Showing posts with label Separation of Powers. Show all posts
Showing posts with label Separation of Powers. Show all posts

Thursday, December 26, 2024

2025 Will Be a Big Year for the FCC in the Courts

On December 16, the Federalist Society hosted a webinar panel event, "Is FTC Administrative Litigation Unconstitutional?" The webinar's panelists discussed the future of Federal Trade Commission's (FTC) litigation and enforcement in light of the Supreme Court's decisions in Axon Enterprise, Inc. v. FTC (2023) and SEC v. Jarkesy (2024) as well as in light of the Court's openness to revisit the contours of administrative power as reflected by decisions such as West Virginia v. EPA (2022) and Loper Bright Enterprises v. Raimondo (2024).

In Jarkesy, the Court held that the Seventh Amendment entitles a defendant to a jury trial when the Securities and Exchange Commission (SEC) seeks civil penalties for securities fraud. The Court determined that the SEC's antifraud provisions replicate common law fraud claims that must be heard by a jury. 

 

Although the Supreme Court's holding in Jarkesy was limited to the Seventh Amendment, the FedSoc webinar panel's discussion touched on two facets of the Fifth Circuit's holding in an earlier stage of the case. The Fifth Circuit held that Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise delegated power, thereby violating the U.S. Constitution's Article I Legislative Vesting Clause. Additionally, the Fifth Circuit held that statutory removal restrictions on SEC Administrative Law Judges (ALJs) violate the Take Care Clause of Article II. Shortly, the Supreme Court will likely tackle nondelegation claims, presidential removal power claims, and other claims brought in other cases against the FTC or other agencies – including the FCC.

 

Indeed, in 2025, the Supreme Court will review the Fifth Circuit's July 2024 en banc decision in Consumers' Research v. FCC. The Fifth Circuit concluded that the universal service contribution system violates the Article I Legislative Vesting Clause. The Court's grant of a writ of certiorari in Consumers' Research v. FCC is noted briefly in my blog post from November 26, 2024. The lower court's decision in the case, which was based on nondelegation principles and precedents, is the subject of my August 2024 Perspectives from FSF Perspectives, "Fifth Circuit Rules USF Contribution Scheme Violates Legislative Vesting Clause."

 

Furthermore, lower courts are likely to weigh in next year on Jarkesy implications for the FCC's enforcement authority. In April 2024, the FCC fined the three nationwide wireless providers for the sale of consumer location-related information. Legal challenges to the Commission's authority to levy those fines are now pending before the D.C. Circuit, the Second Circuit, and the Fifth Circuit. 

 

Added to all of these pending cases are anticipated judicial decisions about the legal fate of the FCC's Safeguarding and Securing the Open Internet Order regulating broadband Internet services as public utilities and the Commission'sDigital Discrimination Order subjecting broadband providers to liability for unintentional disparate impacts. Oral arguments in those respective cases have been held before the Sixth Circuit and the Eighth Circuit

 

In all, it looks like 2025 will be a big year for the FCC in the courts.   

Tuesday, November 26, 2024

Supreme Court Agrees to Hear Challenge to USF's Unconstitutionality

On November 22, the Supreme Court granted a writ of certiorari in Consumers' Research v. FCC. The case involves a constitutional challenge to the Universal Service Fund's (USF) contribution mechanism – or "USF Tax." The grant of certiorari is welcome news because it means that the court will resolve a circuit split between the Fifth Circuit. It also provides occasions for the court to clarify the doctrinal status and contours of the non-delegation doctrine. 

The roughly $8 billion annual USF subsidy program is funded by USF surcharges included as line items on the long-distance portion of voice consumers' monthly bills. Due to the increasing size of subsidy distributions and the shrinking size of the contributor base, the quarterly-adjusted surcharge rate has risen to 35.8% -- a much, much higher rate than just a few years ago. 

 

The Supreme Court will be reviewing the July 24 en banc decision by the U.S. Court of Appeals for the Fifth Circuit that determined the universal service contribution mechanism violates the Legislative Vesting Clause of Article I of the U.S. Constitution. The Fifth Circuit held that Congress's broad delegation of tax authority to the FCC under Section 254 of the Communications Act, combined with the agency's delegation of tax authority to a private entity to collect surcharges from voice carriers and administer the USF, constituted a constitutional violation. Fifth Circuit's en banc decision in Consumers' Research v. FCC, as well as the concurring and dissenting opinions, are summarized in my August 5, 2024 Perspectives from FSF Scholars, "Fifth Circuit Rules USF Contribution Scheme Violates Legislative Vesting Clause." 

