MOSK, J., Dissenting. I dissent.
I would affirm the judgment. Under the circumstances of this case, the procedure used to enter judgment, albeit unconventional, does not prevent review of the issues on which this case can, as a matter of law, be determined. Those dispositive issues concern the operative date of an amendment to a federal statute and state court jurisdiction over a determination of the validity of an exemption to that statute. They involve matters of statutory interpretation, and the facts necessary to frame those issues on appeal are few and not disputed in any material respect. Thus, we are presented with issues of law that we review de novo.
The policies favoring judicial efficiency and the conservation of judicial resources in large, complex cases outweigh any interest that might be served by a reversal on procedural grounds for the sole purpose of requiring the parties to adhere to formal motion procedures. The issues were thoroughly briefed below and on appeal, thereby enabling us to decide them on the merits. Moreover, given the parties’ stipulation agreeing to the procedure utilized by the trial court, neither party is aggrieved or in any way prejudiced by that procedure. In fact, both parties urge this court to decide the merits, which involve issues of widespread importance.
[124]To return the matter to the trial court so that the parties can file papers seeking a judgment to which they have already stipulated is a statutorily renounced “idle act[]” and elevation of form over substance. (Civ. Code, §§ 3532, 3528; see also Civ. Code, § 3533 [“The law disregards trifles.”].) The result is a vivid example of an inflexible, cumbersome judicial system that increasing numbers of commercial litigants are avoiding by choosing alternative means of dispute resolution.
Accordingly, we should hear the appeal and decide it on two of the substantive issues raised. Reaching those issues, I would hold that the effective date of the opt-out notice provisions of the Junk Fax Prevention Act of 2005 (Junk Fax Act), 47 United States Code section 227, is the date of the promulgation of the implementing regulations, rather than the earlier date of enactment. I would also hold that the federal courts of appeals have exclusive jurisdiction to determine the validity of the “established business relationship” exemption recognized under the Telephone Consumer Protection Act of 1991 (Original Act), 47 United States Code former section 227, which was amended by the Junk Fax Act. And, because the determination of those two issues is sufficient to affirm the judgment, I would not reach the issue concerning substantial compliance with the opt-out notice provisions of the Junk Fax Act.
CASE SUMMARY
Plaintiff and appellant Magaña Cathcart McCarthy (plaintiff) received an unsolicited facsimile advertisement (the fax ad) from defendant CB Richard Ellis, Inc. (defendant), after the enactment of the Junk Fax Act, but before the promulgation of the implementing regulations. In response, plaintiff filed a class action for violation of the Original Act as amended by the Junk Fax Act. Plaintiff alleged that, regardless of any established business relationship between plaintiff and defendant, the fax ad failed to comply with the opt-out notice requirements of the Junk Fax Act. Plaintiff also contended that even if the Junk Fax Act was not operative at the time defendant sent the fax ad, there was no established business relationship exemption under the Original Act. Early in the litigation, the trial court rendered decisions adverse to plaintiff on certain legal issues identified by the parties. Among other things, the trial court decided that plaintiff’s claim based on the fax ad did not violate any law because the Junk Fax Act was not operative at the time defendant sent the fax ad. The trial court then entered judgment in favor of defendant based on the stipulation of the parties that the decision of the trial court be treated as an order granting summary judgment.
[125]On appeal, plaintiff argues that the trial court erred in holding that the opt-out notice provisions of the Junk Fax Act were not effective until the promulgation of the implementing regulations, instead of on the date of enactment over a year earlier. Plaintiff further contends that even assuming the Junk Fax Act was effective only after implementing regulations were promulgated, there was no “established business relationship” defense available to defendant under the Original Act because the Federal Communications Commission’s (FCC) long-standing recognition of such a defense was contrary to the express terms of the Original Act and therefore invalid. Plaintiff also contends that the trial court erred when it applied the common law doctrine of substantial compliance to the opt-out notice requirements of the Junk Fax Act and concluded that the fax ad substantially complied with those requirements.
FACTS AND PROCEDURAL HISTORY
On July 18, 2005, defendant sent the fax ad to plaintiff. At the time, defendant had an established business relationship with plaintiff.
On March 16, 2006, plaintiff filed a class action against defendant. Thereafter, plaintiff filed a first amended complaint alleging a single cause of action for violation of the Original Act, as amended by the Junk Fax Act. According to plaintiff, “since July 9, 2005, [defendants have engaged in, and continue to engage in, a course of conduct of sending of a stream of mass transmissions of hundreds of thousands of unsolicited faxes advertising or otherwise promoting the services and products of [defendant] to persons and entities whose telephone numbers are contained in databases maintained by [defendants. . . . Defendants’ conduct of sending unsolicited advertisements to the Plaintiff Class violates 47 U.S.C. § 227 (‘the Act’), including § 227(b)(1)(C) of the Act.”
Plaintiff also alleged that the established business relationship exemption codified in the Junk Fax Act was not available to defendant. According to plaintiff, because the fax ad did not contain the opt-out notice required by the Junk Fax Act, defendant could not rely on its established business relationship with plaintiff as a justification for sending the fax. Plaintiff sought injunctive relief prohibiting further violations of the Junk Fax Act, actual damages, or a minimum of $500 in statutory damages, for each violation of the act, treble damages for willful violation of the Junk Fax Act, and attorney fees and costs.
