Supreme Court Punts On Whether Courts Are Bound By FCC Orders On The TCPA, But Not Without A Convincing Concurring Opinion

Authors: Anthony Sallah and David Krueger

Earlier this morning, the Supreme Court issued its decision in PDR Network, LLC, et al. v. Carlton & Harris Chiropractic, Inc. At issue was whether a TCPA-defendant in a civil case may contest the Federal Communications Commission’s interpretation of the TCPA. The Fourth Circuit said no, and the Supreme Court accepted the decision for review. “Ruling narrowly,” and instead of expressly deciding the question presented, the Supreme Court vacated the Fourth Circuit’s decision and remanded for consideration of two “preliminary issues.”

The backdrop of the issue in PDR Network—one that has plagued TCPA-defendants in recent years—is the Hobbs Act. That Act provides an administrative procedure for facial, pre-enforcement review of FCC orders. In particular, to challenge an FCC order, a party must file a petition for review in a court of appeals within 60 days of the FCC order. Further clouding the issue is that the Act provides that the court of appeals “has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of” final FCC orders. Almost every federal court—but not the district court in PDR Network—has held that absent a party proceeding under the Hobbs Act’s administrative procedures, final FCC orders are binding on district courts. The result is that a defendant in a TCPA action cannot argue to a court that the FCC’s interpretation of the statute is wrong, even if the FCC’s interpretation is unreasonable when compared with the plain language of the law.

The Supreme Court did not expressly decide the question presented. Instead, because it is a court of “review” and not “first view,” it directed the Fourth Circuit to consider two preliminary issues on remand. First, it directed the Fourth Circuit to consider the legal nature of the FCC order at issue, i.e., whether it is a legislative or interpretive rule. If legislative, then it has the “force and effect of law.” If interpretive, then the FCC order may not be binding on courts and TCPA defendants, and would instead be construed as advising the public of the FCC’s construction.

Second, the Supreme Court directed the Fourth Circuit to consider whether PDR Network, the petitioner in the case and the TCPA-defendant below, had a prior and adequate opportunity to seek judicial review of the FCC order at issue. If the answer is no, the Court stated, then “it may be that the [Hobbs Act] permits PDR to challenge the validity of the Order in this enforcement proceeding even if the Order is deemed a ‘legislative’ rule rather than an ‘interpretive’ rule.”

Ultimately, the Supreme Court did not decide the question presented. Perhaps more notable from the decision, though, is Justice Kavanaugh’s concurring opinion. Along with Justices Thomas, Alito, and Gorsuch, Justice Kavanaugh wrote that TCPA defendants in civil cases may indeed contest the FCC’s interpretation of the TCPA, even if that interpretation is contained in a final FCC order. “The general rule of administrative law is that in an enforcement action, a defendant may argue that an agency’s interpretation of a statute is wrong, at least unless Congress has expressly precluded the defendant from advancing such an argument.”

Justice Kavanaugh advanced various rationale for this conclusion. Of primary import is that while other similar federal statutes expressly preclude judicial review of agency actions in a subsequent civil case, the Hobbs Act does not. Moreover, while the Hobbs Act provides courts of appeals with “exclusive jurisdiction” to “determine the validity” of final FCC orders, a district court’s disagreement with the FCC’s statutory interpretation—even if contained in a final order—does not run afoul of this restriction. Rather, a district court only “determines the validity” of an FCC order via a declaratory judgment that the order is valid or invalid, not by merely disagreeing with it. Thus, “if the district court disagrees with the agency’s interpretation in an enforcement action, that ruling does not invalidate the order and has no effect on the agency’s ability to enforce the order against others.”

Justice Kavanaugh noted that his analysis “remains available to the court on remand” as well as to “other courts in the future.” On remand, the Fourth Circuit likely must follow the mandate in the Supreme Court’s majority opinion, namely, by addressing the preliminary issues identified. Thus, it remains to be seen whether any or all of Justice Kavanaugh’s reasoning will find its way into the Fourth Circuit’s analysis—and if it all, it would be after the Fourth Circuit addresses the preliminary issues identified by the majority opinion. Regardless, Justice Kavanaugh’s concurring opinion is a long-awaited and forceful analysis that will likely be advanced by TCPA defendants in the near future, whether at the Fourth Circuit or elsewhere.

Can’t We All Just Tag-Along? The Supreme Court Shuts Down Untimely Class Actions

For over forty years it has been well-known that the filing of a class action tolls the statute of limitations for all members of the putative class.  This doctrine stemmed from the United States Supreme Court’s decision in American Pipe & Construction Co. v. Utah.  The rationale of American Pipe decision was to prevent a multitude of filings, effectively defeating the ostensible efficiencies gained by a class action in the first place.  If there were no tolling, then plaintiffs would have to file prophylactically in case the class action did not pan out for whatever reason. Continue reading “Can’t We All Just Tag-Along? The Supreme Court Shuts Down Untimely Class Actions”