 

The Sixth and Eleventh Circuits previously upheld the USF's contribution mechanism from identical challenges. The Supreme Court will resolve the split between the lower courts. And the court will have occasion to revisit the non-delegation doctrine, which is implicated by the case.  

 

In 2025, expect Free State Foundations scholars to have more to say about a future Supreme Court decision in Consumers' Research v. FCC and the need for Congress to modernize the USF for the broadband era. 

Monday, November 14, 2022

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

Friday, August 05, 2022

Debating the Constitutionality of the Universal Service System

For thoughtful discussion and debate about the constitutionality of the universal service's contribution system as currently operated by the FCC, consider checking out the July 19 webinar hosted by the Federalist Society, titled "Consumers' Research v. FCC and the Legality of the Universal Service Fund Contribution Regime." Video and audio of the event are both available online. The event features a very knowledgeable and experienced panel that ably present their cases. Although the webinar is focused on constitutional arguments about USF raised by the Consumers Research v. FCC case, including the non-delegation issue raised by Section 254 of the Communications Act, the panel discussion also touches on USF contribution policy reform.

As noted in an April 19 blog post, the Free State Foundation and FSF President Randolph May joined an amicus brief that was filed by Competitive Enterprise institute in the Consumers' Research case.  

FSF President Randy May also addressed constitutional issues regarding USF in his November 2021 Perspectives from FSF Scholars, "A Nondelegation Doctrine Challenge to the FCC's Universal Service Regime." Also check out our April 2021 Perspectives, "Congress Should Put Universal Service on a Firmer Constitutional Foundation." Also, I addressed USF contribution reform in my June 2022 Perspectives, "Congress Should Require Major Web Platforms to Support Universal Service."

Tuesday, June 14, 2022

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.

Tuesday, April 19, 2022

Free State Foundation Files Brief Supporting Constitutional Challenges to USF Regime

On April 18, the Free State Foundation and FSF President Randolph May filed an amicus curiae brief in the Fifth Circuit Court of Appeals in a case challenging the constitutionality of the FCC's universal service regime. The amicus brief, which is led by the Competitive Enterprise Institute and includes other telecommunications and administrative law experts, argues that the imposition of the USF contribution fee by the FCC and the Universal Service Administrative Company violates the nondelegation doctrine and the major questions doctrine, both of which are central to maintaining the separation of powers required by the Constitution. The case is Consumers' Research v. FCC.  

Here are two key paragraphs from the amicus brief's introduction:

Only Congress has the power to lay and to collect taxes for the general welfare of all Americans. Regardless of the public policy that it seeks to advance, Congress cannot delegate this power to the FCC or any other executive branch agency. Yet that is exactly what Congress did when it enacted the Telecommunications Act of 1996 to create a universal service program for the Commission to raise revenue however it sees fit "for the protection of the public interest" in seeking to provide greater access to telecommunications services. 47 U.S.C. § 254(b)(7). 

 

The Constitution does not permit Congress to circumvent the legislative process by allowing an independent agency (guided by a private company owned by an industry trade group) to raise and to spend however much money it wants every quarter for "universal service" at the expense of every American who pays a monthly phone bill. Elected representatives of the people, not the Federal Communications Commission, must be responsible for making the difficult decisions to raise the revenue that funds this program. 

The amicus brief argues that the "contribution" mandated by Section 254 of the Communications Act is functionally a tax and that Congress's delegation of broad regulatory power to the Universal Service Administrative Company (USAC) – a private corporation – raises serious structural separation-of-power issues. As the brief states: 

The Company now rakes in nearly $10 billion each year in 'contributions' (ultimately borne by consumers), which it then disburses to libraries, schools, rural areas, and carriers providing services in high-cost areas... Yet Congress provided no direction as to how either the FCC or the Universal Service Administrative Company should calculate rates for service providers or how much money should be collected and distributed each year. 

