Earlier this month, I previewed the arguments in Federal Communications Commission v Consumers’ Research. The case asks the Supreme Court whether the FCC’s Universal Service Fund (USF) violates the nondelegation doctrine, which prohibits Congress from delegating the legislative power to executive branch agencies. As my previous post explains, nondelegation is a largely toothless doctrine, mostly dormant since 1935. But in recent years, five of the nine Supreme Court justices have expressed an interest in revitalizing the doctrine, given the right case in which to do so.
But based on last Wednesday’s oral argument, it appeared this was not the right case. Trent McCotter, counsel for Respondents, argued that the USF surcharge was a tax, and taxation is a quintessential legislative function that Congress cannot transfer wholesale to an agency. He criticized Congress for providing no objective rule to limit the amount of money the agency could raise. He argued that, when coupled with the lack of substantive limits on the scope of the Universal Service Program, this lack of guidance violated the nondelegation doctrine. Congress should set overall policy, he argued, with agencies limited only to filling in the details.
McCotter’s argument captured the sentiments of many (including me) regarding what the law should be. But it floundered under existing law. As Acting Solicitor General Sarah Harris explained, current doctrine allows the legislature to give agencies significant power as long as it includes an “intelligible principle” to guide the agency’s discretion. Justices Kagan, Sotomayor, and Jackson all agreed with Harris that the statute permits the agency only to raise an amount “sufficient” to fund the program’s operations—a sufficiently intelligible principle. It also contains multiple provisions that the agency “shall” consider when defining the program’s offerings, including whether services are “subscribed to by a substantial majority of residential customers.” McCotter responded that the agency routinely treats these provisions as optional, but Kagan and Jackson noted that this is, at most, an argument that the agency has exceeded its statutory authority, not that the statute was unconstitutional.
Justices Gorsuch and Thomas were more sympathetic. Gorsuch tested the limits of the “intelligible principle” test by asking whether Congress could require all Americans to pay an equitable and non-discriminatory contribution to pay down the national debt, but delegate to the Internal Revenue Service the power to set tax rates and deductions. Justice Thomas focused on the lack of a statutory constraint on revenue raising. McCotter stressed that Congress could easily remedy the problem by adopting a statutory cap on USF funding. In response to questions, he conceded that even a $1 trillion cap would be constitutionally sufficient, because Congress rather than the agency would be deciding the program’s value. But swing Justices Kavanaugh and Barrett questioned whether the constitutionality should turn on an astronomically large cap. It seems odd to argue that allowing the agency to raise up to $1 trillion would not represent a nondelegation problem, but limiting it to an amount “sufficient” to fund operations is constitutionally suspect.
This battle over the scope of the “intelligible principle” test revealed a potential strategic error by the challengers. The Court’s liberal bloc repeatedly challenged whether McCotter sought to overturn existing precedent. Even when the Court is convinced a prior opinion was incorrectly decided, in the interests of finality it may choose not to disturb that precedent. The question of whether to overturn erroneous precedent depends on the stare decisis factors—and as the liberal justices repeatedly noted, neither party’s brief explored how those factors would play out in this case. McCotter was content to argue that he should win under existing precedent. But given the permissiveness of existing doctrine, it was probably a mistake not to give the critics of the “intelligible principle” test more space to replace this test with a more robust standard. Justices Alito and Kavanaugh expressed concern with the consequences of finding in Respondents’ favor, both for the universal service program and other potential government programs.
The argument also casts doubt on the Fifth Circuit’s ongoing campaign to manufacture opinions designed to force the Supreme Court’s hand. From social media to age verification to nondelegation, the rebellious circuit court has issued decisions with questionable interpretations of Supreme Court precedent, in the hope of providing vehicles for the Court to clear out what it sees as bad case law. The Court has mostly declined to take the bait, which is not a surprise. Overturning precedent is a significant step. The Justices would prefer to choose the right case to do so, rather than have their hand forced by the Fifth Circuit. I fear that the lower court’s campaign does more harm than good to its overall objective.
A more detailed overview of the argument is available here.
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