[126]Prior to allowing discovery or the filing of a motion for class certification, the trial court, which was part of Los Angeles County’s complex litigation program, identified certain threshold legal issues, and the parties thereafter stipulated that those issues should be briefed and determined prior to further proceedings.1 The first two issues identified by the trial court were: “Can a [Junk Fax Act] claim be asserted for an alleged violation of [the Junk Fax Act’s] opt-out notice requirements with respect to a fax that was sent on or after the effective date of the statute (July 9, 2005), but before the effective date of the FCC’s regulations (August 1, 2006)?” and “Does the [fax ad] on its face comply or not comply with the opt-out notice requirements of [the Junk Fax Act]? In determining this issue, the Court is to decide whether ‘materiality’ is an element of the offense and whether ‘substantial compliance’ with the opt-out notice requirements is a defense to a claim for alleged violation of [the Junk Fax Act’s] opt-out notice requirements.”
After the parties briefed the issues, the trial court held a hearing and ruled as follows: “[U]nder the language of the statute (and for purposes of the instant motion), the opt-out notice provisions under § 227(b)(1)(C)(iii) (and § 227(b)(2)(D)) became effective only when the FCC promulgated regulations meeting the requirements of those subdivisions. ... In the interim period (through the effective date of the FCC regulations on August 1, 2006), entities with an established business relationship with fax recipients could not be held liable under [the Junk Fax Act] for failure to adhere to the opt-out notice requirements.” Although the trial court did not have to reach the substantial compliance issue, it nevertheless ruled that the “intent of [the Junk Fax Act] to provide some notice of the right to opt-out (and the cost-free mechanisms for doing so) may be satisfied by substantial compliance with the statute.”
Based on the trial court’s rulings, the parties entered into a stipulation for judgment, conceding that the trial court would grant a motion for summary judgment in favor of defendant based on the court’s legal rulings. The trial court entered judgment on the stipulation, and this appeal followed. After briefing and oral argument, this court requested letter briefs on whether the procedures employed in the trial court were such that it could render an appropriate and appealable summary judgment. Both parties contended in their letter briefs that the judgment was appropriately entered and appealable, and that this court should decide the merits of the issues tendered on appeal.
[127]DISCUSSION
A. Appropriate and Reviewable Judgment
The parties stipulated to a judgment based on a pronouncement of the law by the trial court that followed legal briefing and argument by the parties. The procedure used, which did not include a demurrer, summary judgment motion, or other dispositive statutory motion, was justified as being a case management tool under the complex litigation program of the Los Angeles County Superior Court (Super. Ct. L.A. County, Local Rules, rules 7.3(h), 7.6; see Cal. Rules of Court, rules 3.400 et seq., 3.750 et seq.; Gov. Code, § 68612; Code Civ. Proc., § 575.1).
Although trial courts in complex cases have broad discretion to manage those cases in a manner that promotes efficiency and the conservation of judicial resources (see, e.g., Cal. Rules of Court, rules 3.400 et seq., 3.750 et seq.), that discretion is limited by countervailing interests of litigants and the public. “Reviewing courts have not hesitated to strike down local court rules or policies on the ground they are inconsistent with statute . ... HO A common theme in the appellate decisions invalidating local rules ... is that a local court has advanced the goals of efficiency and conservation of judicial resources by adopting procedures that deviated from those established by statute, thereby impairing the countervailing interests of litigants as well as the interest of the public in being afforded access to justice, resolution of a controversy on the merits, and a fair proceeding.” (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1352-1353 [63 Cal.Rptr.3d 483, 163 P.3d 160].) Deviation from formal procedures may, in many instances, present on appeal a case without an adequate record. Therefore, statutory procedures, such as those governing summary judgment, are designed, inter alia, to provide the appellate court with a factual and analytical framework upon which there can be de novo review.
It is important to recognize that the trial court did not, in effect, depart from established summary judgment procedures because the parties entered into a stipulation2 in connection with those procedures; “[stipulations may be entered into concerning any step of an action . . . .” (Barendregt v. Downing, [128]supra, 175 Cal.App.2d at p. 736.) Moreover, the court did not dispense with any procedure over the objection and to the prejudice of one of the parties. Here, both parties agreed to the procedure employed by the trial court to determine the legal issues, stipulated to the entry of judgment as if it were based on an order granting summary judgment, and agreed that the ensuing judgment was appealable.3
The briefing and stipulation in the trial court present an adequate record for review of the trial court’s determination of the effective date of the Junk Fax Act and its jurisdiction to determine the validity of FCC orders. The effective date issue is adequately framed by the undisputed facts: nine days after the Junk Fax Act was signed into law, defendant sent the unsolicited fax ad to plaintiff without first obtaining express permission from plaintiff to send the ad; defendant and plaintiff had an established business relationship prior to the transmission of the fax ad; the Junk Fax Act was signed into law on July 9, 2005; and the implementing regulations were issued by the FCC on August 1, 2006. Thus, the effective date issue, which turns on statutory construction and an analysis of legislative history, can be decided on the record before us, without a formal motion or separate statements. And our jurisdiction to rule on the validity of the FCC’s recognition of the established business relationship exemption is a question of law that also can be decided on the present record.