As mentioned above, the amicus brief also argues that "[t]he major questions doctrine forecloses any interpretation of Section 254 that would allow the FCC to collect and to spend billions of dollars every year as it sees fit."

 

The amicus brief in Consumers' Research v. FCC is available for reading here. And thank you to the Competitive Enterprise Institute and their legal counsel. 

 

For more on the constitutional problems with the universal service regime, see FSF President Randy May's November 2021 Perspectives from FSF Scholars, "A Nondelegation Doctrine Challenge to the FCC's Universal Service Regime," as well as our April 2021 Perspectives, "Congress Should Put Universal Service on a Firmer Constitutional Foundation." Additionally, the Free State Foundation filed comments in February 2022 and reply comments in March of this year in the FCC's proceeding for its upcoming Report on the Future of the Universal Service Fund.

Tuesday, February 08, 2022

Federalist Society Podcast Panelists Tackles NFIB v. OSHA and Non-Delegation

The Federalist Society-hosted "Regulatory Transparency Project's Fourth Branch Podcast" features an episode from January 20 on "The Vaccine Mandate Cases and the Future of Administrative Law." The podcast episode featured a panel discussion about the U.S. Supreme Court's decisions released January 13 in NFIB v. OSHA and Biden v. Missouri. The panelists addressed the Court's reasoning in those cases regarding statutory authority and legal doctrines such as non-delegation, major questions, and constitutional avoidance.

One of the panelists for the podcast episode was Law Professor Ilan Wurman, a member of the Free State Foundation's Board of Academic Advisors. Prof. Wurman's 2021 article in the Yale Law Journal on "Non-Delegation at the Founding" was cited by Justice Neil Gorsuch's concurring opinion in NFIB v. OSHA. During the panel discussion, Prof. Wurman offered sharp insights into the differences between non-delegation, major questions, and constitutional avoidance. Listeners will benefit from the contributions of all of the episode's participants regarding the import of NFIB v. OSHA for the future of the administrative state. 

For additional insights on these topics, check out Free State Foundation President Randolph May's Perspectives from FSF Scholars titled "NFIB v. OSHA: Nondelegation, Major Questions, and Chevron's No Show." 

Wednesday, October 06, 2021

Sixth Circuit Challenge to USF Highlights Nondelegation Issues Identified by FSF Scholars

In a recent petition for review at the Sixth Circuit Court of Appeals, Consumers’ Research and other groups challenge the administration of the Universal Service Fund (USF) by the private Universal Service Administrative Co. (USAC), in conjunction with the FCC's supervision, as an unconstitutional delegation of congressional power. In other words, these petitioners argue the USF violates the nondelegation doctrine.

This challenge follows comments from the same petitioners making the same arguments submitted to the FCC’s Proposed Fourth Quarter 2021 Universal Service Contribution Factor proceeding. Petitioners’ main argument is that Congress’s delegation of legislative and taxation powers to the FCC, which the FCC then delegates to USAC, a private corporation, is unconstitutional. Additionally, petitioners also argue that Congress’s delegation of appointment power over the USAC Board of Directors to the FCC Chairman is unconstitutional. In the alternative, petitioners argue that the FCC exceeds its statutory authority and violates the APA in its administration of the USF.


Free State Foundation President Randolph May and Senior Fellow Seth Cooper previously raised similar nondelegation concerns regarding the USF, urging Congress to appropriate USF funding instead of delegating taxing powers to the FCC. May, an administrative law scholar, has long called for an interpretation of the nondelegation doctrine with more vitality. In a 2001 article for the Federal Communications Law Journal, May argued that the Communications Act’s "public interest" standard is far too vague to be a lawful delegation of power. More recently, May commented on the last nondelegation case at the Supreme Court, Gundy v. United States, hoping Gundy signaled a move "some steps closer to the Framers' original constitutional understanding" of separation of powers.

As the chart above shows, consumers are now subject to nearly a 30% surcharge tacked on to all their traditional telephone calls. Free State Foundation scholars have long supported reform of the Universal Service subsidy regime. For example, Free State Foundation Academic Advisor Justin (Gus) Hurwitz recently discussed USF reform, calling for "a rethinking and substantial reworking of our approach to our Universal Service commitment in telecommunications." And Senior Fellow Andrew Long highlighted FCC Commissioner Brendan Carr’s innovative plan to fund universal service through Big Tech platform ad revenues. President Randolph May, writing in the Yale Journal on Regulation just this week, says Commissioner Carr's proposal is worthy of serious consideration and would be a good candidate for an FCC Notice of Inquiry.

