Mclaughlin Chiropractic Associates v. Mckesson Corporation
Oral argument transcript · No. 23-1226 · October Term 2024 · argued January 21, 2025 · the petitioner won
Decision: votes, opinion and citations · Official transcript (PDF) · Argument audio at the Supreme Court
Advocates
- Matthew W.H. Wessler, Washington, D.C., for the petitioner
- Joseph R. Palmore, Washington, D.C., for the respondent
- Matthew Guarnieri, Assistant to the Solicitor General, amicus curiae supporting the respondent
Transcript
From the Court's official transcript; speaker labels as in the transcript, with advocates' full names from its list of appearances.
Chief Justice Roberts: We'll hear argument next in Case 23-1226, McLaughlin Chiropractic Associates against McKesson Corporation. Mr. Wessler. ORAL ARGUMENT OF MATTHEW W.H. WESSLER ON BEHALF OF THE PETITIONER
Matthew W.H. Wessler: Thank you, Mr. Chief Justice, and may it please the Court: Five years ago, in PDR Network, four justices recognized that, properly construed, the Hobbs Act does not require district courts to treat agency orders that interpret federal statutes as binding precedent. Instead, it operates just like other pre-enforcement channeling statutes by providing for direct review of agency orders in the courts of appeals. McKesson and the government reject this view. Together, they urge an interpretation that would bind courts, including this one, to agency interpretations of federal statutes no matter how wrong, and that would be Official 1 true even for interpretive rules that, by definition, do not carry the force of law, transforming even the most informal agency interpretations into permanently binding ones. But none of the relevant markers, text, context, structure, and history support such a misguided and possibly unconstitutional reading of the Hobbs Act. The key phrase, "determine the validity of," authorizes courts of appeals to determine whether an order is legally in effect, and a court does this by issuing a declaratory judgment that the order is valid or invalid. Context cinches this. The phrase is immediately surrounded by terms which all denote specific forms of equitable relief directed against the order itself. The phrase "determine the validity of" should therefore be read the same way. The Act's broader structure reinforces this understanding. From beginning to end, it establishes procedures designed to govern direct review proceedings and elsewhere uses the phrase "determine the validity of" to mean a declaratory judgment. Official 1 And, finally, there's history. The Act was never intended to implicate actions between private parties. Instead, it was patterned on similar statutes established for the review of orders from other agencies that have never been thought to bind district courts. Consistent with the longstanding recognition that interpreting statutes is a job for the judiciary, this Court should construe the Hobbs Act for what it is, a commonplace jurisdictional provision that allows parties to obtain equitable relief directly against agency orders in the courts of appeals. I welcome the Court's questions.
Justice Thomas: What -- what would you do with the Port of Boston case?
Matthew W.H. Wessler: I think Port of Boston case is -- is different for a couple of reasons, Justice Thomas, but, most importantly, in that case, both parties that were involved in the district court were also involved in the regulatory proceeding seeking a petition for review. And I think, in that scenario, where you've got two parties that are specifically Official 1 bound by an agency action, you've got normal estoppel principles, issue preclusion principles, that would apply. But we're not really talking about a situation --
Justice Sotomayor: That's not what the Court there said. The Court could have easily said that, that -- collateral estoppel principles apply, but it didn't. It said -- the Court said that the Act is explicit that the district court was without authority to review the merits of the Commission's decision. So you have a problem that the -- that the analysis that the Court used is directly contrary to your position.
Matthew W.H. Wessler: But I think the -- the difference, Your Honor, in -- in -- in that case compared with what we have here is you've got a situation where the parties that are -- are fighting about the meaning of the agency interpretation were also parties in the agency proceeding itself. Here, you don't have a situation where, you know, the plaintiffs in this case had any role to play or had any -- were --
Justice Sotomayor: But they could Official 1 have.
Matthew W.H. Wessler: -- were involved at all.
Justice Sotomayor: You haven't denied they had an opportunity to -- to --
Matthew W.H. Wessler: Well -- well, we don't deny that -- that, in theory, they had an opportunity.
Justice Sotomayor: No, not in theory. They -- they -- the -- this is an unusual case where the proceeding was actually in effect during the litigation. In my experience -- and I think we've said this -- if there is something like that happening, the district court -- the court below should stay letting that decision become final, and --
Matthew W.H. Wessler: I think, Your Honor, that illustrates what kind of empty promise the -- the -- my friends on the other side's interpretation would have for the Hobbs Act because, you're right, what happened here was the litigation was proceeding for six years and the agency then issued this Amerifactors order. If, in fact, what was supposed to happen at that point was the -- the parties in -- in the underlying litigation were required Official 1 to go and seek some sort of relief in front of either the agency or a petition for review, we are six years on from -- from that point in time happening, and the agency hasn't actually resolved what one -- what one party had actually done in that case, which was to file for reconsideration. And so I think, as the concurrences in PDR Network pointed out, that kind of circuitous route to judicial review doesn't really make very much sense either if you look at the terms of the Hobbs Act text itself or in practical sense. If, in fact, it's the case that a party could seek judicial review in some way, why not allow district courts to -- to -- to provide that review in a case which arises organically from just a -- a claim that the --
Justice Sotomayor: Thank you, counsel.
Matthew W.H. Wessler: -- the statute had been violated.
Justice Sotomayor: What do I do with the dictionary definition of "validity?" "Valid" means things like lawful, meritorious, Official 1 or correct. No dictionary suggests that you only need a declaratory judgment for that. We have Heck versus Humphrey, where the Court said that you cannot bring a wrongful conviction claim under 1983 because doing so would amount to a collateral challenge to the conviction's validity. 1983 only requires money damages. And yet we use "validity" in a very different sense because nothing in the 1983 was going to vacate the conviction. So we've -- there are multiple ways to challenge validity without a declaration.
Matthew W.H. Wessler: Well, I -- I -- I agree with that, Justice Sotomayor. But I think that the phrase "determine the validity" helps provide, I think, clarity for what that term means in the context of 2342. It isn't just that a court is opining on the -- on the validity in a colloquial sense of -- of the legitimacy or reasoning of the order. It's that it's finally resolving whether that order is valid or invalid.
Justice Sotomayor: It was the same language in Yakus, and yet -- "determine the validity" -- and in Yakus, we said it was Official 1 exclusive. I know you rely on the Second Circuit, but, if you look at the analysis, it barely mentions the Second -- the Second Circuit, the sentence -- the second circuit -- sentence -- boy, my tongue got tied.
Matthew W.H. Wessler: Yes.
Justice Sotomayor: What it did was focus in on that language, "determine the validity."
Matthew W.H. Wessler: Well, I -- I respectfully disagree with -- with how much it relied on the first sentence or the second sentence. I think it said those two sentences together lead to the conclusion that we reach in that case. And, you know, the -- the key language there as -- as --
Justice Sotomayor: But we made that finding, and Congress a few years later uses exactly the same language, "determine the validity," in this statute, the Hobbs Act.
Matthew W.H. Wessler: It -- it -- it does, but it doesn't use what I think is, in fact, the key language of the second sentence, which is not Official 1 "determine the validity" but "consider the validity." And I think there's also another distinction at least as a textual matter between the -- the language of the Emergency Price Control Act that was at issue in Yakus and here, which is, if you look at -- at where that language, "determine the validity," is in the Emergency Price Control Act, it doesn't come -- it's not included in the -- in -- in a series of -- of other terms that denote specific forms of equitable relief. And so, yes, the phrase "determine the validity of" is the same between the two statutes, but the context is different.
Justice Sotomayor: I don't understand. I -- when you have a sentence that doesn't say "and," it says "or," the equitable relief is set forth at first. It says has exclusive jurisdiction to "enjoin," that's equitable. "Set aside," equitable. "Suspend" and "hold in part." And it doesn't use the word "and" -- "or" -- "and determine the validity of." It says "or to determine the validity of." That's Official 1 broader. That's intended to be broader.
Matthew W.H. Wessler: Well, I respectfully would disagree with that. I think it's -- it's different and distinct but not necessarily broader. What I think is notable about the -- the way that that -- that sentence is structured is you have the first three terms -- "enjoin," "set aside," and "suspend" -- all referring to some form of injunctive or coercive relief. The next phrase, "determine the validity of," refers to something entirely different, albeit a form of equitable relief, but a declaratory judgment.
Justice Sotomayor: Well, as I mentioned, "or determine the validity of" can be done in a variety of different ways. It doesn't require just a declaratory judgment.
