Litigators of the Week: A Knockout Blow to Latest FCC Net Neutrality Rules After ‘Loper Bright’
Without some sort of future Congressional action, the Federal Communications Commission’s on-again, off-again approach to enforcing net neutrality rules on broadband providers would seem to be permanently off. That’s after a ruling from the Sixth Circuit last week.
With no need to give deference to the FCC’s reading of the underlying statute after the U.S. Supreme Court’s Loper Bright decision, the Sixth Circuit found that broadband providers offer an “information service” under the applicable statute. That reading means the FCC lacks the statutory authority to impose net-neutrality policies through the “telecommunications service” provision of the Communications Act which gives the agency more extensive regulatory authority over common carriers.
Jeffrey Wall and Morgan Ratner of Sullivan & Cromwell, who represented NCTA—The Internet & Television Association, USTelecom—The Broadband Association and the Ohio Telecom Association, took the lead for petitioners challenging the Biden administration’s key tech policy. Wall argued the matter at the Sixth Circuit in October.
Litigation Daily: How did this matter come to you and the firm?
Jeff Wall: The telecom industry did something very smart: They created a team of generalist litigators familiar with the changing administrative-law landscape, partnered with seasoned telecom experts—no easy task for a group of fierce competitors to agree on. This allowed us all to take a fresh look at issues the industry had been grappling with for a long time but informed by this dispute’s long history. When it came time to pitch, we had really studied the issues, and we promised to live and breathe the case with them for the next several years.
How much coordination was there among the various parties challenging the latest net-neutrality order and the amici backing the effort?
Morgan Ratner: Any time there are this many groups that need to be on a single brief, coordination is always an issue. But it was surprisingly painless here. We owe a lot of that to our clients—USTelecom, NCTA and the Ohio Telecom Association—along with other industry groups like CTIA and WISPA, which together cover much of the telecommunications industry. They were both tireless about representing their members’ interests and understanding about the need to compromise. It helped that the industry was aligned in its view that the challenged order was unlawful, unneeded, and unwise.
Who was part of the effort and how did you divide the work—both internally at Sullivan & Cromwell and among the other petitioners?
Ratner: This was a team effort through and through. We took the lead on the briefing and were lucky to have the help of two world-class associates, Max Gottschall and Zoe Jacoby (who has since left us for the SG’s Office). We couldn’t have done it without them. But as Jeff said, we’re not subject-matter experts. So we leaned heavily on all the in-house counsel at both the trade groups and member companies, along with outside counsel like Matt Brill at Latham, Rick Beckner at Sidley, Scott Angstreich at Kellogg, Tom Johnson at Wiley, Helgi Walker at Gibson, and Jen Fischell at MoloLamken—among many others. Some of those folks had been living this for almost two decades, including surviving earlier fights from FCC orders in 2015 and 2018, and their perspective was invaluable. This is a team win in the broadest sense.
Jeff, how did you get tapped to handle the oral argument?
Wall: We had led the briefing so that was natural, but I’m not sure anyone wanted to face our moot panels! The moots were so tough—murder boards by people who are both the best appellate lawyers around and technical FCC experts. That’s one of the thrills of arguing a case like this. You need to be able to hash out technical issues with the experts, and then turn around and talk to generalist judges like somebody who hasn’t spent countless hours reading FCC orders.
The opinion points out: “This order—issued during the Biden administration—undoes the order issued during the first Trump administration, which undid the order issued during the Obama administration, which undid orders issued during the Bush and Clinton administrations.” How do you prepare for oral argument in a case with that kind of underlying record?
Wall: That flip-flopping was one of the themes in our briefs, and one of the things that made this case so interesting. Although most of the history was on our side, in recent years the FCC had gone both ways on this incredibly important question, and courts had applied Chevron deference to say that either way was fine. That’s one of the reasons why when the Supreme Court recently reconsidered Chevron deference in Loper Bright, this so-called net-neutrality issue was Exhibit A for why Chevron should go. But all the changes certainly gave me a ton of material to look at, with several rounds of FCC orders and judicial decisions to scrutinize.
With this decision now in-hand, is there anything that stands out looking back at the argument?
Wall: What made this argument stand out is that it could have gone two completely different ways. We could have won on the major-questions doctrine, which we did before the stay panel. Or we could have won on the text, which we did before the merits panel. We were prepared to go in either direction, and looking back at the argument, it wasn’t obvious which framework the panel was going to use. The judges were very active on both issues.
Did having Loper Bright at your back allow you to focus more firmly on the plain text of the statutory language itself?
Ratner: Absolutely. As Jeff mentioned, previous courts had gone both ways on this question, under the cover of Chevron deference. And the court here felt like it had been freed to finally get into the nitty-gritty of statutory interpretation—to assess key statutory terms as a matter of ordinary language, in historical context, and with reference to other related provisions—and give a definitive answer. I can’t improve on what the court itself said: “Applying Loper Bright means we can end the FCC’s vacillations” on Title II.
What can other parties challenging agency rulemaking take from your approach here?
Ratner: The challengers here assembled a rock-solid administrative record, which included extensive information about the harms they would suffer under a Title II regime and, conversely, the absence of any real-world problem for the FCC to solve. Developing that kind of record can be time-consuming and require a lot of foresight. That set the stage for us to secure a stay before the order ever came into effect, and to add real-world color to our more technical statutory arguments.
What will you remember most about this matter?
Ratner: The tight briefing deadlines. We secured a stay of the order on Aug. 1 of last year, and the court put in place a highly expedited briefing schedule, with our opening brief due on Aug. 12. Eleven days for a merits brief is tight in any case, but in a case like this—an issue of this magnitude that has been closely scrutinized for a decade—I thought at first that it was a typo. But the broader team rallied together, and I couldn’t be prouder of the result if we had had three months to write it.
Wall: I’ve never been a part of a large group that functioned better or more collegially than this one. This industry has been treated as a political ping-pong ball for a long time. Enough was enough.
