The U.S. Court of Appeals for the Fifth Circuit has affirmed a lower court decision striking down a Federal Communications Commission (“FCC”) regulation that interpreted the phrase “prior express consent” in the Telephone Consumer Protection Act (“TCPA”) to mean “written” consent, at least when it comes to so-called “telemarketing” calls.  That decision, in a case called Bradford v. Sovereign Pest Control, relied on Loper Bright’s straightforward proposition that “[c]ourts interpret statutes, no matter the context, based on the traditional tools of statutory construction,” and without deference to an agency’s reading of the law.

Background

The TCPA generally prohibits “robocalls” and “robotexts” that employ either an automatic dialing system or an artificial or prerecorded voice.  One exception to this prohibition, however, is when a “called party” gives “prior express consent.”  Relying on Congress’s broad delegation to “prescribe regulations to implement” the TCPA, the FCC interpreted this consent-based exception in two important ways that seemingly deviated from the statutory text. 

First, the FCC crafted a detailed regulatory definition that required prior consent to be “written.”     

[P]rior express written consent means an agreement, in writing, that bears the signature of the person called or texted that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called or texted advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.  Calls and texts must be logically and topically associated with the interaction that prompted the consent and the agreement must identify the telephone number to which the signatory authorizes

Second, the FCC carved out its own exception to the “written consent” rule for what it characterized as “non-telemarketing, informational calls,” or those calls made to wireless numbers “by or on behalf of a tax-exempt nonprofit organization, or . . . that deliver[] a ‘health care’ message made by, or on behalf of, a ‘covered’ entity or its ‘business associate.’”  The agency insisted on “flexibility” for this category of autodialed or recorded calls—which would include “calls for political purposes” or “other noncommercial purposes . . . such as school closings,” “debt collection, airline notification[s] . . . [and] bank account fraud alerts”—because there was allegedly public support for drawing the distinction, and commenters had expressed concern about the ability to obtain written consent for these specific kinds of communications.  

This brings us to the facts of Bradford.  The appellant, Radley Bradford, was a consumer who had entered into a service-plan agreement with Sovereign Pest, a Texas pest-control company.  As part of his contract, Mr. Bradford provided Sovereign Pest with a cell-phone number.  For years, Sovereign Pest used that number to make pre-recorded calls to Mr. Bradford, reminding him about annual inspections and the opportunity to renew his service plan.  Eventually, though, Mr. Bradford filed a class-action lawsuit against the pest-control company, alleging a violation of the TCPA.  The district court ruled against him.

Statutory Interpretation in the Loper Bright Era

The Bradford court framed its interpretative inquiry in light of Loper Bright and the Supreme Court’s decision last year in McLaughlin Chiropractic Associates, explaining that “courts must interpret the meaning of Congress’s enacted text according to ordinary principles of interpretation, without deference to an agency’s reading.”  The Circuit also emphasized that the “‘appropriate starting point when interpreting any statute is its plain meaning.’”  (Last summer, I wrote about the importance of McLaughlin and its role in understanding where statutory interpretation will go post-Loper Bright.)

Comparing the text of the TCPA with the FCC’s “written consent” rule, including its distinction between telemarketing and so-called “informational calls,” it was clear the former could not sustain the latter:

“[P]rior express consent” encompasses both oral and written consent for both telemarketing and informational calls.  When Congress enacted the TCPA, “express consent” meant consent that is “directly given, either viva voce or in writing.  It is positive, direct, unequivocal consent, requiring no inference or implication to supply its meaning.” . . .  The statute provides no basis for concluding that telemarketing calls require prior express written consent but not oral consent. . . .  Whether Sovereign Pest’s pre-recorded calls to Bradford qualif[ed] as telemarketing or informational calls, those calls required only prior express consent from Bradford.

Moreover, looking to the facts, the Circuit found little reason to doubt Mr. Bradford’s provision of consent.  He had voluntarily provided his cell-phone number when agreeing to his service-plan agreement.  He never contemporaneously objected to the calls he received and instead used those calls as opportunities for scheduling annual inspections and renewing his contract with Sovereign Pest.  And there could be no ground for casting his consent as somehow merely implicit, as opposed to express.

What Comes Next?

The Fifth Circuit’s decision in Bradford is yet another example of how statutory interpretation in the administrative-law context is working with Chevron deference gone.  Judges are again focused on the objective application of interpretative canons that focus on original public meaning and common-sense readings of the law.  Agencies like the FCC can longer garner special solicitude when courts evaluate the validity of their regulations.  As I explained several months ago, this means “[f]ederal agencies are now more firmly subject to the rule of law.  They must operate within clear bounds, and courts must ensure those bounds are respected.”

Americans for Prosperity Foundation applauds the Trump EPA’s decision to repeal the agency’s 2009 Endangerment Finding—a document the agency has used as a springboard to claim sweeping power under the Clean Air Act to unilaterally set national transportation and energy policy by administrative edict without Congress’s permission. The Endangerment Finding has underpinned a host of burdensome and expensive EPA regulations impacting the entire national economy and the daily lives of Americans, including the price we pay for basic consumer goods. By repealing it, President Trump, Administrator Zeldin, and EPA have taken yet another bold step to unleash prosperity, restore American energy dominance, and lower costs. As the Washington Post Editorial Board said, supporting the decision, “It’s about time.” This historic deregulatory action will make buying a new car more affordable and save over a trillion dollars in costs.

