Court Sets Aside FCC's New Title II Order

On January 2, the U.S. Court of Appeals for the Sixth Circuit issued a decision on the merits in MCP No. 185. The three-judge panel's decision set aside the FCC's 2024 Securing and Safeguarding the Open Internet Order. The court wrote:   

Using "the traditional tools of statutory construction," id., we hold that Broadband Internet Service Providers offer only an "information service" under 47 U.S.C. § 153(24), and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies through the "telecommunications service" provision of the Communications Act, id. § 153(51).

The Sixth Circuit's decision in MCP No. 185 presents a straightforward reading of the Communications Act. It thus reaches a relatively easy conclusion that broadband Internet access services are best understood as fitting the definition of lightly regulated "information services" under Title I of the Act. This decision is welcome because it means that innovative broadband networks will remain free from unjustifiable public utility regulation that Congress never authorized. 

The Sixth Circuit's opinion is refreshing because it shows how the traditional tools of statutory interpretation can be used to resolve even seemingly technical questions like the regulatory classification of broadband. It's the type of decision that eluded us so long as lower courts were subject to the "Chevron doctrine" and effectively required to rationalize even far-fetched agency interpretations or re-interpretations of supposed ambiguous statutory provisions. 

The Sixth Circuit's commendable decision was made possible by the Supreme Court's overruling of the "Chevron doctrine" in its 2025 Loper Bright Enterprises v. Raimondo decision, which signaled a return to principles of judicial review based on the best reading of statutes rather than elastic deference to regulatory agencies. 

 

The August 2024 stay order issued by a different Sixth Circuit panel in an earlier stage of the litigation presented a persuasive analysis that the FCC's order is contrary to the Supreme Court's Major Questions Doctrine. However, the merits panel's decision that was issued on January 2 rightly takes a first-things-first approach by concluding the FCC's order exceeded the terms of the Communication Act. Recourse to the Major Questions Doctrine is unnecessary to reach that conclusion. 

 

P.S. In December 2023, the Free State Foundation filed public comments with the FCC opposing the agency's proposed Title II reclassification decision. And in January 2024, the Free State Foundation filed reply comments in the Commission's Securing and Safeguarding the Open Internet proceeding. Those comments and reply comments predated the Supreme Court's decision in Loper Bright. For a defense of the Loper Bright decision, see FSF President Randolph May's July 2024 Perspectives from FSF Scholars, "Chevron's Demise Re-Aligns Administrative State With Founders' Vision."

Chevron Deference Never Promoted Regulatory Stability

As reported by Policyband, at a policy forum hosted yesterday by Broadband Breakfast, Senator Amy Klobuchar bemoaned the demise of the Chevron deference doctrine, claiming that the doctrine's jettisoning "could be a real mess because a lot of how we move forward with our economy is if we have consistent rules in place, right?” She went on: “You know what the rules are and then you can invest because you know what the rules are. And if people don't know what the rules are going to be or if they're going to change, it makes it a lot harder.”

Senator Klobuchar is right that stability in the law is important for businesses so they can properly plan investments and make other business decisions. This is even more true, of course, when the legal rules in question are not improperly or unnecessarily restrictive, costly, or burdensome.

But Senator Klobuchar, and others who have taken the same line, especially those familiar with communications law and policy, should know better. They surely understand that the Chevron doctrine promoted more instability in legal regimes than stability. Of course, the back-and-forth "switcheroos" in the "net neutrality" context between imposition of heavy-handed Title II public utility-like regulations and a light-touch regulatory regime for broadband Internet services is a prime example.

Each time the FCC adopted and then abandoned one or the other version of its "net neutrality" regime it relied upon Chevron deference to support the switcheroo. And each time the courts affirmed the FCC's changes based on the Chevron deference doctrine.

Very few credible observers contend that somehow this instability in the legal regime governing broadband providers has promoted investment, or otherwise has been conducive to business planning. Of course it hasn't. And the same "instability effect" has occurred across the administrative state where regulatory regimes have been subject to back-and-forth switcheroos sustained by application of Chevron deference.

The principal reason the Chevron doctrine was eliminated in Loper Bright Enterprises is because Chevron is inconsistent with the Administrative Procedure Act's requirement that courts, not agencies, must decide “all relevant questions of law” arising on review of agency actions. And the Constitution's separation of powers reinforces the APA's dictate.

