CE Design, Ltd. v. PRISM BUSINESS MEDIA, INC.

In the

United States Court of Appeals

For the Seventh Circuit

No. 09-3172

CE D ESIGN, L IMITED, an Illinois corporation,

individually and as the representative of a

class of similarly situated persons,

Plaintiff-Appellant,

v.

P RISM B USINESS M EDIA, INCORPORATED ,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 1:07-cv-05838—Rebecca R. Pallmeyer, Judge.

A RGUED JANUARY 20, 2010—D ECIDED M AY 27, 2010

Before F LAUM, K ANNE, and E VANS, Circuit Judges.

E VANS, Circuit Judge. This is a junk fax case, and like

most such cases, the facts are not especially juicy. In 2004

Prism Business Media, Inc., sent CE Design, Limited, a

2 No. 09-3172

fax advertising a trade show.1 That’s it. But that small act

sparked a lawsuit that presents some interesting juris-

dictional and regulatory questions. CE Design sued

Prism under the Telephone Consumer Protection Act

(TCPA), which prohibits the use of fax machines to send

unsolicited advertisements. See 47 U.S.C. § 227(b)(1)(C).

Prism sought summary judgment on the ground that it

shared with CE Design an “established business relation-

ship” (EBR)—a status which, Prism argued, provided a

complete defense under the Federal Communications

Commission’s (FCC) orders implementing the TCPA. In

response, CE Design asked the district court to ignore

the FCC orders because, according to it, Congress did not

authorize the FCC to establish an EBR defense. Because

CE Design’s request sounded a lot like one “to enjoin, set

aside, suspend (in whole or in part), or to determine

the validity” of a final FCC order—tasks which the Admin-

istrative Orders Review Act places within the exclusive

jurisdiction of the courts of appeals, see 28 U.S.C. § 2342(1);

47 U.S.C. § 402(a)—the district court concluded that it

lacked jurisdiction to consider the validity of the EBR

defense. After determining that the relationship between

Prism and CE Design met the FCC’s definition of an

EBR, the court granted Prism’s motion for summary

judgment. CE Design appeals.

1

Before this suit was filed, Prism Business Media, Inc., changed

its name to Penton Business Media, Inc., but the parties and the

district court have referred to the defendant as Prism through-

out this litigation. For consistency’s sake, we will do the same.

No. 09-3172 3

The few facts in this case are undisputed. Prism describes

itself as a “business-to-business media company” that

publishes trade magazines and sponsors industry-

specific trade shows. CE Design, a civil engineering and

design firm, is among the more than five million sub-

scribers to Prism’s publications. Between 1998 and 2008

CE Design subscribed to three of Prism’s publications.

For each subscription, CE Design’s president and sole

shareholder, John Pezl, filled out Prism’s subscription

card. On at least two of the subscription cards, Pezl

provided CE Design’s fax number among the required

contact information.

On August 23, 2004, Prism sent CE Design the fax that

set this lawsuit in motion. Prism sent the fax to Pezl’s

attention at the fax number he provided in his subscrip-

tion requests. The fax advertised an upcoming trade

show. It included a notice inviting Pezl to write “remove”

on the face of the advertisement and fax it back to a toll-

free number if he believed he received the fax in error or

if he wished to unsubscribe. Instead of accepting that

invitation, CE Design filed this putative class-action

lawsuit.2

In its complaint, CE Design alleged that Prism

violated the TCPA provision prohibiting the use of “any

telephone facsimile machine . . . to send an unsolicited

advertisement to a telephone facsimile machine.” 47 U.S.C.

2

We think it’s worth noting that CE Design is no stranger to

junk fax litigation; it has filed more than 100 similar suits

under the TCPA.

4 No. 09-3172

§ 227(b)(1)(C). In 2005—after Prism sent the fax but before

CE Design filed this suit—Congress passed the Junk Fax

Protection Act (JFPA), which amended the TCPA to

exempt from the ban on unsolicited fax advertisements

any faxes sent “from a sender with an established

business relationship with the recipient.” 47 U.S.C.

§ 227(b)(1)(C)(i). But the pre-JFPA version of the TCPA

applies in this case, and the EBR exemption does not

appear in that version of the statute. Instead, before 2005

the EBR exemption appeared only in FCC reports and

orders implementing the TCPA. See, e.g., In Re Rules &

Regulations Implementing the Tel. Consumer Prot. Act of 1991

(1992 Report and Order), 7 F.C.C.R. 8752, 8779 n.87

(Oct. 16, 1992). Specifically, the FCC’s 1992 Report and

Order states that “facsimile transmission from persons

or entities who have an established business relation-

ship with the recipient can be deemed to be invited or

permitted by the recipient.” Id.