Neither party claims to be aggrieved by the procedure to which they stipulated, nor does either party claim that it was prejudiced by that procedure.4 It has long been recognized that when the parties consent to a judgment to facilitate an appeal of a trial court ruling on a critical issue, the [129]resulting judgment is reviewable on appeal.5 “In Connolly v. County of Orange (1992) 1 Cal.4th 1105 [4 Cal.Rptr.2d 857, 824 P.2d 663], we, in part, paraphrased and, in part, quoted Building Industry Assn. [v. City of Camarillo (1986) 41 Cal.3d 810 [226 Cal.Rptr. 81, 718 P.2d 68]]: ‘Although a consent . . . judgment is not normally appealable, an exception is recognized when “consent was merely given to facilitate an appeal following adverse determination of a critical issue.” ’ (Connolly v. County of Orange, supra, 1 Cal.4th at p. 1111.) For, in the words of Building Industry Assn, itself, ‘it is “wasteful of trial court time” to require the plaintiff to undergo a probably unsuccessful . . . trial merely to obtain an appealable judgment.’ (Building Industry Assn. v. City of Camarillo, supra, 41 Cal.3d at p. 817.)” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 400 [87 Cal.Rptr.2d 453, 981 P.2d 79].)
Under the specific facts of this case, the procedure utilized to enter judgment was efficient and avoided an unnecessary consumption of judicial resources. This was consistent with the trial court’s “ ‘inherent equity, supervisory and administrative powers, as well as inherent power to control litigation and conserve judicial resources.’ (Lucas v. County of Los Angeles (1996) 47 Cal.App.4th 277, 284 [54 Cal.Rptr.2d 655]; accord, Amtower v. Photon Dynamics, Inc. [(2008)] 158 Cal.App.4th [1582,] 1595 [71 Cal.Rptr.3d 361].)” (K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 951 [90 Cal.Rptr.3d 247]; see also Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 967 [67 Cal.Rptr.2d 16, 941 P.2d 1203] [“It is also well established that courts have fundamental inherent equity, supervisory, and administrative powers, as well as inherent power to control litigation before them.”].)
Thus, the lack of a formal motion in this instance should not prevent appellate review. (See Aloha Pacific, Inc. v. California Ins. Guarantee Assn. (2000) 79 Cal.App.4th 297, 306, fn. 6 [93 Cal.Rptr.2d 148] [parties stipulated to judgment in favor of defendant after plaintiff’s summary judgment motion was denied; appeal allowed even though defendant did not file its own summary judgment motion]; Holmes v. Roth (1992) 11 Cal.App.4th 931, 934, fn. 1 [14 Cal.Rptr.2d 315] [parties stipulated to judgment in favor of plaintiff after defendant’s motion for summary judgment denied; appeal allowed even though plaintiff did not file a summary judgment motion].) As Aloha Pacific and Holmes illustrate, parties can stipulate to a judgment that is reviewable on appeal even though the party in whose favor judgment is entered did not file a summary judgment motion. Fairly read, these cases support the [130]proposition that a formal summary judgment motion is not necessarily required when parties stipulate to a judgment to facilitate an appeal on a dispositive issue.
A reversal of the judgment on procedural grounds will simply result in unnecessary, further proceedings in the trial court. Defendant will have to file a motion, with a separate statement. Plaintiff will file a response, with a separate statement. The trial court will then be faced with the same legal issue it already decided. Plaintiff will appeal, and we will be in the same position we are now, but only after an undue consumption of judicial and party resources. For these reasons, I would not reverse the judgment for failure to follow certain procedures that the parties have stipulated should be deemed followed. (See Amtower v. Photon Dynamics, Inc., supra, 158 Cal.App.4th at p. 1588 [criticizing the use of motions in limine as a substitute for summary judgment and other dispositive motions, but holding that the use of that unorthodox practice in that case did not warrant reversal].)
I do not advocate procedural anarchy. As a general practice, the trial courts should adhere to statutory procedures to avoid the problems identified in the majority opinion, but which are not applicable here. (Amtower v. Photon Dynamics, Inc., supra, 158 Cal.App.4th at p. 1588 [“The better practice in nearly every case is to afford the litigant the protections provided by trial or by the statutory processes.”].) Under the circumstances of this case and the stipulation of the parties, however, the countervailing interests of litigants and the public in being afforded access to justice, obtaining decisions on the merits, and ensuring fair proceedings would not be served by a reversal. On the other hand, a reversal will frustrate the legitimate interests of the trial court in promoting efficiency and avoiding undue consumption of judicial resources.
B. Standard of Review
Plaintiff’s contention that the trial court erroneously determined the effective date of the Junk Fax Act requires the court to construe the relevant provisions of that act. Issues of statutory construction are reviewed de novo on appeal. (Barner v. Leeds (2000) 24 Cal.4th 676, 683 [102 Cal.Rptr.2d 97, 13 P.3d 704] [“We . . . conduct de novo review of the trial court’s resolution of the underlying issues of statutory construction.”]; see also U.S. v. Cabaccang (9th Cir. 2003) 332 F.3d 622, 624-625 [“The construction or interpretation of a statute is a question of law that we review de novo.”].) Similarly, the question of subject matter jurisdiction under the Hobbs Act6 is reviewed de novo. (Rural Iowa Independent Telephone Assn. v. Iowa Utilities [131]Bd. (8th Cir. 2004) 362 F.3d 1027, 1030; Carpenter v. Department of Transp. (9th Cir. 1994) 13 F.3d 313, 314.)