Tuesday, January 19, 2021

President Trump Issues Executive Order for Agency Regulatory Accountability

On January 18, President Trump issued an Executive Order intended to increase the democratic accountability of executive branch agencies' regulatory activities. It requires senior appointees of the President to initiate the  Administrative Procedure Act (APA) process process at their agency, to sign finalized rules, and to approve their agency's regulatory agenda. The idea behind this executive order is to help ensure that federal agency heads chosen by the President – officials at least indirectly accountable through national elections – take responsibility for the actions of the agencies they oversee rather than pass of significant rulemaking and regulatory implementation decisions to subordinates who are insulated from the democratic process. Since federal agency heads chosen by the President are removable by the President, the Executive Order is thus a measure for increasing the President's responsibility for regulatory undertakings by the executive branch.

President Trump's Executive Order is consonant with the constitutional separation of powers. It doesn't reduce the powers of any particular executive branch agency, nor does it transfer any power away from the executive branch to the other branches. No lengthy or expensive process requirements are involved. Indeed, the Executive Order appears to be a common-sense measure for democratic accountability. Despite the late hour of the Executive Order's release, it would be to the next Administration's credit to retain and follow the Order. 

Friday, October 16, 2020

FSF President Randolph May Highlights Vibrancy of the Nondelegation Doctrine at the State Level in Essay for 'The Regulatory Review'

On Thursday, The Regulatory Review published "The Nondelegation Doctrine Is Alive and Well in the States," an essay by Free State Foundation President Randolph May.

In this follow-up to his September 25 piece in the Yale Journal on Regulation, "Justice Ginsburg's Replacement Won't Decimate the Administrative State," Mr. May notes that, although the U.S. Supreme Court has not invoked the nondelegation doctrine since 1935, state supreme courts continue to invalidate laws that, through the impermissible delegation of legislative authority, violate separation of powers principles set forth in their own constitutions.

Midwest Institute of Health v. Governor is one such recent example. In that case, decided earlier this month, the Michigan Supreme Court found a law relied upon by Governor Gretchen Whitmer to declare a state of emergency and issue "lockdown" orders during the COVID-19 pandemic to be "an unlawful delegation of legislative powers to the executive branch in violation of the Michigan Constitution."

Citing the U.S. Supreme Court's decision in Gundy v. United States for the proposition that "the constitutional question is whether [the legislature] has supplied an intelligible principle to guide the delegee's use of discretion," the Michigan supreme court concluded that the terms "reasonable" and "necessary" found in the Emergency Powers of the Governor Act of 1945 were mere "illusory 'non-standard' standards," insufficient to "serve[] in any realistic way to transform an otherwise impermissible delegation of legislative power into a permissible delegation of executive power."

Highlighting the existence of similar supreme court decisions in other states, Mr. May expresses hope that they will inspire the U.S. Supreme Court to revitalize the nondelegation doctrine at the federal level, which he concludes "is central to preserving the U.S. Constitution's separation of powers."

Thursday, October 15, 2020

Thomas Jefferson on Separation of Powers: Too 'Political' for Twitter

Twitter's decisions regarding its handling of tweets are increasingly controversial, with proliferating claims of political favoritism, especially from those on the right. Twitter's decision to restrict the sharing of the New York Post story containing new allegations regarding Joe Biden's possible involvement with his son Hunter Biden's work for Burisma, the Ukrainian energy company on whose board Hunter Biden served, have only intensified the criticism.

 

But sometimes Twitter's decisions just seem downright stupid. Take this one.

 

A couple of times a week, I post "Quotes of the Day" to my Twitter account @FSFthinktank. On October 12, I posted this tweet: "The principle of the Constitution is that of separation of Legislative, Executive, and Judiciary functions, except in cases specified…and it ought to be so commented and acted upon by every friend of free government. #Thomas Jefferson."

