4th Cir. Offers Grist for Hobbs Rule Geeks; Says FCC’s Fax Rule Was Interpretive Rule After SCOTUS Decision; Remands to District Court to Determine Whether to Give “Great Respect” or “Near Indifference” to Agency TCPA Rule

After SCOTUS punted on whether Chevron deference need be given to the FCC’s Fax Rule, so too did the 4th Cir. in Carlton & Harris Chiropractic v. Pdr Network, No. 16-2185, 2020 U.S. App. LEXIS 38073 (4th Cir. Dec. 7, 2020).  First, the Court of Appeals held that the Rule was interpretive and not legislative since the FCC had not got through notice and comment.

Interpretive rules are those “issued by an agency to advise the public of the agency’s construction of the statutes and rules which it administers.” Perez v. Mortg. Bankers Ass’n, 575 U.S. 92, 96-97 (2015). While agencies must follow formal notice and comment procedures to issue legislative rules, they need not do so to issue interpretive rules. Id. at 97. And the FCC didn’t engage in the notice and comment process with respect to the rule at issue here. As the government puts it, “the [FCC] did not purport to exercise [legislative] authority in connection with the relevant portion of the 2006 order.” United States Amicus Br. at 18. The convenience of having to jump through fewer procedural hoops to issue agency guidance, however, “comes at a price: Interpretive rules ‘do not have the force and effect of law and are not accorded that weight in the adjudicatory process.'” Perez, 575 U.S. at 97 (quoting Shalala v. Guernsey Mem’l Hosp., 514 U.S. 87, 99 (1995)); see also Batterton v. Francis, 432 U.S. 416, 425 n.9 (1977) (“[A] court is not required to give effect to an interpretative regulation.”). The 2006 FCC Rule is interpretive, and so the district court wasn’t bound by it.

So, the Court of Appeals remanded the matter to the District Court to decide itself what level of deference the District Court would give to the FCC, so that, then, the Court of Appeals could decide whether the District Court got it right or wrong.

The Supreme Court has held that Chevron deference applies only when a court interprets a rule issued pursuant to an agency’s authority to “make rules carrying the force of law.” Gonzales v. Oregon, 546 U.S. 243, 255 (2006). When the agency’s interpretation doesn’t create law, courts must decide whether to afford that interpretation Skidmore deference. Id. (citing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). Since the 2006 FCC Rule doesn’t carry the  force and effect of law, and is therefore nonbinding, Chevron deference is inappropriate here. See Nahigian v. Juno-Loudoun, LLC, 677 F.3d 579, 587 (4th Cir. 2012) (“Because the . . . guidelines are not regulations issued with the intent that they act as binding law, they fall under the Skidmore deference regime.”). Under Skidmore, the weight that courts afford an agency’s interpretation “depend[s] upon the thoroughness evident in [the agency’s] consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade.” Skidmore, 323 U.S. at 140. The Court later distilled that principle to mean that an interpretive rule is “entitled to respect only to the extent it has the power to persuade.” Gonzales, 546 U.S. at 256 (cleaned up); see also Perez v. Cuccinelli, 949 F.3d 865, 877 (4th Cir. 2020) (“Absent eligibility for Chevron deference, agency interpretations are only given a level of respect commensurate with their persuasiveness.”) (cleaned up). To gauge a rule’s persuasiveness under Skidmore, courts look to “the degree of the agency’s care, its consistency, formality, and relative expertness, and to the persuasiveness of the agency’s position.” United States v. Mead Corp., 533 U.S. 218, 228 (2001). Cases applying these factors have run the gamut. Some have shown “great respect” to persuasive agency interpretations, while others have displayed “near indifference” to unpersuasive ones. See id. (citing cases); see also Sierra Club v. U.S. Army Corps of Eng’rs, 909 F.3d 635, 643-44 (4th Cir. 2018) (explaining that courts afford interpretive rules “modest Skidmore deference, to the extent the agency’s reasoning gives it power to persuade, or, in the absence of such reasoning, no deference at all”) (cleaned up). In line with the Supreme Court’s teaching, we too have held that the amount of Skidmore “respect” owed to an agency interpretation will “var[y]” depending on that interpretation’s particular persuasive qualities. New Cingular Wireless PCS, LLC v. Finley, 674 F.3d 225, 237 (4th Cir. 2012). For example, we recently determined that an agency interpretation was unpersuasive because it represented an “inconsistent” and “stark departure” from “long-used practice.” Romero v. Barr, 937 F.3d 282, 297 (4th Cir. 2019). We held that another warranted no deference because the agency’s interpretation was “completely devoid of any statutory analysis” and made “no effort to explain or justify” the agency’s position. Sierra Club, 909 F.3d at 645. But we deferred under Skidmore to a third agency’s interpretation when that interpretation was “consistent with earlier pronouncements” and its reasoning was “thorough.” Knox Creek Coal Corp. v. Sec’y of Labor, Mine Safety & Health Admin., 811 F.3d 148, 161 (4th Cir. 2016). While the district court disagreed (in dicta) with Carlton & Harris’s reading of the 2006 FCC Rule, the court didn’t examine the Rule’s persuasiveness under Skidmore or the extent to which that persuasiveness requires deference. Rather than guess as to how much deference (if any) the district court is inclined to give the Rule, we think the better course is to allow that court to analyze that issue in the first instance. . . But given that we are remanding the case to the district court to consider what level of deference the court should afford the 2006 FCC Rule and what the proper meaning of “unsolicited advertisement” is in light of that deference, we find it unnecessary to resolve this issue. On remand, we expect that Carlton & Harris would seek leave to amend in the appropriate manner if the need arises.