A Flawed, but Encouraging Nondelegation Decision

The Supreme Court may have reached the wrong result in FCC v. Consumers Research. But ruling emphasizes there are significant constitutional limits to legislative delegation to the executive.

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In today's Supreme Court ruling in FCC v. Consumers' Research, a 6-3 majority upheld the Federal Communications Commission's authority to impose levies on telecommunications carriers to support a "Universal Service Fund" intended to subsidize telecommunications services for low-income consumers, people in rural areas, and some others who might not otherwise get them. The Court rejected the argument that the 1996 law authorizing this levy violates the nondelegation doctrine, which constrains delegation of legislative power to the  executive. But, in the process, the majority also emphasizes important constitutional limits on delegation.

Importantly, Justice Elena Kagan's majority opinion emphasizes that a delegation of "boundless power" to impose fees would be unconstitutional. The majority upholds the universal service fee only because they conclude that the 1996 statute authorizing it imposes a variety of mandatory constraints on the FCC's discretion, including imposing both a "floor" and a "ceiling" on how much money can be raised, and what purposes it can be used for:

Consumers' Research argues that, even under our usual nondelegation test, the term "sufficient" does not do enough. That is because, in the Consumers' Research view,
it sets only "a floor—not a ceiling—on the FCC's revenue-raising power…." Or to put the point differently, Consumers' Research thinks that the statute gives the FCC power, all on its own, to raise our hypothetical $5 trillion. And not unreasonably, it thinks that would pose a constitutional problem.

But in fact the word "sufficient" sets a floor and a ceiling alike. An amount of money is "sufficient" for a purpose if it is "[a]dequate" or "necessary" to achieve that purpose.
Black's Law Dictionary 1447 (7th ed. 1999). That means, of course, that the FCC cannot raise less than is adequate or necessary to finance the universal-service programs Congress wants. But it also means that the FCC cannot raise more than that amount. Were the FCC to raise, say, twice as much as needed, the revenue would not be "sufficient" but instead excessive.

Elsewhere in the majority opinion, Justice Kagan points out that even a strict ceiling is not, by itself, enough to avoid nondelegation problems, if it leaves the executive with sweeping, effectively unconstrained authority:

[A] greater problem inheres in the shared position of Consumers' Research and the dissent: Whatever it applies to (just taxes or fees as well), its focus on numeric limits produces absurd results, divorced from any reasonable understanding of constitutional values. Under that view, a revenue-raising statute containing non-numeric, qualitative standards can never pass muster, no matter how much guidance those standards provide and how tight the constraints they impose. But a revenue-raising statute with a
numeric limit will always pass muster, even if it effectively leaves an agency with boundless power. Consider a hypothetical raised at oral argument: Congress tells the FCC it can demand payments from carriers of any amount it wants up to $5 trillion. (The actual cost of universal service is, of course, a tiny fraction of that amount.) According to Con-sumers' Research, that statute is permissible because . . . well, because Congress has set the $5 trillion figure…. But so what? The purpose of the nondelegation doctrine is to enforce limits on the "degree of policy judgment that can be left to those executing or applying the law." Mistretta v. United States, 488 U. S. 361, 416 (1989) (Scalia, J., dissenting). The anywhere-up-to-$5-trillion tax statute would not do that, whereas a statute with qualitative limits well might.

In other words, nondelegation requires significant constraints on the "degree of policy judgment that can be left to those executing or applying the law." A seeming limitation that fails to do that is not enough!

These points put at least some real teeth into the Court's problematic "intelligible principle" standard for assessing nondelegation. It can no longer be argued that virtually anything will pass muster. In a concurring opinion, Justice Brett Kavanaugh likewise emphasizes "the intelligible principle test is not toothless," though he also notes that the scope of nondelegation constraints is narrower in "the national security and foreign policy realms."

All of this is good news for advocates of more rigorous enforcement of nondelegation constraints on executive power. It may be particular good news for those challenging Trump's attempts to use the International Emergency Economic Powers Act of 1977  (IEEPA) to  impose massive new tariffs (I am co-counsel for the plaintiffs in one such case).

Under Trump's interpretation of IEEPA, there is neither a floor nor a ceiling to the amount of tariffs he can impose under that legislation. And there are also no enforceable limits to the administration's exercise of "policy judgment" under that law.  IEEPA can only be invoked in the event of a "national emergency" that is an "unusual and extraordinary threat" to the US economy or national security. But the administration claims all determinations of what qualifies as a "national emergency" or an "unusual and extraordinary threat" are left to the president's unreviewable discretion. That sure seems like a claim to "boundless authority" to me! And the Court's decision in Consumers Research seems to bar such things.

In his dissenting opinion, Justice Neil Gorsuch  argues that the majority misinterprets the relevant law here, and also that laws imposing taxes are subject to tighter nondelegation constraints than other powers. He may well be right on both points, especially the former.

But the majority decision is still a potentially valuable resource to those of us who want strong enforcement of nondelegation doctrine. Gorsuch himself notes that, even though the Court upheld this particular delegation, it "also signals, unmistakably, that there are some abdications of congressional authority, including in the very statute before us, that the present majority isn't prepared to stomach."

I explained why strong enforcement of nondelegation is necessary and valuable in an article published in Just Security, just yesterday.