As President Donald Trump and Elon Musk’s DOGE continue to slash the size of federal agencies and departments, those executive bodies may be in store for another hit, this time from the U.S. Supreme Court.
The justices next week will have a major opportunity to expand their recent efforts to rein in the so-called administrative state.
Curtailing the power of federal agencies has long been a goal of the conservative legal movement. The high court’s conservative majority has aided that effort with key decisions in the past few terms. Those decisions include overruling a longstanding precedent mandating that courts defer to agencies’ reasonable interpretations of ambiguous regulations and statutes; requiring clear congressional authorization if an agency acts on an issue of “vast political and economic significance;” and restricting the structures of agency operations.
In next week’s case– Federal Communications Commission v. Consumers’ Research, and SHLB Corp. v. Consumers’ Research– Consumers’ Research, a conservative legal organization and its supporters are asking the justices to revitalize a long dormant principle prohibiting Congress from ceding its legislative authority to executive branch agencies and private entities. That principle, drawn from the Constitution’s separation of powers, is known as the nondelegation doctrine.
Although the high court has not used the doctrine to strike down an agency’s action in 90 years, one law firm following the case predicts “revival of the nondelegation doctrine will encourage challenges to every agency, across the entire spectrum of regulated industries, including environmental, financial services, healthcare, and more.”
And although the Supreme Court has stated clearly that Congress may not delegate its legislative power, it has upheld delegations in the past. “The Court has long recognized that administration of the law requires exercise of discretion, and that, in our increasingly complex society, replete with ever changing and more technical problems, Congress simply cannot do its job absent an ability to delegate power under broad general directives. The real issue is where to draw the line.”
Consumers’ Research argued, and a lower federal appellate court agreed, that Congress and the Federal Communications Commission (FCC) crossed the line with the operation of the Universal Service Fund. That fund subsidizes universal modern telecommunication services throughout the country.
How the Fund Works
The fund works this way: The Telecommunications Act of 1996 authorizes the FCC to ensure affordable, reliable communications services throughout the nation. The act directed the FCC to set up a program, the Universal Service Fund, which requires telecommunication carriers to contribute fees to the fund, which are then used to subsidize services. Carriers may, and usually do, pass those contributions on to their customers.
To administer the fund, the FCC created the Universal Service Administrative Company, a private, nonprofit corporation operating under the FCC’s oversight and tight control. The company makes financial projections to the FCC and the agency uses those projections to determine the carriers’ contribution amounts. The company also bills and collects contributions and disburses funds to program beneficiaries.
Consumers’ Research challenged the contribution mechanism. It argued the mechanism violated Article I of the Constitution, which provides that “all legislative Powers herein granted shall be vested in a Congress of the United States.” The U.S. Court of Appeals for the Fifth Circuit agreed, ruling that “the power to levy USF ‘contributions’ is the power to tax—a quintessentially legislative power.”
And the appellate court found a second nondelegation problem: the contribution amounts were formulated by a private entity– the Universal Service Administrative Company. The FCC appealed to the Supreme Court.
The justices on March 26 will hear arguments on three nondelegation questions: Did Congress violate the doctrine by authorizing the FCC to determine the contribution amounts? Did the FCC violate the doctrine by using the administrator’s financial projections to determine the contribution amounts? And did the combination of Congress’ delegation to the FCC and the FCC’s delegation of administrative duties to the administrator violate the doctrine?
There is also lurking in the background a question concerning whether the case itself is moot.
The FCC argues that the answer to all three nondelegation questions is “no.” The Supreme Court has said that to avoid the constitutional violation, Congress only has to provide an “intelligible principle” for agencies to act. “That is, if it defines the general policy that the agency must pursue and the boundaries of the agency’s power,” the FCC writes in its brief to the court. That test is satisfied in this case, it says, because the statute includes six enumerated principles that define the general policy and its boundaries that the FCC must pursue.
There is also no violation in the use of the administrator’s financial projections, the FCC argues. “The administrator of the fund ‘simply gives the FCC advice—namely, projections of the universal service programs’ expenses and the carriers’ revenues for the upcoming quarter, calculated according to FCC rules. Those projections do not bind the Commission.”
And the combination of the delegations to the FCC and to the administrator does not violate the doctrine, the commission adds, because of the guiding principles in the Telecommunications Act. Those principles give effect to a grant of executive, not legislative power.
Several justices have voiced an interest in opinions in examining the nondelegation doctrine, but the court has passed on other opportunities. This case puts the issue directly in front of them and may be difficult to avoid.
Marcia Coyle is a regular contributor to Constitution Daily and PBS NewsHour. She was the Chief Washington Correspondent for The National Law Journal, covering the Supreme Court for more than 30 years.
