Vacates lower court decision deferring to commission

The Supreme Court has vacated a lower court decision on the FCC's enforcement of the Telephone Consumer Protection Act, in the process raising questions about the FCC's ability to enforce other rules and regs, depending on how they are crafted and what court is reviewing them.

At least that is according to court watchers weighing in after the High Court, in a unanimous decision in PDR Network, LLC v. Carlton Harris Chiropractic, Inc., vacated the Fourth Circuit Court of Appeals' decision that a lower court was bound by the FCC's interpretation of "unsolicited advertisement."

That lower (district) court had concluded that it was not and found that an unsolicited fax should not be considered a violation of TCPA.

At issue is how much leeway the courts and regulated entities have to challenge FCC interpretations and definitions in its decisions, which are regularly challenged in courts. One law firm called it a potentially "landmark" ruling.

Writing for the majority, Justice Stephen Breyer said it was not clear if a portion of the FCC's decision was binding on the district court, if it was an interpretive rule or a binding order, or if it was a binding order--the Hobbs Act, which gives appeals courts exclusive jurisdiction over challenges to agency interpretations of orders--affords adequate opportunity for judicial review, since it requires some challenges to be filed within 60 days of an order, a deadline familiar with anyone challenging FCC decisions.

"PDR Network is bad news for the FCC and good news for regulated parties," said Kevin King of Covington & Burling. He said the key takeaway is that it appears FCC orders will be more vulnerable in court going forward.

"Even under the majority's narrow approach, defendants in enforcement suits have two powerful ways to challenge FCC orders," said King. "They can argue that the orders are nonbinding 'interpretive rules' or that the defendant did not have an "adequate" opportunity to challenge the FCC's order. And as Justice [Brett] Kavanaugh's eloquent concurrence makes clear, a third door is also open: it 'remains available' to lower courts to go even further by ruling that the Hobbs Act does not cut off challenges to the merits of FCC orders."

In Kavanaugh's concurrence, which was joined by Justices Samuel Alito, Clarence Thomas and Neil Gorsuch, those justices said that they think that the challengers to the FCC's TCPA definition "may argue that the FCC’s interpretation of the TCPA is incorrect, and that the District Court is not required to accept the FCC’s interpretation of the TCPA."

It will be up to the Fourth Circuit to consider those issues on remand, but if they get back to the High Court, it could wind up weakening the deference the courts generally give to FCC decisions.

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