Administrative law nerds anxiously await the term’s main event tomorrow: argument in Kisor v. Wilkie, in which the Supreme Court will consider whether to overturn Auer deference to agency regulatory interpretations. But yesterday brought us an administrative law undercard: argument in PDR Network v. Carlton & Harris Chiropractic. This undercard did not disappoint.

Carter G. Phillips for petitioners (Art Lien)

The question in PDR Network is whether the Hobbs Act strips district courts of jurisdiction to reconsider the validity of an agency’s legal interpretation of certain statutes. The Hobbs Act requires an aggrieved party to seek judicial review of the agency’s final order within 60 days of its entry in a circuit court of appeals, and vests the circuit court with “exclusive jurisdiction to make and enter … a judgment determining the validity of, and enjoining, setting aside, or suspending, in whole or in part, the order of the agency.”

Here, the U.S. Court of Appeals for the 4th Circuit held that the Hobbs Act prohibits a defendant in a private enforcement action from challenging the Federal Communications Commission’s 2006 legal interpretation of the Telephone Consumer Protection Act. Under the Hobbs Act, the 4th Circuit held, this challenge was raised in the wrong court and more than a decade too late.

As I suggested in the argument preview, this case may boil down to whether the Hobbs Act is ordinary or extraordinary administrative law. That was certainly a central theme when Carter Phillips, counsel for PDR Network, stood at the lectern. The Hobbs Act, he explained, “is just an ordinary judicial review statute” that should not “divest the district court of the authority to decide the question on the basis of the statute and its interpretation.” It would be “extraordinary,” Phillips continued, to hold that the Hobbs Act would prohibit a private defendant — “in the context of a private right of action brought as a class action by private plaintiffs” — from arguing that the defendant has committed no wrong under the plain text of the statute.

Phillips faced a hot bench, as the justices did not find the case to be so ordinary. Justice Sonia Sotomayor suggested the Hobbs Act plainly strips jurisdiction from district courts to look beyond the FCC’s order and questioned why PDR Network wasn’t challenging the constitutionality of the Hobbs Act. Justices Ruth Bader Ginsburg, Samuel Alito and Elena Kagan all wondered whether the Hobbs Act should preclude challenges when the defendant in the private enforcement action would have had no reason — or, in some cases, any ability — to seek judicial review in a circuit court within 60 days of the agency’s final order. Chief Justice John Roberts intervened to ask whether it is “enough that you can seek reconsideration of the FCC determination prior to the application of the order to you.” Phillips returned to his theme, arguing that such a request for agency review is “an extraordinarily convoluted process … where the Commission has absolute discretion to grant or deny it.”

Glenn Hara, counsel for Carlton & Harris Chiropractic, returned to the chief justice’s inquiry. Ordinary administrative law, he explained, provides an avenue for challenging an agency regulation beyond the Hobbs Act’s 60-day deadline: The individual can petition the agency to review its regulation. Justice Stephen Breyer did not seem too pleased with this alternative, noting the “enormous” deference an agency gets on subsequent judicial review when it comes to whether to exercise its discretion to reconsider an existing regulation.

The justices asked questions early and often, raising numerous thorny questions of administrative and constitutional law. Alito and Justice Brett Kavanaugh, for instance, both seemed interested in reconsidering the constitutionality of jurisdiction-stripping statutes like the Hobbs Act — something the parties agreed was not properly presented in this case. And Breyer seemed concerned that the FCC’s legal interpretation was advanced in an order and not a rule.

Rachel Kovner, representing the United States as amicus curiae in support of Carlton & Harris Chiropractic, brought much clarity to the argument. She began by underscoring that this is really just an ordinary statutory interpretation case. And “there are two key kinds of words” in the Hobbs Act: “exclusive jurisdiction” and “determine the validity.”

The Hobbs Act’s use of “exclusive” is important, Kovner argued, when read in pari materia with the judicial-review provisions of the Administrative Procedure Act. That is because Section 703 forecloses judicial review under the APA when there is a “prior, adequate, and exclusive opportunity for judicial review.” In other words, it is completely ordinary for there to be no subsequent review under the APA when Congress has provided for exclusive review elsewhere, as it has done in the Hobbs Act. Importantly here, Kovner underscored, PDR Network has never challenged the adequacy of the Hobbs Act review process. If the adequacy inquiry bothers the justices — as it surely did for several of them — Kovner suggested the proper course would be to dismiss the case as improvidently granted.

Based on the argument, it would be precarious to predict which way the court is heading. A number of the justices seemed sympathetic to the United States’ textualist arguments, yet uncomfortable with what that means for a defendant in a private enforcement action — particularly one who confronts an agency interpretation that is inconsistent with, or perhaps even contradicts, the statutory text. The justices also seemed split on whether the alternative remedy of asking the agency itself to reconsider its regulation was adequate or merely cold comfort.

Justice Neil Gorsuch, however, seemed to be drawn down another path — the one Aditya Bamzai charted in his law-professor amicus curiae brief. In particular, Bamzai argues that the Hobbs Act is a jurisdiction-splitting, not jurisdiction-stripping, statute. In splitting jurisdiction, Bamzai contends, the Hobbs Act does not disturb a district court’s ordinary authority to interpret statutes when an agency’s statutory interpretation is not necessarily an element of a crime or civil cause of action. So the Hobbs Act would remain the exclusive avenue to “determine the validity of” a regulation, but PDR Network could challenge the agency’s legal interpretation as applied in this private enforcement action.

At argument, Gorsuch appeared to be alone in advocating for Bamzai’s path forward. But as the court struggles to find a majority, perhaps that path will attract more travelers.

Editor’s Note: Analysis based on transcript of oral argument.

Posted in PDR Network, LLC v. Carlton & Harris Chiropractic Inc., Featured, Merits Cases

Recommended Citation: Christopher Walker, Argument analysis: Justices struggle with whether the Hobbs Act is ordinary or extraordinary administrative law, SCOTUSblog (Mar. 26, 2019, 11:06 AM), https://www.scotusblog.com/2019/03/argument-analysis-justices-struggle-with-whether-the-hobbs-act-is-ordinary-or-extraordinary-administrative-law/