Supreme Court to Hear Arguments in Important Nondelegation Doctrine Case

On March 26, 2025, the U.S. Supreme Court will hear oral argument in Federal Communications Commission v. Consumers’ Research, an important case concerning the nondelegation doctrine, a constitutional rule which prohibits Congress from delegating its legislative powers without providing an “intelligible principle” to constrain that delegation. Notwithstanding recent federal deregulatory developments, the case is important because the nondelegation doctrine is an important weapon industry can wield against regulatory overreach.  

In the underlying , the majority held that Congress violated the nondelegation doctrine by giving the FCC the statutory authority to fund the FCC’s “universal service programs” by levying “contributions” against telecommunications providers, with the contribution amounts determined by a board composed of telecommunications providers and users of the universal service programs. The telecoms recouped the “contributions” by assessing fees to consumers. The Fifth Circuit’s analysis focused on a few important aspects of the statutory universal service program and its implementation:

• Lack of intelligible principle. The relevant statute provides that universal service funding should be “sufficient . . . to preserve and advance universal service” and that telecommunications services “should be available at . . . affordable rates.” The Fifth Circuit determined that these guidelines failed to provide a sufficiently intelligible principle because the concept of universal service itself is an evolving, amorphous standard that invites the FCC to exact as much revenue as it thinks is wise. The Fifth Circuit also found that these statutory guidelines were mere aspirational principles, rather than “inexorable statutory commands” that would curb the FCC’s discretion. At bottom, the statutory constraint on FCC’s discretion on levying contributions on telecommunications carriers (and derivatively, American consumers) was that rates “should” remain “affordable,” which amounted to no guidance for FCC to consider at all.
• Delegation to Private Entity. The FCC further sub-delegated its power to determine contributions to a private, non-governmental entity without sufficient oversight and control. The Fifth Circuit found that the FCC’s regulations allowed the private entity’s projections to take legal effect without formal approval. It also deemed problematic the fact that the FCC never once reviewed or made a single substantive change to the contribution amounts proposed by the private entity. In effect, the FCC abdicated its constitutional duty to exercise final decision-making authority and gave an unaccountable private entity a rubber stamp to determine the size of what is essentially a tax on U.S. consumers.
• Waste, fraud and self-dealing. The Fifth Circuit was troubled by the fact that, by regulation, the FCC subdelegated its power to a self-interested board.

The Fifth Circuit’s decision shows the nondelegation is alive and well. The Supreme Court’s decision could be quite important in further defining the doctrine and its application to various regulatory actions. Should you have questions about the foregoing, please do not hesitate to contact any of the authors or the Manatt professional with whom you work.