On June 20, the Supreme Court issued an uneventful opinion in the highly anticipated case PDR Network LLC, et al. v. Carlton & Harris Chiropractic, No. 17-1705. The case, which we discussed in depth here, was primed to give TCPA litigants much-needed guidance regarding the impact of Federal Communications Commission rules and regulations on courts. However, rather than issue a decisive opinion as to whether the FCC or the courts will dominate the interpretation of the TCPA, the Supreme Court vacated and remanded the Fourth Circuit’s ruling that a West Virginia court had to follow the FCC’s view regarding “unsolicited advertisements” prohibited by the TCPA. This result leaves open the question of whether federal courts are required under the Hobbs Act to defer to agency decisions under the Chevron doctrine.
Justice Breyer (with Justices Roberts, Ginsburg, Sotomayor, and Kagan joining) issued a short, six-page opinion punting the question of whether defendants in a civil case under the TCPA can contest the FCC’s interpretation of the TCPA because the Fourth Circuit failed to address two questions:
- Is the FCC 2006 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 the FCC 2006 Order the equivalent of an “interpretative rule”, which simply “advises the public of the agency’s construction of the statutes and rules which it administers?”; and
- Did PDR have a “prior” and “adequate” opportunity to seek judicial review of the Order?
The answers to these questions, according to Justice Breyer, were necessary to the final decision and outcome. The Court did state that if the Order was akin to an interpretative rule, the lower courts may not have to follow it (although the Court was very clear that this was a “may” and not a “shall”). Further, if PDR did not have a prior and adequate opportunity to seek review (because the Hobbs Act requires challenges to an Order be brought in a court of appeals within 60 days after the entry of the order), “it may be that the Administrative Procedure Act permits PDR to challenge the Order’s validity in this enforcement proceeding.”
Justice Kavanaugh (with Justices Gorsuch and Alito joining and Thomas joining and writing a separate concurrence (with Gorsuch joining as well)) concurred with the decision to vacate the Fourth Circuit’s decision that the District Court was bound to follow the FCC’s decision, but also stated that the Court could have answered the question presented without sending it back to the Fourth Circuit. In short, Justice Kavanaugh believes that the District Court was not bound to follow the FCC’s 2006 Order, that PDR could have argued that the FCC’s interpretation was wrong, and that by disallowing PDR of that chance, the Fourth Circuit allowed more deference to the FCC then is permitted.
The Court’s decision in PDR Network was an epic letdown for those in the TCPA defense community. Given the new makeup of the Court, many expected the Court to use PDR Network as a vehicle to reduce the deference given to the FCC, which has continuously expanded the reach of the TCPA beyond the plain language of the statute. Following the Supreme Court’s decision, TCPA litigation still lacks any form of clarity: clarity surrounding definitions within the statute (including how to define an automatic telephone dialing system), clarity surrounding the effect of the ACA decision and its relationship with the FCC 2015 ruling, and clarity in the deference courts musts give to FCC rulings and interpretations.
Justice Breyer’s decision ultimately fails to provide such guidance and, in fact, could introduce more uncertainty into the landscape. When faced with an FCC order, parties may now seek to litigate the questions raised by the majority opinion, i.e., whether the order is a “legislative rule” or merely an “interpretive rule,” and whether it was subject to a “prior” and “adequate” review. This could lead to vastly different rulings from courts across the country. Moreover, district court judges may feel more empowered to ignore FCC orders, creating even more uncertainty for TCPA litigants.
However, the concurring opinions offer a glimpse of how the Court could rule in the future. In his concurrence, Justice Thomas wrote that the PDR Network case “emphasizes the need to reconsider” Chevron deference to agency interpretations. Additionally, Justice Kavanaugh’s analysis in his concurring opinion provides an evisceration of the Hobbs Act that could be adopted in the future. He concluded that the Hobbs Act leaves room for a defendant in an enforcement action to argue that the agency’s interpretation was wrong. However, even if Justice Kavanaugh’s analysis is eventually adopted, businesses may still lack the TCPA clarity they crave, as courts across the country could still reach different conclusions on an agency’s interpretation.