Soundboard Ass'n v. Fed. Trade Comm'n

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 6, 2017 Decided April 27, 2018

No. 17-5093

SOUNDBOARD ASSOCIATION,

APPELLANT

v.

FEDERAL TRADE COMMISSION,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:17-cv-00150)

Karen Donnelly argued the cause for appellant. With her

on the briefs was Errol Copilevitz. Daniel W. Wolff entered an

appearance.

Matthew M. Hoffman, Attorney, Federal Trade

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

brief were David C. Shonka, Acting General Counsel, and Joel

Marcus, Deputy General Counsel. Michele Arington and

Leslie R. Melman Assistants General Counsel, and Bradley

Grossman, Attorney, entered appearances.

Thomas C. Bennigson was on the brief for amicus curiae

Public Good Law Center in support of appellee.

2

Before: ROGERS, MILLETT and WILKINS, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

Dissenting Opinion filed by Circuit Judge MILLETT.

WILKINS, Circuit Judge: This appeal arises from

Appellant Soundboard Association’s (“SBA’s”) challenge to a

November 10, 2016 informal opinion letter (the “2016 Letter”)

issued by Federal Trade Commission (“FTC” or

“Commission”) staff. The 2016 Letter stated it was the FTC

staff’s opinion that telemarketing technology used by SBA’s

members is subject to the FTC’s regulation of so-called

“robocalls,” and it announced the rescission of a 2009 FTC

staff letter (the “2009 Letter”) that had reached the opposite

conclusion.

SBA filed suit seeking to enjoin rescission of the 2009

Letter. It argued the 2016 Letter violated the Administrative

Procedure Act (“APA”) because it was a legislative rule issued

without notice and comment and because the FTC’s robocall

regulation unconstitutionally restricted speech on the basis of

content. The FTC opposed both these arguments and also

disputed that the 2016 Letter was reviewable final agency

action. The District Court concluded the 2016 letter qualified

as reviewable final agency action, but the court granted

summary judgment for the FTC on the grounds that the 2016

Letter was an interpretive rule not subject to notice and

comment and that the interpretation stated in the letter survived

First Amendment scrutiny.

We conclude that because the 2016 staff opinion letter

does not constitute the consummation of the Commission’s

decisionmaking process by its own terms and under the FTC’s

3

regulations, it is not final agency action. As SBA concedes,

its speech claims are pleaded as APA claims under 5 U.S.C.

§ 706(2)(B) and cannot proceed without final agency action.

We therefore vacate the decision below and dismiss the case

for failure to state a cause of action under the APA.

I.

A.

SBA is a trade association for companies that manufacture

or use “soundboard” telemarketing technology

(“soundboard”). Soundboard enables telemarketing agents to

communicate with customers over the phone by playing pre-

recorded audio clips instead of using the agent’s live voice.

The agent can choose a pre-recorded clip to ask questions of or

respond to a customer, while retaining the ability to break into

the call and speak to the customer directly. Soundboard also

enables agents to make and participate in multiple calls

simultaneously. According to SBA, soundboard provides

many advantages to telemarketers, including ensuring accurate

communication of information and disclaimers, improving

call-center performance and cost-effectiveness, and employing

individuals who would otherwise have difficulty being

understood over the phone due to accent or disability. J.A. 85-

86.

The FTC regulates telemarketing pursuant to the

Telemarketing and Consumer Fraud and Abuse Prevention Act

of 1994, which directs the Commission to “prescribe rules

prohibiting deceptive . . . and other abusive telemarketing acts

or practices.” 15 U.S.C. § 6102(a)(1). In 1995, the

Commission promulgated the Telemarketing Sales Rule

(“TSR”), which restricts telemarketing to certain times of day,

creates the “do-not-call” list, and imposes other requirements

4

to prevent fraud, abuse, and intrusions on customer privacy. 60

Fed. Reg. 43842 (Aug. 23, 1995); 16 C.F.R. § 310.4(b)(ii), (c).

In 2003, the Commission amended the TSR to more closely

regulate “predictive dialing,” which places multiple

simultaneous calls for a single call-center agent and, therefore,

can result in “call abandonment” – i.e., abruptly hanging up –

when too many customers answer the phone. The 2003

amendment prohibited telemarketers from failing to connect a

customer to an agent within two seconds of the customer’s

completed greeting. 16 C.F.R. § 310.4(b)(1)(iv). The

amendment thus effectively prohibited outbound telemarketing

campaigns consisting “solely of prerecorded messages” –

colloquially known as robocalls – because “consumers who

receive a prerecorded message would never be connected to a

sales representative.” 73 Fed. Reg. 51,164, 51,165 (Aug. 29,

2008).

In 2008, the Commission amended the TSR to prohibit

telemarketers from “initiating any outbound telephone call that

delivers a prerecorded message” without “an express

agreement, in writing” from the consumer with language

demonstrating the individual customer’s consent to receiving

such calls from that telemarketer. Id. at 51,184; 16 C.F.R.

§ 310.4(b)(1)(v)(A). The express-written-consent requirement

does not apply to calls made on behalf of charitable

organizations intended to “induce a charitable contribution

from a member of, or previous donor to,” the organization, as

long as the donor can opt out of such calls. 16 C.F.R.

§ 310.4(b)(1)(v)(B). The Commission justified this exception

on the grounds that members and prior donors have consented

to receiving future charitable solicitation calls and, as a result,

5

have a reduced privacy interest vis-à-vis a charitable

organization’s speech interest. See 73 Fed. Reg. at 51,193-94.

In promulgating the 2008 amendments, the Commission

explained that the comments it received from customers and

industry showed “the reasonable consumer would consider

interactive prerecorded telemarketing messages to be coercive

or abusive of such consumer’s right to privacy. The mere

ringing of the telephone to initiate such a call may be

disruptive; the intrusion of such a call on a consumer’s right to

privacy may be exacerbated immeasurably when there is no

human being on the other end of the line.” Id. at 51,180. The

Commission also rejected the industry’s argument that an

interactive opt-out mechanism for robocalls would adequately

protect consumer privacy, reasoning that the “volume of

telemarketing calls from multiple sources is so great that

consumers find even an initial call from a telemarketer or seller

to be abusive and invasive of privacy.” Id. (quotation marks

omitted).

B.

Before the TSR went into effect in September 2009, a

telemarketer and soundboard user, Call Assistant LLC (“Call

Assistant”), submitted a “request for a FTC Staff Opinion

Letter” regarding whether Call Assistant’s use of soundboard

was subject to the 2008 amendments. J.A. 230 (emphasis in

original). In its request, Call Assistant represented that “[a]t all

times” during a soundboard call, “even during the playing of

any recorded segment, the agent retains the power to interrupt

any recorded message.” J.A. 37. It also represented that during

6

soundboard calls, “live agents hear every word spoken by the

call recipient, and determine what is said” in response. J.A. 38.

On September 11, 2009, FTC staff responded with an

“informal staff opinion” letter from Lois Greisman, the FTC’s

Associate Director of the Division of Marketing Practices (the

“2009 Letter”). J.A. 37. The 2009 Letter stated that “[b]ased

on the description of the technology included in [Call

Assistant’s] letter,” “the staff of the [FTC] has concluded that

the 2008 TSR Amendments . . . do not prohibit telemarketing

calls using” soundboard. J.A. 38. Greisman explained that the

robocall regulation “prohibit[s] calls that deliver a prerecorded

message and do not allow interaction with call recipients in a

manner virtually indistinguishable from calls conducted by live

operators. Unlike the technology that [Call Assistant]

describe[s], the delivery of prerecorded messages in such calls

does not involve a live agent who controls the content and

continuity of what is said to respond to concerns, questions,

comments – or demands – of the call recipient.” Id. Greisman

quoted the FTC’s justification for the TSR’s prohibition on

robocalls, which “convert the telephone from an instrument for

two-way conversations into a one-way device for transmitting

advertisements.” Id. Given Call Assistant’s assertions that

soundboard calls featured a “live human being continuously

interact[ing] with the recipient of a call in a two-way

conversation,” “in Staff’s view,” soundboard use did not

implicate the purposes of the TSR. Id.

The 2009 Letter expressly conditioned this conclusion on

the factual representations in Call Assistant’s request for a staff

opinion, and Griesman advised Call Assistant that the letter did

not represent the views of the Commission:

Please be advised that this opinion is based on

all the information furnished in your request.

7

This opinion applies only to the extent that

actual company practices conform to the

material submitted for review. Please be

advised further that the views expressed in this

letter are those of the FTC staff. They have not

been reviewed, approved, or adopted by the

Commission, and they are not binding upon the

Commission. However, they do reflect the

opinions of the staff members charged with

enforcement of the TSR.

J.A. 39.

After issuing the 2009 Letter, the Commission began to

receive consumer complaints and to observe media reports

about the use of soundboard that conflicted with factual

representations made by Call Assistant. This included

complaints that consumers “are not receiving appropriate

recorded responses to their questions or comments,” that “no

live telemarketer intervenes to provide a human response when

requested to do so,” and that “the call is terminated in response

to consumers[’] questions.” J.A. 30-31. FTC staff also

collected evidence from consumers and industry stakeholders

that “some companies are routinely using soundboard

technology” to “conduct separate conversations with multiple

consumers at the same time,” and observed that companies

engaging in these practices were using the 2009 Letter as a

defense against consumer lawsuits. J.A. 31; 225.