C. Statutory and Regulatory Background
1. The Original Act
On December 20, 1991, Congress enacted the Original Act. (47 U.S.C. § 227.) That act, prior to amendments, prohibited, inter alia, the use of any telephone facsimile machine, computer, or other device to send an “unsolicited advertisement” to a telephone facsimile machine. (47 U.S.C. § 227(b)(1)(C).) The Original Act defined an unsolicited advertisement as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission.” (47 U.S.C. former § 227(a)(4).) Although the Original Act expressly recognized an exemption from the prohibition on “telephone solicitation” based on an established business relationship between the parties, it did not expressly exempt senders of unsolicited facsimile advertisements on that basis. (See 47 U.S.C. former § 227(a)(3).)
2. Established Business Relationship Exemption for Unsolicited Facsimile Advertisements
In 1992, the FCC adopted rules implementing the Original Act. (Rules and Regs. Implementing the Telephone Consumer Protection Act of 1991, Report and Order (1992) 7 F.C.C.R. 8752; see also 47 C.F.R. § 64.1200 (2008).) In a footnote to the Report and Order for those rules, the FCC explained that “[i]n banning telephone facsimile advertisements, the [Original Act] leaves the Commission without discretion to create exemptions from or limit the effects of the prohibition . . . ; thus, such transmissions are banned in our rules as they are in the [Original Act]. [Citation.] We note, however, that facsimile transmission [sic] from persons or entities who have an established business relationship with the recipient can be deemed to be invited or permitted by the recipient.” (Report and Order, supra, 7 F.C.C.R. at p. 8779, fn. 87, citation omitted.) The FCC defined an “established business relationship” in the context of a telephone solicitation as “a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.” (Id. at p. 8793.)
Over a decade later, on July 3, 2003, the FCC updated its telemarketing and facsimile advertising rules. (Rules and Regs. Implementing the Telephone [132]Consumer Protection Act of 1991 (2003) 18 F.C.C.R. 14014-14178.) The updated rules purported to reverse the FCC’s prior determination that an established business relationship with the recipient of a facsimile advertisement would be deemed express permission to send the advertisement. (Id. at pp. 14127-14128.) “We now reverse our prior conclusion that an established business relationship provides companies with the necessary express permission to send faxes to their customers. As of the effective date of these rules, the [existence of an established business relationship] will no longer be sufficient to show that an individual or business has given their express permission to receive unsolicited facsimile advertisements.” (Ibid.) Instead, the FCC determined that recipients must give express permission in a signed writing to receive facsimile advertisements. (Id. at p. 14128.)
On August 18, 2003, however, the FCC issued an order on reconsideration that extended until January 1, 2005, the effective date of the FCC’s “determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements.” (Rules and Regs. Implementing the Telephone Consumer Protection Act of 1991, Order on Reconsideration (2003) 18 F.C.C.R. 16972,¶ 1.) Therefore, according to the FCC, “until the amended rule . . . becomes effective on January 1, 2005, an established business relationship will continue to be sufficient to show that an individual or business has given express permission to receive facsimile advertisements.” (Id. at p. 16975, 1 6, italics added.) On September 15, 2004, the FCC, in response to a petition, again delayed the implementation of its determination reversing the established business relationship exemption from the prohibition on unsolicited facsimile advertisements. The new effective date was June 30, 2005. (47 C.F.R. § 64.1200(a)(3)(i) (2008).)
On June 27, 2005, while Congress was considering enactment of the Junk Fax Act, the FCC again delayed the effective date of the proposed rule reversing the established business relationship exemption: “[W]e . . . delay, until January 9, 2006, the effective date of the determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements . . . .” (Rules and Regs. Implementing the Telephone Consumer Protection Act of 1991, Order, 70 Fed.Reg. 37705 (June 30, 2005).)
3. The Junk Fax Act
The President signed the Junk Fax Act into law on July 9, 2005. As relevant to this case, it amended the Original Act as follows:
[1331]. It codified the established business relationship exemption from the prohibition on unsolicited facsimile advertisements (47 U.S.C. § 227(b)(l)(C)(i));
2. It provided a definition of an established business relationship in the context of unsolicited facsimile advertisements (47 U.S.C. § 227(a)(2)(A));
3. It required the sender of a facsimile advertisement to provide a specified notice and contact information on the facsimile to allow recipients to “opt out” from any future facsimile transmissions from the sender (47 U.S.C. § 227(b)(2)(D)); and
4. It specified the circumstances under which a request to “opt out” complied with the act. (47 U.S.C. § 227(b)(2)(D).)
The Junk Fax Act contained the following provisions relevant to the effective date issue:
“(b) Restrictions on use of automated telephone equipment.
