In a 6-3 decision, the Supreme Court heldthat the Hobbs Act, which grants federal courts of appeals exclusive jurisdiction to review agency orders, does not prevent district courts from independently evaluating an agency's interpretation of the law in civil enforcement proceedings. Justice Kavanaugh authored the majority opinion. Justice Kagan dissented, joined by Justices Sotomayor and Jackson.
As summarized in Dykema's February 2025 issue, McLaughlin Chiropractic Associates v. McKesson Corporation presented the question of whether district courts are bound by the Federal Communications Commission's (FCC) interpretation of the Telephone Consumer Protection Act (TCPA). The case arose after McLaughlin sued McKesson, a healthcare company, for allegedly sending unsolicited fax advertisements in violation of the TCPA. During the litigation, the FCC issued an order concluding that the TCPA did not apply to online fax services—a determination that, if binding on courts, would significantly weaken McLaughlin's claim.
Adhering to Ninth Circuit precedent, the district court deferred to the FCC's interpretation and awarded McLaughlin only $6,000 in damages. The Ninth Circuit affirmed. The Supreme Court granted certiorari to resolve whether the FCC's statutory interpretation was binding on district courts under the Hobbs Act.
The Court's Analysis
The Court categorized statutes authorizing judicial review of agency action into three types:
- Statutes that expressly preclude judicial review during enforcement proceedings.
- Statutes that explicitly permit review in both pre-enforcement and enforcement contexts.
- Statutes that allow pre-enforcement review but are silent on enforcement proceedings—like the Hobbs Act.
Relying on its recent decision in Loper Bright Enterprises v. Raimondo, the Court held that under the third category, district courts must independently interpret the relevant statute in enforcement proceedings. While agency interpretations may still be entitled to "respect," they are not binding on courts, which must apply traditional tools of statutory construction.
The Court emphasized that its holding merely establishes a default rule. Congress remains free to adopt explicit statutory language that prohibits district court review in future legislation. The majority further clarified that courts of appeals retain exclusive jurisdiction to determine the validity of agency orders through declaratory actions. In contrast, district courts in enforcement cases assess only whether a party violated the statute under the "correct" legal interpretation.
The Court distinguished the Hobbs Act from other statutes, such as the Emergency Price Control Act, which contain more explicit language about the scope of judicial review. Addressing concerns about inconsistent outcomes across jurisdictions, the Court dismissed fears of circuit splits, observing that such divisions are a natural consequence of a decentralized judicial system and not sufficient grounds to deny judicial review.
The Dissent
Writing for the dissent, Justice Kagan criticized the majority's statutory interpretation, arguing that it effectively rewrites the Hobbs Act. She disputed the distinction drawn between district court liability determinations and appellate review via declaratory judgment, calling it artificial.
The dissent also rejected the majority's reading of the Emergency Price Control Act as materially different, asserting that the Court's approach would compel Congress to include unnecessary "belt-and-suspenders" clauses to achieve clarity. Finally, the dissent expressed concern that the decision undermines Congress's goal of encouraging prompt pre-enforcement challenges to agency actions and might even embolden regulated parties to ignore agency guidance, knowing they can challenge it later in district court.
Takeaways
- A Post-Chevron Development: This decision adds to the Court's evolving post-Chevron framework, affirming that in enforcement actions, agency interpretations of law are no longer accorded controlling weight. Courts must interpret the statute independently, using traditional interpretive tools, while still allowing appropriate respect to the agency's view.
- Legislative Drafting Implications: Congress can override this default rule by explicitly stating that district courts may not review agency interpretations during enforcement proceedings. The ruling may prompt more precise drafting in future regulatory statutes.
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