McLaughlin Chiropractic Associates, Inc. v. McKesson Corp.
The Supreme Court ruled that federal trial courts are not bound by a federal agency's legal interpretation of a law when deciding an enforcement lawsuit — courts must work out for themselves what the law means.
The decision significantly limits the reach of the Hobbs Act's pre-enforcement review mechanism and opens the door for businesses and individuals to contest agency interpretations of law in court even years after those interpretations were issued.
How it got here: The district court treated the FCC's Amerifactors order as binding, limited damages to $6,000, and decertified the class; the Ninth Circuit affirmed; the Supreme Court agreed to hear the case.
The Case in Depth
What happened
McKesson, a large healthcare company, sent unsolicited fax advertisements to medical practices — including McLaughlin Chiropractic Associates — in 2009 and 2010 without the opt-out notices required by the federal fax-spam law known as the TCPA. McLaughlin sued in 2014 seeking class-action damages. After the FCC issued a ruling saying the TCPA does not apply to faxes received through online fax services, the district court treated that ruling as automatically binding, gutting the class and leaving McLaughlin with only $6,000 in damages for 12 faxes received on a traditional fax machine.
The question before the Court
Does the Hobbs Act require federal trial courts to accept an agency's legal interpretation of a law as binding in private enforcement lawsuits, even after the 60-day window to challenge the agency order directly has closed?
The Court's answer
No — the Hobbs Act does not force district courts to accept a federal agency's legal interpretation as binding in enforcement lawsuits. The Act creates a 60-day window for parties to challenge agency orders directly in courts of appeals before enforcement, but that mechanism only addresses where and when such pre-enforcement challenges must be brought. It does not strip district courts of the power to independently determine what the underlying law means when a lawsuit is actually filed.
The Court held that where a pre-enforcement review statute neither expressly blocks review in enforcement proceedings nor expressly permits it — as the Hobbs Act is silent — the default rule from administrative law applies: courts in enforcement proceedings may decide for themselves what a statute means, giving appropriate (but not absolute) respect to the agency's interpretation. Because the Hobbs Act lacks the express preclusion language found in statutes like the Clean Water Act, the district court here should have interpreted the TCPA on its own rather than treating the FCC's ruling as the final word.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Companies and individuals defending against lawsuits tied to federal agency rules can now challenge whether the agency correctly read the underlying law, rather than being stuck with the agency's interpretation just because a 60-day pre-enforcement challenge window passed. For McLaughlin, the case returns to lower courts to decide whether the FCC's reading of the fax-spam law was right — potentially reviving a far larger class action.
What changes now
The case is sent back to the lower courts, which must now independently interpret the TCPA — deciding on their own whether the FCC's Amerifactors ruling correctly concluded that online fax services fall outside the statute's coverage. If the lower courts disagree with the FCC, McLaughlin's class action could be revived with potentially significant damages. Going forward, the ruling sets a new framework requiring Congress to expressly preclude enforcement-proceeding review if it wants to lock in agency interpretations after the pre-enforcement window closes.
What this does not decide
The Court did not decide whether the FCC's Amerifactors order correctly interpreted the TCPA to exclude online fax services — that question returns to lower courts. The ruling does not disturb statutes like the Clean Water Act, CERCLA, or the Clean Air Act, which expressly prohibit courts from reconsidering agency interpretations in enforcement proceedings.
Concurrences and dissents
Dissent — Justice Kagan
Justice Kagan argues the Hobbs Act's 'exclusive jurisdiction' language straightforwardly bars district courts from determining the validity of covered agency orders — that power belongs to courts of appeals alone. The majority's novel 'default rule,' which requires Congress to explicitly preclude enforcement-proceeding review, is unsupported by text, history, or precedent; prior cases including Venner, Yakus, and Port of Boston all foreclosed exactly the kind of collateral attack the majority now permits. The dissent warns the ruling will undermine regulatory stability, deprive the government of any chance to defend agency orders in private suits, and allow regulated parties to ignore agency rules until an enforcement action materializes.
How the Court got there
The legal reasoning, step by step
- The Court identified three categories of pre-enforcement judicial review statutes. First, statutes like the Clean Water Act and Clean Air Act that expressly bar courts from revisiting agency action in enforcement proceedings. Second, statutes like the Toxic Substances Control Act that expressly allow review in both pre-enforcement and enforcement contexts. Third — where the Hobbs Act sits — statutes that are silent on whether enforcement-proceeding review is available.
- For that silent third category, the Court applied what it called the default rule: district courts in enforcement proceedings must independently determine whether an agency's statutory interpretation is correct, rather than treating it as binding. This default is grounded in the basic presumption that judicial review of agency action is available, codified in § 703 of the Administrative Procedure Act, which says agency action is subject to judicial review in enforcement proceedings unless Congress provides a prior, adequate, and exclusive opportunity for review.
- The Court read the Hobbs Act's 'exclusive jurisdiction to . . . determine the validity' language as referring to entering declaratory judgments in pre-enforcement suits, not to a general decisional power. Using the principle that words take color from their neighbors, the phrase 'determine the validity' sits alongside 'enjoin,' 'set aside,' and 'suspend' — all forms of relief — so it refers to a specific form of relief (a declaratory judgment), not to every act of assessing an agency order's legality. A companion Hobbs Act provision referring to a 'judgment determining the validity' confirms this reading.
- The Court distinguished Yakus v. United States (1944), where the wartime Emergency Price Control Act contained two working in tandem: an exclusivity grant to a special court, plus an explicit second sentence barring all other courts from even 'considering' the validity of covered regulations. The Hobbs Act, enacted six years after Yakus, replicated only the first sentence — Congress deliberately left out the second, express-preclusion sentence that Yakus relied on to bar enforcement-proceeding review.
- The Court confined two earlier Hobbs Act precedents — Port of Boston Marine Terminal and FCC v. ITT World Communications — to their narrower rationale. Both involved parties who had lost before an agency and then tried to relitigate the same issue in district court, which implicates ordinary estoppel and preclusion principles. Neither case addressed the broader question of whether parties who never appeared before the agency could challenge its statutory interpretation in a later enforcement proceeding.
- The Court rejected policy arguments that allowing enforcement-proceeding review would create chaos through disagreement among courts. Circuit splits are ordinary and lead to Supreme Court review; that process should not be short-circuited simply because Congress granted courts of appeals exclusive pre-enforcement jurisdiction. And requiring every potentially affected party to predict future enforcement exposure and file a pre-enforcement challenge within 60 days — or forever lose the right to contest an agency's interpretation — would be impractical and unfair.
Doctrinal impact
Cases affected by this decision
Distinguishes Yakus v. United States (321 U.S. 414)
The Emergency Price Control Act had an explicit second sentence barring other courts from review; the Hobbs Act does not, so Yakus does not control.
Limits Port of Boston Marine Terminal Assn. v. Rederiaktiebolaget Transatlantic (400 U.S. 62)
Confined to estoppel and preclusion principles where a losing party tried to relitigate the same issue in district court; not a broad bar on all enforcement-proceeding review.