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.

Eight-Figure Class Action Attorney Fee Award Dissolves in the Court of Appeals

Author: Jeremy Gilman (former Partner at Benesch Law)

There’s something uniquely interesting about judicial opinions involving class action attorneys’ fees.  For class counsel, it’s the culmination of years of work.  They researched the claim, brought the case, slogged through discovery, endured motion practice, battled through class certification, lost sleep, sacrificed weekends and holidays, and waited.  If they prevailed on class certification, they high fived each other and pressed forward, preparing for a trial that might never occur, because the case may settle.  And if it does settle, class counsel can get paid for it all. Continue reading “Eight-Figure Class Action Attorney Fee Award Dissolves in the Court of Appeals”

Supreme Court Intensifies Timing Pressure on Federal Securities Claimants

Author: Jeremy Gilman (former Partner at Benesch Law)

It is not uncommon for unnamed class members to opt out of the class when securities class actions veer toward settlement.  They might deem the proposed settlement inadequate, and would prefer at that point to go it alone, perhaps believing they can elicit a better deal.  Continue reading “Supreme Court Intensifies Timing Pressure on Federal Securities Claimants”

Supreme Court Tightens Personal Jurisdiction Requirements

Author: Jeremy Gilman (former Partner at Benesch Law)

Determining whether a nonresident defendant is subject to a forum state’s jurisdiction became clearer on June 19, 2017, when the United States Supreme Court announced its decision in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 582 U.S. ____ (2017), case no. 16-466. Continue reading “Supreme Court Tightens Personal Jurisdiction Requirements”

The Case Goes On, For Now: Seventh Circuit Holds Rule 67 Cannot Moot TCPA Class Action

By: David S. Almeida and Mark S. Eisen

In January 2016, the Supreme Court issued its Campbell-Ewald v. Gomez decision and definitely ruled that Federal Rule of Civil Procedure 68 could not be used to moot the claims of a named plaintiff.  Prior to that ruling, courts across the country were split as to whether a defendant could make a complete offer of judgment pursuant to Rule 68—offering to pay all, and sometimes more than, the relief a plaintiff would be entitled to if they won at trial—and thus deprive the plaintiff of standing to continue litigating the case.  In other words, courts were split as to whether a plaintiff could keep litigating after they had already won (following an “unconditional surrender” by the defendant). Continue reading “The Case Goes On, For Now: Seventh Circuit Holds Rule 67 Cannot Moot TCPA Class Action”

Supreme Court Swats Down the “Voluntary-Dismissal Tactic”

Author: Jeremy Gilman (former Partner at Benesch Law)

Let’s say you’re a plaintiff in a federal action and you’re seeking class certification.  The district court denies your motion.  You then seek the court of appeals’ permission to appeal that interlocutory order under Rule 23(f) of the Federal Rules of Civil Procedure, but that court says no.  What to do? Continue reading “Supreme Court Swats Down the “Voluntary-Dismissal Tactic””

The Stealthy Traffic Camera and the Class Action That Wasn’t

Author: Jeremy Gilman (former Partner at Benesch Law)

Mobile speed units.  Those mindless menaces squinting at everything that rolls down the road.  Most drivers approach them with caution, but others, either oblivious to their presence or bent on one-upping the machine, speed by, only to have their stomachs sink when a ticket arrives in the mail. Continue reading “The Stealthy Traffic Camera and the Class Action That Wasn’t”

Supreme Court Reinforces the Primacy of the Federal Arbitration Act, Even Over a “Divine God-Given Right”

Author: Jeremy Gilman (former Partner at Benesch Law)

Kentucky law speaks of the right to jury trial in theological terms.  The Kentucky Constitution provides that “[t]he ancient mode of trial by jury shall be held sacred, and the right thereof remain inviolate, subject to such modifications as may be authorized by this Constitution.”  Expounding on that, the Kentucky Supreme Court noted in an opinion that “the drafters of our Constitution deemed the right to a jury trial to be inviolate, a right that cannot be taken away; and, indeed, a right that is sacred, thus denoting that right and that right alone as a divine God-given right.”  And no, that opinion did not issue in 1815; it issued 200 years later.  Continue reading “Supreme Court Reinforces the Primacy of the Federal Arbitration Act, Even Over a “Divine God-Given Right””

Federal Circuit Court of Appeals Puts the Class in Class Actions

Author: Jeremy Gilman (former Partner at Benesch Law)

The Federal Circuit Court of Appeals is best known for adjudicating patent disputes.  But that’s not the extent of its portfolio.  It also has exclusive appellate jurisdiction over decisions of the United States Court of Appeals for Veterans Claims, which, in turn, reviews decisions of the Board of Veterans’ Appeals.  Those tribunals adjudicate benefits claims by military veterans. Continue reading “Federal Circuit Court of Appeals Puts the Class in Class Actions”

Sixth Circuit Rules that the Class Action Fairness Act Means What it Says

Author: Jeremy Gilman (former Partner at Benesch Law)

A statute, distilled to its essence, is thought conveyed through words.  And when those words are understandable and coherently arranged, there’s nothing for courts to do when adjudicating disputes involving them, other than to apply them as written.

Simple, isn’t it?

In theory, yes.  But theories don’t wear judge’s robes. Continue reading “Sixth Circuit Rules that the Class Action Fairness Act Means What it Says”