Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

FCC ‘Solicited Fax Rule’ Is Dead Nationwide, Second Circuit Says

Dec. 3, 2021, 4:37 PM

A court ruling striking down the Federal Communications Commission’s ‘solicited fax rule’ was binding throughout the country, and the agency acted properly by repealing the rule in response, a federal appeals court in Manhattan ruled Friday.

A divided U.S. Court of Appeals for the Second Circuit upheld the FCC decision to withdraw the rule—which requires even faxes sent with permission to include instructions for opting out of future correspondence—after a federal appeals court in Washington, D.C., found it unlawful in 2017.

Judge Dennis Jacobs, writing for the Second Circuit panel, acknowledged that appeals court rulings are generally only binding within their respective circuits and that an appellate decision against an agency doesn’t usually require the contested regulation to be repealed.

But the 2017 ruling by the U.S. Court of Appeals for the D.C. Circuit invalidated the solicited fax rule under special statutory procedures that “channel” all “challenges to certain FCC orders to a single circuit court,” Jacobs wrote. “The FCC was therefore bound to comply” and “could not pursue a policy of nonacquiescence,” he said.

Although other appeals courts have been able to dodge ruling on the significance of the D.C. Circuit decision when hearing challenges to the solicited fax rule itself, the Second Circuit had to confront the issue directly because it was faced instead with a challenge to the FCC’s repeal order, the judge added.

But he warned the ruling “should not be over-read to suggest” that an FCC order upheld under the special statutory “channeling mechanisms” is “immune from challenge in subsequent enforcement proceedings.”

“Such a result would raise due process concerns, and it does not appear that Congress contemplated such a sweeping effect,” Jacobs wrote.

Judge Richard J. Sullivan joined the ruling.

Judge Steven J. Menashi dissented, saying the ruling conflicted with “fundamental precepts of the federal court system,” including that “one circuit is not normally bound by the decisions of another” and that “the judgment of a federal court binds only the parties before it.”

The “novel mechanism” allowing FCC rule challenges to be channeled to one appeals court is just a procedural convenience, Menashi suggested.

“The court does not identify any law that empowered the D.C. Circuit to issue a judgment with greater binding force than those the D.C. Circuit issues in other cases,” he wrote.

The agency is represented by its general counsel’s office. The petitioners challenging the rule are represented by Bellin & Associates LLC.

The case is Gorss Motels, Inc. v. FCC, 2d Cir., No. 20-1075, 12/3/21.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com