Opinion analysis: Court dodges question (for now) whether the Hobbs Act is ordinary or extraordinary administrative law

Yesterday the Supreme Court handed down its decision in PDR Network v. Carlton & Harris Chiropractic. The court unanimously agreed to vacate and remand the case to the U.S. Court of Appeals for the 4th Circuit. Such unanimity, however, is illusory. The separate opinions in the case underscore deep divisions among the justices as to fundamental principles of administrative law.

The question presented in PDR Network was whether the Hobbs Act strips district courts of jurisdiction to reconsider the validity of an agency’s legal interpretation of certain statutes. The Hobbs Act grants circuit courts of appeals exclusive jurisdiction to determine the validity of certain agency orders and requires an aggrieved party to seek judicial review within 60 days of such a final order’s entry.

In this case, PDR Network did not challenge the Federal Communications Commission’s 2006 legal interpretation of the Telephone Consumer Protection Act until it found itself a defendant in a private enforcement action in a federal district court. The 4th Circuit held that, per the Hobbs Act, this challenge was raised in the wrong court and more than a decade too late.

As I suggested in the argument preview, the question presented is ultimately whether the Hobbs Act is an ordinary statute that provides for pre-enforcement review of certain agency rules in the circuit courts, or an extraordinary one that also strips federal courts of jurisdiction to consider subsequent challenges to the agency’s statutory interpretation even in a private enforcement proceeding.

Justice Stephen Breyer, writing for the court, candidly confesses that it is “difficult to answer this question.” So the court dodges it and remands the case to the 4th Circuit to address two other questions, explaining that “the answer may depend upon the resolution of two preliminary issues.”

First, the court instructs the 4th Circuit to determine whether the FCC’s 2006 order is a legislative or interpretive rule under the Administrative Procedure Act. Why? Because if it’s an interpretive rule, the 2006 FCC order “may not be binding on a district court.” “We say ‘may,” Breyer emphasizes, “because we do not definitively resolve these issues here.”

Second, the court instructs the 4th Circuit to assess whether PDR Network had a “prior” and “adequate” opportunity to seek judicial review of the FCC’s 2006 order, as required by Section 703 of the APA. If not, Breyer explains, it may be that PDR Network can challenge the FCC order now — emphasis again on the “may,” as the court does not answer that question either.

But four justices — Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh — were willing and ready to answer the question presented now. Kavanaugh, writing the principal four-justice concurrence in judgment, sets forth their “straightforward” answer:

The general rule of administrative law is that in an enforcement action, a defendant may argue that an agency’s interpretation of a statute is wrong, at least unless Congress has expressly precluded the defendant from advancing such an argument. The Hobbs Act does not expressly preclude judicial review of an agency’s statutory interpretation in an enforcement action.

In this case on remand, then, “the District Court should interpret the TCPA under usual principles of statutory interpretation, affording appropriate respect to the agency’s interpretation.”

Kavanaugh could have stopped there. But he doesn’t. Instead, he provides extensive analysis so that it “remains available to the court on remand … and to other courts in the future.” In this analysis, he underscores that the ordinary course under the APA is to allow for parties to raise as-applied challenges to regulations in subsequent enforcement actions. That is due to fairness concerns of parties not having adequate notice that an agency rule could potentially affect them in the future.

“In light of that unfairness,” Kavanaugh continues, “Congress traditionally takes the extraordinary step of barring as-applied review in enforcement proceedings only in those statutory schemes where the regulated parties are likely to be well aware of any agency rules and to have both the incentive and the capacity to challenge those rules immediately.” In particular, Kavanaugh identifies certain judicial review provisions in the Comprehensive Environmental Response, Compensation, and Liability Act, the Clean Air Act and the Clean Water Act that both provide for exclusive jurisdiction for pre-enforcement review and expressly prohibit subsequent judicial review in civil or criminal enforcement proceedings.

The Hobbs Act, by contrast, is more ordinary. To be sure, it provides circuit courts with exclusive jurisdiction for pre-enforcement review, but it is silent on whether the regulation can be challenged in a subsequent enforcement proceeding. Kavanaugh concludes that “there is certainly no basis to interpret a silent statute as achieving that extraordinary close-the-courthouse-door outcome.” In so doing, Kavanaugh establishes a clear-statement rule of sorts for jurisdiction-stripping statutes. This approach seems to be one of first principles because, outside of distinguishing Yakus v. United States, he does not engage with the court’s thorny prior precedent on this point that Aditya Bamzai attempted to distinguish in his law-professor amicus brief.

Thomas, joined by Gorsuch, penned a separate concurrence in the judgement to underscore the problems with assuming, as the 4th Circuit did, that “Congress can constitutionally require federal courts to treat agency orders as controlling law, without regard to the text of the governing statute.” That assumption, Thomas continues, also underlies Chevron deference to agency statutory interpretations; “[t]his case proves the error of that assumption and emphasizes the need to reconsider it.”

The Supreme Court’s decision to dodge the question presented and remand is curious. After all, Breyer justifies the remand because the 4th Circuit “has not yet addressed the preliminary issues we have described.” Yet he does not address Carlton & Harris Chiropractic’s argument that both issues were forfeited due to PDR Network’s failure to raise them before the 4th Circuit. As noted in my argument analysis, the federal government suggested at argument that perhaps the proper course would be to dismiss the case as improvidently granted — a “DIG,” in Supreme Court parlance. That would seem like the ordinary course in a situation like this. So what gives? This law professor wonders whether a remand, as opposed to a DIG, was the price for the chief justice’s decisive vote.

Such speculation aside, it will likely only be a matter of time before the court confronts this question again. Perhaps then we’ll find out if there is a fifth vote for Kavanaugh’s treatment of the Hobbs Act as ordinary administrative law.