Matthew W.H. Wessler: I think, in the abstract, "validity" might lead a -- a -- a -- a reader to think that that could be true. But I think, read in context, what's going on in this provision, both with respect to the use of the -- of the term "determine" but also that it's appearing in a list of other forms of equitable relief, that what the statute Official 1 is trying to do is it's trying to provide some -- something of an instruction manual for parties who are -- are planning to seek direct review of an agency action. And it's saying: For that kind of petition or proceeding, where you actually want the agency order to be enjoined in some way or declared invalid, you can do that by filing your petition within 60 days in a court of appeals. But what it is not trying to do is forever bind courts in -- in any garden-variety, run-of-the-mill enforcement --
Justice Sotomayor: It does seem to me that the word "exclusive" has a lot of power otherwise.
Justice Jackson: Why do you say --
Justice Sotomayor: But thank you, counsel.
Justice Jackson: -- that it forever binds? I guess, if we have this mechanism in the Hobbs Act for people to challenge the agency order, I -- I don't understand why -- why you're saying it forever binds -- the agency's order forever binds.
Matthew W.H. Wessler: Well, I mean, you can Official 1 take this case. The district -- the minute the -- the agency issued this Amerifactors order, the district court in this case said: I have no license to review whether the agency's interpretation of the TCPA is correct or not.
Justice Jackson: Right, until the court of appeals hears that question per the statute.
Matthew W.H. Wessler: Well, of course, in this case, it may never hear that question.
Justice Jackson: It may not, but there is a mechanism for it to be corrected. I mean, the suggestion that the agency issues an order and the courts are suddenly divested of any opportunity to address its validity, I think, is inconsistent with the very provision we're talking about here, which allows for the courts of appeals to assess the validity. At a minimum, you agree that the courts of appeals can do that, right?
Matthew W.H. Wessler: Yes, with a maybe friendly amendment, which is not assess the validity but to determine the validity once and for all. And I do think that there is an important distinction -- Official
Justice Jackson: No, I understand how your argument plays out. I guess what I'm just saying is it seems to me that we're just talking about a period of time in which the district court is hearing a -- a -- a -- an enforcement action or whatnot, and the agency issues an order. And given that the Hobbs Act -- until the court of appeals determines the validity, the district court has to assume for the purpose of any litigation that it's before it that it is a valid order.
Matthew W.H. Wessler: I -- I -- I think we're using the term "determine the validity" in different ways. I -- I think what the Hobbs Act says and what it requires is that if -- if you are seeking a petition for review to enjoin or actually declare invalid once and for all this agency action, then, yes, you must bring that petition within 60 days in a court of appeals. But, if what you want is just a district court to -- to --
Justice Jackson: Not apply this order in the context of the litigation that's before Official 1 it.
Matthew W.H. Wessler: Correct. Correct.
Justice Jackson: I appreciate that distinction.
Matthew W.H. Wessler: Yes.
Justice Jackson: I understand it.
Matthew W.H. Wessler: Yes.
Justice Jackson: What I'm suggesting is just the -- the ultimate conclusion on your part that -- or at least you said it at the beginning -- that this somehow means that the courts never have a chance to get out from under the agency order, that the agency order will bind the courts forever, perhaps permanently you say. And I -- I guess I just don't understand that.
Matthew W.H. Wessler: Well, I -- I mean, I think it comes up in -- in a number of different contexts, but you could take, for instance, a set of consumers who would have no reason to ever think that an agency interpretation of the TCPA would matter to them. So the FCC could issue this Amerifactors order --
Justice Jackson: Why wouldn't they if Official 1 we interpret -- if we say that when an agency issues an order, unless and until the -- the court of appeals determines its validity, all litigation that is ongoing related to that order is going to treat it as valid?
Matthew W.H. Wessler: Correct. My -- my -- my -- maybe I didn't -- I was unclear. My -- my hypothetical was just imagine there is no case, the Amerifactors order is issued. A -- a party only has 60 days to file a petition for review under the Hobbs Act. So, in three years down the road, if some consumers believe that a company has violated the TCPA, they are not capable or permitted to bring a petition for review under the Hobbs Act.
Justice Jackson: There's no equitable --
Matthew W.H. Wessler: No. This is a -- this is a -- a bar -- a bar. And, in that scenario, Your Honor, a district court, under my friend's interpretation of this provision, would have no choice but to enforce the agency's interpretation of the TCPA.
Justice Kagan: Can I take you back, Official 1 Mr. Wessler, to Justice Thomas's initial question about the Port case and about Venner and ask you to tell me what your reply brief means with respect to those cases? Because what you say in your reply brief is that those cases stand for a kind of anti-circumvention principle, that we're not going to allow people to evade the Hobbs Act, and you say what those cases do is they shut down collateral challenges that could have been brought under the Hobbs Act. So what do you mean by that? What do you take the scope of those cases to be? Or, said otherwise, what do you take the set of collateral challenges to be that those cases preclude?
Matthew W.H. Wessler: Sure. I think there are maybe two kind of categories, the way to think about it. The first would be in a -- in a case in which the actual parties who are in the -- the -- the -- the civil proceeding were also parties to an agency action. And I think, in that scenario, that --
Justice Kagan: That's not Port of Boston, right? Official
Matthew W.H. Wessler: Well, that is Port of Boston. In Port of Boston, both parties that were the subject of the district court proceeding were also parties in the -- in the agency action that was taking place kind of simultaneously. And so, in that scenario, I think it is fair to say: Well, an order from the district court would effectively enjoin the agency action in a way that -- that would suspend the -- the -- the -- the functioning of the order and would be subject to the Hobbs Act. But I don't think in any of those old cases, Venner, Port of Boston --
Justice Kagan: You -- you said that there were two things? You said --
Matthew W.H. Wessler: Sorry. The other -- the -- I think the other category would be a case in which you might have one party who is specifically given, like, a waiver by an agency. And I think, in a scenario like that, if it later got sued and the only -- the only agency action related to that specific party, the effect of a later suit might be to suspend the agency order in a way that would look like Official 1 the kinds of equitable relief that the Hobbs Act covers. But, once you're out of those two pretty narrow categories -- and, certainly, that isn't the case we've got here or what we had in PDR Network -- it cannot be the case, I think or would submit to the Court, that the Hobbs Act covers any proceeding that arises in the -- in the normal course of a district court's jurisdiction in which the -- the district court is being asked to evaluate or interpret the meaning of a statute and compare the agency's reasoning.
Justice Kagan: So I -- I understand that position, but I guess I'm wondering why you've argued this case quite so broadly. I mean, it seems to me that you win this case so long as you say: There's at least a requirement that the parties bringing the suit are legally bound, and that's not met here, and so we win on that ground. Like, why go further than that?
Matthew W.H. Wessler: Well, I mean, we -- I will take a -- a -- a reversal win in whatever way the Court thinks is best. But I do think Official 1 that there is something quite odd about an interpretation that the other side has offered for 2342 that would extend to cover a district court's ability to interpret the statute. And I think that really is what we're talking about in this case. I think it's even more extreme when you look at the nature of the Amerifactors order here, which all parties argued and agreed below was an interpretive order, one that would --
Justice Kagan: Right. I mean, I guess that's exactly what I'm suggesting. I mean, I think that the -- in our initial opinion in -- remind me of the name --
Matthew W.H. Wessler: PDR -- PDR Network.
Justice Kagan: PDR, right. That the majority opinion basically says, you know -- I -- I think it's important to us the majority opinion says whether this is an interpretive rule. And, here, it seems to me you can just come up and say: This is an interpretive rule, the majority in PDR got it right that that was an important question, and if it's an interpretive rule, you know, it -- it falls outside the Hobbs Act. Official
Matthew W.H. Wessler: Correct.
Justice Kagan: End of case.
Matthew W.H. Wessler: Correct. And we would -- we would accept a -- a decision going no further than that. I do think that it is hard to square the -- McKesson and the government's interpretation of 2342 as expansively as they have argued it to mean anytime a district court is -- is asked to assess the -- the -- the meaning of a statute, if the agency has taken a position on that already, it is -- it is barred from doing that. And I don't think that the -- that the language of 2342 or the structure of the Hobbs Act could be read to -- to -- to sustain that kind of understanding about --
Justice Jackson: What about its purposes?
Matthew W.H. Wessler: -- what Congress was doing.
Justice Jackson: How -- how do you square your point with its purposes?
Matthew W.H. Wessler: Sure. I mean, I -- I don't think there's any indication if you look Official 1 back in the -- in the sort of transformation from the Urgent Deficiency Act to the Hobbs Act what Congress was trying to do to suggest that they were -- that the design of and goal of this statute was to do the -- to do that kind of complete removal of the ability of courts to --
Justice Jackson: I mean, wasn't it trying to --
Matthew W.H. Wessler: -- assess the meaning.
