On November 13, 2018, the Supreme Court agreed to decide whether the Hobbs Act required the district court to accept the FCC’s legal interpretation of the TCPA. PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., No. 17-1705. The plaintiff, Carlton & Harris Chiropractic, brought a class action against the defendant, PDR Network, because the defendant sent it a single fax that offered a free e-book containing information about prescription drugs. The district court granted the defendant’s motion to dismiss for failure to state a claim upon which relief can be granted. The court of appeals vacated the dismissal. Chief Judge Robert C. Chambers of the Southern District of West Virginia granted the motion to dismiss because the fax was not an unsolicited advertisement under the TCPA. Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, No. 3:15-cv-14887 (S.D.W. Va. Sept. 30, 2016). The FCC issued a rule in 2006, which stated that faxes promoting goods or services for free are unsolicited advertisements under the TCPA. Id. at 7-8. Under the Hobbs Act, the courts of appeals have the exclusive jurisdiction to set aside or determine the validity of final FCC orders. See 28 U.S.C. § 2342(1). Judge Chambers determined that the Hobbs Act does not require the courts to adopt the FCC’s interpretation of the TCPA, even if a rule is valid. Carlton & Harris Chiropractic, Inc., No. 3:15-cv-14887, slip op. at 7. He applied the Chevron test, which does not require a court to defer to an agency’s interpretation of an unambiguous statute. Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843 (1984). Judge Chambers found that the TCPA’s definition of advertisement was unambiguous and requires a commercial aim. Carlton & Harris Chiropractic, Inc., No. 3:15-cv-14887, slip op. at 7. Here, “[t]he essential commercial element of an advertisement is missing” because “there is ‘no hope to make a profit’ from the offer and distribution of the reference book.” Id. at 6. He also interpreted the FCC rule as requiring a commercial aim, which the court of appeals also vacated. However, the Supreme Court limited its grant of certiorari to whether the Hobbs Act required the district court in this case to accept the FCC’s rule. The Fourth Circuit, in a 2-1 decision, vacated the dismissal. Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459 (4th Cir. 2018). The court held that the Hobbs Act barred the district court from applying the Chevron test to the FCC rule. Id. at 464. The district court exceeded its jurisdiction by refusing to defer to the FCC rule because the Hobbs Act grants the courts of appeals the exclusive jurisdiction to set aside or determine the validity of the FCC’s interpretations of the TCPA. Id. The Fourth Circuit determined that choosing not to apply or declining to defer to an FCC rule is the same as declaring it invalid. Id. at 465. It concluded that the Hobbs Act requires a district court to apply the FCC’s interpretations of the TCPA. Id. at 466. In dissent, Judge Stephanie Thacker stated that the district court did not exceed its jurisdiction because it found that the FCC rule did not conflict with the statute, since each requires a commercial aim. Id. at 470. Therefore, the district court did not invalidate the FCC rule. Id.
District of Arizona Applies Marks to Grant Summary Judgment Due to Plaintiffs’ Lack of Proof
In Shupe v. Capital One Bank, the District of Arizona granted the defendant’s summary judgment motion on the plaintiffs’ TCPA claim, finding that the plaintiffs failed to show that the defendant used an ATDS, which was necessary for the plaintiffs’ claim. The plaintiffs argued that their lack of evidence was the defendant’s fault. Judge Jennifer Zipps rejected this argument because the plaintiffs had the opportunity to obtain discovery on the ATDS issue and the plaintiffs did not show that the defendant failed to meet its discovery obligations on this issue. In defining an ATDS, Judge Zipps cited Marks, which ruled that ATDS devices “include ‘equipment that could engage in automatic dialing, rather than equipment that operated without any human oversight or control.’”