In my view, the elimination of the Chevron doctrine is correct as a matter of law. And the fact that it promotes stability with respect to regulatory regimes cannot be gainsaid.

Court Considering Whether to Extend Stay on FCC’s New Internet Regulation

July 22 was to be the date on which the FCC's new public utility rules for broadband Internet access services were to go into effect. But on July 15, the Sixth Circuit Court of Appeals issued an administrative stay order in the case of In re: MCP No. 185, postponing the effective date until at least August 5. The Sixth Circuit apparently is considering whether a further stay of the Commission’s new Internet regulation is warranted under the Major Questions Doctrine. In its July 15 order, the court invited supplemental briefings from broadband Internet service providers and the Commission regarding stare decisis and the court’s decision in 2005 NCTA v. Brand X Services. 

Pursuant to a June 28 order by the court, the parties filed briefings to the court regarding the legal authority of the Commission’s new Title II order in light of the Supreme Court’s June 28, 2024, decision in Loper Bright Enterprises v. Raimondo. In Loper Bright, the Supreme Court overruled its 1984 decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.

The Free State Foundation filed comments and reply comments in the FCC’s Safeguarding and Securing the Open Internet proceeding. Those comments explained why the Commission lacked authority to impose public utility regulation on broadband Internet access services under the Supreme Court’s Major Questions Doctrine. In short, the new Title II order was a major rule of political and economic significance, and Congress never provided the agency with a clear statement of authority to impose such sweeping restrictions on private broadband networks. In April of this year, shortly before the order’s release, I wrote a follow-up, “The FCC’s Internet Regulation Plan Fails the Major Questions Doctrine.”

 

In its legal briefings filed with the Sixth Circuit, the FCC argues that it has not expressly relied on Chevron in adopting its new Title II order but on its inherent statutory authority and the Brand X. But a relevant short passage from FSF’s comments anticipated the agency’s position in the pending litigation:  

The Commission appears to put some hope in the D.C. Circuit’s determination in its 2016 decision in US Telecom v. FCC that Brand X conclusively gave the Commission the authority to determine the proper classification of Internet access service, that the agency’s determinations involved matters of statutory ambiguity and were entitled to deference, and that there was no need to consult the Major Questions Doctrine. But the D.C. Circuit’s determination predated the emergence of the Major Questions Doctrine in Supreme Court

jurisprudence as well as the eclipse of Chevron deference, and the appeals court’s decision now appears to be inconsistent with current jurisprudence.

FSF’s comments were filed in December 2023, months before the Supreme Court’s decision was issued in Loper Bright Enterprises v. Raimondo. Even if the agency did not rely on the now-overruled Chevron Doctrine as purported legal authority for its new Title II order, the Major Questions Doctrine still poses an insuperable obstacle to the order’s legal validity. 

 

It is reported that the Sixth Circuit panel is expected to issues a decision on or before August 5 on whether to issue a stay on the rules pending a decision on the merits.

 

Free State Foundation President Randolph May wrote about the Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo in a Perspectives from FSF Scholars published on July 2, “Chevron’s Demise Curbs Agency Power, Boosts Congress’s.” Today, July 23, RealClearMarkets published Mr. May's op-ed, "Chevron's Demise Re-Aligns Administrative State With Founders' Vision." Expect FSF Scholars to have more to say about the long-awaited judicial overturn of the Chevron Doctrine and its implications for future FCC activity as well for the chronically overreaching administrative regulatory state. 

Supreme Court Puts the Chevron Doctrine on a Death Watch

Yesterday, May 1, the Supreme Court, granting certiorari in Loper Bright Enterprises v. Raimondo, decided to consider overruling the decision that established the Chevron deference doctrine. In essence, Chevron requires that federal courts defer to reasonable interpretations of ambiguous federal laws. In reaction, Free State Foundation President Randolph May issued the following statement:

 

"For over a decade, I have suggested that the Chevron doctrine is in tension with fundamental separation of powers principles. Now, the Supreme Court has agreed to consider overruling Chevron “or at least clarify” that agency interpretations are not entitled to deference in some instances of “statutory silence." With a Court majority that is more attuned – and devoted to – foundational separation of powers principles, the Supreme Court's coming reconsideration of Chevron is welcome.

