FCC v. Consumers' Research
606 U. S. ____ (2025) (2025)
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Rule of Law:
A statute authorizing an executive agency to raise funds for specific, congressionally-defined programs does not violate the nondelegation doctrine if it provides an "intelligible principle," such as requiring the amount raised to be "sufficient" to fund programs with clearly delineated beneficiaries and services, even without a specific tax rate or numerical cap.
Facts:
- The Communications Act of 1934, as amended by the Telecommunications Act of 1996, established the "universal service" objective to make communications services available to all Americans.
- Section 254 of the Act requires telecommunications carriers providing interstate services to contribute to the Universal Service Fund.
- The Federal Communications Commission (FCC) uses the Fund to subsidize communications services for specific beneficiaries: low-income consumers, those in rural/high-cost areas, schools, libraries, and rural healthcare providers.
- The FCC determines the total amount to be collected each quarter by calculating a "contribution factor," a percentage of carrier revenues based on the projected expenses of the subsidy programs.
- The FCC appointed the Universal Service Administrative Company (USAC), a private non-profit corporation, to administer the fund's day-to-day operations, including collecting data and projecting quarterly expenses and revenues.
- In December 2021, after receiving projections from USAC, the FCC announced a contribution factor of 25.2% for the first quarter of 2022, an amount carriers would be required to pay and could pass on to their customers.
- Consumers' Research, a non-profit organization, along with a carrier and several consumers, opposed this contribution factor, arguing the underlying statutory scheme was unconstitutional.
Procedural Posture:
- Consumers’ Research filed comments with the FCC opposing the proposed first-quarter 2022 contribution factor, arguing the statutory scheme was unconstitutional.
- The FCC took no action in response, and the 25.2% contribution factor went into effect.
- Consumers’ Research, as petitioner, sought review of the FCC's action in the U.S. Court of Appeals for the Fifth Circuit.
- A three-judge panel of the Fifth Circuit initially denied the petition for review.
- The Fifth Circuit, sitting en banc, granted the petition for review and held that the universal-service contribution scheme was unconstitutional.
- The Federal Communications Commission and other parties, as petitioners, successfully petitioned the U.S. Supreme Court for a writ of certiorari.
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Issue:
Does the universal-service contribution scheme in § 254 of the Communications Act, which directs the Federal Communications Commission (FCC) to collect "sufficient" funds from carriers to support specified programs, violate the nondelegation doctrine?
Opinions:
Majority - Kagan, J.
No, the universal-service contribution scheme does not violate the nondelegation doctrine. Applying the standard intelligible principle test, the Court holds that Congress sufficiently guided the FCC's discretion. The statutory requirement that contributions be "sufficient" imposes a meaningful limit, acting as both a floor and a ceiling on the funds the FCC can raise. This limit is given concrete substance by § 254's specific criteria defining who the beneficiaries are (e.g., low-income, rural) and what services are eligible (essential, affordable, and widely used). The Court rejected creating a stricter nondelegation standard for revenue-raising statutes, following precedent in J. W. Hampton and Skinner. Furthermore, the FCC did not impermissibly subdelegate authority to the private Universal Service Administrative Company (USAC). Under the framework of Sunshine Anthracite Coal, USAC's role is permissible because it functions subordinately to the FCC, which retains all final decision-making authority over the projections and the final contribution factor.
Concurring - Kavanaugh, J.
Joined the majority opinion in full. Concurred separately to outline the background and rationale for the intelligible principle test and to explain that congressional delegations to independent agencies—as distinct from executive agencies supervised by the President—raise substantial Article II questions. However, based on the government's representation that FCC commissioners do not have for-cause removal protections, the FCC is not considered an independent agency for the purpose of this analysis, so that more difficult question is not presented here.
Concurring - Jackson, J.
Joined the majority opinion in full. Concurred separately to express skepticism about the constitutional basis for a freestanding private nondelegation doctrine. Noted that nothing in the Constitution's text appears to support a per se rule barring delegations of authority to private actors, but because the claim failed on its own terms, the Court did not need to address the doctrine's fundamental viability.
Dissenting - Gorsuch, J.
Yes, the scheme violates the nondelegation doctrine. The contributions are a tax, and the Constitution vests the power to tax exclusively in Congress. A delegation of the taxing power is permissible only if Congress itself prescribes the tax rate or, at a minimum, a determinate numerical cap on collections. Section 254 does neither, instead granting the FCC a legislative blank check to decide which programs to fund and how much to tax, as evidenced by the fund's massive growth. The statute's vague, qualitative guidance like "sufficient" and its conflicting list of factors are not the functional equivalent of a cap. The majority saves the statute only by rewriting its terms to be mandatory, departing from their plain meaning and decades of agency interpretation.
Analysis:
This decision strongly reaffirms the Court's long-standing, deferential "intelligible principle" test for congressional delegations, explicitly rejecting calls for a stricter standard for statutes that raise revenue. The ruling provides significant leeway for Congress to grant agencies discretion in funding statutory programs, provided the programs' purposes and beneficiaries are defined. By rejecting the Fifth Circuit's "combination" theory and narrowly interpreting the private nondelegation doctrine, the case also solidifies the legal framework for public-private administrative partnerships, signaling their permissibility as long as the government agency retains ultimate control and decision-making authority.
