Supreme Court Leaves Unanswered Whether District Courts Must Defer to FCC’s Interpretations

TCPA Connect

On June 20, the U.S. Supreme Court remanded for consideration to the U.S. Court of Appeals, Fourth Circuit two preliminary questions antecedent to the main issue of whether federal district courts must defer to the Federal Communications Commission’s (FCC) interpretations of the Telephone Consumer Protection Act (TCPA) under the Administrative Orders Review Act (Hobbs Act).

The case arose out of a dispute between Physicians’ Desk Reference (PDR) and Carlton & Harris Chiropractic. PDR publishes the Physicians’ Desk Reference, which provides information about different prescription drugs. PDR faxed healthcare providers that they could reserve a free copy of a new e-book version of the Physicians’ Desk Reference on PDR’s website. Carlton & Harris Chiropractic, one of the fax recipients, filed a class action, alleging that the fax was an “unsolicited advertisement” under the TCPA.

The district court dismissed the case, ruling that PDR’s fax was not an “unsolicited advertisement.” The Fourth Circuit vacated the district court’s judgment, holding that the district court was required to follow the interpretation of “unsolicited advertisement” set forth in a 2006 FCC order, because the Hobbs Act provides that courts of appeals have “exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of” certain “final orders of the Federal Communications Commission.” Since the FCC order interpreted the term “unsolicited advertisement” to “include any offer of a free good or service,” the Fourth Circuit ruled that PDR’s fax was an unsolicited advertisement.

Written on behalf of the majority, Justice Stephen Breyer’s opinion held that two questions had to be answered before the Court could decide to what extent the FCC order bound the district court. 

First, was the order the equivalent of a “legislative rule,” which is “issued by an agency pursuant to statutory authority” and has the “force and effect of law”? Or is it the equivalent of an “interpretive rule,” which simply “advis[es] the public of the agency’s construction of the statutes and rules which it administers”? If the order is the equivalent of an “interpretive rule,” a district court may not have to defer to it.

Second, did PDR have a “prior” and “adequate” opportunity to seek judicial review of the order? If the Hobbs Act’s exclusive-review provision did not provide PDR a “prior” and “adequate” opportunity for judicial review, it may be that the Administrative Procedure Act allows PDR to challenge the order’s validity.

Justice Breyer’s opinion was joined by Justices John Roberts, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor.   

Justice Clarence Thomas wrote a concurring opinion, joined by Justice Neil Gorsuch, reasoning that “[i]nsofar as the Hobbs Act purports to prevent courts from applying the governing statute to a case or controversy within its jurisdiction, the Act conflicts with the ‘province and duty of the judicial department to say what the law is,’” citing Marbury v. Madison. He added that to the extent the Hobbs Act requires courts to give agency interpretations the force of law, it is unconstitutional in permitting an extra-legislative body to make the law.

Justice Brett Kavanaugh wrote an additional concurring opinion, joined by Justices Thomas, Samuel Alito and Gorsuch, that went a step further and decided the main issue. He reasoned that since the “Hobbs Act does not expressly preclude judicial review of an agency’s statutory interpretation in an enforcement action, . . . [t]he District Court is not bound by the FCC’s interpretation of the TCPA.” He argued that since Congress can and does preclude judicial review in other statutory contexts (such as the Clean Water Act and the Clean Air Act), the fact that it did not do so here meant that district courts could review the interpretation. 

To read the order in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., click here.

Why it matters: The decision means that litigants should prepare for continued unpredictability in district court rulings that involve the FCC’s interpretations of the TCPA. The two concurring opinions may especially motivate district judges to give less weight to those interpretations.