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Parties Involved:
Federal Communications Commission
Respondent
Douglas M. McKenna
Petitioner
United States of America
Respondent

Document Text:

Notice: This opinion is subject to formal revision before

publication in the Federal Reporter or U.S.App.D.C. Reports.

Users are requested to notify the Clerk of any formal errors in

order that corrections may be made before the bound volumes

go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 20, 2007 Decided December 28, 2007

No. 06-1191

ROBERT BIGGERSTAFF,

PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA,

RESPONDENTS

Consolidated with

No. 06-1251

On Petitions for Review of an Order of the

Federal Communications Commission

Christopher A. LaVoy argued the cause for petitioner Robert

Biggerstaff. With him on the briefs were Edward Moomjian, II

and Roy A. Katriel.

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Douglas M. McKenna argued the cause and filed the briefs

pro se.

C. Grey Pash, Jr., Counsel, Federal Communications

Commission, argued the cause for respondents. With him on the

brief were Thomas O. Barnett, Assistant Attorney General,

Catherine G. O'Sullivan and Nancy C. Garrison, Attorneys,

Samuel L. Feder, General Counsel, Federal Communications

Commission, and Jacob M. Lewis and Daniel M. Armstrong,

Associates General Counsel. James J. Fredricks, Attorney, U.S.

Department of Justice, and John E. Ingle, Deputy Associate

General Counsel, Federal Communications Commission,

entered appearances.

Before: GINSBURG, Chief Judge, and ROGERS and GRIFFITH,

Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Robert Biggerstaff and Douglas

McKenna filed petitions for review of a final rule of the Federal

Communications Commission implementing the Junk Fax

Prevention Act of 2005 (“JFPA”), Pub. L. No. 109-21, 119 Stat.

359 (codified at 47 U.S.C. § 227), by adopting an exemption to

the prohibition against unsolicited telephone facsimile

advertisements for entities with whom the recipient has an

established business relationship (“EBR”). In the Matter of

Rules and Regulations Implementing the Telephone Consumer

Protection Act of 1991; Junk Fax Protection Act of 2005, 21

F.C.C.R. 3787 (2006) (“Order”). Neither petitioner, however,

challenges the final rule itself, but rather each focuses on either

a past administrative action by the Commission or the future

effect of the wording of the Order accompanying the final rule.

Biggerstaff’s concern is that a 1992 administratively-created

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EBR exemption, In the Matter of Rules and Regulations

Implementing the Telephone Consumer Protection Act of 1991,

7 F.C.C.R. 8752 (1992) (“1992 Report”), is contrary to the

express text and legislative history of the Telephone Consumer

Protection Act of 1991 (“TCPA”), Pub. L. No. 102-243, 105

Stat. 2394. Although Biggerstaff has standing and his claim is

ripe, his challenge to the 1992 EBR exemption is beyond the

scope of the 2006 rulemaking, which was to implement the

JFPA. Therefore, we must dismiss his petition as untimely.

McKenna’s concern is that permissive wording in the Order

wrongly implies that the JFPA grants statutory authority to send

unsolicited faxes when an EBR only grants an exemption from

federal liability under the statute. We must dismiss his petition

because McKenna lacks standing. He proposes no substantive

changes to the Order that will affect the legal rights of those

who send unsolicited faxes and only speculates that textual

revisions to the Order would reduce the number of unsolicited

faxes he receives and thereby redress the harm he alleges.

 

I.

In 1991, Congress enacted the TCPA, which prohibited the

sending of “unsolicited advertisement[s]” to telephone facsimile

machines. TCPA § 3(b)(1)(C), 105 Stat. at 2396. An

unsolicited advertisement was defined as “any material

advertising the commercial availability or quality of any

property, goods, or services which is transmitted to any person

without that person’s prior express invitation or permission.” Id.

§ 3(a)(4), 105 Stat. at 2395. The TCPA provided a private right

of action for injunctive relief and monetary damages in state

court. Id. § 3(b)(3), 105 Stat. at 2396. In a footnote to the 1992

Report implementing the TCPA, the Commission stated: 

In banning telephone facsimile advertisements, the

TCPA leaves the Commission without discretion to

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create exemptions from or limit the effects of the

prohibition . . .; thus, such transmissions are banned in

our rules as they are in the TCPA. We note, however,

that facsimile transmission from persons or entities

who have an [EBR] with the recipient can be deemed

to be invited or permitted by the recipient.