“(1) Prohibitions. It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—[|] ...['[[]
“(C) to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless—
“(i) the unsolicited advertisement is from a sender with an established business relationship with the recipient;
“(ii) the sender obtained the number of the telephone facsimile machine through—
“(I) the voluntary communication of such number, within the context of such established business relationship, from the recipient of the unsolicited advertisement, or
“(II) a directory, advertisement, or site on the Internet to which the recipient voluntarily agreed to make available its facsimile number for public distribution, except that this clause shall not apply in the case of an unsolicited advertisement that is sent based on an established business relationship with the recipient that was in existence before [the date the Junk Fax Act was enacted] [July 9, 2005] if the sender possessed the facsimile machine number of the recipient before such date of enactment; and
[134]“(iii) the unsolicited advertisement contains a notice meeting the requirements under paragraph (2)(D), except that the exception under clauses (i) and (ii) shall not apply with respect to an unsolicited advertisement sent to a telephone facsimile machine by a sender to whom a request has been made not to send future unsolicited advertisements to such telephone facsimile machine that complies with the requirements under paragraph (2)(E); or m... m
“(2) Regulations; exemptions and other provisions. The Commission shall prescribe regulations to implement the requirements of this subsection. In implementing the requirements of this subsection, the Commission [f] . . . [f]
“(D) shall provide that a notice contained in an unsolicited advertisement complies with the requirements under this subparagraph only if—
“(i) the notice is clear and conspicuous and on the first page of the unsolicited advertisement;
“(ii) the notice states that the recipient may make a request to the sender of the unsolicited advertisement not to send any future unsolicited advertisements to a telephone facsimile machine or machines and that failure to comply, within the shortest reasonable time, as determined by the Commission, with such a request meeting the requirements under subparagraph (E) is unlawful;
“(iii) the notice sets forth the requirements for a request under subparagraph (E);
“(iv) the notice includes—
“(I) a domestic contact telephone and facsimile machine number for the recipient to transmit such a request to the sender; and
“(II) a cost-free mechanism for a recipient to transmit a request pursuant to such notice to the sender of the unsolicited advertisement; the Commission shall by rule require the sender to provide such a mechanism and may, in the discretion of the Commission and subject to such conditions as the Commission may prescribe, exempt certain classes of small business senders, but only if the Commission determines that the costs to such class are unduly burdensome given the revenues generated by such small businesses;
“(v) the telephone and facsimile machine numbers and the cost-free mechanism set forth pursuant to clause (iv) permit an individual or business to make such a request at any time on any day of the week; and
[135]“(vi) the notice complies with the requirements of subsection (d)... ,"7 (47 U.S.C. § 227(b)(1), (2).)
D. Effective Date of the Junk Fax Act Opt-out Notice Provision
Plaintiff’s primary contention on appeal is that the Junk Fax Act became effective, and therefore enforceable against defendant, the day it was signed into law—July 9, 2005—rather than on the day the regulations promulgated under that act became effective—August 1, 2006. According to plaintiff, Congress did not expressly state in the Junk Fax Act that it, or any provision of it, would become effective only after implementing regulations were promulgated and adopted. Plaintiff argues that, as a result, the opt-out notice requirements of the Junk Fax Act became effective immediately upon its passage. Thus, plaintiff concludes that the fax ad violated the Junk Fax Act by not including the required opt-out notice.
In construing the Junk Fax Act, the court should “apply well-settled principles of statutory construction. [The] task is to discern the Legislature’s intent. The statutory language itself is the most reliable indicator, so [the court] start[s] with the statute’s words, assigning them their usual and ordinary meanings, and construing them in context. If the words themselves are not ambiguous, [the court] presume[s] the Legislature meant what it said, and the statute’s plain meaning governs. On the other hand, if the language allows more than one reasonable construction, [the court] may look to such aids as the legislative history of the measure and maxims of statutory construction. In cases of uncertain meaning, [the court] may also consider the consequences of a particular interpretation, including its impact on public policy. (E.g., MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 426 [30 Cal.Rptr.3d 755, 115 P.3d 41]; People v. Smith (2004) 32 Cal.4th 792, 797-798 [11 Cal.Rptr.3d 290, 86 P.3d 348].)” (Wells v. One2One Learning Foundation (2006) 39 Cal.4th 1164, 1190 [48 Cal.Rptr.3d 108, 141 P.3d 225]; see also Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, 571 [87 Cal.Rptr.3d 700, 198 P.3d 1109].)
Although, as a general rule, statutes are considered effective on the date of their enactment, there is a recognized exception to that rule when Congress gives clear direction that a statute will not become effective immediately. As [136]the United States Supreme Court observed in Gozlon-Peretz v. United States (1991) 498 U.S. 395, 404 [112 L.Ed.2d 919, 111 S.Ct. 840], “It is well established that, absent a clear direction by Congress to the contrary, a law takes effect on the date of its enactment.” (Italics added.) The Supreme Court, however, did not require express language in order for the effective date to be other than the date of enactment.
The Junk Fax Act mandates that the FCC promulgate implementing regulations. “The [FCC] shall prescribe regulations to implement the requirements of this subsection. In implementing the requirements of this subsection, the [FCC] ...[!]...[][] shall provide that a notice contained in an unsolicited advertisement complies with the requirements under this subparagraph . . . .” (47 U.S.C. § 227(b)(2)(D), italics added.) When assigned its usual and ordinary meaning and construed in context, that language supports the proposition that Congress gave “a clear direction” (Gozlon-Peretz v. United States, supra, 498 U.S. at p. 407) that the Junk Fax Act’s new opt-out notice requirements would not be effective immediately. Congress charged the FCC, as the agency responsible for enforcing the act, with the responsibility of promulgating regulations to implement the requirements of the Junk Fax Act. That mandate strongly suggests that enforcement of the Junk Fax Act’s new requirements would be dependent upon implementing regulations. That Congress intended to delay the effective date of the new notice requirements until such time as the FCC had, in its discretion, specified various requirements of the act is also evident from the language in the statute expressly vesting the FCC with the discretion (i) to determine the time period within which the sender of an unsolicited facsimile advertisement must comply with a request from a recipient not to send any further advertisements (47 U.S.C. § 227(b)(2)(D)(ii)); and (ii) to determine which classes of small businesses were to be exempt from the requirements of the act (47 U.S.C. § 227(b)(2)(D)(iv)(II)).