The FTC staff began to reconsider the 2009 Letter. In

early 2016, FTC staff contacted telemarketing industry groups

for input and held meetings at which industry representatives

made presentations about soundboard. In a February 2016

meeting, “representatives of [a telemarketing trade group]

acknowledged that soundboard technology is frequently

8

utilized in a matter to allow one live agent to handle multiple

calls simultaneously.” J.A. 226. A trade group representative

also told FTC staff “that if the FTC enforced a requirement that

one agent could only manage one call at a time, no call center

would use soundboard technology because it would not be cost

effective – i.e., the capital expenditure in implementing

soundboard . . . only made business sense if a call center could

increase the volume of calls its agents could handle.” Id.

During this time SBA argued to FTC staff that the practices

described in consumer complaints were contrary to the trade

groups’ code of conduct, and that bad actors should be

punished instead of the entire soundboard industry. J.A. 147-

48.

On November 10, 2016, FTC staff issued a letter (the

“2016 Letter”) concluding that the TSR did apply to

soundboard calls and rescinding the 2009 Letter effective May

12, 2017. The 2016 Letter was from Greisman, as well. It

noted the 2009 Letter was premised on factual representations

made by Call Assistant. But based on consumer complaints,

media reports, meetings with industry representatives, and

other data points, by 2016 the FTC staff believed the factual

bases of the 2009 Letter were faulty. Specifically,

A fundamental premise of [the] September

2009 letter was that soundboard technology

was a surrogate for the live agent’s actual

voice. A human being cannot conduct separate

conversations with multiple consumers at the

same time using his or her own voice.

Nonetheless, some companies are routinely

using soundboard technology in precisely this

manner [of enabling an agent to handle

multiple simultaneous calls] . . . Indeed, Call

Assistant noted publicly that one of the

9

advantages of its technology is that an agent

can conduct multiple calls simultaneously.

J.A. 31-32 (internal quotation marks omitted).

The 2016 Letter also stated that because soundboard users

play prerecorded audio files to communicate with customers,

soundboard calls fall within the plain language of the TSR’s

prohibition on “any outbound telephone call that delivers a

prerecorded message.” J.A. 30. Accordingly, the letter

reasoned,

Given the actual language used in the TSR, the

increasing volume of consumer complaints, and

all the abuses we have seen since we issued the

September 2009 letter, we have decided to

revoke the September 2009 letter. It is now

staff’s opinion that outbound telemarketing

calls that utilize soundboard technology are

subject to the TSR’s prerecorded call provisions

because such calls do, in fact, “deliver a

prerecorded message” as set forth in the plain

language of the rule. Accordingly, outbound

telemarketing calls made using soundboard

technology are subject to the provisions of 16

C.F.R. § 310.4(b)(1)(v), and can only be made

legally if they comply with the requirements

[applicable to robocalls].

J.A. 32 (footnote omitted).

The 2016 Letter provided that “[i]n order to give industry

sufficient time to make any necessary changes to bring

themselves into compliance, the revocation of the September

2009 Letter will be effective six months from today, on May

10

12, 2017. As of that date, the September 11, 2009 letter will

no longer represent the opinions of FTC staff.” J.A. 33. The

2016 Letter concluded by stating that “the views expressed in

this letter are those of the FTC staff, subject to the limitations

of 16 C.F.R. § 1.3. They have not been approved or adopted

by the Commission, and they are not binding upon the

Commission. However, they do reflect the views of staff

members charged with enforcement of the TSR.”1 Id.

C.

SBA sought to enjoin the revocation of the 2009 Letter

and what it characterized as a compliance deadline of May 12,

2017. It argued before the District Court that the 2016 Letter

is a legislative rule requiring notice and comment under 5

U.S.C. § 553 because it expanded the scope of the TSR to reach

soundboard. It also argued that to the extent the 2016 Letter

amends the TSR to apply to soundboard, it is a content-based

speech restriction that “treat[s] speech tailored for first-time

donors differently than speech tailored for previous donors.”

J.A. 191. The Commission moved for summary judgment. It

argued the 2016 Letter was not a reviewable final agency

action, and in any event was an interpretive rule not subject to

notice and comment. The Commission also argued that the

SBA’s affirmative First Amendment challenge was barred by

the APA’s six-year statute of limitations, but that on the merits

1

16 C.F.R. § 1.3(c) provides that “[a]dvice rendered by the staff is

without prejudice to the right of the Commission later to rescind the

advice and, where appropriate, to commence an enforcement

proceeding.”

11

the TSR was a reasonable time, place, and manner restriction

that survived intermediate scrutiny.

The District Court consolidated the motions as cross-

motions under Rule 56 and granted summary judgment for the

Commission. The court concluded the 2016 Letter was a final

agency action but held it was an interpretive rule not subject to

notice and comment, and that the TSR’s application to SBA

survived the intermediate scrutiny applicable to regulations of

commercial speech. SBA timely appealed.

II.

This court “review[s] de novo a district court’s decision to

grant summary judgment, viewing the evidence in the light

most favorable to the non-moving party. A party is entitled to

summary judgment only if there is no genuine issue of material

fact and judgment in the movant's favor is proper as a matter of

law.” Ctr. for Auto Safety v. Nat’l Highway Traffic Safety

Admin., 452 F.3d 798, 805 (D.C. Cir. 2006) (quotation marks

omitted).

The APA limits judicial review to “final agency action for

which there is no other adequate remedy in a court.” 5 U.S.C.

§ 704. While the requirement of finality is not jurisdictional,

without final agency action, “there is no doubt that appellant

would lack a cause of action under the APA.” Reliable

Automatic Sprinkler Co. v. Consumer Prod. Safety Comm’n,

324 F.3d 726, 731 (D.C. Cir. 2003); Flytenow, Inc. v. FAA, 808

F.3d 882, 888 (D.C. Cir. 2015). Agency actions are final if two

independent conditions are met: (1) the action “mark[s] the

consummation of the agency’s decisionmaking process” and is

not “of a merely tentative or interlocutory nature;” and (2) it is

an action “by which rights or obligations have been

determined, or from which legal consequences will flow.”

12

Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (internal

quotation marks omitted); see also Scenic Am. v. U.S. Dep’t of

Transp., 836 F.3d 42, 55-56 (D.C. Cir. 2016). “An order must

satisfy both prongs of the Bennett test to be considered final.”

Sw. Airlines Co. v. U.S. Dep’t of Transp., 832 F.3d 270, 275

(D.C. Cir. 2016).

In evaluating the first Bennett prong, this Court considers

whether the action is “informal, or only the ruling of a

subordinate official, or tentative.” Abbott Labs. v. Gardner,

387 U.S. 136, 151 (1967) (internal citations omitted). The

decisionmaking processes set out in an agency’s governing

statutes and regulations are key to determining whether an

action is properly attributable to the agency itself and

represents the culmination of that agency’s consideration of an

issue. See Holistic Candlers & Consumers Ass’n v. FDA, 664

F.3d 940, 944 (D.C. Cir. 2012) (relying upon the FDA

Manual’s description of warning letters as preceding

enforcement action to conclude they “do not mark the

consummation of FDA’s decisionmaking”); Reliable

Automatic Sprinkler, 324 F.3d at 732, 733 (holding a letter

interpreting a safety regulation was not a final agency action

because “the Commission itself ha[d] never considered the

issue,” and “[t]he Act and the agency’s regulations clearly

prescribe a scheme whereby the agency must hold a formal, on-

the-record adjudication before it can make any determination

that is legally binding.”); see also Sw. Airlines, 832 F.3d at 275

(In evaluating finality, this Court also looks to “the way in

which the agency subsequently treats the challenged action.”).

Because each prong of Bennett must be satisfied

independently for agency action to be final, deficiency in either

is sufficient to deprive SBA of a cause of action under the APA.

Sw. Airlines, 832 F.3d at 275.

13

III.

A.

SBA argues, and the District Court concluded below, that

the extensive investigative efforts by FTC staff and some

definitive language in the 2016 Letter render it the

consummation of agency decisionmaking for “all intents and

purposes.” Soundboard Ass’n v. FTC, 251 F. Supp. 3d 55, 54

(D.D.C. 2017). We disagree.

There is no dispute that the 2016 Letter was “informal”

and “only the ruling of a subordinate official,” and not that of

any individual Commissioner or of the full Commission.

Abbott Labs., 387 U.S. at 151 (citations omitted). It is readily

distinguishable from the final agency action in Frozen Food

Express v. United States, relied upon by SBA and the decision

below. That case involved a formal, published report and order

of the Interstate Commerce Commission, not its staff,

following an investigation and formal public hearing. 351 U.S.

40, 41 (1956). Similarly, unlike the jurisdictional

determination in U.S. Army Corps of Engineers v. Hawkes Co.,

which was issued by the agency and expressly deemed “final

agency action” by regulation, was “valid for a period of five

years,” and was “bind[ing on] the Corps for five years,” 136 S.

Ct. 1807, 1814 (2016), the 2016 Letter is issued by staff under

a regulation that distinguishes between Commission and staff

advice, is subject to rescission at any time without notice, and

is not binding on the Commission. 16 C.F.R. § 1.3(c). This

factor also distinguishes this case from Sackett v. EPA, 566

U.S. 120 (2012), in which a binding enforcement order issued

14

by the EPA Administrator was deemed the consummation of

the agency’s decisionmaking.