7 F.C.C.R. at 8779 n.87 (citations omitted). 

Upon reconsideration in 1995, the Commission reaffirmed

its recognition of the EBR exemption, explaining “that the

existence of an [EBR] establishes consent to receive telephone

facsimile advertisement transmissions.” In the Matter of Rules

and Regulations Implementing the Telephone Consumer

Protection Act of 1991, 10 F.C.C.R. 12,391, 12,408 (1995).

However, in 2003, the Commission “revers[ed] [its] []

conclusion that an [EBR] provides companies with the necessary

express permission to send faxes to their customers,” In the

Matter of Rules and Regulations Implementing the Telephone

Consumer Protection Act of 1991, 18 F.C.C.R. 14,014, 14,127

(2003) (“2003 Rule”), and instead required that “permission to

send fax advertisements must be provided in writing,” id. at

14,128. In the preamble to the 2003 Rule the Commission

“emphasize[d] that, prior to the effectuation of rules contained

herein, companies that transmitted facsimile advertisements to

customers with whom they had [EBR]s were in compliance with

the Commission’s existing rules.” Id. at 14,127 n.699.

However, the 2003 Rule never went into effect; the Commission

extended the effective date on several occasions, eventually

doing so “[i]n light of the on-going developments in Congress

. . . .” In the Matter of Rules and Regulations Implementing the

Telephone Consumer Protection Act of 1991; Fax Ban Coalition

Petition for Further Extension of Stay, 20 F.C.C.R. 11,424,

11,427 (2005). 

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In July 2005, Congress enacted the JFPA, which amended

the TCPA to codify an EBR exemption to the prohibition against

unsolicited facsimile advertisements. 47 U.S.C. §

227(b)(1)(C)(i). The Commission issued a Notice of Proposed

Rulemaking to implement the rule changes required by the

JFPA, In the Matter of Rules and Regulations Implementing the

Telephone Consumer Protection Act of 1991; Junk Fax

Protection Act of 2005, 20 F.C.C.R 19,758 (2005) (“2005

NPRM”), and further stayed the effective date of the 2003 Rule

until the conclusion of the new rulemaking, id. at 19,772.

Biggerstaff and McKenna filed comments in response to the

2005 NPRM and now petition for review of the Order

promulgating the final rule.

II.

On appeal, Biggerstaff focuses on the lingering effect of the

1992 administratively-created EBR exemption and seeks to have

the court set aside that exemption on the ground that it

contradicts the express text and legislative history of the 1991

TCPA. McKenna, in turn, focuses on the future effect of the

JFPA’s EBR exemption and seeks to have the term “permits”

changed to “does not prohibit” in the Order in view of the

statutory text, which merely exempts from federal liability those

who send unsolicited facsimile advertisements on the basis of an

EBR. For the following reasons, the court cannot address the

merits of either petitioner’s contentions.

A.

As a threshold matter regarding the court’s jurisdiction, the

Commission challenges the Article III standing of both

petitioners on the ground that neither can show (1) injury in fact

(2) that was caused by the conduct of the Commission and (3)

that can be redressed by judicial relief. See Lujan v. Defenders

of Wildlife, 504 U.S. 555, 560-61 (1992). We agree as to

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McKenna, but not Biggerstaff. 

1. Biggerstaff asserts that he has standing to challenge the

final rule because he “has pre-JFPA junk faxes subject to the

[1992] EBR administrative defense that he has refrained from

suing on because of the likelihood he will face the defense.”

Pet’r Br. at 9. The Commission views his proffers of injury to

be based on speculation both that he has a viable and timely

claim under the TCPA for damages arising from a December 10,

2004 fax transmission appended to his brief and that the sender

of that fax might raise an EBR defense. The Commission relies

on Platte River Whooping Crane Critical Habitat Maintenance

Trust v. FERC, 962 F.2d 27 (D.C. Cir. 1992), where the court

instructed that “[a]llegations of injury based on predictions

regarding future legal proceedings are . . . ‘too speculative to

invoke the jurisdiction of an Art[icle] III Court,’” id. at 35

(quoting Whitmore v. Arkansas, 495 U.S. 149, 157 (1990))

(second alteration in original). 

Biggerstaff states in a sworn declaration that he has

confronted the EBR defense in previous lawsuits and is

therefore likely to encounter it again:

In my previous junk fax cases, many defendant[s] have

raise[d] “established business relationship” defenses.

