On November 13, 2018, the United States Supreme Court granted in part a petition for a writ of certiorari of the Fourth Circuit’s decision in Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459 (4th Cir. 2018).  The specific question before the Supreme Court is “[w]hether the Hobbs Act required the district court in this case to accept the FCC’s legal interpretation of the Telephone Consumer Protection Act.”  PDR Network, LLC v. Carlton & Harris Chiropractic, Inc.,  No. 17-1705, S. Ct.,  2018 WL 3127423, at *1 (Nov. 13, 2018). 

The Fourth Circuit’s decision addressed the intersection of the framework set forth in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984) and the Hobbs Act, 28 U.S.C. § 2341 et seq., also known as the Administrative Orders Review Act. 

As the Fourth Circuit explained, “[i]n a typical case of statutory interpretation where an agency rule is involved, the familiar Chevron framework requires a court to first ask whether the underlying statute is ambiguous (“step one”).”  “Where a statute's meaning is clear on its face, the inquiry ends and the unambiguous meaning controls.”

Applying this Chevron analysis, the district court held the TCPA’s definition of “unsolicited advertisement” was unambiguous and thus controlling.  The district court therefore declined to defer to the FCC’s interpretation of the relevant TCPA provision.

The Fourth Circuit, however, held that the Hobbs Act requires a district court to defer to the FCC rule, thereby precluding a district court from even reaching step one of the Chevron framework.  According to the Fourth Circuit, “[t]he district court had no power to decide whether the FCC rule was entitled to defense.  By refusing to defer to the FCC rule and applying Chevron analysis instead, the court acted beyond the scope of its congressionally granted authority.”  PDR Network, 883 F.3d at 464.

Earlier this year, the Ninth Circuit issued a related decision in True Health Chiropractic, Inc. v. McKesson Corporation, 896 F.3d 923 (9th Cir. 2018), holding that the FCC’s Solicited Fax Rule  had been held invalid by the D.C. Circuit in Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078, 1083 (D.C. Cir. 2017)—a decision authored by now Justice Kavanaugh.  In reaching this conclusion, the Ninth Circuit adopted the Sixth Circuit’s reasoning in Sandusky Wellness Ctr. v. ASD Specialty Healthcare, 863 F.3d 460, 467–68 (6th Cir. 2017).  Notably, the Fourth Circuit expressly rejected the argument advanced to follow the same Sixth Circuit decision, reasoning, “that decision made no mention of the Hobbs Act's jurisdictional bar nor explained how the court overcame it.” 

PDR Network is significant, as it will affect the amount of deference a district court is required to give the FCC’s legal interpretation regarding the TCPA, both in and beyond the junk fax context.