Justice Jackson: -- wasn't it trying to establish finality, predictability, uniformity? When -- when the court of appeals rules on the validity or does the statutory interpretation you're talking about, we then have a sort of definitive interpretation that applies at least to a particular region. It seems to me that to say that the court -- or that the Congress was still trying to preserve the district courts' ability to make, you know, essentially ad hoc determinations within the context of each of its cases flies in the face of the idea that they were channeling exclusive jurisdiction to determine the validity of the agency's interpretation in the court of appeals. Official
Matthew W.H. Wessler: Yes, but we -- we may just disagree on what "determine the validity" in that -- in this context means, because I agree with everything you just said, but I -- I think it is tailored to a specific kind of -- of -- of remedy for parties who are adversely affected by agency orders.
Justice Jackson: But why does the remedy matter? If you -- if you accept -- if you agree with my premise that what Congress was trying to do was get a rule out there that is being consistently applied, then it really doesn't relate to the remedy. It relates to the merits of the party's claim that this is a valid or invalid interpretation.
Matthew W.H. Wessler: I --
Justice Jackson: And it wanted the court of appeals to make that decision.
Matthew W.H. Wessler: I -- I disagree with that. I think what -- what Congress wanted to do was to create a streamlined process for obtaining quick review of agency actions that would either uphold them throughout or strike them down and invalidate them. But what it was not trying to do -- Official 1 and we -- we know this, I think, for a couple of reasons -- was to extend the Hobbs Act's coverage further to foreclose district courts in the mine-run case from even evaluating whether the agency's interpretation of a statute is correct. And we know that, I think, for -- there are a couple of, I think, indicia. One, you know, it had -- Congress had -- as we discussed earlier, it had Yakus and the Emergency Price Control Act out there when it was enacting the Hobbs Act, and it did not integrate into the Hobbs Act the key second sentence of that statute which had been interpreted, along with the first sentence, to have this result. But I think just as significantly, we know -- and the concurrences in PDR Network pointed this out -- we know that Congress knows how to accomplish, I think, what -- what Your Honor is suggesting, which is to eliminate the ability of district courts of any type -- to provide any judicial review in an enforcement proceeding over an agency interpretation of a statute. Official 1 We see that in the environmental statutes. There are three or four of them. And, you know, that language, which I think is quite clear, provides a kind of negative prescription that district courts do not have the authority to provide any sort of judicial review in enforcement proceeding, just is absent from the -- the Hobbs Act here. And I think that that's a quite significant distinction and one, I think, that we have to, again, as -- as -- as we know from PDR Network, recognize that -- you know, that the -- the silence that the Hobbs Act has when it comes to that kind of question, I -- I think, ought to be significant in the way we understand the background rule that's operating here, which is, for -- for -- for, you know, claims that don't fall within one of these channeling statutes, a district court is always free in that context to assess the, you know, reasoning of an agency's interpretation and interpret the statute itself. And I think the Hobbs Act, because it didn't foreclose that kind of judicial review that we see from other statutes, means that Official 1 district courts must remain free to be able to do that in a case like this one or like in what we had in PDR Network.
Justice Gorsuch: Mr. Wessler, I'm -- I'm struggling a little bit with the off-ramp you were discussing with Justice Kagan, and as I understand it, the idea goes that the Hobbs Act doesn't even apply at all because the Amerifactors order wasn't really an order; it was an interpretive rule. But it was an adjudication, and -- and there was a final order issued in that administrative adjudication. That would seem to be, to me, every day of the week and twice on Sundays an order and therefore implicate the Hobbs Act and -- and raise unavoidably the larger question in this case. What am I missing?
Matthew W.H. Wessler: Yeah, I -- I don't think we disagree with any of that, and -- and I don't think our view is that this isn't an order. I -- I think just because -- you know, the other side has said, well, it's an adjudication and so somehow that doesn't implicate whether there's an interpretive or Official 1 legislative rule. We think --
Justice Gorsuch: I -- I -- one -- I know what an interpretive --
Matthew W.H. Wessler: Yes.
Justice Gorsuch: -- rule looks like, and it doesn't look like an administrative agency order to parties in an adjudication.
Matthew W.H. Wessler: Right.
Justice Gorsuch: At least that's what I had always understood, but maybe I'm missing something.
Matthew W.H. Wessler: Right, although what -- what we have in this order -- it -- it is an adjudicatory order. What we have in this order is an agency simply advising the public of its view of the meaning of a specific phrase in the TCPA. And so, you know, I do think that --
Justice Kagan: And you don't understand that as binding on you, correct?
Matthew W.H. Wessler: Correct.
Justice Gorsuch: No, it's not binding on you, but it's binding, isn't it?
Matthew W.H. Wessler: Well, we wouldn't -- we wouldn't say it's -- it's binding.
Justice Gorsuch: It's just a piece of Official 1 paper in the world? I mean --
Matthew W.H. Wessler: Yes. It would be like an informal guidance offering a -- a view of -- of -- of a statute. We don't think that there -- actually carries any binding significance. And so I think -- you were asking about an off-ramp. I do think that in that way, you know, what a district court, in a -- in a garden-variety, you know, civil case, could do is it could simply ignore the order.
Justice Gorsuch: That's not how the court of appeals understood it.
Matthew W.H. Wessler: Certainly not. Certainly not. But we think that that -- if that were -- if, in fact, the court wanted to, I think, move in this direction, it wouldn't be determining the validity of anything because the order is non-binding by nature because it's interpretive. Now the Ninth Circuit, you know, is the only circuit that we're aware of that has adopted an understanding of the Hobbs Act that renders the classification between interpretive and legislative rules irrelevant. In the Ninth Circuit, it is -- it does not matter. Any -- Official 1 any order that is subject to the Hobbs Act immediately withdraws jurisdiction from the district court to do anything. And I think -- I would submit to the Court that that just cannot be right because it does mean that even non-binding informal guidance is capable of binding district courts --
Justice Sotomayor: Counsel, the problem I'm having with your interpretation is I don't even know why they gave jurisdiction to the agency at all to do anything, meaning -- Justice Kavanaugh expressed a concern that if a defendant could not challenge an agency's order in an enforcement proceeding, that might be unfair or even raise due process concerns. But your interpretation means that if a regular -- regulated party seeks an agency order to determine whether its conduct is permissible, it asks the agency for that, it relies on that order to send the e-faxes, and it's still liable for treble damages to any plaintiff who wants to come in and say: Even though I had an opportunity to challenge this interpretation before the agency, I didn't have Official 1 to bother; I could just wait and sue anyone who followed the agency's order, correct?
Matthew W.H. Wessler: Well, a -- a couple of --
Justice Sotomayor: That's the downside.
Matthew W.H. Wessler: -- a couple of responses to that. I mean, first, I -- I do not think that a defendant would necessarily be on the hook in that scenario for treble damages because that does -- the -- the treble damages provision of the TCPA requires -- or there is a built in a reasonable reliance issue.
Justice Sotomayor: But it still would be liable.
Matthew W.H. Wessler: But I do think you're -- you're -- you're not wrong to suggest that there might be some reliance interests at stake here. I do not think those can overcome what the text of this statute means. I also think that if we're --
Justice Sotomayor: Unless we believe that the Act, by giving an out to people who didn't have an -- an -- an adequate opportunity for review, that's the out -- Official
Matthew W.H. Wessler: Well, I -- I don't think that -- yeah.
Justice Sotomayor: -- that it was -- that it intended to make these orders final unless overturned by the court of appeals.
Matthew W.H. Wessler: May I answer?
Chief Justice Roberts: Certainly.
Matthew W.H. Wessler: Yeah. With respect, I do not think adequacy is a sufficient safety valve, and I think that's true for at least two reasons. The first, Your Honor, is that, you know, the -- you know, the -- this Court has never taken a position on what adequacy in the APA means. I -- I do not think that the point of a jurisdictional statute would be to invest district courts in all of these cases in -- from assessing the specific circumstances of when individual parties in their case may or may not have known about a particular order that would have given rise to a Hobbs Act claim. And I also think it begs a question, exclusive jurisdiction to do what, which, in this case, we would submit the Hobbs Act only requires for petitions that are directly Official 1 challenging agency actions.
Chief Justice Roberts: Thank you, counsel. Justice Thomas? Justice Alito? Anything further, Justice Sotomayor? No? Justice Kagan? Justice Kavanaugh? No? Justice Barrett? Justice Jackson? Okay. Thank you, counsel.
Matthew W.H. Wessler: Thank you.
