Executive Summary
On June 20, 2025, the United States Supreme Court, in McLaughlin Chiropractic Associates, Inc. v. McKesson Corp., held that district courts in civil enforcement proceedings are not bound by an agency's interpretation of a federal law, even if a statute like the Hobbs Act grants "exclusive jurisdiction" to courts of appeals for pre-enforcement review of agency orders. Instead, district courts must independently determine the law's meaning under ordinary principles of statutory interpretation, while affording "appropriate respect" to the agency's interpretation.
This decision significantly expands the scope of judicial review of certain federal agency actions, and limits federal court deference to agencies consistent with Loper Bright Enterprises v. Raimondo.
Background
The Telephone Consumer Protection Act (TCPA) prohibits unsolicited fax advertisements to "telephone facsimile machines" without an opt-out notice and provides a private right of action with statutory minimum damages of $500 per violation.
McLaughlin Chiropractic Associates sued McKesson Corporation for violating the TCPA by sending unsolicited faxes without opt-out notices. McLaughlin sought to represent a class of recipients, including those who received faxes on traditional machines and through online fax services. The District Court certified a class of fax recipients that included both "traditional" and online fax recipients.
While McLaughlin's suit was pending, the Federal Communications Commission (FCC) issued a declaratory ruling (the Amerifactors order) interpreting "telephone facsimile machine" in the TCPA to exclude online fax services.
The District Court, following Ninth Circuit precedent interpreting the pre-enforcement review provisions of the Hobbs Act, concluded that it had no authority to review the Amerifactors order- "a final, binding order" - and granted summary judgment to McKesson regarding online fax claims, decertifying a large portion of the class. This left McLaughlin with claims for only 12 faxes and $6,000 in damages. The Ninth Circuit affirmed this decision, concluding the District Court was "bound" by the Amerifactors order.
The Supreme Court granted certiorari to resolve whether the pre-enforcement review provisions of the Hobbs Act required the District Court to follow the FCC's legal interpretation of the TCPA.
Analysis
The Opinion authored by Justice Kavanaugh concluded that district courts are not bound by agency interpretations in enforcement proceedings: "The Hobbs Act does not preclude district courts in enforcement proceedings from independently assessing whether an agency's interpretation of the relevant statute is correct."
The Independent Judicial Review Authority of District Courts
Justice Kavanaugh began by analyzing the three categories of statutes that authorize pre-enforcement judicial review of agency rules and orders. The Hobbs Act is part of a category of statutes that provide for pre-enforcement review but are silent on whether a party may contest the agency's legal interpretation in later enforcement proceedings.
(The other two categories are 1) statutes that authorize pre-enforcement review and expressly prevent judicial review in later enforcement proceedings, and 2) statutes that authorize pre-enforcement review and expressly authorize (or contemplate) judicial review in later enforcement proceedings.).
For the statutes in the category including the Hobbs Act, the Opinion establishes the "default rule" of allowing independent judicial review in enforcement proceedings: "[i]n an enforcement proceeding, a district court must independently determine for itself whether the agency's interpretation of a statute is correct." This default rule is rooted in the "basic presumption of judicial review" of agency action, which generally means that "unless there is persuasive reason to believe that Congress intended to preclude judicial review, this Court will not preclude review."
Independent Judicial Review Does Not Violate the Hobbs Act
The default rule established by the Opinion does not conflict with the Hobbs Act's grant of exclusive jurisdiction over declaratory judgments. The Hobbs Act grants courts of appeals "exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of... all final orders of the Federal Communication[s] Commission." Accordingly, "a court of appeals determines the validity of the agency order by entering a declaratory judgment that declares the order valid or invalid."
By contrast, when a district court in an enforcement proceeding disagrees with an agency's interpretation, "the district court does not issue such a declaratory judgment. Rather, the district court simply determines the liability of the defendant under the correct interpretation of the statute."
What Businesses Need to Know
The decision reinforces the federal judiciary's role in interpreting statutes, even when an agency like the FCC has offered its own interpretation. Parties now have a clearer path- and more potential opportunities- to challenge agency actions and offer their views of the "correct interpretation" of a statute.
But and as highlighted by Justice Kagan's dissent, removing the "finality and certainty of the Hobbs Act system" may create compliance uncertainty and potential litigation risk for regulated companies. It is unclear what "appropriate respect" to an agency interpretation means following Loper Bright, and what if any reliance businesses can place on agency orders and decisions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
