20 F.4th 87
2d Cir.2021Background:
- The Telephone Consumer Protection Act (TCPA) bans unsolicited fax advertisements; the Junk Fax Prevention Act added a narrow exception and opt-out requirements for certain unsolicited faxes.
- In 2006 the FCC adopted the Solicited Fax Rule requiring the same opt-out notice on solicited faxes as on unsolicited faxes, provoking extensive litigation and class claims for statutory damages.
- The FCC reaffirmed the Rule in a 2014 Order; multiple facial Hobbs Act challenges to that Order were consolidated in the D.C. Circuit under 28 U.S.C. § 2112(a)(3).
- The D.C. Circuit in Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078 (D.C. Cir. 2017), held the Solicited Fax Rule unlawful and vacated the 2014 Order; the FCC thereafter removed the Rule from the CFR in a 2020 Repeal Order citing Bais Yaakov as binding.
- Gorss petitioned the Second Circuit, arguing Bais Yaakov binds only the D.C. Circuit and that the FCC could have declined to acquiesce; the Second Circuit denied review, holding the D.C. Circuit vacatur binds and the FCC acted properly in repealing the Rule.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bais Yaakov is binding on other circuits and the FCC | Bais Yaakov governs only the 2014 Order and is not binding outside the D.C. Circuit | Hobbs Act consolidation made the D.C. Circuit the sole forum for facial challenges; its vacatur is binding nationwide for the Rule's validity | The D.C. Circuit's vacatur of the Rule (via Bais Yaakov) is binding in effect on other circuits when assessing the facial validity of the Rule |
| Whether the FCC erred by repealing the Solicited Fax Rule from the CFR | FCC had discretion to retain the Rule and could nonacquiesce to an out-of-circuit decision | Once Bais Yaakov became final the Solicited Fax Rule could no longer be viewed as lawful; repeal was ministerial and required | FCC did not err; repeal was proper because the Rule was invalidated by the Hobbs Act proceeding |
| Whether the agency may pursue nonacquiescence after a Hobbs Act vacatur | FCC could maintain a national policy and refuse to acquiesce despite an adverse circuit ruling | Hobbs Act § 2112 consolidation channels all facial challenges to one court, so a consolidating court's vacatur precludes agency nonacquiescence | Nonacquiescence is not available where the consolidating court has vacated a rule in a Hobbs Act proceeding |
| Scope and limits of the ruling (intercircuit stare decisis concerns) | Treating an out-of-circuit vacatur as universally binding improperly creates intercircuit stare decisis and exceeds precedent norms | The holding is limited: when a Hobbs Act court invalidates a rule on a facial challenge, that judgment resolves the facial validity nationwide for subsequent challenges | Court confines its holding to the Hobbs Act context: binding effect flows from the consolidation mechanism and the vacatur, not a new general rule of intercircuit stare decisis |
Key Cases Cited
- Bais Yaakov of Spring Valley v. Fed. Commc’ns Comm’n, 852 F.3d 1078 (D.C. Cir. 2017) (vacating 2014 FCC order and holding Solicited Fax Rule unlawful)
- PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (2019) (discussing Hobbs Act review and scope of pre-enforcement review)
- King v. Time Warner Cable Inc., 894 F.3d 473 (2d Cir. 2018) (describing § 2112 consolidation as creating a sole forum for pre-enforcement challenges)
- Sandusky Wellness Ctr., LLC v. ASD Specialty Healthcare, Inc., 863 F.3d 460 (6th Cir. 2017) (discussing TCPA damages exposure from mass faxing)
- True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923 (9th Cir. 2018) (treating Bais Yaakov as invalidating the Solicited Fax Rule)
- Zen Magnets, LLC v. Consumer Prod. Safety Comm’n, 841 F.3d 1141 (10th Cir. 2016) (illustrating a Hobbs Act–analog consolidation and agency repeal following vacatur)