CARLTON & HARRIS CHIROPRACTIC, INC., a West Virginia Corporation, individually and as the representative of a class of similarly-situated persons, Plaintiff - Appellant,
PDR NETWORK, LLC; PDR DISTRIBUTION, LLC; PDR EQUITY, LLC; JOHN DOES 1-10, Defendants - Appellees.
Argued: October 25, 2017
from the United States District Court for the Southern
District of West Virginia, at Huntington. Robert C. Chambers,
District Judge. (3:15-cv-14887)
Lorne Hara, ANDERSON WANCA, Rolling Meadows, Illinois, for
Jeffrey N. Rosenthal, BLANK ROME LLP, Philadelphia,
Pennsylvania, for Appellees.
J. Wanca, ANDERSON WANCA, Rolling Meadows, Illinois; D.
Christopher Hedges, David H. Carriger, THE CALWELL PRACTICE
PLLC, Charleston, West Virginia, for Appellant.
Tagvoryan, BLANK ROME LLP, Los Angeles, California; Marc E.
Williams, Robert L. Massie, NELSON, MULLINS, RILEY &
SCARBOROUGH LLP, Huntington, West Virginia, for Appellees.
DIAZ, THACKER, and HARRIS, Circuit Judges.
& Harris Chiropractic, Inc. appeals from the district
court's dismissal of its claim against PDR Network, LLC,
PDR Distribution, LLC, PDR Equity, LLC, and John Does 1-10
(collectively, "PDR Network") for sending an
unsolicited advertisement by fax in violation of the
Telephone Consumer Protection Act (the "TCPA"), 47
U.S.C. § 227. Carlton & Harris argues that the
district court erred in declining to defer to a 2006 Rule
promulgated by the Federal Communications Commission (the
"FCC") interpreting certain provisions of the TCPA.
Specifically, Carlton & Harris contends that the Hobbs
Act, 28 U.S.C. § 2342 et seq., required the
district court to defer to the FCC's interpretation of
the term "unsolicited advertisement." Additionally,
to the extent that the district court interpreted the meaning
of the 2006 FCC Rule, Carlton & Harris argues that the
district court erred by reading the rule to require that a
fax have some commercial aim to be considered an
the Hobbs Act deprives district courts of jurisdiction to
consider the validity of orders like the 2006 FCC Rule, and
because the district court's reading of the 2006 FCC Rule
is at odds with the plain meaning of its text, we vacate the
district court's judgment.
review a district court's dismissal under Fed.R.Civ.P.
12(b)(6) de novo, "assuming as true the complaint's
factual allegations and construing all reasonable inferences
in favor of the plaintiff." Semenova v. Md. Transit
Admin., 845 F.3d 564, 567 (4th Cir. 2017) (internal
quotation marks omitted).
& Harris maintains a chiropractic office in West
Virginia. PDR Network is a company that "delivers health
knowledge products and services" to healthcare
providers. J.A. 33. Among other things, PDR Network publishes
the Physicians' Desk Reference, a widely-used
compendium of prescribing information for various
prescription drugs. PDR Network is paid by pharmaceutical
manufacturers for including their drugs in the
Physicians' Desk Reference.
December 17, 2013, PDR Network sent Carlton & Harris a
fax. The fax was addressed to "Practice Manager"
and its subject line announced: "FREE 2014
Physicians' Desk Reference eBook - Reserve
Now." J.A. 23. The fax invited the recipient to
"Reserve Your Free 2014 Physicians' Desk
Reference eBook" by visiting PDR Network's
website. Id. It included a contact email address and
phone number. The fax touted various benefits of the e-book,
noting that it contained the "[s]ame trusted,
FDA-approved full prescribing information . . . [n]ow in a
new, convenient digital format" and that the e-book was
"[d]eveloped to support your changing digital
workflow." Id. At the bottom of the fax, a
disclaimer provided a phone number the recipient could call
to "opt-out of delivery of clinically relevant
information about healthcare products and services from PDR
via fax." Id. Finally, the fax advised that
Carlton & Harris had received the offer "because you
are a member of the PDR Network." Id.
& Harris sued PDR Network in the Southern District of
West Virginia, asserting a claim under the TCPA. The TCPA, as
amended by the Junk Fax Prevention Act of 2005, Pub. L. No.
109-21, 119 Stat. 359, generally prohibits the use of a fax
machine to send "unsolicited advertisement[s]." 47
U.S.C. § 227(b)(1)(C). It creates a private cause of
action that permits the recipient of an unsolicited fax
advertisement to seek damages from the sender and recover
actual monetary loss or $500 in statutory damages for each
violation. 47 U.S.C. § 227(b)(3). If a court finds that
the sender "willfully or knowingly violated" the
TCPA, damages may be trebled. Id. Carlton &
Harris seeks to represent a class of similarly situated
recipients of unsolicited faxes offering free copies of the
Physicians' Desk Reference e-book.
Network moved to dismiss the complaint under Rule 12(b)(6)
for failure to state a claim. It argued that the fax offering
the free e-book could not be considered an unsolicited
advertisement as a matter of law because it did not offer
anything for sale. In response, Carlton & Harris pointed
to a 2006 FCC Rule interpreting the term "unsolicited
advertisement." Pursuant to its statutory authority to
"prescribe regulations to implement the
requirements" of the TCPA, see 47 U.S.C. §
227(b)(2), the FCC promulgated a rule providing that
"facsimile messages that promote goods or services even
at no cost . . . are unsolicited advertisements under the
TCPA's definition." See Rules and
Regulations Implementing the Tel. Consumer Prot. Act of 1991;
Junk Fax Prevention Act of 2005, 71 Fed. Reg. 25, 967, 25,
973 (May 3, 2006) (the "2006 FCC Rule"). Carlton
& Harris argued that the fax it received was an
unsolicited advertisement as defined in the 2006 FCC Rule
because it promoted a good at no cost. Moreover, Carlton
& Harris argued that the district court was obligated to
follow the 2006 FCC Rule pursuant to the Hobbs Act.
district court disagreed. The court held that the Hobbs Act
did not compel the court to defer to "the FCC's
interpretation of an unambiguous statute." Carlton
& Harris Chiropractic, Inc. v. PDR Network, LLC, No.
3:15-14887, 2016 WL 5799301, at *4 (S.D. W.Va. Sept. 30,
2016). The district court considered the TCPA's own
definition of "unsolicited advertisement"
"clear and easy to apply, " and thus held that it
was not required to follow the 2006 FCC Rule and
"decline[d] to defer" to it. Id. (citing
Chevron U.S.A., Inc. v. Nat. Res. Def. Council,
Inc., 467 U.S. 837, 843 (1984)). The district court
further held that even under the 2006 FCC Rule, PDR
Network's fax was still not an advertisement because the
rule requires an advertisement to have a "commercial
aim, " and no such aim existed here. Id.
Accordingly, the district court concluded that Carlton &
Harris had not stated a valid claim under the TCPA and
granted PDR Network's motion to dismiss. Id.
This appeal followed.
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.
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; 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.
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.
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).
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 (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.
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
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., 397 F.3d 360
(6th Cir. 2012)).
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 ...