The 2016 Letter does not represent otherwise. It explicitly

and repeatedly states that it expresses the views of “staff,” and

it explains that such views do not bind the Commission. While

the letter does present a conclusive view that “outbound

telemarketing calls made using soundboard are subject to [the

TSR] . . . and can only be made legally if they required with

[the TSR],” J.A. 32, it characterizes this as “staff’s opinion”

and nowhere presents this as the conclusive view of the

Commission. To the contrary, the 2016 Letter is clear that

agency staff is “merely expressing its view of the law,” AT&T

v. EEOC, 270 F.3d 973, 976 (D.C. Cir. 2001) (emphasis

added). Indeed, nonbinding staff advice is precisely what Call

Assistant sought in its specific “request for a FTC Staff

Opinion Letter,” J.A. 230 (emphasis in original).

True, the fact that staff and not an agency head has taken

a challenged action does not end the finality inquiry. But the

2016 Letter differs significantly from decisions by subordinate

officials we have deemed final agency action. Unlike the

guidance at issue in Appalachian Power v. EPA, the 2016

Letter is not binding on Commission staff “in the field” or on

third parties such as state permitting authorities. Cf. 208 F.3d

1015, 1022, 1023 (D.C. Cir. 2000) (“The short of the matter is

that the Guidance, insofar as relevant here, is final agency

action, reflecting a settled agency position which has legal

consequences both for State agencies administering their

permit programs and for companies like those represented by

petitioners who must obtain Title V permits in order to continue

operating.”). Nor is SBA trapped without recourse due to the

indefinite postponement of agency action. Cf. Her Majesty the

Queen in Right of Ontario v. EPA, 912 F.2d 1525, 1531 (D.C.

Cir. 1990) (“[A]lthough . . . the EPA concededly made no final

15

decision on petitioners’ request that the section 115 remedial

process be initiated, it clearly and unequivocally rejected . . .

petitioners’ requests for a separate proceeding[.]”). SBA

concedes it could, but did not, seek an opinion from the

Commission itself – and SBA remains free to do so today. Cf.

Sackett, 566 U.S. at 127 (holding an order issued by the agency

itself to be final when “not subject to further agency review”);

Ciba-Geigy Corp. v. EPA, 801 F.2d 430, 437 (D.C. Cir. 1986)

(“Having definitively stated its position that Ciba-Geigy has no

statutory right to a cancellation hearing, EPA has provided its

final word on the matter short of an enforcement action.”

(alterations, citation, and quotation marks omitted)).

The dissent repeatedly cites Sackett as authority for its

conclusion that informal staff advice is final agency action.

Sackett is a very different case. There, the EPA Administrator

issued a compliance order against the Sacketts under the

“Enforcement” section of the Clean Water Act, 33 U.S.C.

§ 1319. The Administrator’s order made enforceable factual

findings and legal conclusions that the Sacketts’ property

included “waters of the United States” subject to the Clean

Water Act, and that the Sacketts therefore had committed

violations of the Clean Water Act. 566 U.S. at 124-25. The

order directed the Sacketts “immediately [to] undertake

activities to restore” their property “in accordance with [an

EPA-created] Restoration Work Plan” and to provide to EPA

employees “access to the Site . . . [and] access to all records

and documentation related to the conditions at the Site.” Id. at

125 (alterations in original). The Sacketts sought a hearing on

the order from the EPA, which EPA denied, prompting the

Sacketts (having no other recourse) to bring suit in the district

court.

The Supreme Court analyzed the Administrator’s order

separately under each prong of Bennett. Under the first prong,

16

the Administrator’s order was the consummation of the

agency’s decisionmaking process because the Sacketts sought

a hearing, and when that request was denied, “the ‘Findings and

Conclusions’ that the compliance order contained were not

subject to further agency review.’” 566 U.S. at 127. This alone

sufficiently distinguishes the informal staff opinion in this case

from the Administrator’s enforcement order in Sackett, as the

informal staff opinion is “subject to further agency review” in

at least two ways. First, SBA is and has always been able to

request an opinion from the Commission itself; given that Call

Assistant specifically emphasized that they sought a “Staff

Opinion Letter,” a request for Commission advice remains an

available alternative of which the requestors of the 2009 Letter

were well aware – and which they chose not to pursue. Second,

if at some future date the FTC staff make the further decision

to recommend a TSR enforcement action against a soundboard

user, proceeding on that recommendation would require the

Commission to decide – itself, for the first time – whether the

2016 Letter’s interpretation of the TSR is correct, and to vote

on whether to issue a complaint. 16 C.F.R. § 3.11. SBA seeks

a shortcut around both these decision points, but unlike the

Sacketts, SBA is neither out of regulatory review options nor

subject to an order or enforcement action issued from the head

of the agency itself.

Further, the FTC regulations expressly delineate between

advice from the Commission and advice from its staff. The

manner in which an agency’s governing statutes and

regulations structure its decisionmaking processes is a

touchstone of the finality analysis. See Holistic Candlers, 664

F.3d at 944. Under FTC rules, when the Commission itself

gives advice, it may only rescind or revoke that advice upon

“notice . . . to the requesting party so that he may discontinue

the course of action taken pursuant to the Commission’s

advice.” 16 C.F.R. § 1.3(b). Advice from the Commission

17

also constrains its future enforcement authority: It “will not

proceed against the requesting party with respect to any action

taken in good faith reliance upon the Commission’s advice

under this section, where all the relevant facts were fully,

completely, and accurately presented to the Commission . . . .”

Id.

A separate provision governs “[a]dvice rendered by the

staff.” 16 C.F.R. § 1.3(c). Staff advice is given “without

prejudice to the right of the Commission to later rescind the

advice and, where appropriate, to commence an enforcement

proceeding,” and § 1.3(c) has no notice requirement and

provides no safe harbor for reasonable reliance on the advice.2

Id. Unlike Commission opinions, staff advice cannot constrain

the Commission’s future enforcement authority. Thus,

contrary to SBA’s assertions, the 2016 Letter’s disclaimer is

not fairly read as meaningless “boilerplate.” Rather, the 2016

Letter reflects and cites specific FTC regulations that structure

the agency’s decisionmaking processes. Cf. Scenic Am., 836

F.3d at 56 (dismissing as “boilerplate” an agency’s vague

statement that it “may provide further guidance in the future as

a result of additional information”). While an opinion from the

Commission itself might constitute the consummation of its

2

We note a textual distinction between § 1.3(b), which provides that

the Commission may “rescind or revoke” its own advice, and

§ 1.3(c), which provides only that the Commission may “rescind”

staff advice. We conclude this is a distinction without a difference.

Courts and agencies frequently use the terms “rescind”/“rescission”

and “revoke”/“revocation” interchangeably, e.g., Motor Vehicle

Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 51-52

(1983), and we find no indication that “revoke” must have an

independent meaning here. See Lamie v. U.S. Trustee, 540 U.S. 526,

536 (2004) (“[O]ur preference for avoiding surplusage constructions

is not absolute.”).

18

decisionmaking process, the 2016 Letter from FTC staff does

not.

The dissent interprets the FTC’s regulations differently,

concluding that the Commission has “delegated” – in the

dissent’s terms – its advice function such that the staff actually

speaks directly for the Commission, despite express

disclaimers and regulatory distinctions between staff and

Commission advice. Dissenting Op. at 4. We do not agree.

Quoted in full, Section 1.3(a) provides, “[o]n the basis of

the materials submitted, as well as any other information

available, and if practicable, the Commission or its staff will

inform the requesting party of its views.” 16 C.F.R § 1.3(a)

(emphasis added). The dissent’s theory of complete

“delegation” of the Commission’s interpretation and

enforcement authority, such that staff and Commission advice

are interchangeable for finality purposes, is simply incorrect.

When the Commission delegates its authority to staff, it does

so expressly. Cf. 16 C.F.R. § 2.1 (“The Commission has

delegated to the Director, Deputy Directors, and Assistant

Directors of the Bureau of Competition, the Director, Deputy

Directors, and Associate Directors of the Bureau of Consumer

Protection and, the Regional Directors and Assistant Regional

Directors of the Commission’s regional offices, without power

of redelegation, limited authority to initiate investigations.”)

(emphasis added); § 2.14(d) (“The Commission has delegated

to the Directors of the Bureaus of Competition and Consumer

Protection, their Deputy Directors, the Assistant Directors of

the Bureau of Competition, the Associate Directors of the

Bureau of Consumer Protection, and the Regional Directors,

without power of redelegation, limited authority to close

investigations.”) (emphasis added). By contrast, 16 C.F.R.

19

§§ 1.1 et seq. say nothing about delegation. Rather, the

Commission “has authorized its staff to consider all requests

for advice and to render advice, where practicable, in those

circumstances in which a Commission opinion would not be

warranted.”3 16 C.F.R. § 1.1(b). The fact that the

Commission “has authorized” staff to give advice on matters

of lesser importance does not transform staff views into the

Commission’s views. To the contrary, under the plain text of

the 16 C.F.R. § 1.1, if “a Commission opinion [is] not []

warranted,” a Commission opinion is not provided. Only a

staff opinion is provided. See 16 C.F.R. § 1.3(b), (c).

B.

