United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
P. Mehta United States District Judge.
April 24, 2017, this court rejected Plaintiff Soundboard
Association's challenge under the Administrative
Procedure Act to a letter issued by the staff of Defendant
Federal Trade Commission (“FTC”). The letter
announced that the FTC staff now viewed telemarketing calls
using soundboard technology-a technology by which
telemarketers use a combination of prerecorded audio clips
and live sales agents to contact and communicate with
consumers-as subject to the same restrictions placed on
traditional robocalls, in which a live sales agent never
interacts with the consumer. Soundboard Ass'n v. U.S.
Fed. Trade Comm'n, No. 17-cv-00150, 2017 WL 1476116,
at *1 (D.D.C. Apr. 24, 2017). As pertinent here, the court
held that the FTC staff's letter, dated November 10, 2016
(“November 2016 Letter”), was not a legislative
rule requiring notice and comment, but instead was an
interpretive rule that the agency was free to issue outside
such formal process. Id. at *2.
believes the court got it wrong, and now seeks to enjoin the
November 2016 Letter pending review on appeal. Pl.'s Mot.
for Inj., ECF No. 23 [hereinafter Pl.'s Mot.]. For the
reasons explained below, the court denies Plaintiff's
Motion for an Injunction Pending Appeal.
62(c) of the Federal Rules of Civil Procedure authorizes a
district court to issue an injunction pending appeal.
Fed.R.Civ.P. 62(c). A motion brought under Rule 62(c) is
subject to the same four criteria as a motion for preliminary
injunction. Wash. Metro. Area Transit Comm'n v.
Holiday Tours, Inc., 559 F.2d 841, 842-43 (D.C. Cir.
1977). The moving party “must establish that he is
likely to succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that
the balance of equities tips in his favor, and that an
injunction is in the public interest.” Winter v.
Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008);
accord Cuomo v. U.S. Nuclear Regulatory Comm'n,
772 F.2d 972 (D.C. Cir. 1985) (per curiam) (citing
Holiday Tours, 559 F.2d at 843-44).
“remains an open question” in the D.C. Circuit
how trial courts are to weigh those four factors in
evaluating a motion for injunctive relief. Aamer v.
Obama, 742 F.3d 1023, 1043 (D.C. Cir. 2014). This
Circuit has long adhered to the “sliding scale”
approach, whereby “a strong showing on one factor could
make up for a weaker showing on another.” Sherley
v. Sebelius, 644 F.3d 388, 392, 398 (D.C. Cir. 2011). In
the context of a motion under Rule 62(c), that means a party
may make up for a lesser showing of a likelihood of success
as long as it presents a “substantial case” on
appeal and makes a strong showing on the other three factors.
Holiday Tours, 559 F.2d at 843-44; Sherley,
644 F.3d at 392-93. Ultimately, a court asks whether all four
factors “taken together” favor a preliminary
injunction. Davis v. Pension Ben. Guar. Corp., 571
F.3d 1288, 1292 (D.C. Cir. 2009).
judges of the D.C. Circuit have expressed the view that the
Supreme Court's decision in Winter supplants the
“sliding scale” approach, and a movant cannot
obtain an injunction without showing “both a
likelihood of success and a likelihood of
irreparable harm.” Sherley, 644 F.3d at 392.
The Circuit has not, however, expressly disavowed adherence
to the sliding scale approach. Thus, the open question
remains “whether the ‘likelihood of success'
factor is ‘an independent, free-standing requirement,
' or whether, in cases where the other three factors
strongly favor issuing an injunction, a plaintiff need only
raise a ‘serious legal question' on the
merits.” Aamer, 742 F.3d at 1043 (quoting
Sherley, 644 F.3d at 393, 398).
court need not resolve that question here, for whether the
court treats Plaintiff's likelihood of success as an
independent, freestanding requirement or evaluates all four
injunction factors on a sliding scale, the result is the
same: Plaintiff has not demonstrated that it is entitled to
an injunction pending appeal.
Plaintiff Has Not Demonstrated a Likelihood of Success on the
advances two reasons why it has demonstrated a likelihood of
success on the merits despite the court having ruled against
it. First, it contends that the court failed to address its
primary argument as to why the November 2016 Letter
constituted a legislative, rather than an interpretive, rule.
Second, Plaintiff submits that the case presents a close
legal question in an ambiguous area of the law, which should
cut in favor of granting injunctive relief pending appeal.
The court addresses each argument in turn.
Whether the FTC's November 2016 Letter Substantively
Amends Prior Regulations
asserts that it has made out a substantial case on the merits
because the FTC's November 2016 Letter can only be
properly understood as a legislative rule that worked a
substantive change in the law governing the telemarketing
industry. Plaintiff contends that “this [c]ourt did not
squarely address [its] principal argument”:
“Because the FTC's prohibition on any outbound
telemarketing call that delivers ‘a prerecorded
message' (the ‘robocall prohibition') cannot
reasonably be interpreted to prohibit soundboard calls, the
November letter cannot be justified as merely an
interpretation of the robocall prohibition.” Pl.'s
Mot. at 4. Stated another way, Plaintiff argues that
“the [robocall] prohibition cannot fairly be understood
to authorize the FTC to prohibit calls made using soundboard
technology.” Id. at 6.
to Plaintiff's contention, the court did not
“stop short” of addressing Plaintiff's
“principal argument.” Id. at 4, 8. The
court recognized that the dividing line between legislative
and interpretive rules-albeit not a bright one-is exactly
where Plaintiff would draw it in this case. As the court
wrote: “The distinguishing characteristic between the
two [types of rules], therefore, is whether the new rule
effects a ‘substantive' regulatory change to the
statutory or regulatory regime.” Soundboard
Ass'n, 2017 WL 1476116, at *10 (internal quotation
marks omitted). Or, as the Circuit stated in U.S. Telecom
Association v. FCC: “[F]idelity to the rulemaking
requirements of the APA bars courts from permitting agencies
to avoid those requirements by calling a substantive
regulatory change an interpretative rule.” 400 F.3d 29,
35 (D.C. Cir. 2005). By finding the November 2016 Letter to be
an interpretive rule, the court correlatively concluded that
the Letter did not effect a substantive change to the
regulatory regime. Indeed, the ...