Chief Justice Roberts: Mr. Palmore. ORAL ARGUMENT OF JOSEPH R. PALMORE ON BEHALF OF THE RESPONDENTS
Joseph R. Palmore: Thank you, Mr. Chief Justice, and may it please the Court: The Hobbs Act's text, history, precedent, and purpose all support the conclusion that a lower court here could not impose liability on McKesson for engaging in conduct that the FCC said did not violate the TCPA, where plaintiff concedes it had adequate opportunity for judicial review under the Hobbs Official 1 Act. The statutory text and structure show that a Hobbs Act course exclusive jurisdiction to determine the validity of an order means it alone can evaluate whether the order is correct. If Congress had wanted to limit this exclusivity to declaratory judgments, it would have done so expressly. Instead, Sections 2349 and 2342 together show that the Hobbs Act court has exclusive jurisdiction not just over remedies against the order but also over evaluation of its merits. And that is exactly how this Court interpreted predecessor statutes whose terms and precedent Congress incorporated into the Hobbs Act. Under both the Urgent Deficiencies Act and the Emergency Price Control Act, this Court construed those statutes to bar collateral review in enforcement and private-party disputes even when no declaratory judgment or other relief was sought against the order. And consistent with that precedent, Justice Thomas, the Court in Port of Boston interpreted the Hobbs Act's exclusive Official 1 jurisdiction to mean "review the merits," and on that understanding, it barred redetermination of the same issue decided by an agency in a private payment dispute, again, where no declaratory judgment or relief against the order was sought and whether or not the party participated before the agency. Finally, the Hobbs Act's purpose of establishing finality, certainty, and reliance would be undermined by Petitioner's position that an FCC order, even if affirmed under Hobbs Act review, could forever be subject to second-guessing in state and federal courts all across the country. I welcome the Court's questions.
Justice Thomas: So, as I understand you, if a case -- if this case were to come before a district judge, an order before a district judge, and a district judge says this is the most ridiculous opinion I have ever seen in my many years on the bench, however, I have no authority to review it, that -- you don't see a problem with that?
Joseph R. Palmore: Justice Thomas, this is not an issue of agency versus court. This is an Official 1 issue of which court and when. And I think it's important to emphasize how this --
Justice Thomas: It's still -- you have the same -- you have a collateral attack. You have a disagreement between two parties. They're in court. And the district judge says: Under the Hobbs Act, I have no authority, even though I can see this is -- this order is ridiculous.
Joseph R. Palmore: That's because the Hobbs Act court has that authority. And if the order is ridiculous, the Hobbs Act court will reverse. And I think it's important to emphasize page 4 of the cert reply says Petitioners ask this Court to decide the question presented on the assumption that they had a prior and adequate opportunity for judicial review under the Hobbs Act. So the -- the -- the issue about delay and long-ago orders that were presented in PDR is not presented here.
Justice Jackson: Do you -- do you concede that if they didn't have an adequate opportunity that we would have the problem that Petitioner raises here? Official
Joseph R. Palmore: Well, we think adequacy is an important safety valve. And -- and -- and Justice Kavanaugh, in his concurrence in PDR Network, canvassed a number of concerns with an overly strict reading of exclusivity in this scheme. And we -- we understand that --
Justice Jackson: What about the timing? I mean, I -- I had a little colloquy with Petitioner, and he says that, you know, some of these customers, people affected, would have no -- would have had no reason to bring this up with the court of appeals within 60 days of the original order.
Joseph R. Palmore: So two responses, Justice Jackson. One is that concern is not presented here, but given the concession that they did have a prior and adequate opportunity and they just chose not to exercise it, so their view is Hobbs Act exclusivity is optional, they can go either way. Two, in a hypothetical case where that issue was presented, we view that as an adequacy problem. We think Congress addressed potential unfairness, potential due process concerns that Official 1 Justice Kavanaugh canvassed in his PDR Network concurrence, not through limiting the exclusive jurisdiction of the Hobbs Act court but by creating an adequacy safety valve, and we think that's where the consideration of -- of timing, interests, standing, that's where that would go.
Justice Alito: Suppose I'm a -- a district judge in New Jersey and someone shows me a Ninth Circuit opinion on a question of law that I'm considering. And if I conclude that -- and -- and there's no Third Circuit precedent on point and no Supreme Court precedent on point. If I disagree with the Ninth Circuit's interpretation, am I invalidating the Ninth Circuit decision?
Joseph R. Palmore: No, Justice Alito. But that's not the statutory language here. It's not "invalidating." It's "determining the validity," which is a capacious term, and it wasn't one that was new to this statute. It had just been construed by this Court in Yakus. And it's comfortably understood to mean evaluate the soundness. The -- this Court said in Port of Boston it meant review the merits or collaterally redetermine the same issue. Official 1 And if I can just make one quick point on Port of Boston. Mr. Wessler says: Well, that party participated. There were alternative holdings in Port of Boston. The first holding was we think you participated through an agent. But the Court was crystal-clear. It went on and said: Even if not, your interests were implicated. You could have participated and you chose not to. Having made that choice, you can't now get a collateral redetermination of that same issue in the private payment dispute. And that was a -- a dispute over the meaning of Section 15 of the Shipping Act. It was a statutory construction question. And, Justice Kagan, this kind of idea of -- of is this a non-coercive order, the Amerifactors issue, came up in Port of Boston also, because the party there who was objecting to that order and seeking to get collateral review of it said this order has no course of effect. This is just the agency kind of opining on the meaning of the Shipping Act. And what this Court said was that's still reviewable under the Hobbs Act because Official 1 there's this -- it's a finality consideration, does it determine rights or obligations and do legal consequences flow from it? And the Court said: Yes, they do. When an agency with statutory authority construes a statute within its jurisdiction, that means something. And it cited this Court's decision in the Frozen Foods Express case, which was construing the APA declaratory order provision which is now codified in 54(e), which says agencies have authority to "terminate controversy or remove uncertainty." And that's what this order did. It was an adjudication, as Justice Gorsuch pointed out, with real legal effect. And they've conceded again that they could have sought Hobbs Act review. That -- they -- they asked the Court to decide the question on that understanding but opted -- simply opted not to.
Justice Kavanaugh: You -- you mentioned Yakus in response to Justice Alito. Of course, the other side points out that Yakus had the two sentences, "determine the validity" and "consider the validity." Can you just address that? Official
Joseph R. Palmore: Sure, Justice Kavanaugh. What Congress did in the Hobbs Act was combine the two sentences. So the first sentence in Yakus said determine -- the emergency court of appeals has exclusive jurisdiction to determine the validity, and then the second sentence said, and no other court can consider the validity, enjoin, or set aside. What Congress did in the Hobbs Act was meld the two sentences into one, and it drew both from that Emergency Price Control Act and also from the Urgent Deficiencies Act. So it takes "determine the validity" and "enjoin" from the first and second sentence of Yakus; it takes "set aside" from the second sentence of Yakus, also from the Urgent Deficiencies Act. It takes "suspend" only from the Urgent Deficiencies Act. So it's drawing on both these sources, both of which had been interpreted to bar collateral redetermination of the same issue, and it combined them into one. To the extent that my friend is saying that the second sentence is necessary, Congress can provide exclusive jurisdiction to a court without stating the necessary implication. It Official 1 can, of course, choose to do that if it wants to, that exclusive jurisdiction over A means other courts can't exercise jurisdiction over A, but there's no rule I'm aware of that they have to -- to proceed that way. And I think, given the old-soil principle, the way that this language was construed in Port of Boston, that the -- that "determine the validity" has the meaning that we and the government are suggesting.
Justice Alito: Yakus was a very harsh decision rendered in a wartime atmosphere based on particular facts and a particular statute, and you want us to read an awful lot into it. Why should we do that?
Joseph R. Palmore: Justice Alito, you are, of course, correct that the -- Yakus was a World War II statute, but I think it's important to emphasize that the discussion of the wartime exigencies was only in the due process part of the decision. It was not in the statutory construction part of the decision, which is what we're relying on here. And that makes sense. Statutes -- the meaning of statutes don't change depending on whether the country is at war or Official 1 enjoying peace. The due process holding in Yakus, Congress responded to that by amending the Emergency Price Control Act, not to change the "determine the validity" language or the exclusivity but to reopen a window for criminal defendants, civil defendants, to seek review through that exclusive path in the event they were prosecuted or sued. And, here, of course, the -- kind of the -- what you describe as the harsh result in Yakus is avoided, we believe, by Section 703. 703 was not on the books at the time of Yakus. It was enacted two years later and before the Hobbs Act. And so Congress adopts the Hobbs Act knowing that 703 is there, and we believe it provides in a very important safety valve.