 

I do not mean to suggest that overruling Chevron should be considered a slam dunk, or that doing so will be without consequences for both Congress and the administrative state. While in theory, and occasionally in practice, the Chevron deference doctrine operated to affirm 'deregulatory' as well as 'regulatory' interpretations of the agency authority, in the real world of the administrative state, overall, more often than not, the doctrine led to judicial affirmance of agency decisions that expanded the boundaries of an agency's authority.

 

So, if Chevron is overturned or even narrowed meaningfully, one consequence is likely to be curbing the power of the administrative state. The other is that it may force Congress to take more responsibility for writing laws that more specifically delimit agency actions – that is, to write less ambiguous laws. Because Members of Congress, as elected representatives of the people, are directly accountable to the people in a way that unelected administrative agency officials are not, this increased political accountability comports with separation of power principles. [NOTE: The Supreme Court has already taken an important step in this direction with the adoption of the Major Questions Doctrine in West Virginia v. EPA (2022).]

 

Under our Constitution, in our tripartite system of separated powers, there will always be tensions among the three branches – Congress, the Executive, and the Judiciary – and legitimate questions regarding the extent of their respective powers. But as Chief Justice John Marshall proclaimed in the landmark case of Marbury v. Madison (1803): "It is emphatically the duty of the Judicial Department to say what the law is."

 

In a law review article published this year, NFIB v. OSHA: A Unified Separation of Powers Doctrine and Chevron's No Show, I concluded (with co-author Andrew Magloughlin) that Chevron "is on the verge of falling from grace in one way or the other." I suspect that the Supreme Court will overturn, or at least substantially curtail, the Chevron deference doctrine, and that when it does, Chief Justice Marshall's admonition, now over two centuries old, will play a prominent role in further reviving fundamental separation of powers principles."

 

*    *   *

 

Mr. May is a past Chair of the American Bar Association’s Section of Administrative Law and Regulatory Practice. He is a Fellow of the National Academy of Public Administration. Mr. May also has served as a Public Member of the Administrative Conference of the United States and currently is a Senior Fellow at ACUS. He has served as Associate General Counsel of the Federal Communications Commission. 

 

For decades, he has published extensively on administrative law, including the Chevron doctrine and the Major Questions doctrine. For background pertinent to the Chevron doctrine, see these law review articles:

 

Randolph J. May, NFIB. OSHA: A Unified Separation of Powers Doctrine and Chevron's No Show, South Carolina Law Review, Vol. 74, No. 2 (2022) (with Andrew K. Magloughlin)

 

Randolph J. May, Defining Deference Down, Again: Independent Agencies, Chevron Deference, and Fox, Vol. 58, No. 2 (2006)

 

Randolph J. May, Defining Deference Down: Independent Agencies and Chevron Deference, Vol. 58, No. 2 (2006)

 

 

Panelists Tackle Major Questions About the Future of Administrative Law

The Federalist Society held its 2022 National Lawyers Convention on November 10 through November 12. The Convention panel videos are now available online, including one titled "Major Questions Doctrine: West Virginia v. EPA?" The panel, moderated by Judge Edith Jones of the Fifth Circuit Court of Appeals, features Professors Jennifer Mascott and Thomas Merrill, as well as top-notch litigators Ian Gershengorn and Yaakov Roth. Like other events featuring commentary and analysis of the Supreme Court's 2020 decision in West Virginia v. EPA, the panelists discussed the case as a matter of textual interpretation and interpretative canons, in light of the non-delegation doctrine, in view of Chevron doctrine, and also in connection with the court's application of Chevron deference to agency determinations about the scope of their own jurisdiction in its 2013 decision in City of Arlington v. FCC.  

One interesting point made by Mr. Gershengorn about 51-52 minutes into the panel and again at about the 1 hour 21 minute mark was that net neutrality regulation constitutes "the easiest major doctrines case you're going to see" because then-Judge Brett Kavanaugh decided that net neutrality is a major question in the D.C. Circuit in U.S. Telecom v. FCC. 

