Editor’s note: I changed the feature picture. The last one was too suggestive in my view. Try to keep things PG around here.
So AdaptHealth just made a really bad argument that just strengthened the FCC at a time that we really don’t want the FCC to be strengthened.
Going to have to give three different background stories here to make this make sense. Sigh.
First, the backstory on cell phones being residential numbers for purposes of the DNC rules. They are. Just stop arguing otherwise.
But in seriousness, the TCPA protects “residential subscribers” who list their number on the DNC list. The term “residential subscriber” sort of screams out “landline” but the FCC has long held–and the courts have long concluded–that a cell phone can be “residential” when used for that purpose. And while a handful of courts scattered across the land and the decades have suggested otherwise, the law is pretty dang clear that a cell phone is covered by the DNC rules when used for residential purposes.
So, bad argument.
Next, the backstory on the Hobbs Act.
So there is this weird little statute that basically says courts cannot question actions by the FCC taken under the Communications Act. This is basically done to prevent no-expert courts from interfering with the work of an expert agency with regards to things like broadband frequency allocations and spectrum auctions and cray technical things courts don’t know anything about. But since the TCPA is part of the Communications Act the FCC’s power is also pretty much absolute under the TCPA too
Except, maybe it isn’t.
The new Supreme Court–and the Republicans generally–don’t like the idea of independent non-political expert agencies they can’t control (the “deep state” boogey man) so it has watered down the Hobbs Act quite a bit of late. And other courts have been jumping on the “let’s just ignore the FCC” bandwagon. Which is sort of a Pandora’s box situation, but that is actually really important right now.
And that brings me to our third backstory–the FCC TCPA NPRM proceeding.
The FCC–that may or may not be all powerful when it comes to TCPA issues–is currently considering whether or not consent for TCPA purposes can be transferred or not. And although nobody listened to the Czar when I first raised this issue–because nobody likes a prophet, I suppose–it is now looking very very likely that the FCC is going to pull the plug on the entire lead generation industry by holding that consent cannot be transferred (and may even enter this ruling retroactively creating one of the biggest exposure traps in American legal history.)
Indeed, the FTC has seemingly already done it.
I have covered this thoroughly elsewhere–and I will cover it again–but for right now the point is folks REALLY do not want to be out there creating case law STRENGTHENING the FCC’s TCPA powers.
Oh, hello AdaptHealth, what’s this you say? You want to have the court challenge the FCC’s 2003 ruling that cell phones are residential lines?
Oh good. This will go well.
No it will, of course, not go well. Disaster.
So in Tessu v. AdaptHealth, LLC 2023 WL 5337121 (D. Md. Aug. 17, 2023) AH decided to argue the FCC’s 2003 ruling was wrong and not binding on the court.
The Court determined, however, that the 2003 FCC order that created the rule was, in fact, a legislative rule. This is so, in part, because “the FCC used its formal notice and comment process to enact the rules, seeking comment on the establishment of a national do-not-call list.”
The corollaries to the modern NPRM proceeding are clear enough that a court following Tessu would likewise conclude the FCC’s determination is also formal legislative rulemaking–severing one line of attack. While this fight was inevitable, you want to fight GOOD facts on a clean slate– not raise an important argument prematurely and in a BAD factual setting.
Next, AdaptHealth argued it did not have an adequate prior opportunity to seek judicial review of the 2003 ruling because the Proposed Rulemaking was insufficiently specific regarding the question of including wireless phones. That contention is unpersuasive, because the FCC specifically sought comment on “the extent to which wireless subscribers may be considered ‘residential’ for purposes of the TCPA.”
Remember when the FCC’s NPRM came out and I told everyone the FCC had “buried the lead.”
As tessu reminds everyone, all the FCC has to do is throw in a one liner. If you don’t respond to it–that’s on you.
And that’s exactly what the new NPRM does. Sure it focuses on a proposed rule related to “logically and topically” related. But that was a head fake. And all the folks that don’t practice in front of the Commission very often bit. But for a few of us we knew exactly what was going on. The REAL issue was the Public Knowledge proposal– to prevent leads from ever being sold again.
R.E.A.C.H. was all over it, of course, but virtually nobody else was.
And what are the consequences?
Tessu tells us: AdaptHealth had its chance and it failed to participate in the proceeding or appeal from it. As a result Adapthealth is banned from complaining about the FCC’s ruling: “To hold otherwise merely because the issue has arisen in private litigation would permit an end-run around the administrative review mandated by the Hobbs Act. Such an end run could result in a judicial determination of a regulation’s invalidity without participation by the agency and upon a record not developed by the agency.”
And, oh by the way, it has been suggested that only organizations that have fully commented on an NPRM have standing to file a Hobbs Act challenge–I disagree, but there is law to that effect. That means everyone who didn’t comment (like I urged everybody to) might be frozen out of all future legal challenges to the FCC’s NPRM.
So all the companies joining the R.E.A.C.H. comment have standing to challenge on appeal–there is a reason these folks signed on in their own name–everybody else, maybe not.
In any event, the point here is clear– everybody needs to keep the big picture in mind right now.
I created TCPAWorld.com to keep folks informed and to prevent self-inflicted wounds by the defense bar. Well…here we go again.
Nobody should be bringing bad Hobbs Act challenges right now. Let the Appellate Courts and all the new FedSoc judges chip away. Pick GOOD cases for a challenge. Don’t just lob up dead on arrival nonsense that is easy to bat away.
Need to keep the powder dry for the big battle up ahead.
Those few of us who have standing to fight it anyway…
Not too late to join R.E.A.C.H. ahead of the ruling and perhaps back into this thing…
See you soon Convoso roadshow folks.