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Supreme Court to Consider Role of District Courts in Reviewing Agency Rules

Supreme Court to Consider Role of District Courts in Reviewing Agency Rules

In granting certiorari in the case of Carlton & Harris v. PDR Network, LLC, the United States Supreme Court appears poised to guide district courts in their interpretation of administrative agency rules.  The facts of the case are straightforward.  Carlton & Harris, a chiropractor’s office in West Virginia, received a fax from PDR Network, LLC in 2013.  PDR published the Physician’s Desk Reference and the fax it sent to Carlton & Harris invited Carlton & Harris to reserve a free e-book version by visiting PDR’s website.  Carlton & Harris sued PDR under the TCPA’s Junk Prevention Amendment, claiming the fax was an “unsolicited advertisement.”


The Southern District of West Virginia held that it was not compelled to defer to the 2006 FCC Rule’s legal interpretation of “unsolicited advertisement.”  An “advertisement”, according to the District Court, was required to have a “commercial aim.” Since the fax offered something for free, there was no commercial aim; without the commercial aim, the District Court found the fax was not an advertisement.  Since there was no advertisement, Carlton & Harris did not state a claim under the TCPA and its lawsuit was dismissed.


Carlton & Harris appealed to the Fourth Circuit which overturned the District Court’s ruling in a 2-1 decision (Judge Thacker dissenting).  The Fourth Circuit found that the District Court lacked jurisdiction to “enjoin, set aside, suspend (in whole or in part), or to determine the validity of” orders like the 2006 FCC Rule because the Hobbs Act only granted such jurisdiction to federal appellate courts.  Additionally, the Fourth Circuit found that any failure to follow the FCC’s Rule, even it was not called an “invalidation”, had the same effect and “would undermine Congress’s aim of ensuring uniform application of FCC Orders.”


The Supreme Court has granted PDR’s petition for a writ of certiorari earlier week based on the limited question of whether the Hobbs Act required the district court to accept the FCC’s legal interpretation of the TCPA.  The issue of the limits of judicial deference to administrative agencies is of significant interest to several members of the Supreme Court’s conservative block which may have tipped the scales in granting the petition.


The ultimate decision by the Supreme Court could have an immediate impact on the amount of deference district courts must give to agency legal interpretations and rules.  The decision in Carlton is likely to come at the end of the Court’s Spring 2019 term which could coincide with the BCFP’s much-anticipated release of rules for the debt collection industry.