 

FSF President Randolph May addressed the implications of West Virginia v. EPA for net neturality regulation in his July 2022 Perspectives from FSF Scholars, "A Major Ruling on Major Questions." And he pointed out that the court's opinion in West Virginina v. EPA actually quoted then-Judge Kavanaugh's 2017 opinion dissenting from denial of en banc review in U.S. Telecom v. FCC. 

Discussing Chevron Deference After West Virginia v. EPA

As Free State Foundation President Randolph May wrote in his July 2022 Perspectives from FSF Scholars, "A Major Ruling on Major Questions": "There are aspects of the U.S. Supreme Court's decision in West Virginia v. EPA that will be studied and debated by scholars—and, indeed, by judges, lawyers, and executive branch officials—for years to come." Indeed, some the implications of that decision were discussed in the Federalist Society's August 1 online panel event, "The Future of Chevron Deference at the Supreme Court." The panel features Columbia Law School Prof. Thomas Merrill, Jones Day attorney Yaakov M. Roth, and moderator Eli Nachmany. Prof. Merrill and Mr. Roth offer their insights into what the role of the Chevron doctrine may be going forward and how it will relate to the major questions doctrine. One interesting matter that was discussed during the event is whether courts will apply the major questions doctrine as a threshold inquiry prior to any application of Chevron's two-step inquiry – or whether the major questions doctrine will be subsumed into Chevron's first step, which has to do with whether Congress clearly spoke to the matter at hand. 

For more on West Virginia v. EPA, check out FSF President May's press release from June 30 of this year responding to the decision as well as his July 2022 Perspectives.  

Big Administrative Law Decisions Pending at SCOTUS

As the Supreme Court wraps up its 2021-2022 term this summer, it will issue opinions that could reshape administrative law. West Virginia v. EPA and American Hospital Association v. Becerra, both of which the Court has not yet decided, involve separation of powers issues that define the scope of the executive branch's powers. The Court might pare back the executive branch's ability to make law as early as tomorrow morning.

West Virginia v. EPA is a challenge to an environmental rule that West Virginia and other petitioners argue exceeds the EPA's authority. Petitioners argue that the EPA's rule is unlawful under the "major questions doctrine," which requires that Congress "speak clearly when authorizing an agency to exercise powers of vast economic and political significance." Randolph May and I wrote a law review article, NFIB V. OSHA: A Unified Separation of Powers Doctrine and Chevron's No Show, on this subject. A ruling in this case could make it harder for agencies to issue sweeping rules based on vague or unspecific authority in laws passed by Congress.

American Hospital Association v. Becerra involves a challenge to an administrative interpretation of a complicated Medicare statute. For our purposes, during the oral argument in this, the Court appeared to consider overturning or narrowing "Chevron deference." Chevron specifies that courts will uphold agency actions that are based on statutory language that is ambiguous or silent, so long as the actions are based on reasonable interpretations of the relevant statutes. In other words, rather than determining the best reading of the law as the Constitution tasks it to do, the judiciary will permit any reasonable interpretation of a vague or ambiguous law. A ruling in Becerra may limit the executive branch's power by instructing the judiciary to be less deferential.

We will closely read these opinions when the Court releases them. We also note that the two legal issues – the major questions doctrine and Chevron deference – mesh together. Read our law review article mentioned above to learn more.

Committee for Justice Virtual Panel: "Mozilla v. FCC: What Next?"

On Thursday, April 9, the Committee for Justice hosted a virtual panel discussion on the FCC's Restoring Internet Freedom Order, the D.C. Circuit Court's Mozilla decision, Chevron deference, and the future of broadband regulation.

Along with Roslyn Layton, a Visiting Scholar at the American Enterprise Institute, and Nathan Leamer, Vice President at Targeted Victory, Free State Foundation President Randolph May participated in "Mozilla v. FCC: What Next?," a lively and informative conversation moderated by Ashley Baker, Director of Public Policy at the Committee for Justice.

I urge you to take a look. The video is available here.

Pending Case Could Prompt the Supreme Court to Reconsider Brand X

On January 8, 2020, the Federalist Society's Practice Group Podcast featured a teleforum on Baldwin v. U.S. – now pending at the certiorari stage at the U.S. Supreme Court – and on the future of the Court's decision in NCTA v. Brand X Services, Inc. (2005). The call included an incisive critique of Brand X from constitutional and administrative law standpoints. Brand X is a progeny of Chevron U.S.A. v. Natural Resources Defense Council (1984). The call's participants discussed the relationship between Brand X deference and Chevron deference as well as conceptual distinctions between them. 

