Bais Yaakov of Spring Valley v. Federal Communications Commission, 852 F.3d 1078

Background

The Junk Fax Prevention Act (amending the Telephone Consumer Protection Act) bans sending unsolicited fax advertisements and defines “unsolicited” as material sent without the recipient’s prior express invitation or permission.
The Act creates an exception allowing some unsolicited faxes where the sender has an established business relationship and the fax includes a clear, first-page opt-out notice with a cost-free mechanism.
Congress authorized the FCC to promulgate implementing regulations; violations carry statutory damages ($500+ per fax) and a private right of action.
In 2006 the FCC adopted a Solicited Fax Rule requiring opt-out notices on all fax advertisements, including solicited faxes sent with prior express permission.
Anda (a drug distributor) and other businesses challenged the FCC’s interpretation after class litigation threatened large damages for allegedly noncompliant solicited faxes; the FCC reaffirmed the rule and granted a limited waiver for pre-2015 faxes.
The D.C. Circuit majority vacated the FCC order to the extent it required opt-out notices on solicited faxes, holding the FCC exceeded statutory authority; Judge Pillard dissented, arguing the rule reasonably implements Congress’s ban on unsolicited faxes.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §227(b) authorizes FCC to require opt-out notices on solicited fax ads (those sent with prior express permission)	Anda: The statute’s opt-out requirement applies only to unsolicited faxes; Congress did not authorize FCC to impose that requirement on solicited faxes.	FCC: Implementing the ban on unsolicited faxes requires an opt-out mechanism on all faxes so recipients can revoke permission; statutory silence about duration of permission permits this rule.	Held for Anda in part: FCC exceeded its statutory authority; Solicited Fax Rule unlawful insofar as it mandates opt-out notices on solicited faxes.
Whether the FCC may treat prior express permission as revocable and require clear means to revoke it	Anda: Revocability may be recognized, but that does not imply Congress authorized opt-out notice requirements on solicited faxes.	FCC: Permission must be revocable; agency reasonably defined permission as revocable by opt-out and may require a revocation mechanism.	Court: FCC may define permission as revocable and may adopt revocation procedures, but cannot impose the statutory opt-out notice requirement on otherwise solicited faxes absent congressional authorization.
Whether Chevron deference supports FCC’s broader reading of its rulemaking authority	Anda: Chevron does not authorize the agency to rewrite statutory text to regulate solicited faxes when Congress expressly distinguished solicited vs unsolicited.	FCC: Its interpretation is reasonable implementation of §227 and entitled to deference under Chevron.	Court: Applied Chevron but found the statute’s text draws a clear line; FCC’s extension is beyond authority, so deference does not save the rule.
(Dissent) Whether the FCC’s retroactive waiver of the rule for pre-2015 faxes was justified	—	FCC: Waiver addressed industry confusion and avoided unduly harsh retroactive exposure.	Majority: Did not reach waiver (moot as to some petitions); dissent would have held waiver lacked adequate justification and was overbroad.

Key Cases Cited

Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (principle of judicial deference to reasonable agency interpretations)
Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (agencies may act only within congressional authorization)
American Library Ass'n v. FCC, 406 F.3d 689 (limits on agency authority)
Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164 (statutory interpretation controls over policy views)
WAIT Radio v. FCC, 418 F.2d 1158 (standards for agency waivers of its rules)
Northeast Cellular Tel. Co., L.P. v. FCC, 897 F.2d 1164 (FCC waiver authority)
NetworkIP, LLC v. FCC, 548 F.3d 116 (agency must adhere to waiver standards)
United Steelworkers of Am. v. NLRB, 389 F.2d 295 (text of agency decision controls over conflicting explanatory material)
Nat'l Ass'n of Mfrs. v. SEC, 748 F.3d 359 (limits on relying on expressio unius in administrative settings)
Physicians Healthsource, Inc. v. Stryker Sales Corp., 65 F. Supp. 3d 482 (practical problems distinguishing solicited vs unsolicited faxes)