The dissent criticizes the majority for “measur[ing] finality

exclusively from the Commission’s vantage point” because we

conclude that failure to meet Bennett’s first prong is sufficient

to dismiss for want of finality. Dissenting Op. at 1. But it is

undisputed that both prongs of Bennett v. Spear must be

satisfied independently. Sw. Airlines, 832 F.3d at 275. Bennett

directs courts to look at finality from the agency’s perspective

(whether the action represents the culmination of the agency’s

decisionmaking) and from the regulated parties’ perspective

(whether rights or obligations have been determined, and legal

consequences flow). Deficiency from either perspective is

sufficient to dismiss a claim. Thus, there is no need to reach

3

To authorize is “to empower; to give a right or authority to act”

generally. BLACK’S LAW DICTIONARY 122 (5th ed. 1979); see also

id. at 121 (defining “authority” as “permission”). Delegation is

narrower and more specific – to delegate is to give someone authority

to act specifically on one’s behalf or in one’s stead. See id. at 383

(defining “delegate” as “a person who is delegated or commissioned

to act in the stead of another”). Delegation may be one species of

authorization, but the distinction is material.

20

the second Bennett prong if the action does not mark the

consummation of agency decisionmaking. We therefore need

not do so here.

We respond to some of the dissent’s concerns out of

respect for our colleague and to clarify the appropriate finality

analysis. The dissent is troubled that judicial review of

informal agency advice would be unavailable here where,

according to SBA’s characterization, companies have relied on

the 2009 Letter in conducting and growing their operations.

Certainly, reasonable reliance interests of regulated parties

should often be considered when an agency changes course.

But the facts matter. SBA’s members do not have any

significant or reasonable reliance interests in the 2009 Letter,

either by the letter’s own terms or under FTC regulations. Call

Assistant specifically requested an informal “Staff Opinion

Letter” (emphasis Call Assistant’s) on the applicability of the

TSR to soundboard; in that request, Call Assistant made

representations about how it used soundboard in order to

provide the staff with a factual basis for such an opinion. J.A.

230. In express reliance on these factual representations, the

FTC staff stated its opinion that, if these particular facts were

true, the TSR would not prohibit the use of soundboard, at least

for the uses described by Call Assistant. J.A. 38. The 2009

Letter emphasized that the staff opinion extended only to

soundboard use as factually portrayed in Call Assistant’s letter

soliciting the opinion. Call Assistant did not state anywhere in

its letter or supporting materials that call-center agents would

use soundboard to field multiple simultaneous calls; instead,

Call Assistant highlighted how the technology would allow an

agent to better interact with a caller and accurately convey

information to a caller. See J.A. 230-35. Thus, even if the 2009

Letter had been binding on the Commission, it did not bless the

practice of using soundboard to field multiple calls

simultaneously, and it therefore does not appear to be

21

reasonable for a company to rely upon the 2009 Letter for such

uses. SBA members also did not take any affirmative steps to

apprise the FTC that soundboard is frequently not used in the

manner represented by Call Assistant, even after the issuance

of the 2009 Letter; instead, the FTC had to learn that this from

its own investigation after receiving numerous consumer

complaints and reviewing news reports. If industry actors such

as Call Assistant had corrected the factual misrepresentations

(by omission) as proactively as they solicited the staff opinion,

seven years might not have passed before FTC staff

reconsidered and rescinded the 2009 Letter.4

Whether a regulated entity is a small business or a large

trade association, the bottom line is the same for the finality of

an agency’s action. Both prongs of Bennett must be met. The

dissent argues that somehow the impact on industry should

4

The possibility of immediate judicial review of informal advice in

these circumstances might make guidance harder for industry to

request and receive. Not only might staff be less willing to give

advice, the advice that is released may take longer and be more costly

to develop. Further, allowing informal staff opinions of this sort to

be brought into court immediately would cast judges in a role for

which they are particularly ill-prepared: providing advisory opinions

about the policy merits and applicability of agency actions on an

underdeveloped record. The broad interpretation of finality

advocated for by the dissent would, contrary to Abbott Labs.,

“entangle[e] [courts] in abstract disagreements over administrative

policies.” 387 U.S. at 148. While it may serve the short-term interest

of SBA’s members to bring this particular grievance to court

immediately, the incentives of such a result would harm the interest

of all regulated parties in access to informal advice and compliance

help in general. These practicalities are reflected in the plain text of

the FTC regulations that distinguish Commission advice from staff

advice and that provide staff advice more flexibility by making it

rescindable without notice and giving it no precedential effect.

22

have been accounted for in the staff’s decisionmaking, and the

failure to account for practical impacts somehow makes

informal staff advice more final. That approach bootstraps

Bennett’s second prong into its first. The point where an

agency’s decisionmaking process is complete cannot be pulled

to and fro by the gravity of any particular decision for an

industry. Such an unmoored approach to evaluating the finality

an agency’s decision would create uncertainty for everyone –

the agency, the industry, and the courts.

Indeed, if regulated entities could assert a dramatic impact

on their industry no matter who issued the advice or under what

regulatory authority, the first prong of Bennett would have little

meaning. Say some advice is issued by a paralegal, who writes

a letter on no authority but his or her own personal opinion.

And say that advice – if adopted by the Commission itself –

could have significant industry consequences. Under the

dissent’s approach, it is unclear what would stop a regulated

party from claiming that what matters for finality is potential

industry impact, not whether a paralegal’s opinion constitutes

the culmination of agency decisionmaking. This is one reason

why precedent emphasizes the importance of who made a

decision, and how an agency’s regulations delineate

responsibility for and the bindingness of such a decision. See

Abbott Labs., 387 U.S. at 151; Holistic Candlers, 664 F.3d at

944. The fact that an opinion of someone at an agency could

potentially impact a regulated entity says nothing about

whether that opinion is the culmination of the agency’s

decisionmaking.5

5

Our dissenting colleague appears to believe that FTC staff has an

obligation to proactively investigate whether the facts being

represented by an entity requesting advice are false or incomplete.

23

In addition, we do not believe finality can be measured by

what the industry claims it will do or stop doing. The test is

what legal and practical consequences will flow from the

agency’s action. Here, it is unclear that much, if any, of the

claimed consequences for industry could properly be attributed

to the 2016 Letter at all. Even from this underdeveloped record

it appears that the practices that prompted the 2016 Letter –

Dissenting Op. at 20. This is mistaken. Commission regulations

provide that the Commission or the staff will provide advice “[o]n

the basis of the materials submitted.” § 1.3(a). There is no obligation

on the part of FTC staff to investigate further. In fact, FTC

regulations expressly provide that “a request for advice will

ordinarily be considered inappropriate where . . . [a]n informed

opinion cannot be made or could be made only after extensive

investigation, clinical study, testing, or collateral inquiry.” 16 C.F.R.

§ 1.1 (emphasis added). The fact that the regulations authorize “the

Commission or its staff” to use “any other information available”

when providing advice “if practicable” simply allows – but does not

require – the use of any other information that may be in the agency’s

possession. A request for informal staff advice is not a petition for

rulemaking, nor is it an adjudication requiring investigative fact-

finding by the agency. The onus is on requestors of advice to provide

accurate information to form the basis of that advice – notably, FTC

regulations provide a safe harbor against enforcement only “where

all the relevant facts were fully, completely, and accurately presented

to the Commission.” 16 C.F.R. § 1.3(b). See also 16 C.F.R. § 1.2(a)

(“Submittal of additional facts may be requested [by the agency from

the party requesting advice] prior to the rendering of any advice.”).

Therefore, as both the FTC’s regulations and the staff advice letters

make clear, staff or Commission advice is only as good as the facts

on which it is based, and at least in the circumstances here, the

primary responsibility for developing and presenting those facts lies

with the requestor.

24

such as soundboard agents handling multiple calls at a time –

may not be permissible under the 2009 Letter’s interpretation

of the TSR. In addition, even if the staff’s interpretation were

adopted or enforced by the Commission, many permissible

soundboard uses remain. More importantly, if the soundboard

industry built its business on practices that do not conform to

the facts as represented by Call Assistant, they have no cause

to complain about the impact of rescinding the 2009 Letter on

those practices. In any event, under FTC regulations, the 2009

Letter is not and could not be a basis for legally cognizable

reliance interests because it was not issued by the Commission.

16 C.F.R. § 1.3(b).

Finally, the dissent relies heavily again on Sackett to argue

that the 2009 and 2016 Letters constitute final agency action

under Bennett’s second prong. While we need not and do not

conduct a full analysis of this prong, we note significant

differences between the EPA Administrator’s order setting out

express legal obligations in Sackett and the informal staff

advice here. The Sackett Court concluded that “through the

order, the EPA ‘determined’ ‘rights or obligations’” because,

“[b]y reason of the order, the Sacketts have the legal obligation

to ‘restore’ their property . . . and must give the EPA access to

their property and to ‘records and documentation related to the

conditions at the Site.’” Sackett, 566 U.S. at 126. In contrast,

the informal staff advice in the 2016 Letter offers an

interpretation of the TSR, but it fixes no specific, legally

enforceable rights or legal obligations of the kind created by

the Administrator’s order in Sackett. As the FTC conceded, the

2016 Letter might be used to show an SBA member’s

knowledge regarding the meaning of the TSR and, therefore,

could be evidence of willfulness should an SBA member

violate the TSR. But, unlike a violation of the Administrator’s

25

order in Sackett, a so-called “violation” of the 2016 Letter does

not independently trigger any penalties.

