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Deference No More: What BNSF Railway v. Loos Teaches About Future Hobbs Act Challenges to FCC TCPA Orders And The Definition Of An ATDS.

At first blush, the Supreme Court’s recent decision in BNSF Railway v. Loos would seem to have little relevance to TCPA World. The case, after all, involves whether compensation paid to a railroad worker who fell through a drainage gate is taxable. But while the actual holding has nothing to do with TCPA World, the manner in which the Supreme Court reached its decision is key. Neither the majority nor the dissent gave any deference to the IRS’ views on the matter. The majority, led by Justice Ginsburg, never even mentioned Chevron or agency deference, even though the IRS’ interpretation supported the majority’s holding. And Justice Gorsuch’s dissent practically proclaimed Chevron deference dead.

As long-term residents of TCPA World know, the FCC is poised to issue new rulemaking following the D.C. Circuit’s dismantling of its previous approach to the definition of an automatic telephone dialing system (“ATDS”) in ACA International. One of the more frustrating aspects of the ACA International decision, though, is that the DC Circuit did not announce what the law actually is. Instead, it punted the definition of an ATDS back to the FCC – the same agency whose prior attempts to define it were rejected as “arbitrary and capricious.” That has resulted in a split among district courts in the same circuits over the definition of an ATDS. But there is a light at the end of the tunnel. The Supreme Court’s reasoning in BNSF Railway suggests that circuit courts should take a different approach to any Hobbs Act challenges to the FCC’s new rulemaking: rather than saying whether the FCC’s reasoning can stand, say what the law actually is.

Although district courts do not have jurisdiction to diverge from FCC TCPA Orders under the Hobbs Act, there was never a strong case for circuit courts to defer to them, particularly with respect to the definition of an ATDS. That is because the statutory definition of an ATDS is not ambiguous. At all. To qualify, a system must store or produce numbers using a random or sequential number generator. The word “store” has tripped up some courts and commentators, who mistakenly believe that “stored” numbers are somehow different from randomly or sequentially generated numbers. They are not. When a system randomly or sequentially generates telephone numbers, it has two options: 1) dial them immediately or 2) store them for later use. Thus, the statute contains no ambiguity – it only applies to systems that either: 1) generate random or sequential numbers and dial them immediately or 2) generate random or sequential numbers, store them, and dial them later. That airtight statutory language should leave no room for deference even under the old Chevron regime. It certainly should leave no room for deference under the BNSF Railway methodology, where courts examine text and precedent to determine what the law is rather than weighing whether an agency’s interpretation is reasonable.

TCPA World has long been plagued by ambiguous agency interpretations of an otherwise unambiguous statute. The BNSF Railway methodology will hopefully be applied to the TCPA soon, and TCPA liability will no longer depend on the district in which suit is filed.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Daniel Delnero specializes in representing companies facing high-stakes consumer class action litigation, with a particular emphasis on consumer financial services matters. He has successfully represented clients in large, complex matters, including the Telephone Consumer Protection Act (TCPA), Fair Debt Collection Practices Act (FDCPA), mergers and acquisitions litigation, First Amendment litigation, libel and defamation, contract disputes and business torts. Daniel also routinely represents companies and individuals facing intrusive governmental investigations,...

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