As[] a result, I have been subject to onerous discovery

requests and depositions seeking complete records of

all my business contacts and transactions, such as

many years of bank receipts, credit card bills and the

like. This has been done by defendants attempting to

“discover” any form of an “established business

relationship” with me. This produces the effect of a

negative suit value and effectively renders the salutary

purposes of the [statute] and the protection of the

statute as written by Congress as effectively useless to

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me.

Decl. of Robert Biggerstaff ¶ 6 (July 23, 2007). 

Unlike the standing claims presented in Platte River and

Whitmore, which relied on predictions about court decisions,

Biggerstaff’s concern that future defendants will raise an EBR

defense to pre-JFPA facsimile transmissions rests on his

personal experience that such a defense is, if not certain,

definitely likely. Biggerstaff’s assertion of injury is thus more

akin to that in Pennell v. City of San Jose, 485 U.S. 1 (1988),

where the Supreme Court concluded that “[t]he likelihood of

enforcement [of an Ordinance by tenants], with the concomitant

probability that a landlord’s rent will be reduced below what he

or she would otherwise be able to obtain in the absence of the

Ordinance, is a sufficient threat of actual injury to satisfy Art.

III’s requirement” that the plaintiff “‘demonstrate a realistic

danger of sustaining a direct injury as a result’” of the

governmental action at issue, id. at 8 (quoting Babbitt v. United

Farm Workers Nat’l Union, 442 U.S. 289, 298 (1979)). The

Court has recognized that a prediction of injury based on

experience suffices to show injury in fact to the extent that “past

wrongs are evidence bearing on whether there is a real and

immediate threat of repeated injury,” O’Shea v. Littleton, 414

U.S. 488, 496 (1974). Biggerstaff’s declaration and his

appended unsolicited facsimile advertisement yield a claim that

is more than a “vague and unsupported assertion” of injury.

Interstate Natural Gas Ass’n of Am. v. FERC, 285 F.3d 18, 46

(D.C. Cir. 2002). His previous experience litigating his

unsolicited facsimile claims indicates that his fears that future

defendants will raise the EBR defense are not “imaginary or

speculative,” Younger v. Harris, 401 U.S. 37, 42 (1971).

Additionally, Biggerstaff explains that the fax appended to his

brief regarding mortgage refinancing is most likely from one of

several mortgage vendors he had contacted earlier in the year

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when inquiring about refinancing opportunities. He asserts that

“[s]uch an entity would obviously raise a defense of an

‘established business relationship’” based on Biggerstaff’s

initial inquiry. Biggerstaff Decl. ¶ 5. Biggerstaff thus has

established a “likelihood” of injury that rises above the level of

“unadorned speculation,” Pennell, 485 U.S. at 8. Biggerstaff’s

claim is also ripe, see Abbott Labs., Inc. v. Gardner, 387 U.S.

136 (1967), because it involves a pure question of law and he

would encounter hardship if the court were to defer making a

decision, as he could not challenge the 1992 EBR exemption in

a lawsuit under the TCPA in the state courts of his home state of

South Carolina, see Reply Br. at 8 (citing Holliday v. Staples,

Inc., 2004 WL 5349483 (S.C.C.P.)).

Therefore, because Biggerstaff has presented sufficient

evidence of (1) injury in fact, (2) causation, as the 1992 EBR

defense of which he complains was created by the Commission,

and (3) redressability through judicial invalidation of the 1992

EBR exemption, he has standing to challenge the final rule. 

2. McKenna states in his sworn affidavit that he is injured

as a result of receiving unsolicited facsimile advertisements

because these “junk faxes” take his paper and ink without his

consent, interfere with his business activities, and erode the

goodwill of his small business. In his reply brief he notes that

the Commission, in addressing Biggerstaff’s challenge,

concedes that private parties rely on the Commission’s rules in

deciding whether or not to take action. Therefore, he asserts, it

is likely that facsimile advertisers will rely on the wording in the

Order to assess whether they may lawfully send faxes to people

with whom they have an EBR. 

Even assuming McKenna has met his burden with respect

to the first two prongs of the standing requirement, he still fails

to demonstrate that facsimile advertisers will respond differently

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if the court were to require the Commission to revise its Order

to strike references to “permit” and substitute “does not

prohibit” in referring to the JFPA’s relationship to unsolicited

faxes. McKenna asserts: 

My considerable experience dealing with unsolicited

fax senders, with recipients, with the press, with

professional lawyers, and with the courts leads me to

believe there is widespread ignorance and

misunderstanding with respect to the difference

between an exemption from liability in a remedial

consumer protection statute and a law that actually

statutorily permits conduct, even when such permission

would be flat-out unconstitutional. 

