Editor's Note: This article is published by insideARM with permission from the author, G. David Carter of Innovista Law PLLC. The firm's blog, TCPA Defense Force, can be read here.
This week, Judge Brett M. Kavanaugh of the United State Circuit Court of Appeals for the D.C. Circuit will appear before the Senate Judiciary Committee to testify during confirmation hearings for his nomination to become an Associate Justice of the United States Supreme Court. Kavanaugh was nominated by President Trump on July 9, 2018, to fill the seat of the long-serving Justice Anthony Kennedy, who officially retired on July 31, 2018.
As we prepare for what may be a contentious election-year confirmation process, I explore what Judge Kavanugh’s elevation to the high court could mean for the future of the Telephone Consumer Protection Act (TCPA). Based on his many years of service on the D.C. Circuit – the federal appellate court that handles the largest volume of appeals involving issues of federal agency decision making – as well as his speeches and writings, a road map emerges that suggests Justice Kavanaugh may profoundly impact how agencies, such as the FCC, do their work. As a result, this course correction may make it easier for businesses to comply with the TCPA, helping to reduce risk for those companies that strive to comply with the law.
Judge Kavanaugh Knows the Serious Risks of the TCPA
Judge Kavanaugh is already acquainted with the TCPA. In 2017, he authored the D.C. Circuit’s opinion in Bais Yaakov of Spring Valley v. FCC, 852 F.3d 1078 (D.C. Cir. 2017). Bais Yaakov presented a challenge to certain FCC rules implementing the Junk Fax Prevention Act of 2005, an amendment to the TCPA that amended the TCPA’s rules governing faxes, including requiring opt-out notices in those limited instances in which unsolicited fax advertisements are permitted. The petitioners challenged a 2006 FCC regulation that required “solicited fax advertisements” – those faxes sent with the permission of the recipient – to include an opt-out notice on the fax, arguing that this requirement was not included in the text of the statute adopted by Congress and, therefore, was a decision that exceeded the FCC’s authority.
In his opinion for the court, Judge Kavanaugh took notice of the fact that the TCPA “supplies a private right of action” and provides for “stiff penalt[ies] for violating the FCC’s regulations” of “at least $500 for each violation,” which can “add up quickly.” In striking down the FCC’s regulation, Judge Kavanugh rejected the assertion that the FCC has full authority to act in the area of telecommunications unless Congress has expressly prohibited the action in question. According to Judge Kavanaugh, “[t]hat theory has it backwards as a matter of basic separation of powers and administrative law. The FCC may only take action that Congress has authorized.” Thus, because Congress had not authorized the FCC to require opt-out language on solicited faxes, Judge Kavanaugh concluded that the regulation exceeded the scope of the FCC’s authority.
Judge Kavanaugh’s Approach to Regulatory Authority in Bais Yaakov Demonstrates His Philosophy of Limited Agency Power
Judge Kavanaugh’s decision in Bais Yaakov was, by no means, a foregone conclusion. Many courts have upheld FCC action upon the belief that Congress has given the agency broad powers within the realm of telecommunications law and that the agency does not, necessarily, need an express mandate to implement rules that seek to protect consumers. Thus, the Bais Yaakov decision provides some insight into Judge Kavanaugh’s views regarding the breadth of power and authority that federal regulatory agencies should have to make and interpret public policy. Other writings and speeches help to complete a sketch of a judge who seems inclined to limit and curtail regulatory agency power.
Indeed, we believe that Kavanaugh’s confirmation to the Supreme Court will likely open the door to the Supreme Court reconsidering, and likely overruling, a tenant of agency law that has been central for nearly seven decades. Known as Seminole Rock or Auer deference, this doctrine of agency law proscribes that, in reviewing a regulatory agency’s interpretation of its own regulations, courts should defer to the agency’s interpretation, provided the interpretation is within a “zone of reasonableness.” In other words, even if the agency’s interpretation of a regulation is not the best or most obvious interpretation, the courts will not second guess the agency on the theory that the agency is the policy expert and that judges lack the same level of specialized knowledge. The Seminole Rock doctrine dates back to 1945, and its continued vitality was reinforced in the Supreme Court’s 1997 Auer decision.
