ISPs Urge 6th Circuit to Stay Net Neutrality Order Following Chevron Decisions

ISPs told the 6th U.S. Circuit Court of Appeals that the U.S. Supreme Court’s recent decision in two cases overturning the Chevron doctrine means the FCC’s net neutrality order must be stayed pending judicial review (see 2407010036). The FCC said Loper Bright Enterprises v. Raimondo and the other case had no implications for its order, which reclassified broadband as a Title II service under the Communications Act.

A 6th Circuit panel asked for briefs on the implications of the Chevron decisions. They are due Monday in docket 24-7000. The Ohio Telecom Association and major trade associations, including CTIA, NCTA, USTelecom, ACA Connects and the Wireless ISP Association, filed the challenge.

The SCOTUS ruling “confirms petitioners’ core merits argument: that the Commission’s Order triggers and flunks the major-questions doctrine,” industry groups challenging the order said: Loper Bright “makes clear that the major-questions doctrine is not merely an exception to Chevron; it is an enduring principle of statutory interpretation.” SCOTUS emphasized that respect may be accorded “‘contemporaneous’ and ‘consistent’ agency interpretations … and the Commission’s recent and repeated flip-flopping here is anything but,” ISPs said.

Petitioners were already likely to succeed on the merits of the challenge, industry said. After Loper, “that likelihood of success is even clearer.” The brief cites Justice Brett Kavanaugh, then a D.C. Circuit judge, writing about the 2016 decision upholding the earlier reclassification of broadband as a Title II service (see 1705010013): “Whether the Commission may regulate broadband as a public utility is a major question by any measure.”

The FCC urged the court not to stay the order, saying Loper has no direct relevance “because the Order under review does not turn or rely on Chevron.” Instead, the order “consistently focuses on ascertaining the best reading of the Communications Act using the traditional tools of statutory construction -- exactly as Loper Bright instructs.”

SCOTUS’ holding in a 2005 case, NCTA v. Brand X, “that the Commission’s prior treatment of broadband as a Title I information service was ‘a permissible reading of the Communications Act under the Chevron framework’ was predicated on Chevron, which is now overruled, not an assessment of the best reading of the Act,” the FCC said. All nine justices who decided BrandX “recognized the agency’s statutory authority to institute ‘common-carrier regulation of all ISPs,’ with some Justices even concluding that the Act left the agency with no other choice.”

Petitioners seem to think if an interpretive question “is fairly debatable, the Commission must adopt the reading that minimizes regulatory burdens on broadband providers,” the agency said: “That expansive view of the major-questions doctrine has no support in Supreme Court precedent.”

The Benton Institute for Broadband & Society, the National Consumer Law Center and Media Alliance filed in support of the FCC. The Loper decision “has no impact on the pending motion for stay because the Industry Petitioners have failed to meet their burden of demonstrating ‘imminent and irreparable’ harm from the implementation of the order under review,” they said.

The decision "creates countless practical questions regarding how FCC actions will be scrutinized," Venable communications lawyers Craig Gilley and Laura Stefani blogged Tuesday about Loper. Expect an exponential increase in litigation over FCC rulemaking, they said. Loper, SCOTUS' adoption of the major questions doctrine and an almost unlimited statute of limitations to file Administrative Procedure Act cases means the odds of favorable outcomes for parties opposing a new regulation "have increased tremendously," they said.

Even long-established FCC regulations might face the risk of new challenges invalidating them, the lawyers said. The cost-benefit analysis for challenging an FCC rule has changed, with parties having a much stronger incentive to appeal now, they added. The FCC has a "substantially more difficult" role in writing and defending its rules without Chevron deference in its pocket. The agency has the burden now of showing that new rules are justified under the best reading of the relevant statute, not just a reasonable reading. The FCC's implementing orders will likely be more dense as the commission needs a complete record analyzing statutory text to build a formal interpretative record as part of any court defense, they said. Congress -- and particularly the committees overseeing the FCC and communications industries -- will have a higher burden of updating current law and crafting new legislation that is clear in its intent if it intends federal agencies to act.