We respect our dissenting colleague’s concern for

consequences to the soundboard industry in this case, but we

cannot agree that these consequences are sufficient to render

informal FTC staff advice final agency action.

IV.

SBA also argues the 2016 Letter violates its free-speech

rights by subjecting it to the TSR’s alleged content-based

restrictions on constitutionally protected speech. As SBA’s

counsel conceded at oral argument, however, SBA pleaded the

alleged free-speech violations as APA claims only, not

standalone First Amendment claims. We therefore need not

reach the FTC’s arguments that SBA’s speech claims are either

forfeited or time-barred, as these claims must also be dismissed

for want of final agency action.6

***

Pursuant to FTC regulations and by its own terms, the

2016 Letter does not constitute the consummation of the

6

We note a subtle but important distinction between prudential

doctrines such as ripeness, where the presence of constitutional

claims may favor judicial review, and the APA’s statutory

prerequisite of final agency action, without which no cause of action

or claim exists. See John Doe, Inc. v. DEA, 484 F.3d 561, 567 (D.C.

Cir. 2007) (opinion of Edwards, J.) (“[E]ven if exhaustion, ripeness,

and finality may be difficult to distinguish in some contexts, they

must be carefully delineated when, as here, finality is a statutory

jurisdictional prerequisite rather than merely a precaution related to

concreteness and institutional capacity.”); Ticor Title Ins. Co. v.

FTC, 814 F.2d 731, 745-46 (D.C. Cir. 1987) (opinion of Williams,

26

Commission’s decisionmaking process regarding the

applicability of the TSR to soundboard technology. Without

final agency action, SBA lacks a cause of action under the

APA. We therefore vacate the decision below and dismiss the

complaint for failure to state a claim.

So ordered.

J.) (“[W]hile courts often mingle the three doctrines [of finality,

ripeness, and exhaustion], they are analytically distinct. . . . While

exhaustion is directed to the steps a litigant must take, finality looks

to the conclusion of activity by the agency.”). Unlike reviewability

doctrines developed by courts, final agency action is a statutory

requirement set by Congress. We have found no decision of this

Court, and no decision of any other circuit court, holding that the

presence of constitutional claims eases the Supreme Court’s two-part

Bennett test for final agency action. Cf. Unity08 v. FEC, 596 F.3d

861, 865 (D.C. Cir. 2010) (finding First Amendment chilling

concerns relevant to ripeness while explicitly distinguishing ripeness

from finality of agency action); Chamber of Commerce v. FEC, 69

F.3d 603-04 (D.C. Cir. 1995) (finding the presence of First

Amendment speech claims to favor pre-enforcement ripeness when

finality was conceded). Regardless, SBA has not argued for such a

doctrinal shift.

MILLETT, Circuit Judge, dissenting: Why let reality get in

the way of a good bureaucratic construct? In holding that the

2016 Letter from the Federal Trade Commission’s Division of

Marketing Practices is not a judicially reviewable “final agency

action,” the court’s opinion focuses on the Commission’s

structuring of its own regulations to preserve its right to

disagree (or not) with the Division at some “later” date. 16

C.F.R. § 1.3(c). In so doing, the court’s opinion measures

finality exclusively from the Commission’s vantage point.

But there are two sides to this story. Finality is supposed

to look at both whether “the agency’s decisionmaking process”

has “consummat[ed],” and the reality of whether “rights or

obligations have been determined” by or “legal consequences

will flow” from the challenged agency action. Bennett v.

Spear, 520 U.S. 154, 178 (1997) (internal quotation marks and

citations omitted). And in deciding whether the agency process

has ended for purposes of Bennett’s first prong, courts must

look beyond the agency’s say-so to objective and practical

indicia of finality. See, e.g., Sackett v. EPA, 566 U.S. 120, 127

(2012) (holding that compliance order that triggers potential

penalties is final even though agency provided for ongoing

“informal discussion” and consideration of the accuracy of its

findings).

In this case, the agency’s emphatic and directive language

in the 2016 Division Letter, combined with the absence of any

avenue for internal administrative review, unleashes immediate

legal and practical consequences for the industry, forcing its

members to choose between complying by shuttering their

businesses or exposing themselves to potentially significant

financial penalties. When agency action threatens such severe

repercussions, the “mere possibility that an agency might

reconsider” does not deprive the action of finality. Sackett, 566

U.S. at 127.

2

In my view, the Administrative Procedure Act should not

countenance an agency telling an individual or industry that its

business must end, while fending off court review on the

ground that its own internal administrative processes have not

ended. Because the structure of the Commission’s regulations,

the substantive content of the Division’s Letter, the absence of

an internal appeal mechanism, and the consequences that flow

from it together render the Division’s 2016 Letter the end of

the agency’s process, I respectfully dissent.

A

Courts must examine finality in a “flexible” and

“pragmatic way,” considering the impact of delayed review on

both the agency action and the regulated entities. Ciba-Geigy

v. EPA, 801 F.2d 430, 435 (D.C. Cir. 1986) (internal quotation

marks and citation omitted); see United States Army Corps of

Engineers v. Hawkes Co., 136 S. Ct. 1807, 1815 (2016)

(applying the “‘pragmatic’ approach we have long taken to

finality”); Federal Trade Comm’n v. Standard Oil Co., 449

U.S. 232, 239 (1980) (“[C]ases dealing with judicial review of

administrative actions have interpreted the ‘finality’ element in

a pragmatic way.”) (quoting Abbott Laboratories v. Gardner,

387 U.S. 136, 149 (1967)).

Applying that pragmatic test, I acknowledge that the

Federal Trade Commission has dressed the Division’s advice

up with some of the trappings of non-finality. Commission

regulations say that “[a]dvice rendered by the staff is without

prejudice to the right of the Commission later to rescind the

advice and, where appropriate, to commence an enforcement

proceeding.” 16 C.F.R. § 1.3(c). Also, the Division says in its

2016 Letter that it is “express[ing]” only the views of

Commission “staff,” and that the Letter has “not been approved

or adopted by the Commission,” nor is it “binding upon the

3

Commission.” Letter from Lois C. Greisman, Assoc. Dir., Div.

Mktg. Practices, to Michael Bills, Former Chief Exec. Officer,

Call Assistant 4 (Nov. 10, 2016) (“2016 Division Letter”). 1

But a closer look at the Commission’s regulations

governing agency advice reveals the 2016 Division Letter to

be, for all practical purposes, a definitive agency position that

concludes the administrative process for the foreseeable future.

First, advisory opinions by different divisions of the

Commission are not some independent or detached endeavor.

Instead, all requests for advisory opinions must first be

submitted to the Secretary of the Commission. 16 C.F.R.

§ 1.2(a). Then, “[o]n the basis of the materials submitted, as

well as any other information available,” the Commission “will

inform the requesting party of its views,” id. § 1.3(a), through

either the issuance of an opinion by the Commission itself, id.

§ 1.1(a), or the Commission deputizing agency staff to “render

[the] advice,” id. § 1.1(b); see id. (“The Commission has

authorized its staff to consider all requests for advice and to

render advice, where practicable, in those circumstances in

which a Commission opinion would not be warranted.”); see

16 C.F.R. § 0.7 (“The Commission * * * may delegate, by

published order or rule, certain of its functions to a division of

the Commission * * * or an employee * * *.”). 2

1

Available at https://www.ftc.gov/system/files/documents/

advisory_opinions/letter-lois-greisman-associate-director-division-

marketing-practices-michael-bills/161110staffopsoundboarding.

pdf.

2

According to the regulations, a Commission opinion is warranted

only when the “matter involves a substantial or novel question of fact

or law and there is no clear Commission or court precedent,” or the

“subject matter of the request and consequent publication of

4

As a result, when staff issues advisory opinions to

industry, it does so at the Commission’s direction and as its

delegate. For this case, that means the Commission itself has

already decided that this matter does not warrant a Commission

decision and is best handled by delegating the decision to the

enforcement Division. 3 In fact, leaving Division staff to

provide regulatory advice appears to be par for the course with

the Commission. Of the 59 advisory opinions published on the

Commission’s website, 57 have been issued by staff; only 2

were issued by the Commission itself. See FED. TRADE

COMM’N, Advisory Opinions, https://

www.ftc.gov/policy/advisory-opinions (last visited April 17,

2018). And neither of those Commission decisions purported

to review a staff advisory opinion. 4 That pattern of regulatory

Commission advice is of significant public interest.” 16 C.F.R.

§ 1.1(a).

3

In this case, an industry member requested staff advice following

the adoption of the Telemarketing Sales Rule, 16 C.F.R. § 310, and

the Commission directed the staff to issue an opinion. Staff initially

advised in 2009 that the Rule would not apply to soundboard

technology. Letter from Lois C. Greisman, Assoc. Dir., Div. Mktg.

Practices, to Michael Bills, Chief Exec. Officer, Call Assistant (Sept.

11, 2009), https://www.ftc.gov/sites/default/files/documents/

advisory_opinions/opinion-09-1/opinion0901_1.pdf (“2009

Division Letter”). Staff revisited and “revoked” its advice in the

2016 Letter based on new fact findings about the nature of

soundboard technology when used for telemarketing. See 2016

Division Letter, supra, at 3.