Ironically, this later decision was written by the late Justice Antonin Scalia, the leading conservative voice on the court at the time. Before his passing, however, Justice Scalia began to raise significant concerns regarding the propriety of Auer deference. For example, in Decker v. Northwest Environmental Defense Center (2013), Justice Scalia dissented, arguing that Auer deference places “the power to write a law and the power to interpret it … in the same hands” and, as such, “contravenes one of the great rules of separation of powers: He who writes a law must not adjudge its violation.” In a concurring opinion in that case, Chief Justice Roberts and Justice Alito stated that it “may be appropriate to reconsider that principle in an appropriate case,” but concluded that the case under review did not warrant an examination of the issue.
In Perez v. Mortgage Bankers Association (2015), Justice Scalia filed an opinion concurring in the judgment, but again he called on the Court to abandon the Auer doctrine. Echoing the same worries expressed in his Perez dissent, Justice Scalia asserted that Auer deference allows executive agencies to expand their “domain” by “writ[ing] substantive rules more broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by notice and comment [rulemaking].”
More recently, Justice Thomas has championed the fight to reverse Auer and Seminole Rock. In March of this year he wrote a dissent in Garco Construction v. Speer, objecting to the Court’s decision to decline review of a case that would have squarely presented the question of whether Auer and Seminole Rock should be overturned. In his dissent, Justice Thomas expressly stated that these cases “should be overruled” because the level of deference it gives to federal agencies is “constitutionally suspect,” in that it does not adhere to the principle of separation of powers. As we predicted, Justice Gorsuch – President Trump’s first pick to the Court – joined in calling for the reversal of Auer deference. Thus, four of the currently serving Justices (Alito, Gorsuch, Roberts, and Thomas) have either called directly for the reversal of Auer and Seminole Rock or have indicated a willingness to revisit the doctrine in an appropriate case.
Based on his judicial philosophy, Judge Kavanaugh would likely provide a fifth vote for revisiting the deference afforded to regulatory agencies for interpretation of their own regulations. For example, it is reported that, in a 2016 speech at George Mason University, Judge Kavanaugh predicted that Justice Scalia’s efforts to overturn Auer deference will ultimately be successful. Indeed, Kavanaugh has often stated that he is a fan of Scalia’s, and we may well see him be the decisive vote in making this prediction come true.
Kavanaugh may also be willing to reverse or restrict a second type of long-standing deference known as Chevron deference. Under the Chevron doctrine, a reviewing court must defer to an agency’s reasonable interpretation of a congressionally-adopted statute. Thus, if a statute is ambiguous, the agency is given great latitude in deciding how to interpret it, and, so long as that interpretation is reasonable, the courts must accept it, even if the interpretation is not the best or most natural reading of the statute.
While Chevron deference does not allow agencies to both adopt and interpret their own imprecise regulations, the doctrine has long been understood to give federal agencies a great deal of discretion when implementing a law adopted by Congress. In an article published in the Harvard Law Review in 2016, Judge Kavanaugh stated that certain aspects of the way in which courts approach statutory interpretation are “troubling.” According to Judge Kavanaugh, “substantive principles of interpretation – such as constitutional avoidance, use of legislative history, and Chevron – depend on an initial determination of whether text is clear or ambiguous,” but judges do not have “settled, principled, or evenhanded way[s]” of making this initial determination. As a result, he asserted, many cases are resolved by “selectively picking from a wealth of canons of construction.” In this article, Judge Kavanaugh asserted that “Chevron has been criticized for many years,” “has no basis in the Administrative Procedures Act” and “is nothing more than a judicially orchestrated shift of power from Congress to the Executive Branch.”