Justice Gorsuch: I'd like to ask you a question about 703 -- your view of 703. Of course, it's not in the Hobbs Act, but you're interpreting the Hobbs Act in light of it. I understand that. It seems to me we have two choices basically, one recognizing that there's an order here, as, indeed, there is. You can say, well, on the one hand, the Hobbs Act Official 1 doesn't preclude the district court from saying this is the craziest decision I ever saw because it's not undermining that order in any way; it's just adjudicating the rights of the parties presently before the court. That's one option. The second option is to say, ah, yeah, it's still sort of affecting that order in some way, but no worries if -- if you didn't have an adequate opportunity to challenge it. And that's the -- that's what you're asking us to do. Are we going to then have a jurisprudence of adequacy? And, if so, what does that look like for parties who weren't alive at the time of -- of the administrative proceeding, for parties who wish to present different arguments than was considered by the agency at the time, for parties with different factual circumstances than those that the agency may have had in mind at the time it adjudicated the case before it? Thoughts.
Joseph R. Palmore: Sure, Justice Gorsuch. I'll give you some thoughts. I mean, I think I would emphasize at the outset that that issue is not presented here because adequacy is -- is Official 1 conceded.
Justice Gorsuch: I understand that.
Joseph R. Palmore: Right?
Justice Gorsuch: But -- but you're asking us --
Joseph R. Palmore: So --
Justice Gorsuch: -- to open a new door and -- and -- and create a jurisprudence of adequacy. And I just want to understand what it would look like because I think those -- those are our two choices in this case, right, that -- that I outlined at the very beginning of my -- my question?
Joseph R. Palmore: Well -- right.
Justice Gorsuch: One -- one --
Joseph R. Palmore: You can -- you can enforce what we believe to be the proper reading of the Hobbs Act, bracketing that adequacy exists --
Justice Gorsuch: Right.
Joseph R. Palmore: -- for -- for hard cases.
Justice Gorsuch: Or simply say that --
Joseph R. Palmore: Or we could lose, Official 1 right --
Justice Gorsuch: -- you could lose, right.
Joseph R. Palmore: -- on the Hobbs -- on the Hobbs Act. Sure.
Justice Gorsuch: Those are the two choices. But, once -- if we buy yours --
Joseph R. Palmore: Right.
Justice Gorsuch: -- what does this jurisprudence of adequacy look like?
Joseph R. Palmore: Well, I think that -- that -- that there are a couple data points already in the Court's cases. So PDR Network, admittedly, not a definitive holding, but it remanded for consideration of adequacy. And we understand that to be a response to the defendant's argument there that they would have had no interest in participating at the FCC or seeking Hobbs Act review at the time that that order issued. And the Court viewed that party-specific argument as a possible adequacy issue. We think Port of Boston, although it's not citing 703, is consistent with that because it looked at the specifics of that party and it Official 1 said you had every interest in participating and you didn't.
Justice Gorsuch: So what I think it'll wind up doing is saying, for the people who are really closely tied in -- in at the moment, who could have been there or were there, a kind of collateral estoppel sort of idea. But I don't know what it means much beyond that. Five years out, 10 years out, different people, different arguments, different facts. Are -- are we just going to wind up in the same place?
Joseph R. Palmore: Well, Justice Gorsuch, we think Congress was balancing two competing interests here. It was -- it was balancing finality reliance, what this Court called in Corner Post the kind of finality-focused orientation of the Hobbs Act, with, we think, fairness and due process concerns. And so Congress is, of course, not required to pursue all its objectives to the ends of the earth. It can balance them. And we think that that's what it did here. But I think what I'd emphasize is, even if there was some work to do in future Official 1 cases, that would all be work to do about the meaning of "adequacy" because that's --
Justice Gorsuch: I -- I understand that --
Joseph R. Palmore: Yes.
Justice Gorsuch: -- but, if -- if finality is so important and it turns out that your interpretation doesn't do much to advance finality beyond a few parties presently, what -- what are we here about?
Joseph R. Palmore: Well, I think it would, Justice Gorsuch. Of course, here, again, adequacy is conceded, so the Court doesn't really have to get into that. But, in -- you alluded to this yourself. I mean, the FCC operates in a highly regulated -- you know, this is a highly regulated industry. You have an amicus brief from some of the major trade associations who are repeat players. They have armies of people who follow what goes on at the FCC. They engage in litigation. Those folks are like -- unlikely to be able to make any kind of adequacy argument, and they are the ones who are often engaged in this litigation. But we think Congress allowed a -- Official 1 a -- a safety valve.
Justice Gorsuch: But -- but then we're going to have the Corner Posts of the world who are going to come in and say: I wasn't alive, I wasn't there, I wasn't in business. And we've said the statute of limitations allows them to file their claims. That's got to mean something, right?
Joseph R. Palmore: Well, perhaps so, Your Honor. So, I guess, the -- in our conception -- and the government has a different view on adequacy, which is probably a less capacious view.
Justice Gorsuch: Substantially, I suspect.
Joseph R. Palmore: Substantially, right. We have more of a -- you know, we -- we believe it can be more party-specific, but I think it's important to emphasize the implications of -- of Petitioner's view, right, is that a party could go to the agency, say I want to send faxes to online fax services, get a declaratory order, which is like a declaratory judgment, someone wants guidance, they want a ruling before they act at their own peril. The agency could say Official 1 that's right; that's not covered. That could be affirmed by a court of appeals under the Hobbs Act. Then, years later, they could be exposed to liability in a federal court, in a state court, for having relied on and sent the faxes that the FCC in a Hobbs Act-affirmed order said was permissible. We think that --
Justice Jackson: Mr. Palmore?
Joseph R. Palmore: Yes.
Justice Jackson: Sorry. Mr. Palmore, can you speak to Petitioner's argument about interpretive rule? Do you agree that this is an interpretive rule?
Joseph R. Palmore: Absolutely not, Justice Jackson. This is an adjudication. It's not a rule of any kind. It's an adjudication. And through -- in 5 U.S.C. 554(e), Congress gave agencies authority to issue declaratory orders with like effect as to other orders to terminate a controversy or remove uncertainty. And that's what it did here. The FCC, like many other agencies, based on this Court's decision in Chenery II, in the NLRB versus Bell Aerospace, often announces Official 1 kind of broad things that look like rules through declaratory orders. It did it here with notice-and-comment rulemaking.
Justice Jackson: And you consider this to be binding then?
Joseph R. Palmore: Yes. Yes. It's binding in -- it's binding because the -- the FCC was not just deciding a dispute between two particular parties; it was applying the statute to a particular technology, which was this -- these online fax services.
Justice Kagan: But -- so, I mean, suppose that I think that you have some good arguments about why it's not just suits asking for declaratory judgments that fall within the Hobbs Act but that you at least have to have a suit that's challenging an agency decision with the force of law, that that's a necessity to fall within the Hobbs Act. You think that if that's the rule you are covered?
Joseph R. Palmore: Absolutely. And I think Port of Boston stands for that proposition. Port of Boston, again, if you look at the relevant part -- Official
Justice Kagan: So do you think that that should be the rule? Yeah, you don't have to have a declaratory judgment, but -- but the only thing that the Hobbs Act is talking about is challenging -- challenges to agency rulings with the force of law, that the Hobbs Act just excludes anything that doesn't have the force of law?
Joseph R. Palmore: I think that's -- that that's right. So the SG cites in their brief a Seventh Circuit decision called the American Trucking case, which was a ICC report where the ICC was just kind of opining on some things. And the -- what the Seventh Circuit said was that's not a Hobbs Act reviewable order because it has no legal consequences, it doesn't determine rights or obligations, so it's not a Hobbs Act order, so then there would be no preclusion at all.
Justice Kagan: So -- but then --
Justice Kavanaugh: Can you --
Justice Kagan: -- I take it that you're actually agreeing with Mr. Wessler more than I maybe thought you were but disagreeing just as to what this ruling does and what it is. Official 1 In other words, you're saying, yeah, we too agree that if you're talking in the land of interpretations, you're outside the Hobbs Act. But you think that if -- if we limit the Hobbs Act coverage to rulings with the force of law, you think you're in. Mr. Wessler thinks you're out.
Joseph R. Palmore: I want to be careful in how I answer this. So "interpretation" is being used in multiple different ways here. Of course, agencies always are interpreting statutes, including when they issue legislative rules. They -- they are creatures of -- of statute, and they --
Justice Kagan: Yeah, but we know what binding decisions are and what they're not.
Joseph R. Palmore: Right.