But even more fundamentally, the repeal is a win for constitutionally limited government, democratic accountability, and the rule of law. As AFPF argued in a comment supporting EPA’s proposal without taking a position on any scientific or technical issues: “EPA has used its standalone 2009 Endangerment Finding to arrogate to itself unilateral power to set national policy on a global issue—power that properly belongs to Congress alone.” The Trump EPA—unlike its predecessor—recognizes that the Finding “exceeded the agency’s authority” because the power to decide whether and, if so, how to regulate “lies solely with Congress.” That is a big deal.

The era of “trust us, we’re the agency” is over

The Supreme Court’s landmark decision in Loper Bright Enterprises v. Raimondo overruling Chevron deference played an important role in EPA’s decision. Loper Bright is cited twenty-five times in the final rule. There, EPA explains that “[a]s the Supreme Court made clear in Loper Bright,” EPA “can no longer rely on statutory silence or ambiguity to expand [the agency’s] regulatory power.” Instead, as EPA recognizes, quoting Loper Bright, “‘the scope of an agency’s own power’ is determined not by deference to asserted expertise, but by ‘the best reading of the statute,’ which is fixed at the time of enactment.” The agency concluded “the best reading” of its statutory authority under the CAA, “as informed by Loper Bright and principles of statutory interpretation, does not authorize the EPA to assert jurisdiction” to regulate “in a standalone endangerment finding.”

There is also a deeper story here. Loper Bright is not just changing outcomes; it is changing how regulations are written, justified, and defended. EPA’s Endangerment Finding repeal shows what it means to recast regulation for a post-Chevron world and is a prime example of an agency taking its duty to ascertain and respect statutory limits on its authority seriously, instead of reimagining the laws Congress passed as the agency wishes them to be. The era of “trust us, we’re the agency” is over.

It’s up to Congress to Decide

Applying the major questions doctrine—which requires Congress to clearly, not just plausibly, authorize agencies to make important policy choices—EPA independently found that it lacked legal authority to regulate for a second reason: “the Nation’s potential response to global climate change concerns is an issue that has significant economic and policy impacts, including to Americans’ basic way of life, that Congress did not clearly authorize the EPA to decide” and is therefore “a question for Congress to decide in the first instance.” In other words, the issue is of such consequence that the very question of whether to regulate—as opposed to how to regulate—should presumptively be up to Congress to decide, at least absent clear congressional authorization and subject to constitutional limits. Administrator Zeldin recently echoed this sentiment in common-sense terms, explaining the “best reading of the law” and Supreme Court precedent “makes it clear that if you’re going to regulate the heck out of greenhouse gas emissions with trillions of dollars of regulatory costs on Americans, that’s something that Congress should have a debate and a vote on.” Exactly so.

In sum, by repealing the Finding, the EPA disclaims power it has never legitimately possessed and puts it back where it belongs under our system of checks and balances: the halls of Congress. The Constitution promises that highly consequential policy choices, and the tradeoffs involved, must be made by the People’s elected representatives—not unelected bureaucrats acting alone. Whatever one thinks about the wisdom of EPA’s climate regulations, it’s up to Congress to decide whether and, if so, how to address global issues through the deliberately difficult legislative process. That is how is as it should be. And we should all celebrate the Trump EPA’s decision to respect bedrock limitations on the Executive Branch’s power by repealing the Finding.

Read AFPF’s full comment here.

An interesting question after Loper Bright is how the demise of Chevron deference intersects with other deference doctrines that are still on the books, albeit perhaps on life support, such as Auer deference (which allows courts to defer to agency interpretations of their own regulations) and Stinson deference (which teaches that courts should defer to Sentencing Commission commentary on federal sentencing guidelines). 

In Niblock v. University of Kentucky, a recent Sixth Circuit decision addressing a challenge to the adequacy of the University’s sports programs under Title IX, Chief Judge Sutton, joined by Judge Murphy, authored a thoughtful concurring opinion highlighting this broader Loper Bright implementation question. The Sixth Circuit resolved this case on narrower grounds, declining to address the University’s argument that the Department of Education’s Title IX “guidance does not survive” Loper Bright and Kisor because the plaintiffs’ claims failed for other reasons. Nonetheless, the opinion—also authored by Chief Judge Sutton—noted “the many developments in administrative law since 1979” when the guidance was first issued, noting that the Sixth Circuit “has not looked at the validity of the guidance since Loper Bright and Kisor.” 

