Parts of USF Challenge Live On but FCC Seeks Finality

The court’s decision “was a very heartening and pleasing win for the commission,” Lewis said. “It upheld a very important program that the commission has administered for a long time.” The FCC was hoping the ruling would mean the fight was over, “all of it,” he said. But the decision included a footnote where the court, “as a matter of detail,” said several provisions in Section 254 of the Communications Act weren't challenged, he said. “The court expressed no opinion about whether those posed any additional problem.”

“Unfortunately,” Consumers’ Research is “an indefatigable petitioner” and has already asked the 5th Circuit on remand to address whether those provisions, “which allow the commission to provide for additional services for schools, libraries and rural health,” pose “a constitutional problem,” Lewis said. The FCC believes that argument was waived in the case before SCOTUS, he said. “Maybe it can be raised in a future case, but that’s still to be fought out.”

Those questions mean Consumers’ Research was a 99%, rather than a 100%, win for the FCC, Lewis said. “Hopefully the last percent will go away as developments proceed.”

Wilkinson Barker’s Jennifer Tatel, who also spoke during the webinar, agreed the decision wasn’t a 100% FCC and industry victory. The footnote left open the constitutionality of the Communications Act provisions and the dissent “really invited” further argument, she said. “The case has never been about whether particular provisions of 254 are, standing alone, constitutional or not,” she said. The logic of the broader decision would appear to apply “equally to 254 across the board.”

Hobbs Act Uncertainty

Lewis also noted the importance of McLaughlin Chiropractic Associates v. McKesson, SCOTUS’ June decision in a key Telephone Consumer Protection Act case, which is widely viewed as meaning reduced certainty for FCC actions and those of other federal agencies under the Hobbs Act (see 2506200053).

“This is a to-be-continued case,” Lewis added. The FCC can no longer view a ruling as final once it’s decided in a court of appeals, he said. “How much it’s no longer the case remains to be seen. … It poses some interesting problems for FCC decisions and finality."

SCOTUS found "the Hobbs Act provides for pre-enforcement review, before the FCC or private parties go after someone under the TCPA,” Lewis said. “It doesn’t preclude district courts in enforcement proceedings, including private disputes, … from independently assessing whether an agency’s interpretation is correct or whether the agency’s order was unlawful.”

For the most part, SCOTUS is allowing one set of parties to litigate pre-enforcement at the commission and another to raise the issue again in district court, Lewis said. SCOTUS was “really influenced by the notion that district courts should not have to engage in what they called absolute deference to the commission, even if the issue had been litigated in a prior Hobbs Act case.”

SCOTUS found that when a district court is “revisiting” an FCC decision in a private enforcement suit, it's not "determining the validity of the commission’s order, [it's] just simply saying it can’t be enforced against that party because the district court finds the commission’s order and interpretation to be wrong,” Lewis said. “I find that slicing things pretty thin, but it’s the Supreme Court,” he said. “Once they slice it that thin, that’s the world we live in.”

The consequences of McLaughlin “remain to be seen,” Lewis said. The argument was raised that the court could throw the finality of the Hobbs Act “into disarray,” he said. “The court said, ‘Look, this just means [parties] get to sue in district court and district courts might disagree and then courts of appeals might disagree and that’s the world in which the Supreme Court decides circuit splits.”

Sarah Citrin, FCC deputy associate general counsel, said the 6th Circuit’s decision overturning the FCC’s latest net neutrality order (see 2501020047) shows the limits agencies like the FCC face following the demise of the Chevron doctrine.

Citrin said she has argued that having, or not having, Chevron deference “shouldn’t make or break the commission’s defense of its orders,” she said. “I stand by that; I think it’s still true, at least to a point, but there’s also no denying that not having … deference will tip the balance against the commission” in some cases, she said. The net neutrality decision is “a good example” of a case where not being able to rely on Chevron deference proved critical.