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

• Decision Date: 20 June 2019
• Docket Number: No. 17-1705,17-1705
• Citation: 204 L.Ed.2d 433,139 S.Ct. 2051
• Parties: PDR NETWORK, LLC, et al., Petitioners v. CARLTON & HARRIS CHIROPRACTIC, INC.
• Court: U.S. Supreme Court

139 S.Ct. 2051

204 L.Ed.2d 433

PDR NETWORK, LLC, et al., Petitioners

v.CARLTON & HARRIS CHIROPRACTIC, INC.

No. 17-1705

Supreme Court of the United States.

Argued March 25, 2019

Decided June 20, 2019

Carter G. Phillips, Washington, DC, for the petitioners.

Glenn L. Hara, Rolling Meadows, IL, for the respondent.

Rachel P. Kovner for the United States as amicus curiae, by special leave of the Court, in support of the respondent.

Jeffrey N. Rosenthal, Blank Rome LLP, Philadelphia, PA, Ana Tagvoryan, Blank Rome LLP, Los Angeles, CA, Carter G. Phillips, Counsel of Record, Kwaku A. Akowuah, Daniel J. Feith, Kurt A. Johnson, Sidley Austin LLP, Washington, DC, for petitioners.

D. Christopher Hedges, David H. Carriger, Calwell Luce, Ditrapano PLLC, Charleston, WV, Glenn L. Hara, Anderson + Wanca, Rolling Meadows, IL, for respondent.

Justice BREYER delivered the opinion of the Court.

This case concerns two federal statutes, the Telephone Consumer Protection Act of 1991 (Telephone Act) and the Administrative Orders Review Act (Hobbs Act). The first statute generally makes it unlawful for any person to send an "unsolicited advertisement" by fax. 47 U.S.C. § 227(b)(1)(C). The second statute provides that the federal courts of appeals have "exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of" certain "final orders of the Federal Communication Commission." 28 U.S.C. § 2342(1).

In 2006, the FCC issued an Order stating that the term "unsolicited advertisement" in the Telephone Act includes certain faxes that "promote goods or services even at no cost," including "free magazine subscriptions" and "catalogs." 21 FCC Rcd. 3787, 3814. The question here is whether the Hobbs Act’s vesting of "exclusive jurisdiction" in the courts of appeals to "enjoin, set aside, suspend," or "determine the validity" of FCC "final orders" means that a district court must adopt, and consequently follow, the FCC’s Order interpreting the term "unsolicited advertisement" as including certain faxes that promote "free" goods.

We have found it difficult to answer this question, for the answer may depend upon the resolution of two preliminary issues. We therefore vacate the judgment of the Court of Appeals and remand this case so that the Court of Appeals can consider these preliminary issues.

I

Petitioners (PDR Network, PDR Distribution, and PDR Equity, collectively referred to here as PDR) produce the Physicians’ Desk Reference , a publication that compiles information about the uses and side effects of various prescription drugs. PDR makes money by charging pharmaceutical companies that wish to include their drugs in the Reference , and it distributes the Reference to health care providers for free. In 2013, PDR announced that it would publish a new e-book version of the Reference . It advertised the e-book to health care providers by sending faxes stating that providers could reserve a free copy on PDR’s website.

One of the fax recipients was respondent Carlton & Harris Chiropractic, a health care practice in West Virginia. It brought this putative class action against PDR in Federal District Court, claiming that PDR’s fax violated the Telephone Act. Carlton & Harris sought statutory damages on behalf of itself and other members of the class.

According to Carlton & Harris, PDR’s fax was an "unsolicited advertisement" prohibited by the Telephone Act. 47 U.S.C. § 227(b)(1)(C). The Act defines "unsolicited advertisement" as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission." § 227(a)(5). This provision says nothing about goods offered for free, but it does give the FCC authority to "prescribe regulations to implement" the statute. § 227(b)(2). And, as we have said, the FCC’s 2006 Order provides that fax messages that

"promote goods or services even at no cost, such as free magazine subscriptions, catalogs, or free consultations or seminars, are unsolicited advertisements under the [Telephone Act’s] definition.... ‘[F]ree’ publications are often part of an overall marketing campaign to sell property, goods, or services." 21 FCC Rcd., at 3814.

The Order also indicates, however, that faxes "that contain only information, such as industry news articles, legislative updates, or employee benefit information, would not be prohibited." Ibid . The Order then sets forth "factors" the FCC "will consider" when determining whether "an informational communication" that contains advertising material is an "unsolicited advertisement." Id. , at 3814, n. 187.