The Junk Fax Act also required the FCC to promulgate implementing regulations within 270 days of the passage of the act. (See fn. 7, ante.) The specification of such a timeframe, when read in conjunction with the mandatory language requiring implementing regulations, further supports the conclusion that Congress gave “a clear direction” that the Junk Fax Act’s opt-out notice requirements would become binding and effective following the promulgation of regulations.
In Sweet v. Sheahan (2d Cir. 2000) 235 F.3d 80 (Sweet), the Second Circuit Court of Appeals was asked to determine the effective date of certain lead paint disclosure requirements specified in the Residential Lead-Based Paint [137]Hazard Reduction Act of 1992 (Lead-Based Paint Act).8 Analogous to what occurred here, the defendant landlord’s liability to the plaintiff under the statute at issue in Sweet was dependent upon the date the disclosure requirements in the statute became effective as to the landlord. (235 F.3d at p. 86.) The issue, as phrased by the court of appeals, was; “As of what date did [the defendant landlord] become legally obligated to comply with the federal lead-paint disclosure requirements? Was it: (1) October 28, 1995, the date the statute states the regulations would become effective and which was before [the plaintiff] leased the apartment from [the defendant landlord]; or (2) December 6, 1996, the date set forth by the agencies in the Federal Register and Code of Federal Regulations as the effective date of the regulations? If the answer is the former, then [the defendant landlord] would have owed a duty of disclosure to [the plaintiff] and subject matter jurisdiction would exist, but if the latter date is applicable, then [the plaintiff’s] federal claim would have no basis and subject matter jurisdiction would be lacking.” (Sweet, supra, 235 F.3d at p. 86.)
Although the statute at issue in Sweet, supra, 235 F.3d 80, specified a date upon which implementing regulations would become effective, i.e., October 28, 1995, the agencies responsible for promulgating those regulations9 missed that deadline and instead set December 6, 1996, as the date their regulations would become effective. (Sweet, at p. 85, fn. 4.) After examining the statute, regulations, and the corresponding legislative history, the court in Sweet held that “[the plaintiff landlord’s] duty of disclosure did not accrue before December 6, 1996, the date the [responsible] agencies established as the effective date for the regulations.” (Id. at p. 86.) According to the court in Sweet, “the plain language of the statute establishes that the [responsible regulatory agencies] had an obligation to promulgate regulations that implemented the disclosure obligations; the statute itself does not create such obligations on property owners. Our conclusion that the regulations, and not the statute, created the enforceable obligations on private parties is supported by the fact that, in the absence of Congressional direction, the [responsible] agencies were compelled to make a number of decisions in the regulations without which the duties of those private parties would not have been clear.” (Ibid., italics added.) The court in Sweet interpreted the statute at issue there to impose “obligations on the agencies to promulgate regulations which will then—and only then—impose [disclosure] obligations on sellers and lessors. [The defendant] thus had no disclosure obligation until the regulations became effective.” (Id. at pp. 86-87; see also Sipes ex rel. Slaughter v. Russell (D.Kan. 2000) 89 F.Supp.2d 1199.)
[138]In the instant case, the Junk Fax Act, like the Lead-Based Paint Act in Sweet, supra, 235 F.3d 80, mandated that the agency responsible for enforcing the requirements of the Junk Fax Act—the FCC—promulgate regulations to implement the opt-out notice requirements of the act, and that such regulations were to be issued within 270 days. Moreover, as was the case in Sweet, the Junk Fax Act left certain aspects of the implementing regulations to the discretion of the FCC. For example, Congress expressly contemplated a time limit for responding to a recipient’s opt-out request, but left the precise length of time to the FCC. Absent a regulation specifying the time period within which a sender must respond, the duties of a sender in that regard would have been unclear. Similarly, Congress also provided that some types of small businesses would be exempt from the opt-out notice requirement, but left the determination of which specific types of businesses to the FCC. Therefore, unless and until the FCC promulgated regulations specifying the classes of small businesses that were exempt, the duties of small businesses under the Junk Fax Act also would have been unclear. By allowing the FCC both the discretion and the time to provide certain details of the opt-out notice requirements of the act—in the form of mandatory implementing regulations—Congress manifested an intent to delay the effective date of the statutory notice requirements to the date those regulations issued, i.e., August 1, 2006.
Plaintiff points out that Congress, in the Original Act, expressly provided for a delayed effective date for the purpose of promulgating regulations in the future, and yet did not do so in the Junk Fax Act. That distinction, although a reasonable point, is not dispositive. The language in the Junk Fax Act evidencing the need for the regulations to make certain details of the Junk Fax Act comprehensible outweighs the significance of the omission of an express delayed, effective date. Moreover, the language in the Original Act reflects the concern of Congress for the necessity of businesses to adjust to the new statute as further defined by regulations. That same concern is demonstrated in the Junk Fax Act as to the opt-out provision by requiring the FCC to issue regulations to implement the amendments within 270 days. It would make little sense to delay the effective date for implementing regulations in one instance and not in the other. Accordingly, the Junk Fax Act’s opt-out notice requirement was not operative at the time of the fax ad.