In its summary judgment motion, Prism argued that the

FCC’s 1992 Report and Order provides a complete

defense to CE Design’s TCPA claim. Prism argued that CE

Design’s status as a subscriber to Prism’s publications

meant that they had an EBR at the time Prism faxed the

advertisement, and accordingly, the fax it sent CE Design

should be deemed invited. In response, CE Design

argued that the district court should ignore the 1992

Report and Order, as well as subsequent FCC orders

demonstrating that before Congress passed the JFPA, the

FCC considered the EBR exemption to apply to faxed

advertisements. See, e.g., In Re Rules & Regulations Imple-

menting the Tel. Consumer Prot. Act of 1991, 10 F.C.C.R.

No. 09-3172 5

12391, 12408 (Aug. 7, 1995); In Re Rules & Regulations

Implementing the Tel. Consumer Prot. Act of 1991 (2003

Report & Order), 18 F.C.C.R. 14014, 14127 (July 3, 2003). CE

Design argued that the FCC was not authorized to inter-

pret the TCPA to include an EBR exemption, and that

even if it were, the FCC’s interpretation is unreasonable.

In its thorough and thoughtful opinion granting Prism

summary judgment, the district court concluded that it

lacked jurisdiction to consider CE Design’s argument

that the FCC was not authorized to establish an EBR

defense. Specifically, it noted that the Administrative

Orders Review Act, better known as the Hobbs Act,

reserves to the courts of appeals the power “to enjoin, set

aside, suspend (in whole or in part), or to determine the

validity of” all final FCC orders, see 28 U.S.C. § 2342(1);

47 U.S.C. § 402(a), and that before seeking relief from

an appellate court, a party aggrieved by the FCC’s final

order must petition the FCC for reconsideration, see

47 U.S.C. § 405(a). The district court observed that CE

Design’s characterization of the EBR exemption as “unau-

thorized” amounted to an indirect challenge to the

FCC’s rule, and accordingly, it concluded that it lacked

jurisdiction to consider the validity of the EBR exemp-

tion. Instead, the district court considered only whether

the EBR exemption applies to the facts of this case.3 After

3

Although the Hobbs Act prevents the district court from

considering the validity of final FCC orders, the court retains

jurisdiction to determine whether the parties’ actions violate

(continued...)

6 No. 09-3172

carefully considering the FCC’s EBR definition, the

district court determined that at the time Prism faxed

CE Design its advertisement, the parties had an EBR.

Accordingly, the fax was deemed to have been invited,

and Prism was entitled to summary judgment on CE

Design’s TCPA claim.

We review the district court’s grant of summary judg-

ment de novo. See Covell v. Menkis, 595 F.3d 673, 675 (7th

Cir. 2010). CE Design presses two main arguments on

appeal: first, that the district court’s jurisdictional

analysis is erroneous because, according to CE Design,

the court had no need to consider the EBR exemption at

all; and second, that even if the EBR exemption applies,

an EBR exists only where the recipient is a residential

subscriber. Because CE Design characterizes itself as a

business subscriber, it argues that its relationship with

Prism does not qualify as an EBR.

In challenging the district court’s jurisdictional analysis,

CE Design argues that under the familiar analytical

framework established in Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), there

was no need for the court to consider the FCC’s rules or

the Hobbs Act’s jurisdictional bar in evaluating its

TCPA claim. The familiar Chevron framework is a tool

for judicial review of “an agency’s construction of the

3

(...continued)

FCC rules. See, e.g., U.S. West Commcn’s, Inc. v. Jennings,

304 F.3d 950, 958 & n.2 (9th Cir. 2002); GTE S., Inc. v. Morrison,

199 F.3d 733, 742-43, 746-67 (4th Cir. 1999).

No. 09-3172 7

statute which it administers.” Chevron, 467 U.S. at 842; see

also FDA v. Brown & Williamson Tobacco Corp., 529 U.S.

120, 132 (2000). In applying the Chevron framework,

the court first asks whether the statute is silent or am-

biguous on the question at issue, and if it is, the court

will look to the agency regulations to determine

whether they are based on a reasonable construction of

the statute. Chevron, 467 U.S. at 842-43; Castro v. Chi. Hous.