Kavanaugh explained why he believes Chevron produces bad results:
[I]t is important to understand how Chevron affects the Executive Branch. From my more than five years of experience at the White House, I can confidently say that Chevron encourages the Executive Branch (whichever party controls it) to be extremely aggressive in seeking to squeeze its policy goals into ill-fitting statutory authorizations and restraints. My colleague Judge Tatel has lamented that agencies in both Republican and Democratic administrations too often pursue policy at the expense of law. He makes a good point. As I see it, however, that will always happen because Presidents run for office on policy agendas and it is often difficult to get those agendas through Congress. So it is no surprise that Presidents and agencies often will do whatever they can within existing statutes. And with Chevron in the mix, that inherent aggressiveness is amped up significantly. I think some academics fail to fully grasp the reality of how this works. We must recognize how much Chevron invites an extremely aggressive executive branch philosophy of pushing the legal envelope (a philosophy that, I should note, seems present in the administrations of both political parties). After all, an executive branch decisionmaker might theorize, “If we can just convince a court that the statutory provision is ambiguous, then our interpretation of the statute should pass muster as reasonable. And we can achieve an important policy goal if our interpretation of the statute is accepted. And isn't just about every statute ambiguous in some fashion or another? Let's go for it.” Executive branch agencies often think they can take a particular action unless it is clearly forbidden.
Stated simply, we should not unduly blame the executive branch agencies for doing what our doctrine has encouraged them to do.
But when the Executive Branch chooses a weak (but defensible) interpretation of a statute, and when the courts defer, we have a situation where every relevant actor may agree that the agency's legal interpretation is not the best, yet that interpretation carries the force of law. Amazing.
Thus, based on this discussion, it is reasonable to conclude that, if confirmed as an Associate Justice, Kavanaugh will look for opportunities to reduce or eliminate the level of deference courts give to federal regulatory agencies.
Why the Auer and Chevron Doctrines Matter to the TCPA
Judge Kavanaugh’s views on the appropriate role of courts in reviewing agency action suggests that he would likely seek to reexamine the deference courts give to agencies when interpreting their own regulations. A future Justice Kavanaugh may also seek to reduce the level of deference given to agencies when they interpret and apply the laws adopted by Congress. Such an approach may have long term implications for the future of the TCPA.
Currently, given the level of deference of afforded to them, regulatory agencies are encouraged to keep their regulations vague, providing desired future flexibility in how they interpret and enforce the regulations. This creates an environment in which regulations fail to provide businesses with adequate specificity to determine whether particular conduct will be found to comply with the law. Real life examples of this phenomenon – and its consequences – can be found in the TCPA.
Consider, for example, the definition of “automatic telephone dialing system” or “ATDS”. When Congress adopted the TCPA, it defined ATDS as “equipment which has the capacity— to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” The regulations adopted by the FCC provide no additional clarity, instead simply parroting that the terms “ATDS” and “autodialer” mean “equipment which has the capacity to store or produce telephone numbers to be called using a random or sequential number generator and to dial such numbers.” Thus, by not adopting regulations with any greater specificity, the FCC has left itself unbridled discretion to decide the contours of what constitutes an ATDS now and in the future and to change its mind on this important question whenever it deems a change necessary. And, of course, the continued ambiguity deprives American businesses of certainty and harms consumers by making it more difficult for all companies to make decisions about how to run their business in a manner that appropriately balances using cost-efficient technologies without running the risks of catastrophic TCPA exposure.
In theory, as courts reduce or eliminate the level of deference given to regulatory agencies to interpret the laws of Congress or their own regulations, both Congress and executive branch agencies will work harder to adopt laws that are clear and reduce ambiguities. In turn, we could see revisions to the TCPA – either the statute or the regulations, or both – that provide businesses with greater clarity. Thus, if Judge Kavanaugh is confirmed and succeeds in reducing the level of deference courts pay to federal agencies, we may see the FCC and Congress revisit the TCPA to update the statute and its implementing regulations to ensure that its reach is clear and to ensure that the FCC has sufficient authority to govern the types of calls Congress wants to regulate.
Whether Judge Kavanaugh will ultimately succeed in his efforts to fill Justice Kennedy’s seat on the Supreme Court and, if so, whether he will be able to effectuate a fundamental change in key tenants of administrative law is yet to be seen. In the meantime, however, we can hope that the current FCC will soon resolve the critical issues that have led to a surge in TCPA litigation and left businesses without much needed guidance on the scope of the TCPA.