4

One Commission letter addressed a matter in the first instance. See

Letter from Donald S. Clark, Sec’y, FED. TRADE COMM’N, to

Rozanne M. Anderson, ACA Int’l & Andrew M. Beato, Stein,

Mitchell & Mezines, LLP (June 23, 2009), https://www. ftc.gov/

system/ files/documents/advisory_opinions/federal-trade-

commission-advisory-opinion-clarifying-intersection-fair-debt-

5

delegation of decisions to staff weighs in favor of finality. See

Kobach v. Election Assistance Comm’n, 772 F.3d 1183, 1190

(10th Cir. 2014) (finding that internal delegation to Executive

Director of the Election Assistance Commission rendered his

decision final).

That the regulation says it “authorize[s]” staff to render

advice, rather than “delegates” to staff, is neither here nor there

semantically. See Op. at 17–18. The ordinary meaning of

“authorizes” is to empower a person to act or speak for another.

See BLACK’S LAW DICTIONARY 123 (5th ed. 1979) (defining

“authorize” as “[t]o endow with authority or effective legal

power, warrant, or right.”); see also MERRIAM-WEBSTER

(“[T]o endorse, empower, justify, or permit by or as if by some

recognized or proper authority.”) (emphasis added); THE

AMERICAN HERITAGE DICTIONARY OF THE ENGLISH

LANGUAGE 89 (New College ed. 1976) (“To grant authority or

power to.”). That is also what a delegation does. See THE

AMERICAN HERITAGE DICTIONARY OF THE ENGLISH

LANGUAGE 349 (New College ed. 1976) (defining “delegate”

as “to commit to one’s agent or representative.”). Here, the

Commission specifically decided that the Division was best

suited to speak on this matter, and that the Commission would

not weigh in. It is that fact of deputization that matters in

collection-practices-act/p064803facta-adop-1.pdf. The other came

almost thirteen years after an advisory opinion by agency staff had

issued. See Letter from Donald S. Clark, Sec’y, FED. TRADE

COMM’N, to Jonathan Sheldon & Carolyn Carter, Nat’l Consumer

Law Ctr. (May 3, 2012) (continuing the longstanding position

adopted by staff),

https://www.ftc.gov/system/files/documents/advisory_ opinions/16-

c.f.r.part-433-federal-trade-commission-trade–regulation-rule-

concerning-preservation-consumers-claims/ 120510advisoryopinion

holderrule.pdf.

6

determining finality, not which synonym for conferring

authority the agency uses.

Second, nothing in the regulations governing advisory

opinions labels those delegated decisions as non-final or just a

first round in the agency process. Instead, the regulatory

scheme treats the advisory letter as concluding the process for

obtaining the agency’s position on legal matters. 16 C.F.R.

§ 1.3(a) (request for Commission advice will be answered by

either “the Commission or its staff * * * inform[ing] the

requesting party of its views”).

Notably, the Commission’s regulations do not provide a

process for appealing or obtaining any form of internal review

of staff opinions. Instead, the decision whether to issue

advisory opinions directly or through agency staff rests

exclusively with the Commission. 16 C.F.R. § 1.2(a), 1.3(a).

Individuals seeking agency advice cannot control that decision,

no matter how many times they might try to get the

Commission itself to weigh in. See also Oral Arg. Tr. 31–32

(Commission counsel acknowledges that, while the

Association “certainly could make the request” for review of

the Division’s decision, “the Commission [is] not certainly

bound to issue an opinion[.]”). And as mentioned, precious

few requests succeed in prompting the Commission to weigh

in. If the Commission itself answers only 3% of requests for

advice, as its history suggests, and if the Commission has never

once intervened to “review” the opinion of its subdivisions, the

numbers themselves evidence that the Division’s advice here

was the agency’s final word.

Like the Sacketts, Soundboard has no “entitlement to

further agency review.” Sackett, 566 U.S. at 127 (emphasis

added). The court is unmoved, reasoning that Soundboard

could either request an advisory opinion from the Commission

7

or await enforcement. Op. at 15–16. But the Commission has

already decided that this issue does not meet the criteria for a

Commission opinion. Soundboard’s ability to keep knocking

on a door that will not open is as beside the point here as it was

in Sackett: “The mere possibility that an agency might

reconsider * * * does not suffice to make an otherwise final

action nonfinal.” Sackett, 566 U.S. at 127; see also Hawkes

Co., 136 S. Ct. at 1814 (where the agency decision is typically

not revisited, the “possibility” of further consideration “does

not make an otherwise definitive decision nonfinal”).

Nor does the option to await a penalty-seeking civil

enforcement action strip agency action of finality. The

Supreme Court has repeatedly held that parties need not “wait[]

for [the agency] to drop the hammer in order to have their day

in court.” Hawkes Co., 136 S. Ct. at 1815 (internal quotation

marks omitted); see Sackett, 566 U.S. at 127 (“But the Sacketts

cannot initiate [an enforcement] process, and each day they

wait for the agency to drop the hammer, they accrue, by the

Government's telling, an additional $75,000 in potential

liability.”); see also Free Enter. Fund v. Public Co. Accounting

Oversight Bd., 561 U.S. 477, 490 (2010) (“We normally do not

require plaintiffs to bet the farm by taking the violative action

before testing the validity of the law.”) (internal quotation

marks, citation, and alteration omitted).

Third, while the Commission emphasizes that the

regulations expressly reserve its right “later to rescind the

advice” of staff, 16 C.F.R. § 1.3(c), that language actually

supports finality. To begin with, the same qualification about

potential rescission applies, almost verbatim, to indisputably

final Commission opinions. Id. § 1.3(b) (“Any advice given by

the Commission is without prejudice to the right of the

Commission to reconsider the question involved, and, where

the public interest requires, to rescind or revoke the action.”).

8

Indeed, even without that regulatory reservation, the ability of

agencies to reverse course is well-settled, so long as they

reasonably explain themselves. See Telecommunications

Research & Action Ctr. v. Federal Communications Comm’n,

26 F.3d 185, 193 (D.C. Cir. 1994) (“We have long recognized

that an agency’s view of what is in the public interest may

change * * *. When that happens, we require only that the

agency changing its course supply a reasoned analysis

indicating that prior policies and standards are being

deliberately changed, not casually ignored.”) (internal

quotation marks, alterations, and citation omitted). 5

In addition, the regulation’s requirement that the

Commission “rescind” Division opinions underscores that,

unless the Commission takes that affirmative step, the Division

opinion operates as a statement of the agency’s position. After

all, “rescind” means “[t]o make void; to repeal or annul” a

legally operative document, as in to “rescind the legislation.”

BLACK’S LAW DICTIONARY 1499 (10th ed. 2009); see also THE

NEW OXFORD AMERICAN DICTIONARY (2d ed. 2005) (defining

“rescind” as to “revoke, cancel, or repeal (a law, order, or

agreement): the government eventually rescinded the

directive”). One does not “rescind” a mere suggestion or

informal advice.

Further, the regulation speaks only of the Commission

reserving the power to rescind the staff opinion “later.” 16

C.F.R. § 1.3(c). Framed that way, the ability to rescind is just

a tool the Commission keeps in its back pocket; it does not

mean that Division advice that the Commission chooses to

leave in place is only half-baked or tentative. The opposite is

5

See also Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 57 (1983) (“An agency’s view of what

is in the public interest may change, either with or without a change

in circumstances.”).

9

true. Once staff “inform[s] the requesting party of its views,”

id. § 1.3(a), that is the agency’s final answer, unless and until

there is a later change of heart. The simple fact that the

Division’s decision could (or could not) “be altered in the

future has nothing to do with whether it is subject to judicial

review at the moment.” Appalachian Power Co. v. EPA, 208

F.3d 1015, 1022 (D.C. Cir. 2000); see id. at 1023 (concluding

that interpretive and policy statements may constitute final,

consummated action if they are otherwise “final” in nature).

Fourth, the Administrative Procedure Act is explicit that

an agency action remains reviewable “final” agency action

notwithstanding the availability of appeal to a “superior agency

authority,” unless agency rules render the initial agency

decision “inoperative” pending such appeal. 5 U.S.C. § 704.

Nothing in the Commission’s regulations provide for appeal to

the Commission, let alone render the Division’s 2016 Letter

inoperative until reviewed. To the contrary, the regulations are

explicit that whatever opinion issues is the Commission’s

answer to the request for its views, 16 C.F.R. § 1.3(a), and the

decision will take effect on whatever date the staff decides—

here, May 12, 2017. See 2016 Division Letter, supra, at 4

(“[T]he revocation of the September 2009 letter will be

effective six months from today, on May 12, 2017.”). In short,

as in Sackett, the Commission’s regulations provide “no

entitlement to further agency review,” 566 U.S. at 127, or even

a second bite at the advisory apple.

The opinion for the court also points out that staff

decisions do not afford regulated entities the same “safe

harbor” protections from enforcement as formal Commission

opinions do. Op. at 16–17; see 16 C.F.R. § 1.3(b) (providing

that, when all relevant facts have been disclosed and agency

orders complied with, the “Commission will not proceed

against the requesting party with respect to any action taken in

10

good faith reliance upon the Commission’s advice under this

section”).

The regulations certainly do make that formal distinction.

But it bears noting that the Commission in an enforcement

action cannot extract penalties unless the defendant had “actual

knowledge or knowledge fairly implied * * * that [its] act is

unfair or deceptive and is prohibited by [Commission] rule.”