E. Established Business Relationship Exemption Under the Original Act
Plaintiff argues that even assuming the opt-out notice requirements of the Junk Fax Act did not become effective until August 1, 2006—well after the transmission of the fax ad—defendant nevertheless violated the prohibitions on unsolicited facsimile advertisements in the Original Act, regardless of [139]whether defendant had an established business relationship with plaintiff. According to plaintiff, although the Original Act contained an express established business relationship exemption from the prohibition on “telephone solicitation,” there was no such express exemption from the prohibition on unsolicited facsimile advertisements. As plaintiff reads the Original Act, the only defense available to a sender of an unsolicited facsimile advertisement under that act was prior express permission from the recipient. Because defendant did not obtain such permission in this case, plaintiff contends defendant violated the prohibition on unsolicited facsimile advertisements in the Original Act.
In making its argument, plaintiff concedes that in 1992 the FCC recognized the existence of an established business relationship exemption from the prohibition on unsolicited facsimile advertisements, albeit in a footnote in its administrative commentary,10 and that the FCC repeatedly delayed implementation of a subsequent rule eliminating that exemption. Plaintiff contends the FCC’s recognition of the exemption for unsolicited facsimile advertisements was a nullity because it conflicted with the express terms of the Original Act. Plaintiff therefore urges us to conclude that the FCC’s recognition of an established business relationship exemption for facsimile advertisers legally was void ab initio.
“The Hobbs Act, 28 U.S.C. § 2342, gives the federal courts of appeals ‘exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of ... all final orders of the Federal Communications Commission made reviewable by section 402(a) of title 47.’ Id. Section 402(a), in turn, encompasses ‘any proceeding to enjoin, set aside, annul, or suspend any order of the Commission under [the Communications Act of 1934, as amended by the Telecommunications Act of 1996],’ with exceptions not relevant here. Together, these two statutes ‘vest the courts of appeals with exclusive jurisdiction to review the validity of FCC rulings.’ Wilson v. A.H. Belo Corp., 87 F.3d 393, 396-97 (9th Cir. 1996). Aggrieved parties may invoke this exclusive jurisdiction ‘only by filing a petition for review of the FCC’s final order in a court of appeals naming the United States as a party.’ [US West Conmmunications v.] MFS Intelenet [(9th Cir. 1999)] 193 F.3d [1112,] 1120; see also 28 U.S.C. §§ 2342, 2344.” (U.S. West Communications v. Hamilton (9th Cir. 2000) 224 F.3d 1049, 1054 (U.S. West).)
In U.S. West, supra, 224 F.3d 1049, the plaintiff argued that a provision in a “Local Competition Order” released by the FCC was not a final order and [140]therefore that the provision could be reviewed without complying with the requirements of the Hobbs Act. The court in U.S. West disagreed: “[The plaintiff] argues, however, that [the challenged provision of the Local Competition Order] is not a ‘final order’ of the FCC and that the Hobbs Act therefore does not bar our review. We are not persuaded. In Sierra Club v. United States Nuclear Regulatory Commission, 862 F.2d 222 (9th Cir. 1988), we held that agency orders are ‘final orders’ for the purposes of the Hobbs Act ‘if they impose an obligation, deny a right, or fix some legal relationship as a consummation of the administrative process.’ Id. at 225. In 1997, the Supreme Court held that, ‘[a]s a general matter, two conditions must be satisfied for agency action to be “final”: First, the action must mark the consummation of the agency’s decisionmaking process—it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.’ ” (224 F.3d at p. 1054.)
Plaintiff, using the same reasoning as the plaintiff in U.S. West, supra, 224 F.3d 1049, argues that the FCC’s recognition of an established business relationship exemption from the prohibition of unsolicited facsimile advertisements is not a formal regulation or final order of the FCC and therefore is reviewable on appeal, notwithstanding the requirements of the Hobbs Act, which gives federal appeals courts “exclusive jurisdiction” to invalidate formal orders of the FCC. Given that the FCC’s finding of such an exemption was first published in 1992, and that the FCC repeatedly published orders acknowledging the continued existence of the exemption, plaintiff’s argument is unpersuasive. As in U.S. West, the exemption was the culmination of the FCC’s decisionmaking process, and, for well over a decade, it constituted an administrative action “ ‘by which rights or obligations have been determined, or from which legal consequences [have] flowjed].’ ” (U.S. West, supra, 224 F.3d at p. 1054.) For example, the Court of Appeal in Kaufman v. ACS Systems, Inc. (2003) 110 Cal.App.4th 886 [2 Cal.Rptr.3d 296] relied on the exemption as part of its First Amendment analysis in that case. “[T]he ‘[Original Act] does not act as a total ban on fax advertising.’ (Missouri ex rel. Nixon v. American Blast Fax, Inc. [(8th Cir. 2003)] 323 F.3d [649,] 659.) A fax broadcaster may send advertisements to those with whom it or the advertiser has an established business relationship. Fax broadcasters and advertisers may also obtain consent for their faxes through mailings, telephone calls made in accordance with telemarketing regulations, and interaction with customers at their places of business. (Ibid.; Van Bergen v. State of Minn. [(8th Cir. 1995)] 59 F.3d [1541,] 1556; Moser v. F.C.C. (9th Cir. 1995) 46 F.3d 970, 975; 47 U.S.C. § 227; 47 C.F.R. § 64.1200 (2003); 15 U.S.C. §§ 6101-6108; 16 C.F.R. §§ 310.1-310.9 (2003).)” (Kaufman v. ACS Systems, Inc., supra, 110 Cal.App.4th at p. 911, italics added.) The established business relationship exemption under the Original Act, as consistently recognized by the FCC, is a [141]final order for purposes of the Hobbs Act. (Contra, Gottlieb v. Carnival Corp. (E.D.N.Y. 2009) 595 F.Supp.2d 212, 219, fin. 5.)11 The issue of the regulation’s validity is therefore subject to the exclusive jurisdiction of the federal courts of appeals.12 Thus, plaintiff has not established that under the Original Act, defendant may not invoke the established business relationship defense.