Justice Kagan: And I take Mr. Wessler to be essentially saying there is -- that the -- the -- the decision that you're challenging is not binding on you, and that's at least one reason why you don't have a good argument under the Hobbs Act.
Joseph R. Palmore: So a couple points, Justice Kagan. We think an order is either in Official 1 under the Hobbs Act or it's out. It's either reviewable under the Hobbs Act or it's not reviewable, and then this exclusivity discussion we're having is inapplicable. They've conceded in, you know, Footnote 2 of their reply brief that this is a final order reviewable under the Hobbs Act. So our point is there may be some things agencies do that have absolutely no legal consequences that are not reviewable under the Hobbs Act at all, and then we wouldn't be having this discussion. There's no middle category, though -- and this is a -- a point I want to emphasize -- of orders that are somehow reviewable under the Hobbs Act, they're final and legally consequential enough to be reviewable under the Hobbs Act but don't trigger this kind of exclusivity.
Chief Justice Roberts: Thank you, counsel. Justice Thomas?
Justice Thomas: I'm going to try one more time. You mentioned Yakus. Yakus was a criminal trial. They were indicted for Official 1 violating one of the stabilization laws. And the district court refused to admit evidence, their arguments, to allow their arguments that the ruling of the Board or Commission was improper. What if the judge, the district judge, said that it's ridiculous, it's the worst thing I've ever seen? You find nothing wrong with that even in the criminal context?
Joseph R. Palmore: Well, I don't think the court -- of course, this is not a criminal case, and -- and --
Justice Thomas: No. Well -- but you're relying on Yakus.
Joseph R. Palmore: Well, there's a due process holding in Yakus that is as you described. We don't need to rely on the full extent of that Yakus due process holding. We're the defendant. We're the ones wielding an agency order that says that what we did did not violate the statute. And the other side is trying to impose liability on us. So the situation is -- is flipped. The due process concerns -- and I completely Official 1 understand them, and Justice Rutledge wrote about them at length, although he tethered his discussion to the criminal context. Those -- none of those issues is -- is applicable here.
Chief Justice Roberts: Justice Alito?
Justice Sotomayor: The problem with the other side's argument is that unlike Corner Post, where the new entity went and -- as it has a right to do, to challenge the order completely by -- they could do a petition for reconsideration, correct, before the Commission?
Joseph R. Palmore: Yes, Your Honor.
Justice Sotomayor: They can file a petition for a declaratory judgment in a circuit court, correct?
Joseph R. Palmore: A -- a declaratory ruling at the agency, right.
Justice Sotomayor: Yeah.
Joseph R. Palmore: And then they could get Hobbs Act review of that.
Justice Sotomayor: Exactly.
Joseph R. Palmore: Yes.
Justice Sotomayor: So now we -- if we don't do something like this, people can just ignore agency final orders because they can't Official 1 be -- if they think they got a good argument, they might as well just go ahead and do it and -- because the agency ruling will have no effect on them.
Joseph R. Palmore: I -- I -- I think that's right. And the Hobbs Act is somewhat unique, as this Court in Corner Post described it. It's unique in having the marrying of "exclusive" and "determine the validity." And Congress really wanted finality in this situation. And, again, in a case like this one, where the party has conceded that it could have sought judicial review and it -- it said that was a reason why this was a good cert vehicle, their position would basically turn Hobbs Act exclusive review into an option. A party could decide to do it, or they could decide to kind of hang back and wait and see if it mattered to them down the road.
Justice Sotomayor: Until somebody sued them, the government or --
Joseph R. Palmore: Correct.
Chief Justice Roberts: Justice Kagan? Justice Gorsuch?
Justice Kavanaugh: Just one question Official 1 in response to Justice Kagan. Force of law, do you think that -- or what do you think that means?
Joseph R. Palmore: I -- the best I can do, Justice Kavanaugh, is use this Court's words. I mean, it -- does it -- does it determine legal consequences --
Justice Kavanaugh: Mm-hmm.
Joseph R. Palmore: -- or do -- I'm sorry, determine rights or obligations, or do legal consequences flow from it? So that's what this Court in Port of Boston said when the same kind of argument was made, well, this isn't a coercive order. And, of course, that became the -- kind of the formulation in Bennett versus Spear --
Justice Kavanaugh: There's a lot of debate --
Joseph R. Palmore: -- down the road.
Justice Kavanaugh: -- a lot of debate in application about particular things, whether they have the force of law, isn't there?
Joseph R. Palmore: Well, perhaps, but I think the FCC declaratory orders are quite common. They're done through notice-and-comment Official 1 rulemaking. They have, for decades, resulted in Hobbs Act review. This Court's decision --
Justice Kavanaugh: Yeah.
Joseph R. Palmore: -- in City of Arlington was a declaratory ruling.
Justice Kavanaugh: That's one.
Joseph R. Palmore: So they -- they -- agencies can and do kind of broadly applicable things through this font of their authority.
Justice Kavanaugh: Thank you.
Chief Justice Roberts: Justice Barrett? Justice Jackson?
Justice Jackson: Was the character of this order as interpretive or otherwise addressed by the lower court?
Joseph R. Palmore: It was -- yes, this issue was joined. And the -- the Ninth Circuit held it was an adjudication. It did not hold that it was an interpretive rule. It said this is an adjudication. And that was actually critical --
Justice Jackson: Well, I thought the -- I thought legislative versus interpretive was the fault line, that you -- you -- Official
Joseph R. Palmore: So -- so there's legislative and interpretive, is kind of over here.
Justice Jackson: Yeah.
Joseph R. Palmore: And then there's adjudication over here. And what the Ninth Circuit said was this is an adjudication. And that was critical to one of its holdings, which was that it applied retroactively because that's what adjudications do. And so that -- that was the holding below, that this was an adjudication, not that it was an interpretive rule. And the -- and the Petitioners never explained in the cert petition or anywhere else why the Ninth Circuit was wrong in what it said, other than to say: Well, this was an adjudicatory order kind of interpreting the statute. But that's a different use of the word "interpretive" because agencies always interpret statutes.
Justice Jackson: Thank you.
Chief Justice Roberts: Thank you, counsel. Official 1 Mr. Guarnieri. ORAL ARGUMENT OF MATTHEW GUARNIERI, FOR THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE RESPONDENTS
Matthew Guarnieri: Mr. Chief Justice, and may it please the Court: The Hobbs Act precludes collateral attacks on covered agency actions in district court even in suits between private parties. The Act does so by conferring exclusive jurisdiction on the courts of appeals to determine the validity of covered agency actions. Now Petitioner contends, as you've heard this morning, that determining the validity of an order refers only to entering a declaratory judgment finding that the order is valid or invalid. That reading of the Act is inconsistent with its plain language, purpose, and history, and with this Court's precedent, particularly the -- the Port of Boston case, which we refer to as Transatlantic, which I still don't think Petitioner has provided an adequate explanation for. Official 1 If you accept Petitioner's view, that would mean that a regulated party could obtain a final order from the FCC determining that some particular course of conduct does not violate the TCPA. That order could be upheld on direct review by the court of appeals under the Hobbs Act procedures, and a private plaintiff could nonetheless go into district court, sue the regulated party, and ask the district court to disregard the agency's order and impose liability. That is not how the Hobbs Act has ever been understood to work, and we ask this Court to reject that interpretation. I welcome the Court's questions.
Justice Thomas: Does that take you as far as the Court in Yakus?
Matthew Guarnieri: I -- I think, at least with respect to the statutory interpretation piece of this, yes. And that's no accident. Congress was clearly drawing on the language that this Court interpreted in Yakus. The Emergency Price Control Act conferred on a special emergency court exclusive jurisdiction to determine the validity of price Official 1 control regulations, and Congress took that language, which -- which was, I think, unique at the time in the Emergency Control Act. Congress took it and brought it into the Hobbs Act in order to accomplish the same purpose that this Court construed the Emergency Price Control Act to have in the Yakus decision.
Justice Gorsuch: If you take the Hobbs Act to go as far as Yakus -- that's an extraordinary thing. I mean, Yakus is not a case people usually want to rely on outside the wartime context. But, if that's as far as the Hobbs Act goes, if it goes that far, aren't we going to have real due process questions? I mean, Justice Rutledge raised them. Justice Powell raised them years later in --
Justice Barrett: -- know the reference --
Justice Gorsuch: -- what was that?
Justice Barrett: Do you know the reference?
Justice Gorsuch: In one of them. Yeah. You know which one I'm talking about.
Matthew Guarnieri: I do, Your Honor. Official
Justice Gorsuch: Let's see. I can even find it for you.