Auth., 360 F.3d 721, 727 (7th Cir. 2004). According to CE

Design, the district court needed to consider its jurisdic-

tion to review the EBR defense only if it found the TCPA

ambiguous and moved past step one of the Chevron

analysis. Specifically, CE Design argues that the FCC-

created EBR defense conflicts with the TCPA’s

plain language, which prohibits businesses from faxing

unsolicited advertisements and defines “unsolicited

advertisement” as one “which is transmitted to any

person without that person’s prior express invitation or

permission.” See 47 U.S.C. § 227(a)(5). CE Design asserts

that the phrase “prior express invitation or permission”

is unambiguous, and accordingly, it argues that under

the Chevron framework, there was no need for the

district court to even consider the agency-created EBR

defense. CE Design therefore concludes that the Hobbs

Act’s proscription of district court review of final FCC

orders should never have come into play in this case.

CE Design’s argument presents something of a chicken-

and-an egg question: What comes first, the Hobbs Act’s

jurisdictional restrictions or step one of Chevron? But

while one can go around and around on the chicken-and-

the-egg dilemma, an Article III court’s obligation to

8 No. 09-3172

ensure its jurisdiction to resolve a controversy precedes

any analysis of the merits. See Davis v. Fed. Election Comm’n,

128 S. Ct. 2759, 2768 (2008); Morales-Morales v. Ashcroft,

384 F.3d 418, 421 (7th Cir. 2004). In arguing that the

district court can put off considering its jurisdiction

until after step one of Chevron, CE Design turns that

traditional approach on its head. What’s more, CE

Design’s suggestion that the district court can embark

on step one of the Chevron analysis without reviewing the

FCC’s EBR defense ignores both the purpose and the

effect of the Chevron framework. Chevron is designed to

help courts determine the validity of a challenged agency

regulation by determining two things: First, whether

Congress expressly or implicitly delegated authority to the

agency to fill in any gaps in the statute that the agency

administers; and second, whether the agency’s rule is

based on a reasonable construction of that statute. Chevron,

467 U.S. at 842-44; see also Bellum v. PCE Constructors,

Inc., 407 F.3d 734, 738-39 (5th Cir. 2005) (noting that

Chevron guides a court’s determination of a regulation’s

validity); Castro, 360 F.3d at 727 (same). The purpose

of even just the first step of the Chevron analysis is to

determine the validity of the agency’s interpretation. See

Bankers Life & Cas. Co. v. United States, 142 F.3d 973, 983

(7th Cir. 1998); Square D. Co. & Subsidiaries v. C.I.R., 438

F.3d 739, 745 (7th Cir. 2006). If at step one the court deter-

mines that the statutory language is clear, it then decides

whether the plain meaning of the text supports or

opposes the challenged regulation. Khan v. United States,

548 F.3d 549, 554 (7th Cir. 2008). The effect of that

decision is to “ ‘either strike or validate’ ” the regulation

No. 09-3172 9

interpreting the statute. Id. (quoting Bankers Life, 142

F.3d at 983). But deeming agency action valid or

ineffective is precisely the sort of review that the

Hobbs Act delegates to the courts of appeals in cases

challenging final FCC orders.4 28 U.S.C. § 2342(1); FCC v.

ITT World Commc’ns, Inc., 466 U.S. 463, 468 (1984); see also

Wilson v. A.H. Belo Corp., 87 F.3d 393, 399-400 (9th Cir.

1996) (noting that asking a district court to agree or dis-

agree with an FCC ruling invokes the Hobbs Act’s juris-

dictional bar).

CE Design argues that asking a district court to “ignore”

the EBR defense at step one of its Chevron analysis

is not the same as asking the court to invalidate the

rule. We just don’t see the difference in this fine distinc-

tion. When Prism raised the EBR exemption as a defense

to CE Design’s TCPA claim, it inherently called upon

the district court to enforce the FCC’s rule. CE Design’s

request that the court “ignore” the rule is just another

way of asking it not to enforce the rule. That CE Design’s

challenge to the FCC’s EBR defense arises in a dispute

between private parties makes no difference—the

Hobbs Act’s jurisdictional limitations are “equally ap-

plicable whether [a party] wants to challenge the rule

directly . . . or indirectly, by suing someone who can be

expected to set up the rule as a defense in the suit.” City

of Peoria v. Gen. Elec. Cablevision Corp. (GECCO), 690

4

On appeal CE Design has not argued that the 1992 Report

and Order setting forth the EBR defense is anything other

than a final FCC order.

