• The power of the administrative state is back before the Supreme Court.
• The Court is largely expected to limit agency authority to dictate how federal courts interpret legislation.
• Such a ruling could have significant implications for TCPA compliance and litigation.

Yesterday, the Supreme Court heard oral argument in a case that will likely determine whether a federal district court or the Federal Communications Commission (FCC) has the final say on how to interpret the Telephone Consumer Protection Act (TCPA). A decision granting district courts this power, which has generally been reserved to the FCC and appellate courts when rulemaking is involved, would be a further turn away from the longstanding practice of deference to agency authority. More immediately, such a ruling would open the door for litigants to challenge FCC orders interpreting the TCPA in private enforcement actions.

In McLaughlin Chiropractic v. McKesson Corporation, McLaughlin is challenging whether a California district court correctly held (and the Ninth Circuit correctly upheld) that a federal law known as the Hobbs Act required the district court to defer to an FCC order deciding that online faxes are not covered by the TCPA. McLaughlin argues that district courts should be able to question and evaluate the FCC’s interpretation of the statute. McKesson counters that the Hobbs Act unambiguously denies district courts the power to review such FCC orders.

In recent years, the Supreme Court has shown a willingness to move the power to interpret statutes away from administrative agencies (such as the FCC) and into federal courts. Most notably, in Loper Bright Enterprises v. Raimondo, the Court overturned the decades-old Chevron doctrine that instructed courts to defer to agency interpretations of ambiguous statutes. The Court seems poised to do so again here.

Those in favor of allowing district courts to review FCC orders contend that — in requiring district courts to defer to agency interpretations of a federal statute — the Hobbs Act wrongly denies litigants the ability to argue against flawed agency decisions. Those opposed argue that allowing district courts to make these determinations will undermine regulatory consistency and finality nationwide.

These themes were front and center during oral argument. Justices Kavanaugh, Gorsuch, Alito, and Thomas all voiced concern that requiring deference to agency orders would deprive litigants of their due-process right to challenge incorrect interpretations of law. Justices Sotomayor and Kagan, in turn, focused on the express language of the Act and the importance of finality in rule making. Justice Jackson, meanwhile, sought to narrow the type of rulemaking subject to the Hobbs Act.

Ultimately, we do not know how the Court will rule. Neither Chief Justice Roberts nor Justice Barrett — the potential swing votes — engaged in questioning, leaving those following uncertain as to their views. But if either Justice determines that district courts have the authority to review FCC orders that interpret the TCPA, it will open the door for defendants to argue that the FCC regulations enforcing the TCPA are invalid — an argument that was previously unavailable to them. A decision is expected by early summer.

Cozen O’Connor’s Class Actions attorneys will provide further updates as they unfold.