Carlton & Harris Chiropractic v. PDR Network, LLC, 982 F.3d 258

Background

PDR Network sent an unsolicited fax to Carlton & Harris offering a free 2014 Physicians’ Desk Reference eBook; Carlton & Harris sued under the TCPA, which prohibits sending "unsolicited advertisement[s]" by fax.
A 2006 FCC order stated that facsimile messages that promote goods or services even at no cost are "unsolicited advertisements" under the TCPA.
The district court held it was not bound by the FCC interpretation, applied Chevron, concluded the TCPA requires a commercial purpose, and dismissed Carlton & Harris for failing to plausibly allege a commercial intent.
The Fourth Circuit initially reversed, holding the Hobbs Act required adopting the FCC interpretation; the Supreme Court granted certiorari and vacated, directing the court to decide whether the 2006 FCC Rule is legislative or interpretive and whether PDR had an adequate prior opportunity for review.
On remand the Fourth Circuit held the relevant portions of the 2006 FCC Rule are interpretive (not legislative) and therefore nonbinding, declined to apply Chevron, and remanded for the district court to assess the appropriate level of Skidmore deference and further proceedings.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2006 FCC Rule is legislative or interpretive	The FCC pronouncement should bind lower courts as an authoritative agency interpretation	The Rule is not binding; the district court may interpret the TCPA independently	The court held the 2006 FCC Rule is interpretive, not legislative, and thus nonbinding
Whether the Hobbs Act compelled the district court to adopt the FCC interpretation	Hobbs Act requires courts to follow the FCC's interpretation of the TCPA	District court can interpret the statute when no party challenges the FCC order's validity	Because the Rule is interpretive, Hobbs Act did not bind the district court; prior Fourth Circuit holding was vacated on this point
What level of deference applies to the FCC’s interpretation (Chevron vs Skidmore)	Defer to FCC interpretation (per earlier Fourth Circuit reading)	No Chevron deference for an interpretive, nonbinding rule; if any, apply Skidmore and weigh persuasiveness	Chevron is inappropriate; district court should apply Skidmore and assess the Rule’s persuasiveness on remand
Whether remand for discovery or leave to amend was required	Carlton & Harris argued leave to amend/discovery could show commercial purpose and should be allowed	PDR said discovery unnecessary and argued the dismissal was proper without further amendment	No discovery remand required; court vacated dismissal and remanded so district court can reassess deference and, if needed, consider a proper motion to amend

Key Cases Cited

Semenova v. Md. Transit Admin., 845 F.3d 564 (4th Cir. 2017) (Rule 12(b)(6) de novo review and pleading standard)
Perez v. Mortgage Bankers Ass'n, 575 U.S. 92 (2015) (distinguishing interpretive and legislative rules and notice-and-comment requirements)
Shalala v. Guernsey Mem'l Hosp., 514 U.S. 87 (1995) (interpretive rules do not have force of law)
Batterton v. Francis, 432 U.S. 416 (1977) (agency guidance not binding like legislative rules)
Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (Chevron deference framework)
Gonzales v. Oregon, 546 U.S. 243 (2006) (Chevron applies only to rules with force of law; otherwise Skidmore)
Skidmore v. Swift & Co., 323 U.S. 134 (1944) (persuasiveness factors for nonbinding agency interpretations)
United States v. Mead Corp., 533 U.S. 218 (2001) (degree of deference depends on agency action’s formality and congressional intent)
PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (2019) (Supreme Court vacated and remanded to consider whether the FCC Rule is legislative or interpretive and reviewability)
Nahigian v. Juno-Loudoun, LLC, 677 F.3d 579 (4th Cir. 2012) (interpretive guidance falls under Skidmore)
Sierra Club v. U.S. Army Corps of Eng'rs, 909 F.3d 635 (4th Cir. 2018) (Skidmore deference may be modest or none depending on persuasiveness)
New Cingular Wireless PCS, LLC v. Finley, 674 F.3d 225 (4th Cir. 2012) (Skidmore deference varies with the interpretation’s persuasive qualities)
Romero v. Barr, 937 F.3d 282 (4th Cir. 2019) (refusing deference where agency’s change conflicted with long practice)
Knox Creek Coal Corp. v. Sec'y of Labor, 811 F.3d 148 (4th Cir. 2016) (deferring under Skidmore when reasoning was thorough and consistent)
Perez v. Cuccinelli, 949 F.3d 865 (4th Cir. 2020) (agency interpretations outside Chevron receive respect commensurate with persuasiveness)