10 No. 09-3172

F.2d 116, 120 (7th Cir. 1982); see also United States v. Dunifer,

219 F.3d 1004, 1006-07 (9th Cir. 2000) (noting that the

Hobbs Act’s jurisdictional bar applies to affirmative

defenses); United States v. Any & All Radio Station Trans-

mission Equip., 207 F.3d 458, 463 (8th Cir. 2000) (holding

that Hobbs Act barred district court review of challenge

to validity of FCC regulations raised as defense in forfei-

ture action); Cahnmann v. Sprint Corp., 133 F.3d 484, 487-

88 (7th Cir. 1998) (noting that where issue arises in

federal suit regarding validity of FCC order court “would

have to interrupt the litigation and . . . compel the

parties to resort to the FCC for a determination of that

validity”). That is exactly the case here, where Prism

pointed to the FCC’s EBR exemption as a defense to CE

Design’s statutory claim. Because CE Design argued that

the district court should ignore—or in other words,

invalidate—the FCC’s EBR exemption for purposes of

this suit, the Hobbs Act’s jurisdictional bar came into

play. See Any & All Radio Station Transmission Equip., 207

F.3d at 463 (“Whichever way it is done, to ask the

district court to decide whether the regulations are

valid violates” the Hobbs Act.); see also Biggerstaff v. FCC,

511 F.3d 178, 184-85 (D.C. Cir. 2007) (noting that Hobbs

Act precludes challenge to EBR defense).

CE Design’s attempt to show that there is a difference

between asking the court to ignore a regulation at

Chevron’s step one and asking it to set aside or

invalidate a regulation cannot be squared with its

repeated characterization of the FCC’s decision to

establish the EBR defense as being unauthorized or

“ultra vires.” CE Design describes the legislative history of

No. 09-3172 11

the EBR defense and argues that Congress rejected it

intentionally and never gave the FCC the authority to

resurrect it. But as the Supreme Court has made clear, a

litigant can’t avoid the Hobbs Act’s jurisdictional

bar simply by accusing an agency of acting outside its

authority. See ITT World Commc’ns, Inc., 466 U.S. at 468-

69; see also Bd. of Governors of the Fed. Reserve Sys. v. MCorp

Fin., Inc., 502 U.S. 32, 43-44 (1991) (same with respect

to exclusive jurisdiction provision set forth in 12 U.S.C.

§ 1818(i)(1)). And as we have explained, Chevron is de-

signed to resolve whether Congress expressly or

implicitly delegated authority to an agency to interpret

a statute. See Joseph v. Holder, 579 F.3d 827, 831 (7th

Cir. 2009). If it did not, the agency action is invalid. See

Ceta v. Mukasey, 535 F.3d 639, 642 & 643 n.7 (7th Cir. 2008)

(noting that finding statute clear at Chevron’s step one

invalidates challenged regulation). CE Design’s insistence

that the FCC’s EBR defense is “unauthorized” merely

illustrates Prism’s point that their dispute turns on the

validity of an FCC order. See ITT World Commc’ns, Inc., 466

U.S. at 468-69; Sw. Bell Tel. Co. v. Ark. Pub. Serv. Comm’n,

738 F.2d 901, 906-07 (8th Cir. 1984) (vacated on other

grounds) (noting that a party “cannot bypass” the Hobbs

Act by characterizing agency action as “ultra vires”). But

the Hobbs Act prevents the district court from

reviewing the validity of FCC regulations, and we, in

turn, presume them valid for purposes of this appeal.

See Jennings, 304 F.3d at 958 n.2.5

5

CE Design suggests in a footnote in its opening brief that

we have jurisdiction under the Hobbs Act to invalidate the

(continued...)

12 No. 09-3172

None of the cases on which CE Design relies in chal-

lenging the district court’s jurisdictional analysis demon-

strate that a district court may proceed through step one

of the Chevron analysis without rubbing up against the

Hobbs Act’s jurisdictional bar. Some of the cases to

which CE Design points involve state-agency decisions

or rules that are not even subject to the Hobbs Act’s

jurisdictional bar and therefore have nothing to say

about the Hobbs Act’s interplay with Chevron. See, e.g.,

Cler v. Ill. Educ. Ass’n, 423 F.3d 726 (7th Cir. 2005); Ind. Bell

Tel. Co. v. McCarty, 362 F.3d 378 (7th Cir. 2004); United

States v. Dierckman, 201 F.3d 915 (7th Cir. 2000); Sprint

Spectrum L.P. v. State Corp. Comm’n of the State of Kan., 149

F.3d 1058 (10th Cir. 1998). Others involve disputes over

the application—rather than the validity—of FCC rules.

