FCC v. Consumers’ Research

For over a century, the US Supreme Court has stated that Congress can’t give away too much power. According to Article I of the Constitution, “All legislative Powers herein granted shall be vested in a Congress of the United States,” and the Court has interpreted this to mean that Congress can never delegate legislative power to anyone. This is the “nondelegation doctrine.” 

But wait a minute: isn’t delegation ubiquitous? Doesn’t most executive power rely on delegated power from Congress? Doesn’t the whole administrative state depend on delegations to the president and agencies? 

Yes. The Constitution doesn’t prohibit all delegations—it only prohibits delegations of legislative power. And, the Court has said, if a delegation is constrained by some “intelligible principle”—some principle that the delegate can execute—that power isn’t legislative. A delegation only becomes a forbidden delegation of legislative power when it gives the delegate unconstrained discretion. 

But wait another minute: even then, aren’t there lots of unconstrained delegations? What about requirements that agencies set “generally fair and equitable” prices or distribute broadcast licenses in the “public interest” or ensure that corporate structures aren’t “unduly or unnecessarily complicate[d]”?  

Also, yes. But the Court has only struck down congressional delegation under the nondelegation doctrine twice—in 1935. All delegations involve some discretion and some vagueness, and “how vague is too vague” or “how much discretion is too much” is hard. But the recent changes in the composition of the Court have brought about many significant changes in constitutional law, and several conservative Justices have been eyeing the nondelegation doctrine as well. Could this be the time? 

As of last summer, with FCC v. Consumers’ Research, the answer is “No.” The nondelegation doctrine’s dry spell continues into its 91st year. 

The facts are these: The 1996 Telecommunications Act contains provisions for achieving “universal service.” Telecom carriers contribute to a Universal Service Fund, which is used to subsidize projects in underserved areas. The Fund has to be “sufficient” to “advance universal service.” Each carrier contributes based on a “contribution factor”—an amount proportional to its revenues, such that it all adds up to the necessary amount of money. 

Who determines how much should go into the Fund? The Universal Service Administrative Company (USAC), a private nonprofit owned by an association of telecom carriers. USAC produces the projections that determine the Fund’s required amount of money—and therefore the carriers’ contribution factors. USAC then submits those projections to the FCC “for approval and eventual use in calculating required contributions.” 

The Fifth Circuit thought this was all unconstitutional. It gave two reasons: First, the FCC had excessive discretion, because the limits on its taxing authority were “minimal,” “contentless,” and “amorphous.” Second, the FCC invalidly delegated its taxing authority to USAC, a private entity. The Fifth Circuit didn’t say whether either of these would be enough, on its own, to invalidate the scheme—but the combination of both factors made the scheme unconstitutional. 

The Supreme Court (with Justice Kagan writing the majority) disagreed. 

First, it held—after analyzing the statutory structure—that the FCC’s discretion was adequately constrained. (In doing so, it rejected a proposed stricter nondelegation rule for delegations of taxing power.) Admittedly, the statute uses vague words like “sufficient” and “adequate.” “Universal service” is admittedly an evolving standard—but this is no worse than all the other delegations that have been upheld since 1935. In a subtle exercise of constitutional avoidance, the majority read the statute more narrowly than it might have—thus reducing the apparent scope of the delegation, and making it easier to uphold. 

Second, it held that there was no excessive delegation to USAC. Even if there’s a constitutional problem in delegating to private parties, there’s no problem in merely relying on them in a subordinate role—and, the Court held, USAC is “broadly subordinate” to the FCC. (Because the Court found no real private delegation at all, it didn’t rule on whether there’s any special rule for private delegations.) 

Finally, having rejected each of the Fifth Circuit’s reasons in isolation, the Court also rejected the Fifth Circuit’s combination theory. 

And so, the nondelegation doctrine survives, with the same century-old “intelligible principle” formulation. The decision was 6–3; Justice Kagan’s majority was joined not only by her fellow liberals but also by three conservatives: Chief Justice Roberts and Justices Kavanaugh and Barrett. Justices Kavanaugh and Jackson each wrote concurrences. Justice Gorsuch, joined by Justices Thomas and Alito, dissented. 

My interest in this case stems from the “private nondelegation” argument. The view that private delegations are per se unconstitutional has recently gained currency, especially among conservatives (including my former boss, Justice Alito). I’m a dissenter from that view: in a recent Notre Dame Law Review article, I argue that the so-called “private nondelegation doctrine” has no support in Supreme Court precedent and is also a bad idea. I was therefore pleased to see that Justice Jackson, in her two-paragraph concurrence, “express[ed her] skepticism that the private nondelegation doctrine . . . is a viable and independent doctrine in the first place,” pointing to “recent scholarship”—citing my article! 

Based on my research, I authored an amicus brief for the Reason Foundation (my former employer), making this same argument, and pointing out that the real problem with many private delegations (including this one) is not the nondelegation doctrine but rather the Due Process Clause and the Appointments Clause. And I was pleased to see that Justice Gorsuch, in his dissent, cited my brief for those arguments—leaving them for another day because they hadn’t been addressed by the parties or the court of appeals. This is useful, because it shows a recognition that such arguments can be significant in private nondelegation cases if properly argued from the get-go. (There’s a pending Fifth Circuit case implicating those issues right now, in the context of thoroughbred horse racing.) 

Getting my research and advocacy cited by both sides in a major Supreme Court case—now that’s something that appeals to my professorial pride and vanity.