Matthew Guarnieri: It's the -- the Adamo --
Justice Gorsuch: Adamo or -- whatever. However you pronounce it. Adamo.
Matthew Guarnieri: Yeah.
Justice Gorsuch: You really want us to start a -- a Fourteenth Amendment jurisprudence about this?
Matthew Guarnieri: Well, I don't think that you -- that -- that there are going to be cognizable due process claims in the mine-run of applications of the Hobbs Act. The Due Process Clause of the Fourteenth Amendment does not create any kind of freestanding entitlement to get judicial review of agency action in any court at any time that the plaintiff chooses.
Justice Gorsuch: Well, I -- I think it does generally --
Matthew Guarnieri: Congress --
Justice Gorsuch: -- I think it does generally say: When Congress chooses to invest courts with jurisdiction, as a rule, judges Official 1 interpret the law and they have a duty to do so independently and -- and not to automatically and reflexively have to adopt interpretations that the executive branch chooses and prescribes for them. Right?
Matthew Guarnieri: I -- I think, Justice Gorsuch, that might be a little bit different than the due process concern that my friend has articulated. That's more --
Justice Gorsuch: It's -- it's one I have --
Matthew Guarnieri: -- in the nature or line of an Article III --
Justice Gorsuch: -- so why don't you address it.
Matthew Guarnieri: Sure. So I think, if you're thinking about the way the Hobbs Act generally -- the -- the way Congress envisioned this would work, you would get judicial review in the court of appeals under the Hobbs Act, and it would be that application of Article III authority that would then be binding in the sense --
Justice Gorsuch: I understand that, but -- Official
Matthew Guarnieri: -- that a district court would be --
Justice Gorsuch: -- but somebody -- some -- the fact that one person gets judicial review under the Hobbs Act and makes whatever arguments in our adversarial system that they choose, and then another party, years later potentially, with very different arguments and different facts, it wasn't around, and you're telling me due process has nothing to say about whether that individual gets to have a judge decide his case?
Matthew Guarnieri: Well, again, I think Congress was talking here about which court gets to do that. It's the Hobbs Act court that gets to exercise Article III authority to determine the validity of the agency's covered action.
Justice Gorsuch: I understand that. And I'm asking you on the due process question. You don't think that raises any due process questions?
Matthew Guarnieri: No, I don't think that you would have a viable due process argument if your contention is that you are -- are not entitled to challenge the validity of the Official 1 agency's order in an enforcement action. I think you can also get there -- I mean, Section 703, I think, confirms that. Section 703 of the APA is the provision that recognizes that Congress can provide for an exclusive review scheme. And there are circumstances in which, when Congress does that, parties are not entitled to judicial review of the agency's action in the enforcement proceeding.
Justice Gorsuch: So Justice Rutledge was wrong --
Matthew Guarnieri: I think that would be --
Justice Gorsuch: -- and Justice Powell were wrong to be worried about those concerns?
Matthew Guarnieri: No, of course not, but I -- you know, I think they were focused on aspects of the Emergency Price Control Act that aren't necessarily replicated in the Hobbs Act. The other thing that I would -- I would point out for the -- I mean, this is a -- it is the plaintiff here, the plaintiff in the private TCPA action, who is seeking to avoid the Official 1 application of an FCC order or an order by a component bureau of the FCC. And I think the due process concerns are particularly weak -- weak in that context.
Justice Gorsuch: Yes, but you're asking --
Matthew Guarnieri: I mean, at least in the Yakus --
Justice Gorsuch: -- us to draw a much broader rule based on Yakus, and so we have to consider where that leads and -- anyway, I -- I've taken up enough of your time.
Justice Kagan: Mr. Guarnieri, in your brief, you say the term "validity" refers in this context to having legal strength, force, or authority -- that's one -- or to being grounded in sound principles. So suppose I agree with the first half of that, that "validity" does refer in this context to having legal force, but that I don't agree with the second half, that it just refers to is the ruling grounded in sound principles, that what we're talking about here under the Hobbs Act is a challenge to the -- the legal effect of an agency order, not the sort of hazy Official 1 challenge to, like, do I have sound does -- did the agency have sound principles? So what would it mean if I took your definition and chopped it in half and said I only agree with the first part, that the Hobbs Act covers that?
Matthew Guarnieri: Sure. Justice Kagan, if I'm understanding your question, I think this goes back to some of the issues you -- you may have been discussing with -- with my friends earlier about, you know, what do we do with this declaratory order and what do you do if you think, you know, some particular agency action is not meant to have legal force or effect at all? I -- I agree with the way that Mr. Palmore put it. The Hobbs Act in Section 2342 both specifies the things that are reviewable under the Hobbs Act and provides that that jurisdiction is exclusive and no district court here may determine the validity of the covered agency actions. Now, if you do that analysis and you determine that some particular agency action actually has no legal force or effect and is not Official 1 the kind of thing specified in the Hobbs Act as an agency action for which you could get direct review in the court of appeals, then you're just out. There is -- the -- the -- you -- the exclusivity provision does not come into play because that agency action --
Justice Kagan: So what do you think is just out? What category of rulings is just out?
Matthew Guarnieri: I -- I think there are some things agencies do that are -- would constitute interpretive rules as that -- in the technical meaning of that sense under the APA that have no legal force or effect. We cite a case involving a report issued by the ICC. The FCC commonly issues reports both to the public and to Congress. Those things don't have legal force or effect. They wouldn't satisfy the test for finality.
Justice Kagan: So what I understand Mr. Wessler --
Matthew Guarnieri: Yeah.
Justice Kagan: -- to be saying -- and he'll correct me if I'm wrong -- is, in this case, notwithstanding that there's an Official 1 adjudication, it was not an adjudication binding on the parties here.
Matthew Guarnieri: I -- I -- I'm not actually sure what Mr. Wessler would say about that. I think he has tried to characterize this as an interpretive rule, which is simply incorrect. The FCC understands declaratory orders to have -- they are legally binding orders issued by the agency after adjudication. Here, the agency put this out for public -- it -- it gave notice. It -- it solicited public comment on this. Declaratory orders under the APA, under 5 U.S.C. 554(e), have like effect as other agency orders. These are not the same thing as an informal guidance document that the agency might issue to advise the public of its understanding of some preexisting statutory obligation. I mean --
Justice Kagan: Thank you.
Matthew Guarnieri: -- these are -- this is a real agency order.
Justice Jackson: Can I understand a little bit more, though? I mean, you said, if -- if the agency act has no legal force or effect, then you're just outside the Hobbs Act. Official 1 So that, in your view, would allow the district court to consider it in the context of an enforcement action, is that right?
Matthew Guarnieri: Yes, Justice Jackson.
Justice Jackson: But doesn't that seem odd when the language in the exclusive jurisdiction provision says that the court of appeals determines the validity? It seems counterintuitive that you would have the district court determining whether or not this has a legal force and effect and, therefore, the Hobbs Act applies at all when that goes to validity, even your brief suggested it, and yet we have the language in the statute that says the validity is supposed to be interpreted -- or determined by the court of appeals.
Matthew Guarnieri: Well, Justice Jackson, the statute says that the court of appeals shall have exclusive jurisdiction to determine the validity of, and it's followed by an enumerated list, and the enumerated list specifies various statute -- statutory authorities exercised by agencies like the FCC. And I -- I don't think it would violate the exclusivity provision for a district Official 1 court to determine that something the FCC has done in a particular case is not, for example, a final order made reviewable under Section 402 -- of -- (a) of the Communications Act. If the district court decides that, then the district court has effectively decided that this is not the kind of thing the Hobbs Act covers at all. The other point that I would make on this if -- if I may --
Chief Justice Roberts: Sure.
Matthew Guarnieri: -- is simply that it is open to regulated parties to argue that the FCC has done something by declaratory order that it could only have permissibly done by notice-and-comment rulemaking. But that is the kind of challenge that must be brought within the Hobbs Act framework itself. You could present that argument to the court of appeals. And we've seen -- seen cases like that.
Chief Justice Roberts: Thank you, counsel. Justice Thomas? Justice Alito?
Justice Alito: Let me just ask you Official 1 another question about Port of Boston. Why can't Port of Boston be read to mean that when a litigant is an actual party to an adjudicatory proceeding and that proceeding produces an order regarding the rights of that specific party, the party must seek review through the Hobbs Act and not by waiting for an enforcement action? Why can't Port of Boston be interpreted that way?
