March 19, 2019

March 18, 2019

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The U.S. Supreme Court Will Rule on FCC Interpretation of the TCPA

Late last year, the U.S. Supreme Court granted certiorari in PDR Network, LLC v. Carlton & Harris Chiropractic (No. 17-1705), addressing the issue of whether the Hobbs Act requires the district court to accept the Federal Communication Commission’s (FCC’s) legal interpretation of the Telephone Consumer Protection Act (TCPA). In 1991, Congress passed the TCPA to restrict telephone solicitations and use of automated telephone equipment, charging the FCC with interpretation and rulemaking authority over the Act. In 2005, the TCPA was amended to include the Junk Fax Prevention Act (JFPA) that restricted the use of the fax machines to deliver unsolicited advertising. Shortly after, the FCC issued 2006 FCC Rule, which inter alia, provided guidance on the 2005JFPA amendment.   At issue before the Court, is the FCC’s interpretation of the definition of “unsolicited advertisements” in the context of the JFPA, found in the 2006 FCC Rule.

The Fourth Circuit, in PDR Network, held that the district court erred in refusing to defer to the FCC’s interpretation of the definition of “unsolicited advertisement” under the TCPA. Specifically, the district court ruled that a fax advertisement for free services did not qualify as an “unsolicited advertisement” under the law, despite the 2006 FCC Rule which stated that “even at no cost”, a fax message promoting good and services qualified as an unsolicited advertisement”.

Although PDR Network centers on a dispute over “junk faxes”, its implications extend far beyond. The Court will address a broad range of issues dealing with the scope of deference under the Hobbs Act and its interplay with the Chevron doctrine. The Hobbs Act provides exclusive jurisdiction to the Court of Appeals, in challenges to final orders issued by six federal agencies, including the FCC. To complicate matters, the Chevron doctrine, an administrative law principle derived from the Supreme Court case, compels federal courts, regardless of level, to adhere to agency interpretation of a statute it administers unless the court finds Congress’s language in the statute “clear and unambiguous”. Thus, a dilemma arises when a district court is adjudicating a case involving a final ordered issued by one of the six federal agencies regulated by the Hobbs Act. Does the Hobbs Act strip the district court of its ability to apply the Chevron deference?

Ultimately, the Court will conclude whether the district court is automatically bound by federal agency interpretation under the Hobbs Act, or has some leeway to ignore such interpretation, as allotted under Chevron when it deems statutory language “clear and unambiguous”. The Court’s ruling is timely, as the FCC is scheduled to issue rules regarding several significant TCPA issues in the coming year.

On a practical level, if the Court rules in favor of greater district court discretion, TCPA litigation will likely become much more unpredictable and costly. With regulatory, legislative, and judicial developments imminent, 2019 is shaping up to be an interesting year for the TCPA. We will continue to update as TCPA developments unfold. Stay tuned for our upcoming TCPA post on the circuit split over what constitutes an “Automatic Dialing Telephone System” (ATDS).

Jackson Lewis P.C. © 2019

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About this Author

Jason C. Gavejian, Employment Attorney, Jackson Lewis, Principal, Restrictive Covenants Lawyer
Principal

Jason C. Gavejian is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. and a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

Mr. Gavejian represents management exclusively in all aspects of employment litigation, including restrictive covenants, class-actions, harassment, retaliation, discrimination and wage and hour claims in both federal and state courts. Additionally, Mr. Gavejian regularly appears before administrative agencies,...

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Attorney

Maya Atrakchi is the Knowledge Management (“KM”) Attorney for Jackson Lewis P.C.’s Privacy, e-Communication and Data Security and International Employment Issues Practice Groups, and is based in the New York City, New York, office of Jackson Lewis P.C.

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