 

I liked the Jefferson quote enough that the next day I decided to spend $50 to promote it. But, immediately after attempting to initiate the ad campaign, I received a message from Twitter simply informing me that the promotion was rejected because it was "Political," and, therefore, inconsistent with its ads policy.




 

Who knew that Thomas Jefferson commending the Constitution's separation of powers principles would be considered by Twitter to be objectionable as "Political"? It wasn't a tweet promoting mask-wearing or not.

 

In response to Twitter's rejection notice, I posted this tweet on October 13: "I wanted to promote this tweet with a $50 ad buy, but it was immediately rejected by Twitter as "Political." I've defended Twitter's right under the First Amendment many times to decide what content it wants to carry on its service. But Thomas Jefferson on separation of powers?"

 

It's true that Thomas Jefferson was a politician, so I suppose Twitter can claim that anything he said or wrote should be labeled "Political," even though he was also the primary author of the Declaration of Independence – and even though he's been dead for almost two centuries.

 

Yes, because Twitter is a private non-governmental entity, I'll continue to defend its First Amendment right to decide what to promote or not, even when its decisions are silly or capricious, and even when I disagree.

 

But now that Twitter has saved me $50, if Thomas Jefferson's message affirming the importance of the Constitution's separation of powers principles resonates with you, or if you just want others to consider it, please feel free to share my rejected tweet. 

Tuesday, September 17, 2019

Constitution Day 2019

Today, September 17, is Constitution Day, commemorating the signing of the proposed U.S. Constitution at the conclusion of the Philadelphia Convention in 1787. 

The work of the Free State Foundation, being dedicated constitutional principles and the rule of law, often addresses the intersection of current communications and intellectual property policy issues with constitutional structural and individual rights issues. Here are some publications by FSF scholars from 2018 and 2019 touching on constitutional matters: 
  • FSF Comments regarding Commercial Leased Access Rates (July 22, 2019) (explaining why cable leased access rules are contrary to the First Amendment's Free Speech Clause jurisprudence);
  • Prof. Daniel A. Lyons, "State Net Neutrality Mandates and the Dormant Commerce Clause: Some Preliminary Thoughts,"Perspectives from FSF Scholars, Vol. 14, No. 14 (May 21, 2019);
  • Randolph J. May and Seth L. Cooper, "The FCC Should Stop Potential Liability for Smartphone Owners: The Ninth Circuit's Autodialer Decision Threatens Text Messaging Services," Perspectives from FSF ScholarsVol. 14, No. 5 (Feb. 15, 2019) (explaining how a broad definition of "autodialer" bans protected free speech, contrary to the overbreadth doctrine in First Amendment jurisprudence);
  • Randolph J. May and Seth L. Cooper, "John Marshall's Jurisprudence Supports Preemption of California's Net Neutrality Law," Federalist Society Review, Vol. 20 (Jan. 28, 2019);
  • Randolph J. May, Maintaining the Constitution's Separation of Powers," Perspectives from FSF ScholarsVol. 13, No. 37 (Oct. 1, 2018) [originally published in the Washington Times];
  • Randolph J. May and Seth L. Cooper, "A Constitution Day Call to Strengthen Copyrights," Perspectives from FSF ScholarsVol. 13, No. 35 (Sept. 17, 2018) [originally published in Real Clear Markets]; 
  • Christopher J. Walker, "Judge Brett Kavanaugh's Views on Chevron Deference at the FCC and Beyond," Perspectives from FSF ScholarsVol. 13, No. 32 (Aug. 28, 2018); 
  • Seth L. Cooper, "FCC Proposals Promoting Infrastructure Deployment Don't Violate Anti-Commandeering Rule,"Perspectives from FSF ScholarsVol. 13, No. 29 (Jul. 17, 2018); 
  • Randolph J. May, "Woodrow Wilson's Case Against the Constitution," Perspectives from FSF ScholarsVol. 13, No. 20 (May 31, 2018) [originally published in the Washington Times].

Not to be forgotten is the ongoing series on Constitutionalizing the Administrative State by Professor Joseph Postell, a Member of FSF's Board of Academic Advisors, which was the subject of yesterday's blog post.

Happy Constitution Day.  

Monday, September 16, 2019

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. 

