In a 6-3 decision, the Supreme Court held that the Federal Communications Commission (FCC)'s Universal Service Program (USP) does not violate the nondelegation doctrine. Justice Kagan wrote the majority opinion in FCC v. Consumers' Research and Schools, Health & Libraries Broadband Coalition v. Consumers' Research, with Justices Kavanaugh and Jackson filing separate concurrences. Justice Gorsuch dissented, joined by Justices Thomas and Alito.
As described in Dykema's April edition, this dispute arises from the FCC's implementation of universal service provisions enacted by Congress in the Telecommunications Act of 1996. The statute created the Universal Service Fund, requiring interstate telecommunications carriers to contribute to a fund aimed at ensuring nationwide access to essential communication services. The FCC appointed the Universal Service Administrative Company (USAC), a private nonprofit, to manage the day-to-day billing, collection, and disbursement.
Consumers' Research, a coalition of consumers, a telecom carrier, and a policy advocacy group, challenged the program under the nondelegation doctrine—a constitutional law principle that limits the extent to which Congress can delegate its legislative powers to other branches of government, stemming from the idea that the Constitution vests all legislative powers in Congress and therefore Congress must exercise those powers itself rather than transferring them to another body. They argued that the statutory framework unlawfully delegated legislative powers to both the FCC and, in turn, to USAC.
Rejecting that argument, the Court reaffirmed the longstanding intelligible principle test as the applicable standard for evaluating delegations of legislative authority—Congress's delegation of legislative power to another branch of government must have an "intelligible principle" to guide the agency's exercise of that delegated authority. In other words, Congress must make clear the general policy it wants the agency to pursue and the boundaries of the delegated authority, enabling both the courts and the public to ascertain whether the agency has followed the law. The Court found that Section 254 of the Act provides sufficiently clear direction by defining the goals of universal service, the types of services eligible for support, and the standards for implementation. The evolving nature of telecommunications, the Court noted, does not undermine the statute's specificity.
The Court also dismissed the idea that revenue-raising programs—such as the USF—should be subject to a more stringent nondelegation standard. Imposing such a special rule, the Court admonished, would destabilize a wide range of existing statutory schemes and lead to "absurd results."
On the question of sub-delegation to a private entity, the Court declined to merge the traditional nondelegation doctrine with the separate "private nondelegation doctrine." It emphasized that the FCC retains ultimate policymaking authority and oversight over USAC, preserving constitutional accountability.
Concurrences
- Justice Kavanaugh addressed the historical basis and ongoing relevance of the intelligible principle test in nondelegation analysis.
- Justice Jackson expressed doubt about the private nondelegation doctrine's coherence as an independent legal standard.
Dissent
- In dissent, Justice Gorsuch, joined by Justices Thomas and Alito, argued that the USP violates the nondelegation doctrine because Congress improperly delegated legislative authority without clear limits. They maintain that allowing the FCC to define and fund evolving "universal service" standards gives the agency excessive discretion over both policy and funding decisions, cautioning that such broad delegations erode constitutional separation of powers and invite unaccountable governance.
- The dissent signals a continuing appetite among some Justices to revisit or reinvigorate the nondelegation doctrine. The critique was not just a narrow disagreement with the majority, but part of a broader, well-documented trend to reimpose stricter constitutional limits on congressional delegations of power to administrative agencies.
- Although the majority applied the existing "intelligible principle" test, the dissent's structural concerns and strong separation-of-powers framing suggest that the doctrine's boundaries remain unsettled. With multiple Justices openly skeptical of expansive agency authority—and ongoing litigation involving major regulatory schemes—it's reasonable to expect the Court will confront the nondelegation doctrine again soon, possibly with a case that forces a direct reconsideration of the "intelligible principle" standard itself.
Takeaways
- Affirmed Path for Agency Partnerships: The Court's decision affirms agencies' ability to use private nonprofit administrators to manage federal programs—so long as statutory guidance is clear and agency oversight remains robust. This could encourage similar structures in future federal regulatory programs.
- Intelligible Principle Standard: The dissenting Justices present a robust defense of the nondelegation doctrine and separation of powers that reflects a textualist and formalist critique of broad statutory delegations that, in their view, confer excessive policymaking authority on administrative agencies without sufficient congressional guidance. The dissent underscores a skeptical view of administrative discretion, especially when it involves both regulatory power and control over public funds, that the Court will likely wrestle with in future cases.
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