Aff. of Douglas M. McKenna ¶ 27 (July 10, 2007). But

McKenna has proffered no evidence that a change in the

wording of the Order will cause a change in third-party

behavior. For example, he proffers no comparison between

public reactions to an order using permissive language and

public response to an order using words that connote an

exemption from liability. The difficulty in making such a

showing here is compounded by the fact that the Order, in

addition to referring to “permitting” unsolicited faxes on the

basis of an EBR, states at several points that an EBR is an

“exemption to the prohibition on sending unsolicited facsimile

advertisements,” 21 F.C.C.R. at 3788; id. at 3791; see also id. at

3793. In contrast to Biggerstaff’s circumstances with regard to

confronting the EBR defense in state litigation, McKenna’s

assertions about what third parties understand and how they

might react to a revised Order is far more tenuous and too

speculative to show redressability.

Therefore, because McKenna fails to show that he has

standing to challenge the final rule, we must dismiss his petition.

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B. 

A procedural hurdle bars our consideration of Biggerstaff’s

contention that the court should set aside the 1992

administratively-created EBR exemption because the

Commission lacked authority to adopt it. Biggerstaff has not

petitioned for a rulemaking to modify the 1992 EBR exemption,

which “ordinarily” is “the appropriate way in which to challenge

a longstanding regulation on the ground that it is ‘violative of

statute,’” Kennecott Utah Copper Corp. v. U.S. Dep’t of

Interior, 88 F.3d 1191, 1214 (D.C. Cir. 1996) (quoting Public

Citizen v. Nuclear Regulatory Comm’n, 901 F.2d 147, 152 (D.C.

Cir. 1990)); see also Geller v. FCC, 610 F.2d 973, 978 (D.C.

Cir. 1979). Therefore, for the court to examine the merits of his

contention, Biggerstaff must demonstrate that in the 2006

rulemaking the Commission reopened consideration of its

authority to adopt the 1992 EBR exemption, for otherwise his

challenge is untimely. See 47 U.S.C. § 402(a); 28 U.S.C. §§

2342(1), 2344; see also Cellular Telecomm. & Internet Ass’n v.

FCC, 330 F.3d 502, 504 (D.C. Cir. 2003). The Commission’s

intention to initiate a reopening must be clear from the

administrative record, see Charter Communications, Inc. v.

FCC, 460 F.3d 31, 38 (D.C. Cir. 2006), and we find no such

intention in the 2006 rulemaking.

An agency’s reconsideration of a rule in a new rulemaking

constitutes a reopening when the original rule is “reinstated” so

as to have renewed effect. Public Citizen, 901 F.2d at 152. In

Ohio v. EPA, 838 F.2d 1325 (D.C. Cir. 1988), the court

determined that it could review the validity of a rule

promulgated three years before the challenged rule because “the

period for seeking judicial review may be made to run anew

when the agency in question by some new promulgation creates

the opportunity for renewed comment and objection,” id. at

1328. The court relied on Montana v. Clark, 749 F.2d 740 (D.C.

Cir. 1984), which held that the “time for seeking review ran

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anew from the time of re-promulgation because the agency ‘held

out [a provision in a prior rule] as a proposed regulation, offered

an explanation for its language, solicited comments on its

substance, and responded to the comments in promulgating the

regulation in its final form.’” Ohio v. EPA, 838 F.2d at 1328

(quoting Montana v. Clark, 749 F.2d at 744). Thus, an official

reinterpretation of an old rule that creates a new opportunity to

challenge the continuation of that rule triggers reopening. See

General Motors Corp. v. EPA, 363 F.3d 442, 449-50 (D.C. Cir.

2004). 