For the foregoing reasons, I would affirm the judgment.
The parties’ stipulation included a recital that the determination of the threshold issues would not be in lieu of summary judgment motions. Nevertheless, in the subsequent stipulation for entry of judgment, the parties provided that the stipulation was in lieu of a formal summary judgment.
“ ‘The term “stipulation” as used in practice means an agreement entered into by attorneys in the form required by law, relating to some matter incidental to an action or proceeding. Such a stipulation . . . when made in open court. . . constitutes not only an agreement between the parties, but also one between them and the court, which the court is bound to enforce for the benefit of those interested and for the protection of its own honor and dignity.’ (46 Cal.Jur.2d (Stipulations) § 2.) Q] Stipulations may be entered into concerning any step of an action (Code Civ. Proc., § 283), including the entry of judgment (Church v. Church [(1940)] 40 Cal.App.2d 701 [105 P.2d 643]), modification of a judgment (Putnam v. Cameron [(1954)] 129 Cal.App.2d [12889] [276 P.2d 102]), or for retrial of a partially tried cause (City of Los Angeles v. Cole [(1946)] 28 Cal.2d 509 [170 P.2d 928]).” (Barendregt v. Downing (1959) 175 Cal.App.2d 733, 735-736 [346 P.2d 870].)
Although the court in Monarch Healthcare v. Superior Court (2000) 78 Cal.App.4th 1282 [93 Cal.Rptr.2d 619] unequivocally declared at page 1286 that “[p]arties cannot stipulate to circumvent a legislatively designated code section as the exclusive statutory vehicle,” the case that Monarch cites for that proposition, Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1501 [38 Cal.Rptr.2d 626], does not support it. Gilberd, which involved a trial court’s jurisdiction to reconsider a prior order, did not even involve a stipulation by the parties, much less one to circumvent jurisdictional requirements.
The general rule in class action procedure is that the trial court should decide whether to certify a class prior to mating any determinations on the merits. (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1074 [56 Cal.Rptr.3d 861, 155 P.3d 268].) But that rule does not apply in cases, such as this one, in which the defendant seeks or agrees to a determination on the merits prior to a class being certified. (Id. at p. 1083 [“If [a defendant] fails to timely object, or affirmatively seeks resolution of the merits before certification, [the defendant] will be deemed to have waived its rights [to have a class certified prior to merits determinations].”].)
Cf. Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334 [82 Cal.Rptr.3d 229, 190 P.3d 586], in which the California Supreme Court recognized the ability of parties to an arbitration agreement to alter the general rule that arbitration awards are not reviewable on the merits by expressly agreeing that an arbitrator’s award may be reviewed for legal error. (Id., at pp. 1340, 1362.)
28 United States Code section 2342.
The “Historical and Statutory Notes” for section 227 provide, under the heading “Regulations,” as follows: “Pub. L. 109-21, Sec. 2(h), July 9, 2005, 119 Stat. 362, provided that: ‘Except as provided in section 227(b)(2)(G)(ii) of the Communications Act. . ., not later than 270 days after the date of enactment of this Act [July 9, 2005], the [FCC] shall issue regulations to implement the amendments made by this section [amending this section and enacting this note].’ ”
42 United States Code sections 4851 through 4856.
The Department of Housing and Urban Development and the Environmental Protection Agency were charged under the Lead-Based Paint Act with promulgating implementing regulations. (Sweet, supra, 235 F.3d at p. 84.)
There is no contention that the established business relationship exemption was not in compliance with the Administrative Procedure Act, 5 United States Code section 511 et seq., or any other provision.
There are authorities applying or acknowledging the established business relationship exemption before the enactment of the Junk Fax Act. (See, e.g., Kaufman v. ACS Systems, Inc., supra, 110 Cal.App.4th at p. 911; Accounting Outsourcing, LLC v. Verizon Wireless Personal Comms. (M.D.La. 2004) 329 F.Supp.2d 789, 808; Carnett’s, Inc. v. Hammond (2005) 279 Ga. 125 [610 S.E.2d 529, 531]; Lampkin v. GGH, Inc. (2006) 2006 OKCIVAPP 131 [146 P.3d 847, 854].)
A judgment refusing to determine an issue on the ground of lack of jurisdiction is not ordinarily res judicata. (Shore v. Shore (1954) 43 Cal.2d 677, 681 [277 P.2d 4]; see also 7 Witkin Cal. Proc. (5th ed. 2008) Judgment, § 379, p. 1007 [“A judgment of dismissal has res judicata effect only if it is on the merits.”].)