, structure,
and legislative history compel me to conclude that
Congress chose not to create a private right of action
under § 3009. See Sandoval, 532 U.S. at 288 (noting that
the inquiry into legislative intent involves looking to
the text and structuie of a statute); Towche Ross & Co.
v. Redington, 442 U.S. 560, 571, 99 S. Ct. 2479, 61 L. Ed.
2d 82 (1979) ("Implying a private right of action on the
basis of congressional silence is a hazardous enterprise
at best."); Gaj v. [*558] U.S. Postal Service, 800 F.2d
64, 68-69 (8d Cir. 1986) (finding no private right of
action under Postal Reorganization Act, 39 U.S.C. §
1001(b), because neither language of statute nor
legislative history reflected Congressional intent to
create private remedy). As the only other court to deal
with this question has noted, "if a private individual
wishes an injunction against an unfair trade practice as
defined in section 3009, the individual must seek
recourse with the FTC or pursue any other available
federal or state court remedies." Randolph, 2002 U.S.
Dist. LEXIS 26289, *25-*26 (W.D. Tex. 2002).
III. The Court Lacks Jurisdiction Over Plaintiff's
State Law Claims
In every case, a federal court is required independently
to examine its jurisdiction. FW/PBS, Inc. v. City of
Dallas, 493 U.S. 215, 231, 110 S. Ct. 596, 107 L. Ed. 2d
603 (1990) overruled on other grounds by City of
Littleton v. Z.J. Gifts D-4, LLC, 541 U.S. 774, 1248. Ct.
2219, 159 L. Ed. 2d 84 (2004); see also, Allen v. Wright,
468 U.S. 737, 750, 104 S. Ct. 3315, 82 L. Ed. 2d 556
(1984). The court may thus address jurisdiction sua
60a
sponte at any stage of proceedings. See F W/PBS, Inc.,
493 U.S. at 230; Sun Buick v. Saab Cars U.S.A., 26 F.3d
1259, 1261 (8d Cir. 1994); Eastampton Center, LLC v.
Township of Eastampton, 155 F. Supp. 2d 102, 112
(D.N.J. 2001). When determining whether to exercise
pendent jurisdiction over state law claims, federal
courts should consider judicial economy, convenience,
fairness to litigants, and comity. See Hudson United
Bank v. Litenda Mortg. Corp., 142 F.3d 151, 157 (3d Cir.
1998); Lentino v. Fringe Employee Plans, Inc., 611
F.2d 474, 478 (3d Cir. 1979).
Whether or not Wisniewski has even alleged a claim
under state law has become a matter of some dispute.
The Amended Complaint, filed when Karnuth was the
named Plaintiff, purports to bring claims under
Pennsylvania statutes "and similar . . . acts in other
states." Yet, as I have noted, the Amended Complaint
includes specific cites to Pennsylvania law only. (Compl.
at PP 50-59). Wisniewski, a resident of Illinois, adopted
the Amended Complaint as his own. Given
Wisniewski's residence, Defendant directed its Motion
to any claims alleged under Illinois law. Plaintiff has
indicated, however, that he apparently will not proceed
on his state law claims. (N.T. of Oct. 24, 2005, at 67:22-
70:17). In any event, having dismissed Plaintiff's federal
claim, I have discretion to dismiss any remaining state
law claims for want of jurisdiction. 28 U.S.C. 1367(c)(3);
see also Hudson United, 142 F.3d at 157; Fortuna's Cab
Service, 269 F’. Supp. 2d 562, 566 (D.N.J. 2003) (citing
United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.
Ct. 1180, 16 L. Ed. 2d 218 (1966)). As it appears Plaintiff
has abandoned any remaining state law claims for the
purposes of this litigation, there is no prejudice to
either party if I dismiss the Amended Complaint in its
6la
entirety. See Queen City Pizza, Inc. v. Domino's Pizza,
Inc., 124 F.3d 480, 444 (3d Cir. 1997) ("Because all
federal claims were correctly dismissed and dismissal of
the remaining contract claims would not be unfair to
the litigants or result in waste of judicial resources"
dismissal of state claims was appropriate). Accordingly,
I dismiss the remainder of Plaintiff's Complaint for
want of jurisdiction.
An appropriate Order follows.
PAUL 8S. DIAMOND, J.
ORDER
AND NOW, this 20th day of December, 2005, upon
consideration of Plaintiff's Motion for Partial Summary
Judgment (Doc. No. 79), Defendant's Motion for
Summary Judgment (Doc. No. 80), the parties’
responses, and any related submissions, itis hereby
ORDERED as follows:
1. Plaintiffs Motior for Partial Summary Judgment is
DENIED.
2. Defendant's Motion for Summary Judgment is
GRANTED. Count I of Plaintiff's Complaint is hereby
DISMISSED with prejudice.
3. Counts II and III of Plaintiff's Complaint are hereby
DISMISSED without prejudice for want of
jurisdiction. The Clerk of Court shall close this matter
for statistical purposes.
BY THE COURT/PAULS. DIAMOND, J.
62a
Dated: 1/24/2008
No. 06-1305
UNITED STATES COURT OF APPEALS FOR THE
THIRD CIRCUIT
DAVID WISNIEWSKI, ON BEHALF OF HIMSELF
AND ALL OTHERS SIMILARLY SITUATED
v.
RODALE, INC. David Wisniewski, Appellant
On Appeal from the United States District Court for
the Eastern District of Pennsylvania. District Court
No. 03-cev-00742. District Judge: The Honorable Paul S.
Diamond.
SUR PETITION FOR REHEARING
Before: SCIRICA, Chief Judge, SLOVITOR, McKEE,
RENDELL, BARRY, AMBRO, FUENTES, SMITH,
FISHER, CHAGARES, JORDAN, HARDIMAN and
WEIS,* Circuit Judges
The petition for rehearing filed by Appellant in
the above entitled case having been submitted to the
judges who participated in the decision of this Court,
and to all the other available circuit judges in regular
active service, and no judge who concurred in the
decisions having asked for rehearing, and a majority of
the circuit judges of the circuit in regular active service
not having voted for rehearing, the petition for
rehearing by the panel and the Court en bance, is
63a
DENIED.
Footnote
*The vote of the Honorable Joseph F. Weis, Jr., Senior
United States Circuit Judge, is limited to panel
rehearing only.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.