Biggerstaff maintains that the 2005 NPRM implicitly

reopened consideration of the 1992 administratively-created

EBR exemption by inviting comments on “any other issues that

relate to the sender’s ability to send facsimile advertisements to

persons with whom an EBR was formed prior to enactment of

the [JFPA],” 20 F.C.C.R. at 19,763. But Biggerstaff takes this

statement out of context and mischaracterizes the Commission’s

purpose. The JFPA requires that a sender transmitting a

facsimile advertisement on the basis of an EBR must have

obtained the fax number through either “the voluntary

communication of such number, within the context of such

[EBR]” or “a directory, advertisement, or site on the Internet to

which the recipient voluntarily agreed to make available its

facsimile number for public distribution.” 47 U.S.C. §

227(b)(C)(ii). An exception exists if the EBR was in existence

and the sender possessed the fax number prior to the JFPA’s

date of enactment, in which event the sender need not

demonstrate how it obtained the number. Id. The 2005 NPRM

sought comment on how to “verify that a sender had an EBR

and recipient’s facsimile number prior to July 9, 2005.” 20

F.C.C.R. at 19,763. This statement is not fairly understood as an

attempt by the Commission to examine its statutory authority to

create the pre-JFPA EBR exemption; it was made in an effort to

implement the new statutory mandate. Nor does the reference

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in the Order accompanying the final rule, noting that Biggerstaff

and others “oppose an EBR exemption for fax advertising,” 21

F.C.C.R. at 3793 & n. 43, suggest that the Commission

reconsidered the validity of the 1992 EBR exemption, especially

given that the Commission’s response to the objection referred

only to its “mandate [] to implement the statute as enacted by

Congress,” that will help “prevent future unwanted faxes,” id.

“[A]n agency [does not] reopen an issue by responding to a

comment that addresses a settled aspect of some matter, even if

the agency had solicited comments on unsettled aspects of the

same matter.” Kennecott, 88 F.3d at 1213.

Biggerstaff also maintains that a Notice of Proposed

Rulemaking in 2002, see In the Matter of Rules and Regulations

Implementing the Telephone Consumer Protection Act of 1991,

17 F.C.C.R. 17,459 (2002) (“2002 NPRM”), which resulted in

the prospective revocation of the 1992 EBR exemption,

reopened consideration of that exemption by inviting comments

on whether the Commission should continue to recognize the

EBR defense. The parties agree that the 2005 NPRM

incorporated the 2002 NPRM. See Resp’t Br. at 15; Pet’r Reply

Br. at 15. In 2002, because “telemarketing practices ha[d]

changed significantly” since 1991, 17 F.C.C.R. at 17,460, the

Commission sought comment on “whether the Commission’s

rules need to be revised in order to more effectively carry out

Congress’s directives in the TCPA,” id. at 17,461. Specifically,

the 2002 NPRM solicited comment on “the Commission’s

determination that a prior business relationship between a fax

sender and recipient establishes the requisite consent to receive

telephone facsimile advertisement transmissions.” Id. at 17,483.

But although the 2002 NPRM did reconsider the 1992 EBR

exemption, instead of “reaffirm[ing]” it, Public Citizen, 901

F.2d at 151, and “re-promulgat[ing]” it, Ohio v. EPA, 838 F.2d

at 1328, the Commission revoked it altogether, see 2003 Rule,

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18 F.C.C.R. at 14,127. The Commission’s prospective

rescission of the EBR exemption in 2003 places Biggerstaff’s

challenge to that exemption outside the scope of the 2006

rulemaking. Given the absence of any indication in either

NPRM that the Commission intended to re-examine its statutory

authority in 1992 to adopt an EBR exemption, there is no basis

for the court to conclude that the Commission reopened the issue

in the 2006 rulemaking. See Charter Communications, 460 F.3d

at 38; see also FCC v. Schreiber, 381 U.S. 279, 289 (1965). The

enactment of the JFPA and its deadline for the promulgation of

regulations, see JFPA § 2(h), 119 Stat. at 362, were reason

enough for the Commission to confine its 2006 rulemaking to

implementing the JFPA. Further, given an agency’s obligation

under the Administrative Procedure Act to provide notice of a

proposed rulemaking that is “adequate to afford interested

parties a reasonable opportunity to participate in the rulemaking

process,” Florida Power & Light Co. v. United States, 846 F.2d

765, 771 (D.C. Cir. 1988) (internal quotation marks omitted);

see 5 U.S.C. § 553(b), had the Commission also intended to

rescind the 1992 administratively-created EBR exemption

retroactively, it is unclear how interested parties who have relied

on the EBR exemption in past transactions would have been put

on notice.

Accordingly, because Biggerstaff’s challenge to the validity

of the 1992 EBR exemption falls outside the scope of the 2006

rulemaking, and because McKenna lacks Article III standing, we

dismiss the petitions.

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