Court: federal suit should have been dismissed

The federal District Court in Indianapolis should have dismissed a suit challenging Indiana’s prerecorded telephone messages statute because a state court was already considering the issue and could have provided an adequate legal remedy, the 7th Circuit Court of Appeals ruled today.

The three-judge appellate panel also chastised U.S. District Judge Larry McKinney for concluding last October that the then-approaching 2006 congressional election was a reason for urgent attention on this issue.

The 7th Circuit decision came in FreeEats.com, Inc. v. State of Indiana and Steve Carter, Attorney General, No. 06-3900. The issue stems from near-simultaneous disputes in both state and federal courts last year involving Indiana Code 24-5-14-5, the Automated Dialing Machine Statute.

Virginia-based company FreeEats.com sought to halt the attorney general’s enforcement of the little-used statute adopted in 1988 and stating: “A caller may not use or connect to a telephone line in an automatic dialing-announcing device unless the subscriber has knowingly or voluntarily requested, consented to, permitted, or authorized receipt of the message; and that the message was immediately preceded by a live operator who obtained the person’s consent before the message began.”

Carter’s office had filed a state claim in Brown Circuit Court in early September 2006 against another company that had hired FreeEats.com to make the pre-recorded calls to Indiana residents from Virginia. Three days after that state court action, FreeEats.com filed this federal action seeking an injunction to stop enforcement.

Judge McKinney ruled Oct. 24, 2006, that Indiana’s statute on automated phone calls does not restrict interstate commerce and is not pre-empted by federal law, but he also denied Carter’s motion to stay and dismiss the case pursuant to the abstention doctrine spelled out in Younger v. Harris, 401 U.S. 37 (1971). That ruling required federal courts to abstain from enjoining most ongoing state proceedings unless there are certain extraordinary circumstances.

While the state had argued that the federal court could abstain while similar issues were resolved in pending state court litigation, Judge McKinney decided to forward those issues on because of the federal issues involved – specifically the Nov. 7 general election.

But Circuit Judge Daniel Manion and his appellate colleagues disagreed in an 18-page opinion and remanded the case for dismissal.

“Whether a fast-approaching election justifies refusing to abstain under the principles of Younger is an issue of first impression in this circuit,” he wrote.

“We further note that elections, be they municipal, state, or federal, take place on a very regular basis,” Judge Manion wrote. “If we were to conclude that waiting until weeks before an election to file a suit seeking injunctive and declaratory relief from a state statute that was enacted eighteen years earlier gives rise to ‘extraordinary circumstances,’ then it would give license to the federal courts to run roughshed over the state courts’ rights to adjudicate properly filed actions involving constitutional challenges that relate in some way to that election. That result would not respect comity, and this it would violate the core principles of Younger.”

Aside from the election issue, the 7th Circuit also noted that the Indiana state court clearly has the power to grant a preliminary injunction to FreeEats.com to prevent the state from enforcing the statute, as well as issuing decisions on other federal law preemption and constitutionality claims.