15 U.S.C. § 45(m)(1). Reasonable reliance on a staff advisory

opinion would thus seem to inoculate the regulated entity

against liability for penalties. Presumably that is why the

soundboard industry continued its business practices without

Commission challenge for seven years on the basis of the 2009

Division Letter advising that the Telemarketing Sales Rule did

not apply. And presumably that is also why the Division felt

obliged before reversing its legal position in the 2016 Letter to

(i) undertake a months-long investigation, (ii) conduct multiple

meetings with industry members, and (iii) afford industry

members six months’ lead time to come into compliance before

enforcing the agency’s new position.

In other words, while the formal protections differ for

Commission-rendered advice, the differential in practice seems

small, and whatever delta remains says nothing about the

finality of the Division’s 2016 Letter for purposes of judicial

review. 6

6

The court responds that Soundboard lacked any basis for reasonable

reliance here because the facts Call Assistant provided to the agency

in 2009 did not reflect reality. That puts the cart ahead of the horse

since judicial review is where parties can contest the accuracy and

substantiality of agency factual determinations. 5 U.S.C. § 706

(providing for judicial review of final agency action “unsupported by

substantial evidence”). Anyhow, that same point would be just as

true if the Commission were to issue an indisputably final

11

B

Consistent with that regulatory structure, the 2016

Division Letter itself speaks in final, conduct-altering, and

compliance-demanding terms, leaving the regulated businesses

to either knuckle under or face a penalty-seeking enforcement

action.

1

To begin with, the Letter states unqualifiedly that

telemarketing calls using soundboard technology “are subject”

to the “plain language of the [Telemarketing Sales] [R]ule,” 16

C.F.R. § 310.4(b)(1)(v). 2016 Division Letter, supra, at 3. So

going forward, calls “can only be made legally if they comply

with the [rule’s] requirements.” Id. (emphasis added). For

both agency officials on the sending end and industry on the

receiving end, there is nothing preliminary, tentative, or

qualified about that message.

In case that shot across the industry’s bow were not

warning enough, the 2016 Division Letter then gives notice that

the newly announced application of the Telemarketing Sales

Rule to soundboard technology “will be effective six months

from today.” 2016 Division Letter, supra, at 4. That six-month

Commission opinion. See 16 C.F.R. § 1.3(b) (“The Commission will

not proceed against the requesting party with respect to any action

taken in good faith reliance upon the Commission’s advice under

this section, where all the relevant facts were fully, completely, and

accurately presented to the Commission[.]”). What matters to

finality is that staff letters, even if not formally granted safe harbor

protection, functionally serve the same purpose in that, by dint of the

knowledge requirement, they will generally preclude imposition of

penalties where regulated entities have reasonably relied on the

agency’s advice.

12

lead time, the Letter explains, is to afford the industry sufficient

time to “make [the] necessary changes to bring themselves into

compliance” with the law. Id. The agency thus “views its

deliberative process as sufficiently final to demand compliance

with its announced position.” Ciba-Geigy, 801 F.2d at 436.

And when agency action is final enough that business-ending

compliance is expected by a date certain, it should be final

enough for judicial review. What is final for the goose should

be final for the gander.

The 2016 Division Letter also identifies no avenue for

further Commission review on the question. Worse, the Letter

snuffs out any hope for a change of heart by explaining that its

broadside against the use of soundboard technology in

telemarketing calls is commanded by the “plain language” and

“plain meaning” of the Telemarketing Sales Rule. 2016

Division Letter, supra, at 3. Specifically, the Division said:

The plain language of the [Telemarketing Sales

Rule] provision governing prerecorded calls

imposes restrictions on “any outbound

telephone call that delivers a prerecorded

message.” It is indisputable that calls made

using soundboard technology deliver

prerecorded messages. As such, under the plain

meaning of the words in the [Telemarketing

Sales Rule’s] prerecorded call provision,

outbound telemarketing calls using soundboard

technology are covered because such calls

“deliver a prerecorded message.”

Id. The Division’s position thus “admit[s] of no ambiguity” or

possibility of modification. Ciba-Geigy, 801 F.3d at 437. If,

as the Commission acknowledges, Appellee Br. 53–54, the

Telemarketing Sales Rule on its face plainly foreordains the

13

2016 Letter’s conclusion, exactly what more is industry

supposed to wait for?

Even more importantly, the consequences to industry that

flow from compliance with the Division’s 2016 Letter are dire,

“forc[ing] many users to downsize or close their doors

altogether.” Soundboard Br. 13. The Division knew this when

issuing the letter. The Soundboard Association told the

Division that extending the Telemarketing Sales Rule to

soundboard technology would “decimate[] an industry” and

“[e]liminate[] jobs for persons with a variety of disabilities[.]”

J.A. 62. “Because the letter largely outlaws soundboard, the

many businesses that manufacture or distribute soundboard

technology will have no choice but to close down entirely or,

at a minimum, dramatically scale back their operations. That

will lead to the loss of thousands of jobs across those industries

alone.” J.A. 113 (quoting Declaration of Arthur F. Coombs III,

Dkt. 2-2).

In addition, telling industry that telemarketing can no

longer “lawfully” be undertaken with their technology will

require industry “to scrap the soundboard technology systems

in which they have invested millions of dollars and countless

hours of development and training,” and to “lay off many—

and, in some cases, all—of the thousands of people whom the

companies have trained and, for years, paid good salaries to[.]”

Dkt. 2-2 at 11–12; see also Dkt. 2-2 at 10 (compliance with the

2016 Division Letter will “eliminate 80% or more of

[company] revenue,” and dampen sales even in areas not

subject to the Telemarketing Sales Rule); Dkt. 2-3 at 3–4

(affirming that one company will be forced to make massive

layoffs and will lose over $3 million invested in soundboard

technology as a result of the Division’s 2016 letter).

14

Neither the Commission nor the Division denies that those

consequences will ensue.

To be sure, the 2016 Division Letter ends with the caveat

that the advisory opinion has “not been approved or adopted by

the Commission,” and does “not bind[]” it. 2016 Division

Letter, supra, at 4. But the 2016 Letter then quickly intones

that it nonetheless “reflect[s] the views” of the Division

“charged with enforcement of the [Telemarketing Sales Rule].”

Id. 7 And the Commission, for its part, decided to publish the

2016 Letter on its website, right alongside Commission advice

(which also takes the form of a letter to the requesting party). 8

Anyhow, such boilerplate qualifications are not enough to

fend off judicial review of otherwise final agency action. In

Appalachian Power Co., the EPA’s advisory guidance

contained an even more forceful caution, emphasizing that

“[t]he policies set forth in this paper are intended solely as

guidance, do not represent final Agency action, and cannot be

relied upon to create any rights enforceable by any party.” 208

F.3d at 1023. Such “boilerplate,” which the EPA—like

Commission staff here—routinely included at the end of

guidance documents, was not enough “‘to keep the

proceduralizing courts at bay.’” Id. (quoting Peter L. Strauss,

Comment, The Rulemaking Continuum, 41 DUKE L.J. 1463,

7

See 16 C.F.R. § 0.16 (The Bureau “investigat[es] alleged law

violations, conducts compliance investigations and initiates

proceedings for civil penalties to assure compliance with final

Commission orders[.]”); id. § 2.1 (delegating authority to the Bureau

to initiate investigations); id. § 2.5 (noting that delegated agents

conduct investigations).

8

See FED. TRADE COMM’N, Advisory Opinions,

https://www.ftc.gov/policy/advisory-opinions (last visited April 17,

2018).

15

1485 (1992)); see FED. TRADE COMM’N, Advisory Opinions,

https://www.ftc.gov/ policy/advisory-opinions (last visited

April 17, 2018) (documenting that all of the Commission’s

staff advisory opinion letters contain the same or nearly

identical cautionary language as the 2016 Letter).

Likewise, in Her Majesty the Queen in Right of Ontario

v. EPA, 912 F.2d 1525 (D.C. Cir. 1990), we held that an

assistant EPA administrator’s letter constituted final agency

action notwithstanding a concluding demurral that the letter

represented only the assistant’s personal thoughts and not those

of the agency, id. at 1532. What mattered was that the assistant,

who was the principal advisor for the matters at issue, laid out

a decidedly non-tentative interpretation of the governing

statute that was “unambiguous and devoid of any suggestion

that it might be subject to subsequent revision.” Id.

So too here. The Division’s 2016 Letter speaks with the

announced authority and expertise of the Telemarketing Sales

Rule’s enforcer. There is nothing tentative or interlocutory

about its declaration that the plain meaning of federal law

requires Association members to shutter most if not all of their

telemarketing business. Nor is there any administrative appeal

process. In other words, the writing is on the wall, and a line

of routine boilerplate cannot erase it.

2

The final straw that collapses the Commission’s claim of

non-finality is the “legal consequences [that] flow” from the

2016 Division Letter. Sackett, 566 U.S. at 126 (internal

quotation marks, citation, and alterations omitted). Federal law

empowers the Commission to file civil enforcement actions for

penalties against those who violate Commission rules

governing unfair or deceptive trade practices, including the

Telemarketing Sales Rule, if the defendants had “actual

16

knowledge or knowledge fairly implied” that their conduct was

“prohibited by such rule.” 15 U.S.C. § 45(m)(1); see 16 C.F.R.