See, e.g., In re Airadigm Commc’ns, Inc., 519 F.3d 640 (7th

Cir. 2008); Fedor v. Cingular Wireless Corp., 355 F.3d 1069

(7th Cir. 2004). Still others clearly state that no FCC deci-

sion governed the matter. See, e.g.,Verizon New Eng., Inc.

v. Me. Pub. Util. Comm’n, 509 F.3d 1, 11 (1st Cir. 2007);

TCG N.Y., Inc. v. City of White Plains, 305 F.3d 67, 76 (2d

Cir. 2002).

The few remaining cases to which CE Design points

do not even mention the Hobbs Act’s jurisdictional bar, let

5

(...continued)

FCC’s EBR exemption. But of course, CE Design “cannot use

an appeal from a district court to circumvent the Hobbs Act’s

requirement that a challenge to an FCC order is subject only

to direct review in a court of appeals.” See GTE S., Inc., 199

F.3d at 743.

No. 09-3172 13

alone describe its interplay with Chevron. CE Design

points with particular urgency to Global Crossing Tele-

communications, Inc. v. Metrophones Telecommunications,

550 U.S. 45 (2007), and Core Communications, Inc. v. Verizon

Pennsylvania, Inc., 493 F.3d 333 (3d Cir. 2007), describing

them as cases applying the Chevron analysis to deter-

mine the legality of FCC rules without proceeding

through the Hobbs Act’s jurisdictional channels. But

those cases involved situations where the FCC attempted

to expand, see Global Crossing, 550 U.S. at 47-48, or limit, see

Core Commc’ns, 493 F.3d at 337, the jurisdiction of the

district courts. The respective courts looked to Chevron

only to answer threshold questions of whether the FCC

could create a cause of action, Global Crossing, 550 U.S.

at 53-55, or limit otherwise available routes to federal

court, Core Commc’ns, 493 F.3d at 339. A closer case is

Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir.

2009), which CE Design cited in its reply brief. In

Satterfield, the Ninth Circuit applied Chevron deference to

an FCC order determining that the TCPA’s ban on using

automatic telephone dialing systems to call cell phone

numbers applied to text messages. Id. at 952-53. There, the

Ninth Circuit embarked on a Chevron analysis of the

FCC’s order without considering the implications of the

Hobbs Act. But the Ninth Circuit’s silence on the issue

does not lend persuasive support to CE Design’s theory

that a district court can engage in the Chevron analysis

without questioning its jurisdiction to determine the

validity of the regulation in question. CE Design simply

has not cited any cases that directly support its central

thesis.

14 No. 09-3172

In a final effort to discredit the district court’s juris-

dictional analysis, CE Design warns us that the conse-

quences of adhering to the Hobbs Act here would be “an

affront to the Constitution” and would allow agency

interpretation to trump congressional intent in a way

that violates separation-of-powers principles. Specifically,

it argues that the district court’s jurisdictional analysis

renders the Hobbs Act unconstitutional by preventing

“the court from reading and applying the plain language”

of the TCPA. But that is pure bluster (dressed up in

CE Design’s rather hyperbolic analogies to nuclear

missiles and the Cold War). In passing the Hobbs Act,

Congress vested the power of agency review of final

FCC orders exclusively in the courts of appeals. 28 U.S.C.

§ 2342(1). The Hobbs Act’s jurisdictional bar thus

does not leave private parties without a mechanism for

judicial review of agency action; it merely requires

litigants to seek review through its specific procedural

path. See GECCO, 690 F.2d at 120-21; see also ITT World

Commc’ns, 466 U.S. at 468 & n.5. To allow parties to

bypass that procedure would ignore Congress’s

“specific grant of exclusive jurisdiction in the courts of

appeals for review of FCC orders.” Sw. Bell, 738 F.2d at

906; see also Am. Bird Conservancy v. FCC, 545 F.3d 1190,

1194 (9th Cir. 2008) (noting that “a plaintiff may not

escape an exclusive avenue of judicial review through

artful pleading”). And the procedural path designed by

Congress serves a number of valid goals: It promotes

judicial efficiency, vests an appellate panel rather than a

single district judge with the power of agency review, and

allows “uniform, nationwide interpretation of the federal

No. 09-3172 15

statute by the centralized expert agency created by Con-

gress” to enforce the TCPA. Dunifer, 219 F.3d at 1008

(quoting N.Y. Co. v. N.Y Dep’t of Labor, 440 U.S. 519, 528

(1979)); see also Sw. Bell, 738 F.2d at 906-07.

