Supreme Court passes on chance to revive nondelegation doctrine—but more opportunities wait in the wings

June 11, 2024 | By MOLLY NIXON

On June 10, the Supreme Court declined to take up two similar cases that would have provided an opportunity for the Court to reinvigorate the nondelegation doctrine, which enforces the Constitution’s vesting of “all Legislative powers . . . in a Congress of the United States.” Those powers, so the thinking goes, cannot then be redelegated by Congress—the most accountable branch—to the president; nor can legislative power be transferred to non-governmental actors under a related doctrine, which precludes private delegation.

In the cases, both captioned Consumers’ Research v. Federal Communications Commission, the petitioners challenged Congress’s decision to grant the Federal Communications Commission, an independent agency, limitless authority to raise revenue for its Universal Service Fund as well as the FCC’s handing over of that revenue-raising power to a private company. While this is the end of the road for these two cases, there are other nearly identical cases in the pipeline that may well create a circuit split, making a Supreme Court grant more likely.

Congress’s policy: The FCC should do good telecom things

In 1996, Congress passed the Telecommunications Act, which requires every telecommunications carrier providing interstate services to “contribute” (fork over) to FCC-established “mechanisms” to preserve and advance universal service, which is described in the law as “an evolving level of telecommunications services that the [FCC] shall establish periodically.” While the Telecommunications Act identifies some vague “principles”—including quality services at “just, reasonable, and affordable rates”—to guide the FCC in defining those services, the Commission is effectively left on its own to determine the scope of that “evolving level” and is even given the power to create other “necessary and appropriate” principles.

The FCC has, in turn, outsourced “administration” of the USF to a private corporation: the Universal Service Administrative Company, which is led by a board that includes representatives of industry interest groups and funding recipients. That company proposes the fund’s budget every quarter and the proposed amount is deemed approved if the FCC does nothing within 14 days after the date of the announcement of the proposed amount. The FCC rarely alters the company’s proposals, so they typically go into effect automatically. The telecom carriers’ contributions—now billions of dollars a year—are not limited by any statutory formula, nor are they capped in amount. And they are generally passed on to consumers; you’ve likely seen a line entry for the fee on your phone bill. “As a result,” the petitioners observed, the company effectively “sets the quarterly taxing rate paid by millions of Americans.”

Not surprisingly, given this set-up, there have been numerous complaints about the absence of oversight over the fund’s programs, with members of Congress, non-partisan government bodies, and others alleging a “history of extensive waste,” abuse, and fraud. In a 2004 congressional hearing, the FCC’s Inspector General agreed with a congressman’s characterization of one component as a program that “applicants view . . . as a big candy jar, free money.”

Frustration with Congress… and Supreme Court precedent

Consumers’ Research, an advocacy group, and a number of other parties challenged quarterly contribution determinations in four different circuits. In each case, they have argued the Telecommunications Act violates the nondelegation doctrine because it fails the Supreme Court’s self-admittedly lax “intelligible principle” standard. In arguing that Congress has provided no such constraining principle to the FCC, the challengers point to the statute’s merely aspirational considerations, labeled “hazy” by Eleventh Circuit Judge Kevin Newsom, who observed that the statute left the agency free to do “essentially whatever it wants.” Despite being “deeply skeptical that [his court’s decision in the case] can be squared with constitutional first principles,” Judge Newsom believed that outcome was compelled by the Supreme Court, which has “tolerated . . . decidedly ‘not demanding’” standards in applying the intelligible principle test.

The plaintiffs also challenged the FCC’s delegation of power to the Universal Service Administrative Company, pointing to the Supreme Court’s statement that delegation to private persons is “legislative delegation in its most obnoxious form,” in no small part because those private persons have interests that “may be and often are adverse to the interests of others in the same business,” unlike (we hope) government officials.

The Supreme Court should limit what authority Congress can cede

The tripartite structure of our federal system vests the legislative, executive, and judicial powers in three separate branches to protect against the consolidation of power and check any one branch’s effort to encroach on Americans’ liberty. James Madison famously warned that “[t]he accumulation of all powers . . . in the same hands . . . may justly be pronounced the very definition of tyranny.” No doubt the lines between the branches—and particularly between the legislature and the executive—can be blurred and there are several areas in which a degree of shared power seems to be contemplated by the Constitution itself, such as in foreign affairs.

But other authority is more clear cut, such as the power to “lay and collect taxes,” vested explicitly in Congress. Granting decision-making authority over the government’s ability to tax and spend to the body closest to the people—the power of the purse—was meant to put voters in charge of the size and scope of the federal government. And while Congress’s delegation of that authority to the executive branch (and to an agency not fully within the president’s control, at that) raises constitutional concerns, in the re-delegation of that taxing power to a private body there is, in the words of Justice Samuel Alito, “not even a fig leaf of constitutional justification.”

In a 1789 letter to James Madison, Thomas Jefferson opined that “[t]he tyranny of the legislatures is the most formidable dread at present, and will be for long years. That of the executive will come in its turn, but it will be at a remote period.” That period is remote no more. The Court can’t force Congress to reclaim its legislative mantle, but it can, within its judicial role, enforce the separation of powers.

The FCC has so far prevailed in the Sixth Circuit and the Eleventh Circuit: Those are the two cases that were denied review by the Supreme Court. Consumers’ Research also lost in their initial Fifth Circuit challenge, but that court granted en banc review, increasing the likelihood of a circuit split. The group also has a similar case pending before the DC Circuit.

The Supreme Court’s preference for awaiting additional development of the law in the lower courts is understandable, but the Court is also well aware of the mischief its non-enforcement of delegation limits has made in the lower courts. Regardless of the outcomes in the Fifth and DC Circuits, the Supreme Court should take up a case to provide guidance to lower courts on the viability of nondelegation doctrine claims and, in so doing, put members of Congress on notice that they may have to return to work.