The concurrence expressed skepticism about the guidance’s validity, notwithstanding prior circuit law upholding it. This guidance was “adopted the guidance in a different world . . .  where courts routinely deferred to agency interpretations of statutes and regulations,” Judge Sutton observed, “[b]ut a lot has changed since 1979.” Citing Loper Bright, he explained that courts “no longer defer to agency interpretations of the statutes they administer” but instead “now treat all laws alike, ‘independently interpret[ing] the statute and effectuat[ing] the will of Congress subject to constitutional limits,’ without abdicating that responsibility to executive agencies.” Citing Kisor, he noted that courts “no longer lightly defer to agency interpretations of their own regulations” under Auer and thus this doctrine plays far less of a role today in statutory interpretation. 

Tying this together, Judge Sutton’s concurrence continues: 

The fate of these erstwhile deference-to-agency regimes remains linked. One reason that an agency’s interpretations of its own rules received deference under Auer was that its views of the relevant statute also received deference under Chevron. Knock out Chevron, and the scope of Auer deference narrows considerably, if indeed it remains meaningful at all. Loper Bright and Kisor should prompt us to revisit the 1979 guidance in an appropriate case. 

This point is important, underscoring Loper Bright’s broader potential significance in realigning the relationship between federal courts and the executive branch. It may well be that Loper Bright’s reaffirmation of Article III courts’ obligation to independently interpret statutes in cases involving agencies has fatally undermined the theoretical underpinnings of whatever remained of Auer deference after Kisor—and the continuing vitality of other sundry deference doctrines. And it will be interesting to see whether the Supreme Court will build on Loper Bright by squarely overruling Auer in a future decision and fully restoring Article III’s promise of judicial independence in saying what the law is.  

SCOTUS Relist

Dovetailing with Judge Sutton’s observations in Niblock on the relationship between the defunct Chevron doctrine and whatever remains of Auer, the future of Stinson deference is also in flux in the wake of Loper Bright’s overruling of Chevron. And it just so happens that the Court has before it an ideal opportunity to clarify how its decisions in Loper Bright and Kisor impact other deference doctrines. As Recasting Regulations has previously written about here and here, a now-thrice-relisted cert petition raises a related question in Poore v. United States, asking the Court to address “[w]hether the limits on agency deference announced in Kisor and Loper Bright constrain the deference courts may accord the Sentencing Commission’s interpretation of its own rules via commentary.” If the Court agrees to decide this case on the merits, it will provide an important opportunity to elucidate the broader meaning and significance of Loper Bright.  

Tomorrow, the Supreme Court will consider for the first time two cert petitions at its conference presenting Loper Bright-related questions. A third, more tangentially Loper Bright-related petition will return as a relist.

United National Foods is Back

The petition in United National Foods, Inc. v. NLRB raises at least two Loper Bright implementation questions:

Whether Loper Bright Enterprises v. Raimondo . . .  permits a court to (a) accept an agency’s reasonable construction of a statute without exhausting all relevant tools to find the single, best meaning or (b) give precedential weight to decisions affording deference under Chevron . . . when the court evaluates different agency action.

By way of background, this case returns to the Court for a second time after United National Foods’s original cert petition was GVR’d in light of Loper Bright.  In an earlier decision, a divided Fifth Circuit panel relied on Chevron deference to uphold the authority of the NLRB’s General Counsel to unilaterally dismiss an administrative complaint after a party has filed for summary judgment, concluding the National Labor Relations Act was ambiguous on that point. On remand from the Supreme Court the same divided panel ruled once more in favor of the agency. Judge Oldham again dissented, suggesting “‘further consideration’ was an empty formality. . . .  Same reasoning, same result, different day.”  In his view, “that result conflict[s] with Loper Bright and the Supreme Court’s GVR order[.]” Should the Court grant cert, it will also have the opportunity to clarify that Loper Bright applies with full force to the NLRB’s interpretation of the NLRA, putting that arguably open question to rest.

Poore Over This Sentencing Commission Case

The petition in Poore v. United States likewise raises an important question about the applicability of the principles announced in Loper Bright:  Whether the limits on agency deference announced in Kisor v. Wilkie and Loper Bright constrain the deference courts may accord the Sentencing Commission’s interpretation of its own rules via commentary. The New Civil Liberties Alliance filed an amicus brief in support of Mr. Poore’s petition, underscoring the importance of the question. Recasting Regulations previously covered the Poore petition in greater detail here.

Loper Relist Watch

The Court has also relisted the petition in Tennessee v. Kennedy. Although the questions presented do not directly implicate Loper Bright, the decision below does insofar as it addresses the broader question of the scope of statutory stare decisis that applies to Chevron-era precedent after Loper Bright. That is, the decision below raises the question whether statutory stare decisis travels with the specific agency action at issue or with the agency’s interpretation of the statute. Recasting Regulations has covered this case in greater detail here.

Mr. Pepson is regulatory counsel at Americans for Prosperity Foundation.

Earlier this month, a group of Republican U.S. Senators, led by Ted Cruz (Texas) and Mike Lee (Utah), sent a letter to the Environmental Protection Agency (“EPA”) discouraging the agency from moving forward with a proposal to reallocate exempted renewable volume obligations pursuant to the agency’s Renewal Fuel Standard program. Loper Bright figured prominently in the coalition letter and, specifically, the legislators’ argument that Congress’s failure to authorize such reallocation by statute deprived the EPA of authority to do so in the face of statutory silence.