4th Cir. Says Hobbs Act Precludes District Court from Sidestepping the FCC’s Rules in TCPA Blast-Fax Case

The question presented is whether and when a fax that offers a free good or service constitutes an advertisement under the TCPA. To resolve it, we must answer two more: first, must a district court defer to an FCC interpretation of the TCPA? And if so, what is the meaning of “unsolicited advertisement” under the 2006 FCC Rule? We address these issues in turn.    The TCPA defines “unsolicited advertisement” to include “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, in writing or otherwise.” 47 U.S.C. § 227(a)(5). In a typical case of statutory interpretation where an agency rule is involved, the familiar Chevron framework requires a court to first ask whether the underlying statute is ambiguous (“step one”). See Chevron, 467 U.S. at 843, 104 S.Ct. 2778; Montgomery Cty., Md. v. F.C.C., 811 F.3d 121, 129 (4th Cir. 2015). Where a statute’s meaning is clear on its face, the inquiry ends and the unambiguous meaning controls. Chevron, 467 U.S. at 842–43, 104 S.Ct. 2778.  In this case, the district court applied step one of Chevron to the TCPA’s definition and found it to be unambiguous. Thus, it declined to defer to the FCC interpretation. We conclude, however, that the Hobbs Act, 28 U.S.C. § 2341 et seq., precluded the district court from even reaching the step-one question.  The Hobbs Act, also known as the Administrative Orders Review Act, provides a mechanism for judicial review of certain administrative orders, including “all final orders of the Federal Communications Commission made reviewable by section 402(a) of title 47.” 28 U.S.C. § 2342(1). A party aggrieved by such an order may challenge it by filing a petition in the court of appeals for the judicial circuit where the petitioner resides or has its principal office, or in the Court of Appeals for the D.C. Circuit. 28 U.S.C. § 2343. The Hobbs Act specifically vests the federal courts of appeals with “exclusive jurisdiction” to “enjoin, set aside, suspend (in whole or in part), or to determine the validity of” the orders to which it applies, including FCC interpretations of the TCPA. See 28 U.S.C. § 2342. “This procedural path created by the command of Congress promotes judicial efficiency, vests an appellate panel rather than a single district judge with the power of agency review, and allows uniform, nationwide interpretation of the federal statute by the centralized expert agency” charged with overseeing the TCPA. Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110, 1119 (11th Cir. 2014) (internal quotation marks omitted).  The district court erred when it eschewed the Hobbs Act’s command in favor of Chevron analysis to decide whether to adopt the 2006 FCC Rule. Federal district courts are courts of limited jurisdiction and “possess only that power authorized by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) (internal quotation marks omitted); U.S. Const. art. III, § 1. Where, as here, Congress has specifically stripped jurisdiction from the district courts regarding a certain issue, those courts lack the power and authority to reach it.  This sort of “jurisdiction-channeling” provision, especially in the context of administrative law, is “nothing unique.” Blitz v. Napolitano, 700 F.3d 733, 742 (4th Cir. 2012) (noting that “agency decisions are commonly subject to such” provisions and that “final agency actions are generally reviewed in the courts of appeals”). When Chevron meets Hobbs, consideration of the merits must yield to jurisdictional constraints. “[A]n Article III court’s obligation to ensure its jurisdiction to resolve a controversy precedes any analysis of the merits … [A]rguing that the district court can put off considering its jurisdiction until after step one of Chevron … turns that traditional approach on its head.” CE Design, Ltd. v. Prism Bus. Media, Inc., 606 F.3d 443, 447–48 (7th Cir. 2010). Indeed, a district court simply cannot reach the Chevron question without “rubbing up against the Hobbs Act’s jurisdictional bar.” Id. at 449. The district court had no power to decide whether the FCC rule was entitled to deference. By refusing to defer to the FCC rule and applying Chevron analysis instead, the court acted beyond the scope of its congressionally granted authority.  Every other circuit to consider the issue has reached the same result. In Mais v. Gulf Coast Collection Bureau, Inc., the Eleventh Circuit reversed a district court finding that an FCC interpretation of the TCPA’s “prior express consent” exception was inconsistent with the statute. 768 F.3d at 1113. The court held that because of the Hobbs Act, the district court “lacked the power to consider in any way the validity of the 2008 FCC Ruling.” Id. The Eighth Circuit, in Nack v. Walburg, refused to consider whether an FCC interpretation of the TCPA “properly could have been promulgated” because the Hobbs Act “precludes us from entertaining challenges to the regulation.” 715 F.3d 680, 682 (8th Cir. 2013). And in Leyse v. Clear Channel Broad., Inc., the Sixth Circuit held that the Hobbs Act “deprives the district court below—and this court on appeal—of jurisdiction over the argument that the exemption [to the TCPA] was invalid or should be set aside because of procedural concerns.” 545 Fed.Appx. 444, 459 (6th Cir. 2013) (unpublished) (amending and superseding Leyse v. Clear Channel Broad. Inc., 697 F.3d 360 (6th Cir. 2012) ).  PDR Network urges us to instead follow the Sixth Circuit’s decision in Sandusky Wellness Ctr., LLC v. Medco Health Sols., Inc., which also considered the meaning of “advertisement” under the TCPA. 788 F.3d 218 (6th Cir. 2015). But although Sandusky declined to defer to the 2006 FCC Rule because it found the statutory definition unambiguous, that decision made no mention of the Hobbs Act’s jurisdictional bar nor explained how the court overcame it. See id. at 223. For that reason, we do not find that decision persuasive here.