Some cases are destined to continue forever, and the case of Carlton & Harris Chiropractic v. PDR Network may be one of them, given the Fourth Circuit’s decision yesterday- its third encounter with the case since it was filed back in 2015.
As Judge Harris explains, the basic facts are that the plaintiff, “a chiropractic office, filed suit under the Telephone Consumer Protection Act after it received an unsolicited fax offering a free eBook with information about prescription drugs.”
Initially, the district court had dismissed the plaintiff’s claim, holding that an offer of a free book was not within the statute’s scope. On appeal, the plaintiff argued that the district court should have deferred to a 2006 FCC Rule, and indeed was required to under the Hobbs Act. In 2018, the Fourth Circuit agreed, vacating the district court’s order “because the Hobbs Act deprives district courts of jurisdiction to consider the validity of orders like the 2006 FCC Rule, and because the district court’s reading of the 2006 FCC Rule is at odds with the plain meaning of its text.” The Supreme Court granted cert on the question of “[w]hether the Hobbs Act required the district court in this case to accept the FCC’s legal interpretation of the Telephone Consumer Protection Act,” but, after argument, held that that question could not be answered without deciding (1) whether the Rule was legislative or interpretive, and (2) whether PDR had a prior and adequate opportunity to seek judicial review of the 2006 Rule– questions the Fourth Circuit had not answered. Accordingly, the Court vacated and remanded.
On remand in the 4th Circuit, all parties agreed the 2006 Rule was interpretive, and that the district court was not bound by the rule, eliminating the question that had led to the cert grant in the first place. In 2020, the Fourth Circuit then remanded the case to the district court to determine what degree of deference was owed to the 2006 Rule.
In 2022, the district court then dismissed the case, holding that the fax in question was :not an “advertisement” under the TCPA, because it offered the eBook for free and not for sale. An appeal followed, and yesterday the Fourth Circuit again reversed. The Fourth Circuit held that an “advertisement” under the TCPA refers to any faxes that are “commercial in nature,” rejecting the plaintiff’s argument that any fax that promotes the quality of a free good or service qualifies as an advertisement, and declining to defer to the FCC’s 2006 Rule, finding the statutory language unambiguous. But….the court found that the plaintiff’s amended complaint adequately alleged that the fax was commercial in nature, based on allegations that PDR earned a commission for each free book it distributed. At the same time, it rejected the argument that the fax’s opt-out notice itself was an advertisement under a “pretext” theory.
Concurring, Judge Thacker agreed the plaintiff’s complaint met the “low pleading bar,” but found that the long-term “prognosis” for the case “is not good.” As such, a second trip to First Street seems unlikely.
