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PDR Network, LLC v. Carlton & Harris Chiropractic Inc.

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What is deference in the context of the administrative state?

Deference, or judicial deference, is a principle of judicial review in which a federal court yields to an agency's interpretation of a statute or regulation. The U.S. Supreme Court has developed several forms of deference in reviewing federal agency actions, including Chevron deference, Skidmore deference, and Auer deference. Learn about state-level responses to deference here.


Supreme Court of the United States
PDR Network, LLC v. Carlton & Harris Chiropractic Inc.
Term: 2018
Important Dates
Argument: March 25, 2019
Decided: June 20, 2019
Outcome
Vacated and remanded
Vote
9-0
Majority
Chief Justice John G. Roberts • Clarence Thomas • Ruth Bader Ginsburg • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh


PDR Network, LLC v. Carlton & Harris Chiropractic Inc. is a 2019 U.S. Supreme Court case concerning judicial deference and judicial review. The court questioned whether the Administrative Orders Review Act (Hobbs Act) can require district courts to defer to agency interpretations of laws and prevent judicial review in private enforcement actions.[1]

The case examined a 2006 Federal Communications Commission (FCC) final order interpreting a provision of the Telephone Consumer Protection Act (Telephone Act) and its interplay with the Hobbs Act, which grants federal courts of appeal exclusive jurisdiction to review final orders issued by the FCC and other specified agencies. The court vacated and remanded the judgment of the United States Court of Appeals for the 4th Circuit and instructed that court to answer preliminary questions about the nature of the FCC's final order and the availability of judicial review.[1][2][3]

HIGHLIGHTS
  • The case: In 2013, PDR Network, LLC sent a fax to Carlton & Harris, a West Virginia chiropractor, offering the company a free copy of the Physicians Desk Reference. Carlton & Harris then sued PDR in federal court under the Telephone Consumer Protection Act (Telephone Act). The Telephone Act prohibits companies from using fax machines to send unsolicited advertisements and allows the recipient of an unsolicited fax advertisement to sue the sender. The district court ruled in favor of PDR and dismissed the case, but the 4th Circuit vacated that ruling and said that the Hobbs Act requires district courts to apply the FCC's interpretation of the Telephone Act.
  • The issue: Whether the Hobbs Act (1) requires district courts to automatically defer to an agency's final order and (2) prevents judicial review in private enforcement actions.[4]
  • The outcome: The U.S. Supreme Court vacated the 4th Circuit's ruling and remanded the case for the 4th Circuit to consider two questions:

    Was the FCC final order a legislative rule with the force of law or an interpretive rule? Did PDR have a prior, adequate opportunity to seek judicial review of the final order?[1]


    • You can review the lower court's opinion here.[5]

    Why it matters: Though commentators anticipated that the ruling in the case could have affected deference practices, the court ultimately remanded the case to the 4th Circuit to answer preliminary questions. The decision made by the 4th Circuit after this ruling could clarify whether statutes can require federal courts to defer to agency final orders, regardless of the text of the governing statute. It could also clarify whether the Hobbs Act and similar statutes with exclusive review provisions prevent judicial review in private enforcement actions.

    Timeline

    The following timeline details key events in this case:

    • June 20, 2019: U.S. Supreme Court vacated and remanded the 4th Circuit's ruling
    • March 25, 2019: Oral argument
    • November 13, 2018: U.S. Supreme Court agreed to hear case
    • June 21, 2018: Petition filed with U.S. Supreme Court
    • February 23, 2018: 4th Circuit Court vacated district court's judgment

    Background

    In 2013, PDR Network, LLC sent a fax to Carlton & Harris, a West Virginia chiropractor, offering the company a free copy of the Physicians Desk Reference. Carlton & Harris then sued PDR in federal court under the Telephone Consumer Protection Act (Telephone Act). The Telephone Act prohibits companies from using fax machines to send unsolicited advertisements and allows the recipient of an unsolicited fax advertisement to sue the sender. The FCC previously issued a final order in 2006 outlining the agency's interpretation of the term "unsolicited advertisement."[6]

    The district court granted PDR Network’s motion to dismiss because it found that the advertisement was not commercial in nature and was not an unsolicited advertisement under the law. "[T]he court found that the Hobbs Act does not require the court to defer to the FCC’s interpretation of an unambiguous term."[7]

    The Fourth Circuit Court vacated district court's judgment. PDR Network appealed to the Supreme Court, and the court agreed to hear the case on November 13, 2018.[7]

    Question presented

    The petitioner presented the following question to the court:[4]

    Question presented:
    • Whether the Hobbs Act strips courts of jurisdiction and requires automatic deference to an agency's final order even if there has been no challenge to the validity of such order?

