In a recent ruling, the Fourth Circuit has followed its sister circuits in holding that district courts must follow the Federal Communications Commission’s (FCC) interpretations of the Telephone Consumer Protection Act (TCPA).
In Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459 (4th Cir. 2018), a chiropractic office brought a putative TCPA class action against an organization that had sent the office an unsolicited advertisement by fax. The fax contained an offering of a free e-book. The defendant, a “company that ‘delivers health knowledge products and services’ to healthcare providers,” responded with a motion to dismiss. The Fourth Circuit held that faxes that offer goods and services, even free goods and services, are “advertisements” under the TCPA. The Fourth Circuit, in a split decision, reversed the district court’s dismissal of the suit.
The TCPA, which generally prohibits the use of a fax machine to send unsolicited advertisements, creates a private cause of action that permits the recipient of an unsolicited fax advertisement to seek damages from the sender. The defendant moved to dismiss the complaint for failure to state a claim, arguing that the fax offering the free e-book could not be considered an “unsolicited advertisement” as a matter of law because it did not offer anything for sale. In response, the plaintiff pointed to a 2006 rule promulgated by the FCC which provides that faxes “that promote goods or services even at no cost … are unsolicited advertisements under the TCPA’s definition” (emphasis added). Plaintiff argued that the fax it received was such an “unsolicited advertisement.” The district court dismissed the suit, holding that the Hobbs Act, 18 U.S.C. § 1951 (which gives the D.C. Circuit primary jurisdiction on administrative law and agency issues) did not compel the district court to defer to the FCC’s interpretation of the TCPA.
On appeal, the Fourth Circuit determined that pursuant to the Hobbs Act, a district court must defer to and apply FCC interpretations of the TCPA. The appellate court reasoned that the Hobbs Act creates a “jurisdictional bar,” which strips the district court of any power to decide whether the FCC rule was entitled to deference. Finally, in applying the 2006 FCC rule, the Fourth Circuit held that a fax that offers a good or service, whether for sale or free, constitutes an advertisement under the TCPA.
Why it matters: Here, the Fourth Circuit reasserted, in accordance with all other circuits that had considered the issue to date, that courts “must follow the guideposts that Congress has set out.” The Hobbs Act dictates that courts must apply the 2006 FCC rule in interpreting the TCPA, and that rule, in turn, tells courts what constitutes an “advertisement” within the meaning of the statute. In short, the district court is “without jurisdiction” to consider whether or not to apply the FCC’s interpretation of the TCPA.
To read the order in Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, click here.