McLaughlin Chiropractic v. McKesson: Implications for Pre-Enforcement Review in Environmental Law

Earlier this year, the U.S. Supreme Court issued a significant decision that could have far-reaching implications for various types of Environmental Protection Agency (EPA) enforcement proceedings. While the case under review did not involve environmental issues—instead, it involved allegations that the defendant sent unsolicited advertisements via fax in violation of the Telephone Consumer Protection Act (TCPA)—the Court’s decision is broad enough that it could impact the enforcement of various environmental laws as well. Learn more from the California environmental litigation attorneys at Bick Law LLP.

The U.S. Supreme Court’s Decision in McLaughlin Chiropractic v. McKesson

In McLaughlin Chiropractic v. McKesson, the U.S. Supreme Court addressed the specific question of whether the federal Hobbs Act requires a federal district court to accept the Federal Communications Commission’s (FCC) interpretation of the TCPA made in a previous proceeding unrelated to the current enforcement proceeding. The case made its way to the Court after a company that was not involved in the previous proceeding petitioned the FCC for a declaratory ruling about “whether the TCPA applies to faxes received through online fax services.”

In response to the request—and while the litigation was still pending—the FCC issued an order in which it interpreted the term “telephone facsimile machine” in the TCPA to exclude online fax services. Based on this order, and following Ninth Circuit precedent holding that FCC orders are not subject to review at the district court level, the district court granted McKesson’s motion for summary judgment.

On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The plaintiffs then petitioned the U.S. Supreme Court for review. By a 6-3 majority, the Court held:

“The Hobbs Act does not bind district courts in civil enforcement proceedings to an agency’s interpretation of a statute. District courts must independently determine the law’s meaning under ordinary principles of statutory interpretation while affording appropriate respect to the agency’s interpretation.”

Emphasizing that the Hobbs Act is silent about judicial review in enforcement proceedings, the Court further clarified that, “[i]n enforcement proceedings, district courts must independently determine whether an agency’s statutory interpretation is correct, rather than being bound by the agency’s interpretation.” This is based on the principles of judicial review established under the federal Administrative Procedure Act (APA).  It is of note that this ruling is aligned with the Supreme Court’s ruling in Loper Bright, which required lower courts to conduct a full review without deference to an agency’s decision.

Notably, however, while the Hobbs Act is silent regarding judicial review, many other federal statutes are not. The Court acknowledged this in its opinion as well—and, in doing so, it specifically mentioned several federal environmental laws. After noting that all pre-enforcement review statutes fall into one of three categories, the Court wrote:

“[S]tatutes like the Clean Water Act, CERCLA, and the Clean Air Act expressly preclude judicial review in enforcement proceedings, [while] statutes like the Toxic Substances Control Act expressly authorize or contemplate review in both pre-enforcement and enforcement proceedings.”

The third category includes statutes, such as the Hobbs Act, that do not address the issue of judicial review. For statutes in this latter category, the Court held that, “[b]lindsiding all potentially affected parties by requiring them to bring pre-enforcement challenges within 60 days or lose their right to contest an agency’s interpretation in a later enforcement proceeding would be impractical and unfair.”

How McLaughlin Chiropractic v. McKesson Could Impact Environmental Enforcement Going Forward

So, what does the Court’s decision in McLaughlin Chiropractic v. McKesson mean for environmental enforcement going forward?

The short answer is, “It depends.” Specifically, it depends on the statute (or statutes) involved. In enforcement cases involving statutes that expressly preclude judicial review—like the Clean Air Act, Clean Water Act and CERCLA—this express preclusion continues to override the default principles of judicial review established under the APA. On the opposite end of the spectrum, in enforcement cases involving statutes that expressly authorize judicial review—like the Toxic Substances Control Act and the Endangered Species Act (although enforcement is through citizens’ suits) —this further codification of the APA’s grant of authority to the judiciary makes clear that companies can challenge EPA decisions in court when warranted.

It is cases involving statutes that are silent on the issue of judicial review, for example, the National Environmental Policy Act,  that will be affected by the Court’s decision in McLaughlin Chiropractic v. McKesson. Going forward, it is now clear that EPA’s interpretations of these statutes may be subject to being challenged at the district court level.

Key Takeaways for Companies That Are Subject to EPA Oversight

With all of this in mind, here are some key takeaways for companies that are subject to EPA oversight:  

• The Court’s Decision Does Not Impact EPA Enforcement of Statutes that Expressly Preclude Pre-enforcement Judicial Review, like CERCLA – As discussed above, the Court’s decision in McLaughlin Chiropractic v. McKesson does not affect these statutes’ express preclusion of judicial review.  
• The Court’s Decision Also Does Not Impact EPA Enforcement of Statutes Like the Toxic Substances Control Act – Likewise, statutory provisions that expressly authorize judicial review remain unaffected by the Court’s decision in McLaughlin Chiropractic v. McKesson.
• Companies Can Challenge EPA’s Statutory Interpretations In Other Cases – In other cases, however, the Court’s decision clarifies that companies can challenge EPA’s statutory interpretations at the district court level when warranted.
• The Ability to Challenge an EPA Interpretation Does Not Guarantee Success – Importantly, even though the Court’s decision paves the way for additional challenges to EPA’s interpretation of relevant statutes, district courts must comply with the APA standards reiterated in Loper Bright, which provides that district courts are not bound by an agency’s interpretation, but instead must determine the meaning of the law under ordinary principles of statutory interpretation, affording appropriate respect to the agency’s interpretation. See Loper Bright Enterprises v. Raimondo, 603 U. S. 369, 402 (2024).  
• Effective Compliance Management and Informed Decision-Making Remain Essential – Going forward, companies that are subject to EPA oversight must continue to prioritize effective compliance management, and they must work with their legal counsel to make informed decisions about when judicial challenges to EPA’s statutory interpretations are warranted.

Schedule a Call with a California Environmental Litigation Attorney at Bick Law LLP

Bick Law LLP is a California environmental law firm that represents companies in a wide range of industries in EPA compliance and enforcement matters. We provide representation for transactions and litigation involving environmental issues as well. If you would like to speak with one of our experienced California environmental litigation attorneys about your company’s obligations, risks, or opportunities, give us a call at 949-432-3500 today.