FSF President Randolph May has written numerous publications going back several years addressingChevron, Brand X, and related decisions involving judicial deference to agency decisions. Here are just a few of his more recent publications:

• Randolph J. May, "The Ongoing Saga of Chevron and Net Neutrality," Perspectives from FSF Scholars, Vol. 14, No. 33 (Oct. 21, 2019);

• Randolph J. May, "Delegation, Deference, and the FCC," FSF Blog (Jul. 12, 2019);

• Randolph J. May, "Judge Brett Kavanaugh's Views on Chevron Deference at the FCC and Beyond," Perspectives from FSF Scholars, Vol. 13, No. 32 (Aug. 6, 2018);

• Randolph J. May "Notes for NARUC," FSF Blog (Jul. 21, 2016); and

• Randolph J. May, "Chevron Decision's Domain May Be Shrinking,"Perspectives from FSF Scholars, Vol. 10, No. 23 (Jul. 7, 2015).

FCC's Defining Case for Repealing Internet Regulations Upheld in Court

In my December 2017 Perspectives from FSF Scholars paper "The FCC's Defining Case for Repealing Internet Regulations," I explained that the legal fate of the Restoring Internet Freedom Order (RIFO) would come down to definition of terms in the Communications Act. Indeed, the D.C. Circuit's decision in Mozilla v. FCC upheld the RIFO based on the agency's interpretation of the relevant statutory terms. 

My paper explained that the draft RIFO presented a convincing explanation for why broadband Internet access service meets the definition of an "information service" under Title I. Further, my paper explained that the RIFO's reclassification decision was supported by agency precedent and the U.S. Supreme Court's decision in NCTA v. Brand X Services (2005). Also, my paper stated that "if an appellate court applies the deferential Chevron standard of review for agency interpretations of federal statutes, the Restoring Internet Freedom Order’s legal validity should be a foregone conclusion." In fact, Brand X and "Chevron deference" weighed heavily in the D.C. Circuit's decision in Mozilla v. FCC.

Notably, the D.C. Circuit did not uphold the RIFO's express preemption provision. For incisive commentary on that aspect of the decision, see the October 4 Perspectives paper by Professor Daniel Lyons, a Member of the Free State Foundation's Board of Academic Advisers. For a same-day reaction to the decision in Mozilla v. FCC, see Free State Foundation President Randolph May's October 1 Media Advisory.

New FSF Scholars Paper on the Progressive Origins of the American Administrative State

On September 11, Professor Joseph Postell, a member of the Free State Foundation's Board of Academic Advisors, published a Perspectives from FSF Scholars paper titled "Progressivism and the True Beginnings of the Administrative State." Professor Postell is the author of an excellent work of history and political theory titled Bureaucracy in America: The Administrative State's Challenge to Constitutional Government, published in 2017 by University of Missouri Press. 

Professor Postell's Perspectives paper sets out a definition of the term "administrative state" and argues that the American administrative stated emerged in the early 20th Century, based on a now theory of constitutionalism advanced by Progressives. This paper is the latest installment in a series addressing important moments in the development of the American administrative state and explaining how those moments ought to guide contemporary reforms. The series is particularly timely today, on the eve of Constitution Day. 

Series on Constitutionalizing the Administrative State

Joseph Postell, "Bureaucracy in America: A Constitutional Approach to Administration," Perspectives from FSF Scholars, Vol. 13, No. 13 (April 17, 2018).

Joseph Postell, "The Framers Establish an Administrative Constitution," Perspectives from FSF Scholars, Vol. 13, No. 19 (May 24, 2018). 

Joseph Postell, "Reconciling Administration and Constitutionalism in Early America,"Perspectives from FSF Scholars, Vol. 14, No. 2 (January 14, 2019).

Joseph Postell, " Progressivism and the True Beginnings of the Administrative State,"Perspectives from FSF Scholars, Vol. 14, No. 21 (September 11, 2019).

Check out Professor Postell's scholarly work in this series and stay tuned for more.