§ 1.98 (addressing penalty amounts). Each individual

“violation” subjects the offender to up to a roughly $40,000

penalty, 16 C.F.R. § 1.98. And for ongoing violations, each

day the conduct continues “shall be treated as a separate

violation,” 15 U.S.C. § 45(m)(1)(C). Penalties could thus

quickly snowball into more than $1 million a month or roughly

$14.5 million a year for each single contract held by a

soundboard company. 9

As counsel for the Commission agreed at oral argument,

the specificity and directness of the 2016 Division Letter’s

conclusion that the Telemarketing Sales Rule outlaws the use

of soundboard technology “certainly[] * * * would be a factor”

in establishing the knowledge required to trigger an

enforcement action and financial penalties, and it is something

that “a reasonable business would take into account.” Oral

Arg. Tr. 33. Given the 2016 Letter’s warning to industry that

9

At oral argument, counsel for the Commission indicated that each

individual phone call “would be a violation,” which would

accumulate even more rapidly into crushing financial penalties. Oral

Arg. Tr. 24. Like the Supreme Court in Sackett, this court need not

definitively resolve the amount of penalties that the law might

ultimately permit in these circumstances. 132 U.S. at 126 & n.3

(assuming without deciding that government is correct about liability

for penalties). What matters to finality analysis is the “Government’s

current litigating position,” grounded in statutory text, that failure to

comply with the 2016 Division Letter could provide a legal basis for

substantial civil penalties, id. at 126. That risk is a specific and

concrete legal consequence that flows from the challenged agency

action. See id. And because the Division Letter spawns such legal

exposure, the mere possibility that prosecutorial discretion later

down the road could reduce the amount of penalties says nothing

about the finality of agency action now.

17

the use of soundboard technology is “plain[ly]” unlawful, 2016

Division Letter, supra, at 3, any failure to comply would put a

business at substantial risk of not only an enforcement action,

but also significant penalties running back to the date of this

so-called non-final Letter. The 2016 Division Letter thus is

not, as the court’s opinion would have it (Op. 24), mere

“evidence.” Op. at 24. The Letter lights the liability fuse; it is

the difference between severe financial penalties and no

penalties at all. See Sackett, 566 U.S. at 120 (noting that legal

consequences flow from the EPA’s order because it “exposes

the Sacketts to double penalties in future enforcement

proceedings”).

The Division’s message to industry is clear: Proceed at

your own peril. Finality principles will not allow the

Commission to brush off that “immediate and practical impact”

of the Division’s announcement. Frozen Food Express v.

United States, 351 U.S. 40, 44 (1956). The clear and explicit

announcement in the 2016 Division Letter about the reach of

the Telemarketing Sales Rule’s “plain language,” 2016

Division Letter, supra, at 3, “warns” every member of the

soundboard industry to either reshape “the manner in which an

important segment of the * * * business will be done” or run

the “risk” of civil penalties, Frozen Food Express, 351 U.S. at

44. When an agency’s “authoritative interpretation” and

demand for “compliance” means business’s “only alternative

to costly compliance” is “to run the risk of serious civil * * *

penalties,” finality attaches and the time for judicial review has

come. Ciba-Geigy, 801 F.2d at 437–439; see Hawkes Co., 136

S. Ct. at 1815 (holding that parties “need not await enforcement

proceedings before challenging final agency action where such

proceedings carry the risk of serious criminal and civil

penalties”); Sackett, 566 U.S. at 126 (finding that the Army

Corps’ action had “all of the hallmarks of APA finality that our

opinions establish” because, inter alia, it “exposes the Sacketts

18

to double penalties in a future enforcement proceeding”); Rhea

Lana, Inc. v. Department of Labor, 824 F.3d 1023, 1025 (D.C.

Cir. 2016) (“By notifying Rhea Lana that the company was in

violation of its wage-and-hour obligations, the letter rendered

knowing any infraction in the face of such notice, and made

Rhea Lana susceptible to willfulness penalties that would not

otherwise apply.”).

Also, the risks to which the soundboard industry is

exposed in this case are magnified because the 2016 Letter

threatens enforcement actions and substantial penalties against

speech. Given the Telemarketing Sales Rule’s varied

prohibitions and exceptions pertaining to the scope of outlawed

speech, the “legal consequences [that] flow” from the 2016

Letter include the chilling of potentially constitutionally

protected speech. Bennett, 520 U.S at 178; cf. Sorrell v. IMS

Health Inc., 564 U.S. 552, 580 (2011) (striking down

selectively imposed content- and speaker-based burdens on the

commercial speech of pharmaceutical manufacturers as

unconstitutional under the First Amendment).

Accordingly, the Division’s declaration that the

soundboard industry needs to shut up and shut down by a date

certain should weigh heavily in the finality calculus. See Cox

Broad. Corp. v. Cohn, 420 U.S. 469, 485–486 (1975) (finding

state court decision “final” in part because “[d]elaying final

decision of the First Amendment claim until after trial will

leave unanswered an important question of freedom of the

press under the First Amendment, an uneasy and unsettled

constitutional posture [that] could only further harm the

operation of a free press”) (internal quotation marks and

alterations omitted); see also Blount v. Rizzi, 400 U.S. 410,

416–417 (1971) (noting that prior restraints “require ‘prompt

19

judicial review’ * * * to prevent the administrative decision of

the censor from achieving an effect of finality”). 10

Given all of that, the Division’s 2016 Letter comfortably

fits the mold of cases in which we have held that the actions of

subordinate agency officials qualify as final agency action. See

Safari Club Int’l v. Jewell, 842 F.3d 1280 (D.C. Cir. 2016)

(Fish and Wildlife press release adopting position of Division

of Scientific Authority constitutes final agency action); Rhea

Lana, Inc., 824 F.3d at 1025 (letter from subordinate official

informing company of agency’s longstanding interpretation of

the Fair Labor Standards Act is final agency action);

Appalachian Power Co., 208 F.3d at 1021–1022 (guidance

drafted by subordinate EPA officials constitutes final agency

action); Her Majesty the Queen, 912 F.2d at 1531 (letter of

assistant EPA official—with explicit caveat that it contained

only a personal opinion—constitutes final agency action);

Natural Res. Def. Council, Inc. v. Thomas, 845 F.2d 1088,

1093–1094 (D.C. Cir. 1988) (memorandum drafted by

subordinate EPA official constitutes final agency action);

Ciba-Geigy Corp., 801 F.2d at 435 (letters issued by director

of pesticide programs constitute final agency action).

*****

As the opinion for the court notes, agency advice that is

genuinely advisory can play an important role in allowing the

regulators and regulated to communicate effectively and work

10

The opinion for the court cabins consideration of any potential

chilling effect to the ripeness inquiry alone. Op. at 25 n.5. But

factors relevant to ripeness often bear on finality as well. See Ciba-

Geigy, 801 F.3d at 435 (considering finality as a component of

ripeness).

20

together in coordinating voluntary compliance measures and

improving the effectiveness of regulatory programs.

But “such a ‘count your blessings’ argument is not an

adequate rejoinder to the assertion of a right to judicial

review[.]” Hawkes Co., 136 S. Ct. at 1816. If agencies want

to give advice, they should speak in advisory terms, allow for

internal review, or not attach substantial consequences to

noncompliance with what is supposed to be mere advice.

To be sure, allowing judicial review in this case might

increase the fact-finding burden on agencies issuing advisory

opinions, but that will only be true for a certain subset of

decisions—those with unambiguous pronouncements of a legal

position, announced compliance dates, and substantial legal

consequences for failure to fall in line. And those seem to be

precisely the cases in which the law should force agencies to

take a harder look, to substantiate their judgments, and to

submit their decisions to judicial review. If the agency does

not yet have all the facts or is not yet committed to its position

as a matter of statutory policy, perhaps it should finish the job

before telling an industry to shutter its operations.

At bottom, finality is about agency accountability for the

decisions it makes and the consequences it unleashes. The

Division’s 2016 Letter, after all, is not about just adjusting or

modifying business behavior to comport with regulatory

standards. Rather, the Letter announces that plain regulatory

language broadly condemns as illegal an entire business model.

The Letter then assigns a date certain by which businesses are

expected to comply by largely ceasing their operations, laying

off employees, and writing off significant financial

investments. Failure to toe the Division’s line will expose the

soundboard industry to potentially severe penalties, with no

right first to administrative appeal or review. The Division

21

Letter leaves the soundboard industry whipsawed between

abandoning its business and facing potentially ruinous

enforcement actions and penalties. In these circumstances, the

benefits of informal and collaborative interchange between the

regulator and the regulated have evaporated. And the agency

should not be able to transmogrify the mantle of “staff advice”

into both a sharp regulatory sword and a shield from judicial

review.

No doubt a technology used for telemarketing is hardly a

sympathetic poster child for a dissenting opinion. But the pride

of our legal system is its evenhandedness and fairness to all

who come before it. Plus the issue here is not whether the

Commission can regulate the soundboard industry or

telemarketing. It is only whether the Commission must own

up to the regulatory actions it has set in motion, and whether

those who are told to close up shop and discharge their

employees are entitled first to a day in court. In my view, if the

law requires us to treat the 2016 Division Letter and its

business-ending consequences as just some informal, take-it-

or-leave-it staff suggestion, then the law is being stingy with

reality. I respectfully dissent.