Supreme Court to weigh congressional power to delegate

WASHINGTON — The Supreme Court is set to hear arguments in a pair of cases Wednesday over how much power Congress can give to executive agencies without running afoul of the Constitution, which could end up shaping how legislation is written.

The arguments center on whether Congress handed over too much power to the Federal Communications Commission when it created the Universal Service Fund. The fund collects money from telecommunications companies and distributes funds intended for telecommunications services nationwide.

Several experts said the cases come as a majority of the members of the conservative-controlled Supreme Court have expressed interest in imposing new limits on what’s called the “nondelegation doctrine” — or how much legislative power Congress can cede to other entities. Depending on how the justices handle the complicated case, experts said, it could have wide-ranging impacts on federal agencies.

Brianne Gorod, chief counsel at the Constitutional Accountability Center, said the case also could end up placing serious restrictions on Congress. The court is expected to rule in the case by the conclusion of the term at the end of June.

“If the court were to invent new restrictions on Congress’ ability to delegate authority to agencies, it could seriously undermine Congress’ ability to legislate effectively, limiting its ability to delegate granular policy questions to the experts best equipped to answer those questions,” Gorod said.

Alexander Volokh, an associate professor of law at Emory University, said a majority of the justices have said in recent cases they want to look at the doctrine, “which has gone really underenforced for decades.” For years, Congress just had to provide an “intelligible principle” that guides the agency in legislation, which has been easy to satisfy, Volokh said.

“It is one thing to say there ought to be a revised nondelegation doctrine. It is another thing to say what it should look like,” said Volokh, who served as counsel on a brief for the Reason Foundation arguing that the court should not draw different lines based on whether power ends up in the hands of a government or private entity.

Volokh said the nature of the case makes it difficult to predict how the justices will handle the result. They could dodge the issue entirely, or issue a general principle about delegation, or make different standards based on the power being delegated or what entity it could be delegated to.

The cases Wednesday come from a U.S. Court of Appeals for the 5th Circuit decision that found the USF unconstitutional because it violates that doctrine. The judges there wrote that the combination of Congress’ unlimited grant of authority to raise funds, and the role of private parties in setting those rates, violated the constitutional restriction on Congress delegating its taxing power.

Congress passed a law in 1996 establishing the current USF, which collects and distributes about $8 billion a year from telecommunications providers to subsidize service for populations and institutions who may not otherwise be able to afford connections. That includes the E-rate program for schools and libraries as well as rural health care providers, Native American tribes and others.

The Universal Service Administrative Co., a nonprofit organization created by the FCC, collects and distributes the funds subject to FCC approval.

The FCC and industry groups appealed the 5th Circuit decision, arguing that Congress has for hundreds of years granted broad discretion to agencies, ranging from deciding what inventions deserve patent protection to how much to reimburse people for improperly seized property.

In its brief to the Supreme Court, the FCC argued that the 5th Circuit made too big a deal of the fact that the FCC uses a private entity to administer the fund — the Commission still formally approves all decisions and isn’t bound by the advice of the administrator of the USAC.

“Taken to its logical conclusion, the court’s approach would permit litigants to allege that members of Congress have delegated legislative power by relying too much on staffers; that the President has delegated executive power by relying too much on advisers; or that judges have delegated judicial power by relying too much on law clerks,” the brief said.

A bipartisan group of more than two dozen members of Congress from both chambers defended the program’s constitutionality in an amicus brief in the case. The group also pushed back on the 5th Circuit’s characterization of a program run amok, pointing out that Congress has conducted regular oversight and amended the program through statute multiple times.

“To say (as the Fifth Circuit did) that the Universal Service Fund’s implementation lacks continued direction from Congress is simply untrue — indeed, many of the amici themselves have played an active role overseeing and further directing this program’s implementation,” the brief said.

The USF’s challengers, a nonprofit organization called Consumers’ Research, argued that Congress effectively gave up its taxing authority by creating the USF without limitation. In their Supreme Court filings, the group argued that Congress’ vague direction to the FCC to promote universal service cannot pass constitutional muster.

“If Congress replicated this mechanism elsewhere, there would be no need to pass budgets or make appropriations ever again. The entire federal government could be funded with a single, vague delegation to the IRS, which could then hand over that power to a private group,” the brief said.

Charles Honart, a shareholder at the Stevens & Lee law firm who published a white paper about the case, said a decision affirming the 5th Circuit could result in more litigation or more involvement from the courts in determining just how much delegation is permissible.

Honart pointed out that court decisions invalidating actions based on nondelegation have been historically rare, as the existing “intelligible principle” standard has been easy for Congress to satisfy. Tightening that standard — or laying out another one — could result in a “blurrier” line between what’s permissible and what’s not, and litigants would need to rely on judges to clarify the line.

“We may end up with more involvement by the courts in the event that the Supreme Court applies the intelligible principle standard or an alternative standard in a way that requires Congress to do more by way of making the policy judgments, setting forth the rules, setting forth the facts that the agency must consider as well as the criteria against which to measure them, rather than leaving it to the agencies,” Honart said.

Honart also said the Trump administration has already laid the groundwork for a reexamination of regulations thought to raise constitutional concerns as part of a February executive order. That order directed agencies to identify rules with “constitutional infirmity” — including those based on unlawful delegations of legislative power — and could serve as fodder for future lawsuits.

The cases are FCC et al. v. Consumers’ Research et al. and Schools, Health & Libraries Broadband Coalition et al. v. Consumers’ Research et al.