Having concluded that the district court correctly

determined that it lacked jurisdiction to consider

whether to enforce the EBR defense in the present case, we

turn to CE Design’s argument that its subscriber rela-

tionship with Prism does not fall within the FCC’s defini-

tion of an EBR. Specifically, it points to a subpart of the

FCC’s 1992 Report and Order stating that “as used in

this section . . . [t]he term ‘established business relation-

ship’ means a prior or existing relationship formed by a

voluntary two-way communication between a person

or entity and a residential subscriber.” See 7 F.C.C.R. at

8792-93. Based on that definition’s inclusion of the term

“residential subscriber,” CE Design argues that an EBR

exists only where the fax recipient is a private individual

or a business run from a residence. Because CE Design

describes itself as a business subscriber, it concludes

that “it did not have an EBR with Prism or any other

broadcaster.”

We agree with the district court’s conclusion that CE

Design’s reading of the FCC’s pre-JFPA definition of EBR

is far too narrow. The definition on which CE Design

bets its hand is located in the implementing regulations

appended to the 1992 Report and Order—specifically,

under the heading “Subpart L—Restrictions on Telephone

Solicitation.” 7 F.C.C.R. at 8790. Subpart L addresses the

TCPA’s limitations on automated calls to residences and

16 No. 09-3172

makes no mention of unsolicited faxes. In that limited

context, it makes sense that the FCC restricted the EBR

definition to residential subscribers—Subpart L is geared

toward preventing people from being bombarded at

home with annoying automated phone calls. In the

section specific to faxed advertisements, the FCC states

that unsolicited faxed ads “can be deemed to be invited

or permitted by the recipient,” but does not in any way

limit the term “recipient,” or otherwise indicate that the

EBR defense is limited to residential subscribers. 7 F.C.C.R.

at 8779 n.87. More importantly, the whole of the 1992

Report and Order demonstrates that the FCC did not

intend the limited reading of the EBR defense that CE

Design ascribes to it here. For example, elsewhere in the

1992 Report and Order the FCC explains that the term

“business relationship” should be construed broadly and

that an EBR is “a prior or existing relationship formed

by a voluntary two-way communication between the

caller and the called party, which relationship has not

been previously terminated by either party.” Id. at 8771.

In describing the types of relationships that are encom-

passed by an EBR, the FCC specifically cited “publishers

with subscribers” as an example. Id. Accordingly, it

would be hard not to conclude that the FCC intended for

relationships like that between Prism and CE Design—a

publisher and its subscriber—to fall within the scope of

the EBR exception.

In various orders issued following the promulgation of

the 1992 rules, the FCC continued to emphasize a broad

reading of the relationships covered by the EBR defense.

In 2001 the FCC issued a public notice reminding con-

No. 09-3172 17

sumers about the TCPA’s junk fax prohibition. In that

notice, the FCC explained that the prohibition on unsolic-

ited faxes “applies to unsolicited advertisements trans-

mitted to both businesses and residences . . . . An estab-

lished business relationship, however, demonstrates

consent to receive fax advertisement transmissions.” 16

F.C.C.R. 4524 (Feb. 20, 2001). In the 2003 Report and

Order, the FCC explained that the EBR exemption was

“sufficient to show that an individual or business has

given their express permission to receive unsolicited

facsimile advertisements.” 6 18 F.C.C.R. at 14127. Given

the FCC’s broad reading of the EBR definition, we agree

with the district court that the FCC did not intend to

limit the EBR exemption to only residential subscribers

who receive unsolicited faxes. And because Prism and

CE Design’s publisher-subscriber relationship falls

within the scope of business relationships the FCC in-

tended the EBR defense to cover, we also agree that the

EBR exemption applies in this case.

The judgment of the district court is A FFIRMED.

6

In the 2003 Report and Order, the FCC reversed its stance

and said that as of the effective date of the new rules it was

implementing, an EBR would no longer provide a defense. But

those rules never took effect before Congress passed the JFPA,

and in the interim the FCC continued to recognize the

EBR exemption.

5-27-10