    Outcome

    With a 9-0 vote, the court vacated the decision made by the 4th Circuit Court of Appeals and remanded the case for that court to consider preliminary issues before resolving the question in this case.[1] First, the 4th Circuit must decide whether the 2006 FCC order was a legislative rule with the force of law or an interpretive rule. Second, did PDR have prior adequate opportunity to seek judicial review of the order?[1] Justice Stephen Breyer wrote the majority opinion, joined by Chief Justice John G. Roberts, and Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.[1]

    Opinion

    See also: Legislative rule and Interpretive rule

    Justice Breyer wrote that the case involved the interaction between the Telephone Consumer Protection Act of 1991 (Telephone Act) and the Administrative Orders Review Act (Hobbs Act).[1] He argued that it is difficult for the court to answer whether the Hobbs Act requires district courts to uphold the 2006 FCC order defining "unsolicited advertisements" without first determining whether the final order is considered to be a legislative rule with the force of law or an interpretive rule. Breyer stated that the district court would not have been required to defer to an interpretive rule, which is non-binding and does not have the force and effect of law.[1]

    Breyer also questioned whether the Hobbs Act’s exclusive review provision, which requires certain challenges to FCC orders to be brought in a court of appeals within 60 days of the issuance of the order, did not afford PDR a prior and adequate opportunity for judicial review as required by the Administrative Procedure Act (APA). If not, Breyer argued that the APA permits PDR to challenge the final order’s validity in the case.[1]

    Since the 4th Circuit had not addressed those questions in its prior decision, the court remanded the case for the 4th Circuit to review.[1]

    Concurring opinion

    Justice Clarence Thomas wrote a concurring opinion joined by Justice Neil Gorsuch arguing that the Hobbs Act might be unconstitutional if interpreted to prevent district courts from independently interpreting the text of the Telephone Act.[1] He argued that this case shows why the court needs to reconsider precedents like Chevron v. NRDC (1984).[1]

    Justice Brett Kavanaugh wrote a concurring opinion joined by Justices Clarence Thomas, Samuel Alito, and Neil Gorsuch.[1] He argued that the 4th Circuit was wrong to require district courts to uphold interpretations of the Telephone Act made by the FCC.[1] He agreed with the decision to vacate the 4th Circuit's judgment, but argued that the U.S. Supreme Court should have also decided that the Hobbs Act allows defendants to challenge agency final orders in private enforcement actions.[1]

    Text of the opinion

    Read the full opinion here.

    Audio

    • Audio of oral argument:[8]

    Transcript

    • Transcript of oral argument:[9]

    Aftermath

    The United States Court of Appeals for the 4th Circuit had yet to schedule a rehearing in the case as of September 2019.[10]

    See also

    External links

    Footnotes

    1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 Supreme Court of the United States, "PDR Network, LLC v. Carlton & Harris Chiropractic Inc.," accessed June 20, 2019
    2. ↑ Supreme Court of the United States, "17-1705 PDR Network, LLC v. Carlton & Harris Chiropractic Inc." accessed February 23, 2019
    3. ↑ USLegal.com, "Review Under Hobb’s Act," accessed September 5, 2019
    4. ↑ 4.0 4.1 Supreme Court of the United States, "17-1705 PDR Network, LLC v. Carlton & Harris Chiropractic Inc." accessed February 23, 2019
    5. ↑ SCOTUSblog, "PDR Network, LLC v. Carlton & Harris Chiropractic Inc." accessed February 23, 2019
    6. ↑ SCOTUSblog, "Court adds two new cases to merits docket," November 13, 2018
    7. ↑ 7.0 7.1 Oyez, "PDR Network, LLC v. Carlton & Harris Chiropractic Inc." accessed February 24, 2019
    8. ↑ Supreme Court of the United States, PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., argued March 25, 2019
    9. ↑ Supreme Court of the United States, PDR Network, LLC v. Carlton & Harris Chiropractic Inc., argued March 25, 2019
    10. ↑ United States Court of Appeals for the 4th Circuit, "Oral Argument Calendar," accessed September 5, 2019
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