Supreme Court Reconsiders Constitutionality of Agency Policymaking

The Supreme Court heard oral arguments Wednesday in a case testing the limits of the nondelegation doctrine, an issue that may sound lawyerly, but which is of the utmost importance in ensuring separation among the federal branches and accountability for the important decisions that affect us all. 

Nondelegation is the principle that one branch of government may not give away its power to another. Thus, Congress, vested by the Constitution with the “legislative powers,” cannot give those powers to the executive branch. And yet it appears to do so routinely with broadly-written laws that invite bureaucrats to make the decisions and set the rules that will bind the public.

Not since 1935 has the Supreme Court used the nondelegation doctrine to strike down a federal statute. More than judicial deference, that failure has enabled the growth of the federal administrative state, which has become in many respects an autonomous policymaking body. 

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Interest in nondelegation has resurfaced in the past few years. In 2019, three justices voted to strike down a criminal law as unconstitutional on nondelegation grounds. Last term, the Supreme Court agreed to consider a nondelegation challenge to the Securities and Exchange Commission’s in-house legal proceedings, though it ruled against the commission on Seventh Amendment grounds instead. And the court raised hopes yet again when it agreed to hear Federal Communications Commission v. Consumers’ Research, a nondelegation challenge to the FCC’s universal service program.

But after Wednesday’s oral arguments, those awaiting nondelegation’s revival might be deferring their hopes to another term and another case.

After deregulating the telecommunications industry, Congress sought to continue subsidies for phone service in rural and low-income communities by passing the Telecommunications Act of 1996, which authorized the FCC to raise “sufficient” funds to ensure affordable service in these areas. The FCC raises contributions toward “universal service” from carriers who then pass the costs along to customers.

Consumers’ Research argues that by empowering the FCC to raise unspecified sums, Congress unlawfully delegated its taxing power to an independent agency. It argues further that the agency subdelegated most of that power to a private industry group called the Universal Service Administrative Co., or USAC, which sets the quarterly contribution amount.

The 5th U.S. Circuit Court of Appeals accepted those arguments last fall, but today those arguments received a skeptical hearing from the justices. Currently, courts will uphold a delegation so long as Congress gave the agency an “intelligible principle” to guide its activities.

Justice Elena Kagan thought that was satisfied here. She rejected the challenger’s theory that Congress’ directions to the FCC were merely precatory, observing that the FCC could only raise funds to provide telecom services that are essential to modern life and could only spend funds in rural or poor communities. Her skepticism of the challenger’s interpretation was shared by Justices Sonia Sotomayor and Ketanji Brown Jackson.  

Justice Amy Coney Barrett questioned the challenger’s assertion that Congress would be making a meaningful policy choice simply by capping the funds the FCC could raise even if it made that limit exorbitantly high. Justice Samuel Alito, though less skeptical in principle, expressed “concerns” with what ruling for the challenger might do to the universal service program and to other statutory schemes where Congress described its wishes in impressionistic terms.    

The challengers were always facing an uphill battle. A doctrine does not lie dormant for 90 years without some bad caselaw accumulating.

Since 1935, the Supreme Court has blessed standards as vacuous as “public interest, convenience and necessity” as constitutionally sufficient. Given that fact, it is surprising that challengers in the Consumers’ Research case never asked the court to overrule any of those cases. Instead, they maintained that they could win under the status quo because all the apparent limitations Congress put on FCC actions were illusory. Concepts like universal service and affordability, they maintained, were effectively subjective when left solely to the agency to construe.  

On the other side, acting Solicitor General Sarah Harris and former Bush Solicitor General Paul Clement defended the law on behalf of the Trump administration and a telecoms consortium, respectively. Both acknowledged that laws could, in fact, fail the intelligible-principle test. But both insisted that Congress had given the FCC sufficient guidance to preserve the universal service program against nondelegation concerns. 

Justice Clarence Thomas asked them whether Congress had set any real limit on the money the FCC could raise. Harris conceded that Congress set no numeric or objective limit but insisted that the command to raise “sufficient” sums for universal service supplied an adequate, qualitative limitation.

Probing for a limit on qualitative principles, Alito asked whether Congress could enact a law requiring “equitable” contributions sufficient to pay down the national debt by 1% a year, but left to the IRS discretion to determine marginal tax rates. 

Barrett offered her own hypothetical, asking whether Congress could tax food to subsidize meals for the hungry. Harris resisted these but did little to explain why, other than speculating that these programs might come with less congressional guidance. Clement suggested that nondelegation would be a concern only where the law applied economy-wide and/or provided no direction at all to the agency.

Justice Neil Gorsuch, an established supporter of reviving the nondelegation doctrine, asked whether the FCC could spend funds to give beneficiaries Starlink accounts under the commission’s evolving definition of universal service. Harris conceded that such an interpretation might not be impossible, but that any challenge to it would be better addressed as an “arbitrary and capricious” decision under the Administrative Procedure Act.  

Chief Justice John Roberts was relatively passive today. Six years ago, he was among the three justices who voted to apply the nondelegation doctrine. But it is impossible to guess at his views based on today’s arguments. The three Democrat-appointed justices seem willing to uphold the universal services program. Gorsuch and Thomas appear prepared to say that Congress delegated its taxing power without constitutionally adequate limits. But the remaining justices were difficult to read.

A decision is expected by the end of June.