For the second time in the last month, the Supreme Court has agreed to take up a case that directly implicates the question of whether federal courts will give deference to the pronouncements of federal regulatory agencies.  As we previously discussed, on November 13, 2018, the Court announced it would review the Fourth Circuit’s decision in PDR Network, LLC v. Carlton & Harris Chiropractic Inc., which involves the question of whether the Hobbs Act requires trial courts to give deference to the FCC’s prior interpretations of the TCPA. 

The latest addition to the Supreme Court’s docket for next year is Kisor v. Wilkie.  In this case, the Supreme Court will decide whether to overrule a judge-made doctrine of deference to regulatory agencies known as Auer, or Seminole Rock, deference.  Auer deference requires federal courts to defer to an agency’s reasonable interpretation of its own ambiguous regulations.

When Justices Gorsuch and Kavanaugh were nominated to the Court, I predicted that Auer deference would eventually be reexamined.  It has not taken long at all for that prediction to be proven out.  Of course, my prediction was informed by the growing drumbeat to overrule Auer deference among conservative jurists.  The late Justice Antonin Scalia, who had a hand in creating Auer deference, began the campaign to eliminate the doctrine based on a conclusion that it violates the separation of powers principle by allowing agencies to both adopt and interpret the law.  Scalia and others also argued that Auer deference encourages agencies to issue vague regulations specifically so that they can retain flexibility to interpret the regulations in the future, depriving individuals and businesses of needed clarity. 

Kisor is not a case about the TCPA or the FCC. Instead, it is a case brought by a Marine who served in the Vietnam War and sought benefits for post-traumatic stress disorder. In 2006, the Department of Veterans Affairs agreed that Kisor suffered from PTSD, but it refused to grant Kisor benefits dating back to 1983, when he had first filed a claim for benefits.  The VA’s denial in Kisor’s case hinged on its interpretation of the term “relevant” in one of its own regulations.

On appeal, the U.S. Court of Appeals for the Federal Circuit concluded that the regulation was ambiguous, but that Auer deference required it to defer to the VA’s interpretation because it was reasonable. 

In granting Kisor’s petition for certiorari, the Supreme Court agreed to hear only the question of whether Auer should be completely overruled.  Notably, the Supreme Court rejected an alternative question which would have examined whether the Federal Circuit erred by not relying first on a doctrine requiring ambiguous regulations to be interpreted in favor of providing Veterans with benefits, which would have subordinated the Auer doctrine and changed the outcome for Kisor.  The Supreme Court’s decision to not take up this alternative issue may be a signal that Auer is on its last legs. 

While Kisor does not directly implicate the TCPA, the elimination of Auer deference would undoubtedly impact how the FCC approaches its role in interpreting and enforcing the TCPA.  Specifically, an agency that understands that courts will not defer to later interpretations of vague regulations is likely to be more inclined to write regulations that are clear and precise, thus hopefully providing regulated companies with greater clarity regarding their legal responsibilities.  In my discussion regarding Kavanaugh’s nomination, I outlined some examples of how vague regulations adopted by the FCC have left businesses without sufficient guidance to ensure that their conduct will not be found to violate the TCPA. To the extent that the elimination of Auer deference produces better results, that would be a welcomed change. 

On the other hand, as we have seen from the great "ATDS” debate this year, when the courts are not bound to enforce the FCC’s pronouncements on the TCPA, they will inevitably arrive at conflicting, and often contradictory, conclusions.  Thus, we cannot ignore the possibility that if Auer is struck down, and if the Supreme Court determines that the Hobbs Act does not always require deference to the FCC’s TCPA pronouncements, we may well see a period of even greater uncertainty as courts react to these fundamental shifts in long-standing tenants of administrative law.  For this reason, 2019 has the potential to be a monumental year for the TCPA. 

 


 

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Meet David, our cultivator, dreamer, and norm disrupter. He advocates effortlessly in and out of the courtroom, leveraging his wealth of experience along the way. Constantly carving new paths, you can find David guiding his clients’ deals and big-picture strategies. The sky’s the limit.