Matthew Guarnieri: That is not the rationale that this Court gave for its decision in Port of Boston. The Court squarely rested on the exclusivity language in the Hobbs Act. There was a factual dispute there about whether the shipper, Transatlantic, had been represented in the agency proceedings through its agent, which was a -- the agent was a member of the shipping association which was a party to the agency proceeding. This Court said, even if you were not a formal party to the proceeding, your interests were at stake and you had an opportunity to participate and you did not. So I don't think the reasoning of the decision can be squared with my friend's suggestion that you could write that off as a Official 1 case about -- you know, a -- an instance in which a party is actually bound by the agency adjudication in the sense of sort of preclusion principles.
Justice Alito: Did the Court in Port of Boston grapple with all the considerations that were laid out in Justice Kavanaugh's concurring opinion in PDR?
Matthew Guarnieri: No, Justice Alito. I mean, I will grant you that the -- the analysis in Transatlantic or Port of Boston doesn't seem as troubled by some of the -- the analysis set forth in -- in Justice Kavanaugh's concurring opinion in PDR Network. But the issue was squarely presented there, and the Court had no difficulty determining that the suit at issue in that case was in -- in effect an effort to get a collateral redetermination of something that had already been settled by the Federal Maritime Commission and for which review under the Hobbs Act was the exclusive mechanism for -- for determining the validity of that agency action. I don't think you have to rest -- I think Port of Boston is a -- a -- a strong card Official 1 for us, but I don't think you have to rest exclusively on that decision either. I mean, this goes back to cases like Venner and Lambert Run Coal Company. There are numerous decisions of this Court decided under the predecessor scheme, the Urgent Deficiencies Act, that likewise rejected efforts to get a kind of collateral attack on the agency's order and in suits in which no party was requesting declaratory relief against that order. So I don't think -- in addition to -- to Transatlantic, there are -- there are other pre-Hobbs Act precedents that just can't be squared with my friend's understanding of how this statute should -- works.
Justice Alito: Well, let me take you -- ask one final question about Yakus. And I don't know how big the defendants in Yakus were, but let's suppose they were -- you know, this was some mom-and-pop operation that was subject to the price controls that were in effect during World War II, and it was really quite unlikely that an entity in that position was going to be following all the details of what was being -- of what was being done in Official 1 wartime regulations. So they just were unaware of what was happening, and then they find themselves in court being criminally prosecuted for violating the price controls. Would you say there's not a due process concern there?
Matthew Guarnieri: I -- I think the holding of Yakus is that there was no due process violation in that application of the statute, even in the context of a criminal prosecution. Obviously, we are one step removed from that here. This is a civil enforcement action, not a criminal prosecution. Now I -- I will say my -- the Respondent in this case has suggested that today, if a similar issue arose, you have Section 703 as a safety valve. Now, in PDR Network, we took the position that in Section 703, when the statute refers to an adequate prior opportunity for review under one of these exclusive schemes, adequacy was supposed to be judged at a level of generality. The question is whether the statutory scheme provided an adequate opportunity to -- the regulated community in general, not the specific party in Official 1 that case. We haven't had occasion to revisit that position here because Petitioner has asked the Court to decide this case on the premise that Petitioner already had a prior and adequate opportunity to seek review under the Hobbs Act. But what I want to stress is, if you disagree with us about how to read the adequacy language in Section 703, I mean, that could be something the Court could address in an appropriate future case. It is not a reason to adopt Petitioner's understanding of the Hobbs Act.
Justice Alito: All right. Thank you.
Chief Justice Roberts: Justice Sotomayor? Justice Kagan? Justice Gorsuch?
Justice Gorsuch: Just one quick question about Port of Boston. You -- you emphasized that -- that Transatlantic there wasn't a party to the administrative proceedings, right?
Matthew Guarnieri: Yes, although I think there was a factual dispute in that case about Official 1 the extent to which it should be --
Justice Gorsuch: Right. Didn't the Court expressly rely on the fact that Transatlantic had been represented before the Commission?
Matthew Guarnieri: No, Your Honor. I think, if you look at the final paragraph of --
Justice Gorsuch: "It was, in fact, represented before the Commission and has previously made numerous claims to party status. In the petition for reconsideration filed with the Commission, it asserted that it had been represented in the administrative evidentiary proceeding through its agent."
Matthew Guarnieri: Yes, Justice Gorsuch, but I think --
Justice Gorsuch: That's part of the holding of the Court, right?
Matthew Guarnieri: -- if you -- I -- I entirely agree. The -- the Court was engaging in two alternative analyses, alternative holdings. I think I heard Mr. Palmore use that phrase earlier. I -- I entirely agree with you that the Court was saying that Transatlantic was Official 1 trying to have it both ways. They had claimed party status before.
Justice Gorsuch: Right.
Matthew Guarnieri: Now they were disclaiming it. If you look at the next paragraph --
Justice Gorsuch: I -- I'm looking at it.
Matthew Guarnieri: -- where it is continued --
Justice Gorsuch: Yeah.
Matthew Guarnieri: -- there is a clause that says: "Even if Transatlantic was not a formal party" --
Justice Gorsuch: Yeah. It does say that.
Matthew Guarnieri: -- "the exclusivity analysis applies the same way."
Justice Gorsuch: It -- it says that because it had every opportunity to participate before the Commission and not in the abstract, in the sense that it did, and just discussed in the prior paragraph. It's not that somebody could have come in. It's that these people did come in. It Official 1 was -- that was bound up in the Court's analysis, wasn't it?
Matthew Guarnieri: Yeah, I think we would say the same thing about a party in McLaughlin's shoes. McLaughlin had every opportunity to participate in the agency proceedings and chose not to. And I think the analysis would look the same way.
Chief Justice Roberts: Justice Kavanaugh? Justice Barrett? Justice Jackson? No? Thank you, counsel. Rebuttal, Mr. Wessler. REBUTTAL ARGUMENT OF MATTHEW W.H. WESSLER ON BEHALF OF THE PETITIONER
Matthew W.H. Wessler: Thank you. Just a -- a few brief points in rebuttal. The Hobbs Act's grant of exclusive jurisdiction simply means that a district court may not entertain a petition for review of an agency action subject to the Act. Nobody questions that the Hobbs Act's grant of that kind of jurisdiction is designed to create a streamlined process for funneling Official 1 pre-enforcement facial challenges to agency actions into the courts of appeals. And, of course, no matter how the Court resolves this case, those challenges will continue. But I think what's at issue here is really whether the Hobbs Act -- the text of that statute, this Court ought to read it in a way that expands and extends the sweep of the Hobbs Act to cover any opportunity a district court might have in a garden-variety civil litigation case to even consider or evaluate the reasoning of an agency interpretation. I think that can't be right, as we've explained, based on both text, structure, and history of the statute. I think, to your point, Justice Alito, yes, Port of Boston, I think distinctly different from what we've got going on here because it involved parties who, Justice Gorsuch, as you noted, were themselves directly involved in the agency proceeding. That isn't the kind of proceeding that we have here, in which the FCC has issued a declaratory order that only one party sought. So, in -- so, in this case, you have Official 1 Amerifactors, a company seeking a declaratory order. There are no other parties, nor could there be for purposes of this agency action. I think that's significant because the only opportunity that a party in the plaintiff's shoes in this case would have should they -- had they wanted to try to challenge that interpretation, would be to do what another party did, which is to file a petition for reconsideration in front of the agency. That is an empty promise of judicial review, as, Justice Gorsuch -- as, Justice Kavanaugh, you pointed out in your concurrence in PDR Network, because that petition for reconsideration of the FCC's Amerifactors order has been pending for more than five years. I think what you heard from my friends on the other side was perhaps a backing away of a view that the Hobbs Act covers interpretive orders along with legislative orders. If that's correct, it would require reversal here because the Ninth Circuit's rule from which we have taken an appeal is that the Hobbs Act covers both interpretive and legislative orders. Official 1 I note that the government on page 31 of its brief defends that proposition. Despite what you heard today, it has taken the position that there is no exception under the Hobbs Act for interpretive rules. It covers both kinds of rules. And adjudication can still be an interpretive rule, as courts have routinely held. Adjudications are simply an alternative path to a regulation or a rule-making that an agency can take, but it does not affect a -- a distinction between agency action that carries the force of law versus agency action that does not. And I will just point out that in PDR Network, there, the FCC issued a rule through notice and comment, but on -- on remand, the Fourth Circuit held that it was interpretive and therefore not subject to the FCC. This Court should make clear once and for all that the Hobbs Act does not require a district court to follow an agency's interpret of a -- interpretation of a statute, no matter how wrong. Thank you. Official
Chief Justice Roberts: Thank you, counsel. The case is submitted. (Whereupon, at 12:32 p.m., the case was submitted.)