Supreme Court Hears Oral Argument in Case Regarding FCC’s Authority to Interpret Telephone Consumer Protection Act

At a Glance

• The crux of the plaintiffs’ / petitioners’ argument before the Supreme Court was that the Hobbs Act, by requiring deference to agency guidance, restricts the possibility of arguing against incorrect agency positions and, thus, usurps the courts’ judicial authority to interpret the law.
• In opposition, McKesson’s counsel argued that agency interpretations have resulted in consistency.
• Whether the Supreme Court endorses or eliminates the reach of the Hobbs Act, there is likely to be increased TCPA litigation regarding the application of the Supreme Court’s reasoning.

Recently, the U.S. Supreme Court heard oral argument in a case that has the potential to sound the death knell to the Federal Communications Commission’s (FCC) authority to bind courts to its interpretation of the Telephone Consumer Protection Act (TCPA). The case, McLaughlin Chiropractic Associates Inc. et al. v. McKesson Corporation, will decide whether federal district courts are obligated to follow FCC guidance regarding the TCPA as is currently required by the Hobbs Act. Following the Supreme Court’s June 28, 2024, decision in Loper Bright Enterprises v. Raimondo, the Hobbs Act remains the leading authority empowering the FCC (once considered to have broad discretion to interpret and apply all facets of the law) to provide standardized and nationally binding interpretations of the law. 

McLaughlin began as a class action filed in the Northern District of California, a hotbed for TCPA litigation. Plaintiffs alleged that defendant McKesson had used fax machines to send unsolicited advertisements to the putative class members in violation of the TCPA. In December 2019, during the pendency of the case, the FCC released a Declaratory Ruling stating that faxes delivered digitally / online (rather than in hard copy) were not included in the TCPA’s definition of “telephone facsimile machine.” As a result, the district court decertified the class in McLaughlin. That decertification was affirmed by the Ninth Circuit. True Health Chiropractic, Inc. v. McKesson Corporation, No. 22-15710, 2023 WL 7015279 (9th Cir. Oct. 25, 2023). The plaintiffs’ subsequent petition for certiorari was granted, and oral argument was held on January 21, 2025. 

Oral Argument

The crux of the plaintiffs’ / petitioners’ argument before the Supreme Court was that the Hobbs Act, by requiring deference to agency guidance, restricts the possibility of arguing against incorrect agency positions and, thus, usurps the courts’ judicial authority to interpret the law. The petitioners’ counsel argued that the Hobbs Act was meant only to “create a streamlined process for obtaining quick review of agency actions,” not create a “negative prescription that district courts do not have the authority to provide any sort of judicial review in an enforcement proceeding.” In support of this argument, counsel identified other statutes (such as environmental statutes) that explicitly contain language that limits the ability of district courts to review agency interpretations of the law — language, he argued, that is absent from the Hobbs Act. 

In opposition, McKesson’s counsel argued that agency interpretations have resulted in consistency: “[T]he Hobbs Act’s purpose of establishing finality, certainty, and reliance would be undermined by Petitioner’s position that an FCC order, even if affirmed under Hobbs Act review, could forever be subject to second-guessing in state and federal courts all across the country.” The Hobbs Act, he argued, does not foreclose judicial review nor does it seek to eliminate “adequate opportunity” for judicial review of agency interpretations. Rather, it merely directs that the forum for that opportunity be the appellate courts. The design of the Hobbs Act, he argued, is intentional: “Congress was balancing two competing interests here. It was [ ] balancing finality reliance, what this Court called in Corner Post the kind of finality-focused orientation of the Hobbs Act, with [ ] fairness and due process concerns.”

Several Justices raised concerns about the reach and implications of deference under the Hobbs Act and emphasized the importance of due process rights. For example, Justice Gorsuch questioned whether the Due Process Clause can be analyzed as creating the right to judicial review because “judges interpret the law and they have a duty to do so independently — and not to automatically and reflexively have to adopt interpretations that the executive branch chooses and prescribes for them.” Such questions and comments suggest a potential rejection of the Hobbs Act and further undermining of deference to agencies. 

In turn, Justices Sotomayor, Kagan and Jackson focused their questions on whether the plaintiffs’ arguments could be squared with the plain language of the Hobbs Act. Justice Sotomayor highlighted the Supreme Court’s previous holding in Yakus v. United States, which acknowledged exclusive jurisdiction to federal agencies based on Congress’ use of the term “determine the validity” in the statute at issue in Yakus — the Emergency Price Control Act (ECPA). The ECPA allowed a specially appointed Price Administrator to set maximum price regulations during wartime, but who was subject to meaningful judicial review to “determine the validity” of any given price regulation; thus, there was no due process concern. The same foundational phrase, “determine the validity,” appears in the Hobbs Act and could support ongoing deference. 

Notably, the anticipated swing voters, Chief Justice Roberts and Justice Coney-Barrett, refrained from questioning, offering little insight into how the Court might ultimately rule. 

Potential Effects

Since the TCPA’s passage in 1991, the FCC has released a multitude of orders attempting to explain, standardize or expand the law’s application. But the FCC’s interpretation of the TCPA has not been consistent: the FCC’s own orders have at times been internally contradictory (as occurred previously with an FCC order regarding faxes), and shifts in interpretation have traditionally followed changes in presidential administrations. Those political swings have been especially challenging to businesses that invest heavily in compliance only to see the FCC later change its view. 

On the one hand, reliance on the language of the statute and the courts’ interpretation of that language could diminish these episodic shifts in the interpretations of the law. On the other hand, despite these shifts, reliance on the enforceability of the FCC’s interpretations of the TCPA did provide national uniformity. But a ruling that FCC interpretations are no longer binding on courts would likely lead to disparate rulings across and within federal circuit courts and state courts on issues once deemed settled. That would create a patchwork of different standards depending on where a called / faxed / texted party is located. 

Thus, regardless of the outcome, we expect there to be increased litigation involving the TCPA as courts grapple with the impact of the Supreme Court’s reasoning regarding the interpretation of a law that was not written to address the types of communications and communication devices in use today.