NACo Legal Advocacy: McLaughlin Chiropractic Associates, Inc. V. McKesson Corporation

County Nexus

McLaughlin Chiropractic Associates, Inc. V. McKesson Corporation could make it more difficult for counties to challenge Federal Communications Commission (FCC) orders, many of which have taken steps to preempt and curtail local authority by limiting counties’ abilities to manage their own right of way and assess fair market value permitting and impact fees on providers seeking to construct, modify or extend telecommunications infrastructure in their communities. 

Background

The central question in McLaughlin v. McKesson is does the Hobbs Act require the district court in this case to accept the Federal Communications Commission’s (FCC) legal interpretation of the Telephone Consumer Protection Act (TCPA). Under the TCPA, Congress made it illegal to use a fax machine, computer or other device to send an unsolicited advertisement to a fax machine. The respondent in this case, McKesson, sent a promotional online fax campaign to small medical practices, including the petition, McLaughlin, who then sued McKesson under the TCPA. 

Years into proceedings, the FCC issued an order interpreting the TCPA to exclude “online fax services” from the definition of “telephone facsimile machine.” The district court ultimately held that it was bound by a Ninth Circuit precedent to treat the FCC order as authoritative and binding according to the Hobbs Act. The Hobbs Act provides circuit courts “exclusive jurisdiction” to “enjoin, set aside, suspend (in whole or in part), or to determine the validity of” certain agency orders (28 U.S.C. § 2342). Because of this jurisdiction, parties that want to challenge final rules must do so within 60 days in the appropriate federal court of appeals. The Hobbs Act requirement that challenges to orders must be brought within 60 days of finalization makes it extremely difficult for local governments to oppose these orders. The Court will consider whether or not the Hobbs Act strips district courts of their ability to reconsider the validity of an agency’s interpretation of certain statutes.

NACo Advocacy

In a Local Government Legal Center amicus brief filed in support of the petitioner, NACo argued that neither the text nor the purpose of the Hobbs Act requires district courts to defer to agency rulings and that such an interpretation raises serious constitutional concerns. NACo asks that the Court reverse the previous decision and ensure that local governments are afforded the ability to challenge agency interpretations of congressional mandates. 

Current Status

On June 20, in a 6-3 decision authored by Justice Kavanaugh, the Supreme Court found that the district court was not bound by the FCC’s decision and that the Hobbs Act does not preclude district courts from independently determining whether an agency’s interpretation is correct during enforcement proceedings. The decision finds that while it is correct that under the Hobbs Act entities have only 60 days to launch a pre-enforcement challenge to agency orders in the appropriate federal Circuit Court, these limitations only apply in cases where Congress has expressly precluded judicial review in a subsequent enforcement proceeding. This is a major win for county government’s ability to challenge FCC orders and the position that was argued for by the LGLC.