ATDS, WTF? The DC Circuit Dismantles the FCC’s 2015 TCPA Order

Author: Mark S. Eisen

Following the FCC’s 2015 Telephone Consumer Protection Act Omnibus Order, following ten consolidated appeals of the Order filed shortly thereafter, and following an oral argument in 2016, on March 16, 2018 the DC Circuit issued its long-awaited opinion dismantling the Order.  Unfortunately, the DC Circuit did not do much more than tell the FCC that many of its rulings were arbitrary and capricious—in other words, the Court did not itself provide definitive interpretations.  Now, three years later, plaintiffs and defendants alike find themselves with infinitely more questions than answers, and with a long road to hoe back before the FCC. Continue reading “ATDS, WTF? The DC Circuit Dismantles the FCC’s 2015 TCPA Order”

This Time, It’s Personal: TCPA Personal Jurisdiction Ruling Severely Limits Nationwide Class Actions

It is no secret that there are certain jurisdictions that plaintiffs’ class action attorneys prefer to file suit, most notably, Chicago, Los Angeles, Miami and New York, to name a few.  While plaintiffs’ lawyers may have countless clients in those jurisdictions, rarely is the defendant they are pursuing physically resident in those jurisdictions.  In order to satisfy the personal jurisdiction requirements then, plaintiffs’ lawyers thus have to rely on specific jurisdiction—jurisdiction that arises out of the defendant’s suit-related contacts with the forum—not general jurisdiction—jurisdiction that exists (with limited exception) only in those forums where the defendant is incorporated or headquartered. Continue reading “This Time, It’s Personal: TCPA Personal Jurisdiction Ruling Severely Limits Nationwide Class Actions”

Second Circuit Confirms Prior Express Consent For “Health Care” Messages Need Not Be In Writing Under TCPA

On February 21, 2018, the Second Circuit Court of Appeals affirmed a lower court’s grant of summary judgment in a TCPA defendant’s favor, holding that the TCPA plaintiff provided prior express consent for a “health care” message, precluding liability. In its decision, the Second Circuit confirmed that under the TCPA, a defendant need not obtain written prior express consent to send a health care message. Continue reading “Second Circuit Confirms Prior Express Consent For “Health Care” Messages Need Not Be In Writing Under TCPA”

District Court Stays Securities Class Action Involving Initial Coin Offering Pending Supreme Court Review

On February 1, 2018, a federal district court in the Northern District of California stayed a putative class action involving the Tezos Initial Coin Offering (“ICO”) pending the United States Supreme Court’s decision in a case addressing state court jurisdiction over securities class actions.  In granting the defendant’s request for a stay, the court refrained from deciding the novel securities and jurisdictional issue of whether ICOs are securities offerings subject to the Securities Act of 1933. Continue reading “District Court Stays Securities Class Action Involving Initial Coin Offering Pending Supreme Court Review”

Biometrics: The Wave of the Future Sparks a Current Wave of Class Action Litigation

Authors: David S. Almeida, Mark S. Eisen and Courtney C. Booth

Brought about by an obscure state law passed nearly a decade ago—the Illinois Biometric Information Protection Act (740 ILCS 14/1)—the next wave of privacy class action litigation is here and in full-swing.  While an Illinois law, the BIPA is appearing in cases nationwide regarding the collection, storage and use of biometric information.  The BIPA, in short, regulates the collection and use of biometric information (i.e., iris scans, fingerprints, voiceprints and facial geometry).  The BIPA was enacted in 2008, and flew largely under the radar until an initial trickling of class actions, beginning with the first class action filed against Facebook in 2015, and followed shortly thereafter by lawsuits against Google, Shutterfly and Snapchat. Continue reading “Biometrics: The Wave of the Future Sparks a Current Wave of Class Action Litigation”

Benesch Ranks in BTI Litigation Outlook 2018

Benesch has been ranked in the top 20% of all law firms by corporate counsel for Class Actions in BTI Litigation Outlook 2018. Each year BTI reaches out to a strategically designed group of top legal decision makers at large organizations with $1 billion or more in revenue.

BTI Litigation Outlook 2018 is based solely on in-depth telephone interviews with leading legal decision makers. This comprehensive analysis trends data from more than 4,800 corporate counsel client interviews conducted over the span of 18 years.

Bittersweet: The Chicago Sweetened Beverage Tax Sparks Class Action Litigation

After a protracted legal fight, Cook County’s much maligned Sweetened Beverage Tax went into effect on August 2, 2017.  See County of Cook, § 74-850, et seq.[1]  In relevant part, the tax requires retailers of sweetened beverages to tax $.01 per ounce of sweetened beverage.  For bottled beverages, calculating the tax is fairly straightforward (though, as noted below, putative class action lawsuits over the taxation of bottled water have been filed against companies like PepsiCo and Walgreens).  For fountain drinks—which have caused the biggest litigation headache—the tax is calculated by the number of ounces the cup can hold.

Continue reading “Bittersweet: The Chicago Sweetened Beverage Tax Sparks Class Action Litigation”

Northern District Of Illinois Is Botching TCPA Fax Rule

Authors: David Almeida and Mark Eisen

Published in Law360

In 2006, the Federal Communications Commission enacted the so-called solicited fax rule under the Telephone Consumer Protection Act. This rule required certain byzantine language to appear at the bottom of every single fax advertisement informing recipients how to opt out of receiving future faxes, even if those faxes were requested (i.e., solicited) by the recipients. What is more, violations of this regulation are punishable by between $500 and $1,500 per fax in statutory damages.

View the full article here.