The District Court found in PDR’s favor and dismissed the case. It concluded that PDR’s fax was not an "unsolicited advertisement" under the Telephone Act. 2016 WL 5799301 (S.D. W. Va., Sept. 30, 2016). The court did recognize that the FCC’s Order might be read to indicate the contrary. Id. , at *3. And it also recognized that the Hobbs Act gives appellate courts, not district courts, "exclusive jurisdiction" to "determine the validity of" certain FCC "final orders." 28 U.S.C. § 2342(1). Nonetheless, the District Court concluded that neither party had challenged the Order’s validity. 2016 WL 5799301, *3. And it held that even if the Order is presumed valid, a district court is not bound to follow the FCC interpretation announced in the Order. Id. , at *4. In any event, the District Court also noted that a "careful reading" of the Order showed that PDR’s fax was not an "unsolicited advertisement" even under the FCC’s interpretation of that term. Ibid.

Carlton & Harris appealed to the Fourth Circuit, which vacated the District Court’s judgment. 883 F.3d 459 (2018). The Court of Appeals held that "the jurisdictional command" of the Hobbs Act—that is, the word "exclusive"—"requires a district court to apply FCC interpretations" of the Telephone Act. Id. , at 466. Thus, the District Court should have adopted the interpretation of "unsolicited advertisement" set forth in the 2006 Order. Ibid. And because the Order interpreted the term "advertisement" to "include any offer of a free good or service," id. , at 467, the facts as alleged demonstrated that PDR’s fax was an unsolicited advertisement.

PDR filed a petition for certiorari. We granted certiorari to consider "[w]hether the Hobbs Act required the district court in this case to accept the FCC’s legal interpretation of the Telephone Consumer Protection Act." 586 U. S. ––––, 139 S.Ct. 478, 202 L.Ed.2d 374 (2018).

II

The Hobbs Act says that an appropriate court of appeals has "exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of ... final orders of the Federal Communication Commission made reviewable by section 402(a) of title 47." 28 U.S.C. § 2342(1) ; see 47 U.S.C. § 402(a) (making reviewable certain "orde[rs] of the Commission under" the Communications Act, of which the Telephone Act is part). It further provides that "[a]ny party aggrieved" may bring such a challenge in the court of appeals "within 60 days after" the entry of the FCC order in question. 28 U.S.C. § 2344.

Here, we are asked to decide whether the Hobbs Act’s commitment of "exclusive jurisdiction" to the courts of appeals requires a district court in a private enforcement suit like this one to follow the FCC’s 2006 Order interpreting the Telephone Act. The parties in this case did not dispute below that the Order is a "final order" that falls within the scope of the Hobbs Act. 883 F.3d at 464, n. 1. And we assume without deciding that the Order is such a "final order." Even so, the extent to which the Order binds the lower courts may depend on the resolution of two preliminary sets of questions that were not aired before the Court of Appeals.

First , what is the legal nature of the 2006 FCC Order? In particular, is it the equivalent of a "legislative rule," which is " ‘issued by an agency pursuant to statutory authority’ " and has the " ‘force and effect of law’ "? Chrysler Corp. v. Brown , 441 U.S. 281, 302–303, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979) (quoting Batterton v. Francis , 432 U.S. 416, 425, n. 9, 97 S.Ct. 2399, 53 L.Ed.2d 448 (1977) ). Or is it instead the equivalent of an "interpretive rule," which simply " ‘advis[es] the public of the agency’s construction of the statutes and rules which it administers’ " and lacks " ‘the force and effect of law’ "? Perez v. Mortgage Bankers Assn. , 575 U. S. 92, ––––, 135 S.Ct. 1199, 1204, 191 L.Ed.2d 186 (2015) (quoting Shalala v. Guernsey Memorial Hospital , 514 U.S. 87, 99, 115 S.Ct. 1232, 131 L.Ed.2d 106 (1995) ).

If the relevant portion of the 2006 Order is the equivalent of an "interpretive rule," it may not be binding on a district court, and a district court therefore may not be required to adhere to it. That may be so regardless of whether a court of appeals could have "determin[ed]" during the 60-day review period that the Order is "vali[d]" and consequently could have decided not to "enjoin, set aside, [or] suspend" it. 28 U.S.C. § 2342. And that may be so no matter what degree of weight the district court ultimately gives the FCC’s interpretation of the statute under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). We say "may" because we do not definitively resolve these issues here.

Second , and in any event, did PDR have a "prior" and "adequate" opportunity to seek judicial review of the Order? 5 U.S.C. § 703. The Administrative Procedure Act provides that "agency action is subject to judicial review in civil or criminal proceedings for judicial enforcement" except "to the extent that [a] prior, adequate, and exclusive opportunity for judicial review is provided by law ." Ibid. (emphasis added). We believe it important to determine whether the Hobbs Act’s exclusive-review provision, which requires certain challenges to FCC final orders to be...