The United States Supreme Court will hear the case McLaughlin Chiropractic Associates Inc. v. McKesson Corporation, which poses the question of whether federal district courts, under the Hobbs Act, must adhere to the rulings of the Federal Communications Commission (FCC).
McLaughlin specifically raises a narrow question about whether the Telephone Consumer Protection Act (TCPA) prohibits so called “junk faxes” (i.e. faxes containing advertisements and solicitations) that are received only via online fax services. Depending on how the Supreme Court addresses that question could have far-reaching implications, well beyond the TCPA’s faxing rules.
The Litigation and Intervening FCC Ruling
McLaughlin Chiropractic Associates filed a putative class action complaint against McKesson in 2013. The complaint alleged that that McKesson violated the TCPA by sending unsolicited “junk fax” advertisements without offering an opt-out mechanism to recipients. Some of the alleged faxes were received only through online fax services. In 2019, the district court initially certified a class of plaintiffs who had allegedly received the junk faxes.
Shortly after the class was certified, however, the FCC issued a declaratory ruling, holding that the TCPA only applies to physical fax machines and not to online fax services. In that ruling, the FCC determined that Congress did not intend the TCPA’s fax prohibition to apply to faxes sent to equipment other than a “telephone facsimile machine.” The FCC ruled that faxes sent by online fax services that consumers may delete without printing are in effect the same as “email sent over the Internet.” The FCC’s ruling was consistent with its authority under the Hobbs Act, and consistent with its practice of interpreting and regulating the TCPA.
Following the FCC’s 2019 ruling, the district court decertified the class in McLaughlin, finding that it was impossible to distinguish between the “junk faxes” sent to a physical fax machine and those received only through online fax services. As a result, the court was unable to determine which putative class members had claims (i.e., those who received a fax through a fax machine) and which putative class members did not have claims (i.e., those who received a fax through an online service). In 2023, the Ninth Circuit Court of Appeals upheld the lower court’s decertification order.
McLaughlin’s Supreme Court Petition
McLaughlin Chiropractic’s petition to the Supreme Court seeks to clarify whether district courts under the Hobbs Act must follow the FCC’s legal interpretation of the TCPA.
McLaughlin Chiropractic specifically asks that the Supreme Court answer the question left open in PDR Network LLC v. Carlton & Harris Chiropractic, 588 US _ (2019), another TCPA case that sought to address the enforceability of the FCC’s legal interpretation of the TCPA under the Hobbs Act. The Court in PDR Network held that two unresolved questions, the nature of the challenged FCC order and whether PDR Network had adequate opportunity to seek judicial review, stopped them from reaching a decision on the central Hobbs Act question.
In a concurring opinion in PDR Network, Justices Brett Kavanaugh and Clarence Thomas wrote that, if the threshold questions had been met, they would have found that the Fourth Circuit erred in concluding that plaintiffs involved in TCPA disputes have no ability to contest FCC rulings on the interpretation of the law. Justice Kavanaugh specifically wrote that the “Hobbs Act does not expressly preclude judicial review of an agency’s statutory interpretation in an enforcement action.”
McLaughlin Chiropractic now argues that the threshold issues that previously prevented the Court from reaching its decision are not present and the Hobbs question can be reached. Aside from the underlying facts and allegations, another key difference between PDR Network and McLaughlin is that the composition of the Court has shifted such that a majority of the present Court may agree with the PDR Network concurrence.
Legal Implications
The Supreme Court’s determination of the enforceability question could close the door for good on plaintiffs seeking to sue for junk faxes sent via online services under the TCPA. If the Supreme Court ultimately rules that federal district courts are in fact bound by the FCC’s interpretation, it would prevent potential plaintiffs from seeking to enforce the TCPA against companies using such online fax services.
If, on the other hand, the Supreme Court determines that federal courts need not adhere to the FCC’s interpretation on faxes or other TCPA questions of law, companies will face an onslaught of new cases not just over junk faxes but arising from numerous other provisions of the TCPA. For decades, the FCC has issued orders and rules to apply consistency in how courts interpret the TCPA in light of advancements in communications technology in the years since the TCPA was enacted in 1991.
Litigants have periodically challenged the FCC’s orders and on occasion courts have overruled the FCC, most notably in 2018, when the D.C. Circuit Court of Appeals struck down the FCC’s definition of an autodialer. But should the Supreme Court find that the FCC lacks the authority to regulate the TCPA, plaintiffs could potentially challenge decades of FCC orders, resulting in an avalanche of TCPA litigation, as courts would need to rule on innumerable questions previously handled by the FCC.
That outcome is not outside the realm of possibility given that the Supreme Court overturned the decades’ old doctrine of Chevron deference in Loper-Bright Enterprises v. Raimondo. A key question is whether the Supreme Court will distinguish between Chevron, a court-created doctrine, and the Hobbs Act, a federal law enacted by Congress. The latter specifically limits the power of federal courts to review the FCC’s decision-making under the TCPA.
In sum, companies that utilize online fax services to advertise will be impacted by the Supreme Court’s decision, regardless of where the Court lands on the narrow question presented. If the Supreme Court uses McLaughlin to limit the FCC’s power to interpret and regulate the TCPA, however, the reverberations will be felt far and wide. That includes potentially calling into question whether companies can rely on FCC regulations when designing compliance programs around calling, texting, and faxing.
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