Junk Fax Appeal Argument Centers on Appeals Court Deference
How bound the 2nd U.S. Circuit Court of Appeals is by a 2017 D.C. Circuit decision that resulted in the FCC scrapping part of its junk fax rule (see 1811140054) was the central issue in oral argument Tuesday as petitioner Bais Yaakov of Spring Valley, New York, challenged that March agency order. Hearing the case were Judges Dennis Jacobs, Richard Sullivan and Steven Menashi.
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The 2nd Circuit decision has big implications for parallel litigation before the 1st Circuit, said petitioner lawyer Aytan Yehoshua Bellin. Oral argument in the 1st Circuit case (docket 20-1537) was Jan. 7. In that case, Bais Yaakov challenged a lower court's dismissal for lack of subject-matter jurisdiction of a suit against college testing company ACT for sending junk faxes.
Bellin told the 2nd Circuit panel that the FCC says it's bound by the D.C. Circuit decision to repeal the requirement that senders place a notice on the ads describing how the recipient can opt out and to grant retroactive waivers, but the agency isn't. He said the FCC junk fax rule was properly promulgated at the time, so the agency has no authority to retroactively repeal it. That the regulator wouldn't take such an approach in enforcement actions invalidates the commission's argument, said Bellin. He said the petitioner is "fine with" the 2nd Circuit deciding that the D.C. Circuit decision has no effect on cases in other jurisdictions.
FCC lawyer Adam Crews said accepting the petitioner's argument that the agency erred would create an intra-circuit clash with past 2nd Circuit decisions. He said the panel would split with other circuits and cause confusion by requiring the commission to restore a rule it's enjoined by the D.C. Circuit from enforcing.
Much of the oral argument was over the D.C. Circuit's exclusive jurisdiction powers under the Administrative Orders Review Act (Hobbs Act) and whether that then precludes other appellate courts from determining the rule's validity. The court pressed Crews on the difference between the Hobbs Act and Administrative Procedure Act over what court or courts handle pre-enforcement petitions to review. Crews said Hobbs has an exclusive provision that gives it unique remedies but was challenged by the court that APA has similar set-aside language.
Bellin repeatedly argued there's ample 2nd Circuit and Supreme Court precedent showing the only cases that bind courts of appeal are from SCOTUS or that particular appellate court, and the 2nd Circuit doesn't have to defer to the D.C. Circuit decision. Nothing in the Hobbs Act says the first appellate court decision is binding, he said.
At one point, the court said the FCC would seem to have a reasonable policy objective in not wanting a patchwork system of regulation with different rules for different circuit courts. Bellin said the agency can't properly retroactively repeal a rule without congressional authorization. "If they were doing it from this point forward, that would be one thing," he said. Crews said the FCC isn't arguing that the D.C. Circuit decision is binding on the 2nd Circuit, but its judgment needs to be seen as conclusively deciding the issue's validity.