Junk Fax Case Before Supreme Court Seen Critical to FCC Work on TCPA
The Supreme Court’s decision in a junk fax case, PDR Network v. Carlton & Harris Chiropractic, has major implications for what the FCC does on the Telephone Consumer Protection Act, experts said Wednesday evening at an FCBA seminar (see 1904240063). Consumer and Governmental Affairs Bureau Deputy Chief Mark Stone said the FCC is exploring many issues on the TCPA, beyond the definition of automatic telephone dialing system (ATDS). The PDR case, No. 17-1705, was argued in March. Justices took up an appellate court ruling that a litigant in a private junk fax lawsuit can't attack the validity of an FCC order that could have been challenged under the Hobbs Act when issued (see 1903250068).
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Last year, the FCC invited further input on the definition of ATDS covered by TCPA restrictions. That was after a 9th Circuit U.S. panel ruling interpreted ATDS broadly, siding with a consumer's text-messaging complaint in Jordan Marks v. Crunch San Diego, No. 14-56834 (see 1809210029). The other big case is the U.S. Court of Appeals for the D.C. Circuit’s decision last year in ACA International v. FCC, No. 15-1211 (see 1803160006), which shot down two key agency decisions from 2015 and affirmed two others, speakers said. “That decision is driving a lot of discussion today,” said Mark Brennan of Hogan Lovells.
PDR “presents a very important issue of how FCC orders are reviewed and how FCC orders are applied in private-party litigation under the TCPA and will have consequences otherwise as well,” said Joseph Palmore of Morrison & Foerster. PDR was sued under the TCPA for sending a junk fax. The district court in considering a motion to dismiss looked at a 2006 FCC order that said an offer of free goods and services can be advertisements and can be actionable, Palmore said.
The 4th U.S. Circuit Court of Appeals ruled the lower court had erred in engaging in its analysis of the FCC’s order based on the Chevron doctrine, Palmore said. The district court said the law isn’t “ambiguous at all -- an advertisement is an offer to sell something, this is not an advertisement,” he said: The 4th Circuit said, “District court, you erred by even engaging that analysis, even doing a Chevron analysis of this FCC order, you were bound by that, you had to apply the FCC’s order.”
The appellate court said only a court of appeal can review an FCC order, under the Hobbs Act, Palmore said. PDR appealed to the Supreme Court saying nothing in the Hobbs Act says a district court can’t review a FCC order, he said. How the high court decides “has great implications for TCPA litigation,” he said. If either side in a TCPA case thinks the FCC misinterpreted that law, “can they are argue that … or are they going to be bound by what the FCC found?” Palmore said the high court is likely to rule by the end of June.
Before the FCC’s 2015 TCPA declaratory ruling there was no clarity, said Lauri Mazzuchetti of Kelley Drye. “We have been begging, pleading, ‘Courts, wait for the FCC.’” Depending on how PDR comes out, courts may feel less bound by what the FCC decides, she said.
After the FCC’s 2015 ruling, lots of smaller companies unplugged their autodialers, said Leah Dempsey, lead plaintiff ACA International's vice president-federal advocacy. The FCC sought comment last May on what is an autodialer and how reassigned numbers should be treated, she said. It's also looking at whether it needs to provide more clarity of revocation of consent and whether ways to opt out should be standardized, she said: “It has been close to a year, and I think we’re all waiting to see what happens next.”
The FCC has developed “a large record” in response to the big TCPA cases, Stone said. “We’re kind of sifting through that,” he said. “We know everyone is eager to hear what the FCC’s views are. In the meantime, that’s not stopped the commission from moving forward to protect consumers from unwanted calls.” The FCC is watching the junk fax case as well, Stone said. The TCPA issues are “high on our radar screen,” he said.
Part of the discussion was on illegal robocalls, a prime target of the FCC under Chairman Ajit Pai. “We know the robocall problem won’t be solved by law enforcement alone so we try where possible to spur innovation through the industry,” said Ian Barlow, FTC Do Not Call Program coordinator. The FTC also does outreach through the news media (see 1903150061), he said: “We’re not going to solve the problem by suing people.”
“We agree this is a really substantial problem,” said Patrick Halley, USTelecom senior vice president-advocacy and regulatory affairs. “We don’t want to have illegal, fraudulent robocalls traveling over our networks. It’s not in our interest. … It’s something that we spend a lot of time on every day.” No matter what the FCC does on autodialers or revocation of consent, people will make robocalls, Halley said. “It’s going to happen,” he said. “It’s technically pretty easy.”