Friday, July 12, 2019

Delegation, Deference, and the FCC


During the last week of its just-ended term, the Supreme Court handed down two eagerly anticipated decisions with significant implications for administrative law and, indeed, more broadly, for separation of powers constitutional jurisprudence. The two decisions are Gundy v. United States and Kisor v. Wilkie. While there will be thousands of pages in law reviews, blogs, and elsewhere devoted to dissecting various aspects of these two important cases – within the next several months, no doubt! – here I want to focus mainly on their implications for the Federal Communications Commission. 

And, to be straight-up about it, I want to use the Court's opinions in the two cases as an occasion to highlight two earlier law articles of mine advocating what at the time seemed fairly radical administrative law and constitutional propositions – but which now appear much less so.

But first a brief recap of the principal holdings of the two cases. In Gundy, the Court rejected, by a 5 – 3 vote, Mr. Gundy's challenge to his conviction under the Sex Offender Registration and Notification Act (SORNA) for failure to register as a sex offender. Gundy, who had been convicted of his offense prior to SORNA's enactment, argued that the statute's delegation of authority to the Attorney General to "specify the applicability" of SORNA's registration requirements" and to "prescribe rules for [their] registrations" for pre-enactment offenders is so devoid of direction as to violate the nondelegation doctrine. In other words, Gundy argued that Congress unconstitutionally had delegated its legislative power to the executive branch.

Writing for the majority, Justice Kagan held the delegation "easily passes muster," especially in light of the Court's precedents affirming other broad delegations of legislative power so long as the statute contains some "intelligible principle" to guide executive branch officials in its execution. For good measure, Justice Kagan observed: "Indeed, if SORNA’s delegation is unconstitutional, then most of Government is unconstitutional—dependent as Congress is on the need to give discretion to executive officials to implement its programs."


In an extended dissent, Justice Gorsuch, joined by Chief Justice Roberts and Justice Thomas, argued that SORNA gives the Attorney General too much "unfettered discretion" to decide which registration requirements to impose on pre-enactment offenders – in short, more policy-making authority than Congress may delegate to executive branch officials. Justice Gorsuch contended that the "intelligible principle" requirement has been applied so leniently that it has permitted "delegations of legislative power that on any other conceivable account should be held unconstitutional."

As for claims the Court should not be put in a position of policing congressional delegations by drawing lines as to the degree of permissible indeterminateness, Justice Gorsuch pointed to other instances in which the Court has reined in Congress in a way that necessarily implicates separation of powers boundaries: "These cases show that when separation of powers is at stake we don't just throw up our hands. In all these areas, we recognize that 'abdication is not part of the constitutional design.'"

All that said, Justice Alito's brief 145-word opinion "concurring in the judgment" likely is the most important of all for what it portends. While voting to reject the nondelegation challenge in light of the Court's precedents, he declared: "If a majority of this Court were willing to reconsider the approach we have taken for the past 84 years, I would support that effort. But because a majority is not willing to do that, it would be freakish to single out the provision at issue here for special treatment."

Justice Kavanaugh did not participate in the consideration of Gundy. But based on his D. C. Circuit opinions and other writings, there is little doubt that he is more than willing to reconsider the Court's approach to applying the nondelegation doctrine. So, it appears there are now five Justices prepared to do so – Chief Justice Roberts, and Justices Thomas, Alito, Gorsuch, and Kavanaugh.

And now to Kisor, which also implicates separation of powers principles. There the Court, with Chief Justice Roberts supplying the crucial fifth vote, refused to overrule the so-called Auer-Seminole Rock deference doctrine, which, in essence, requires judges to defer to administrative agencies' interpretations of their own rules. As Justice Gorsuch contended in a lengthy concurring opinion as vigorous as his Gundy dissent, separation of powers principles, once again, are implicated when judges defer to agencies' interpretations of their regulations rather than deciding for themselves, without application of any controlling deference, whether the regulations are lawful.  Justice Gorsuch, harkening back to Chief Justice Marshall's famous dictum in Marbury v. Madison that “[i]t is emphatically the province and duty of the judicial department to say what the law is,” stated the Auer deference doctrine "sits uneasily with the Constitution."

For my present purposes, with regard to Kisor, it is enough to point out that both Chief Justice Roberts and Justice Kavanaugh made clear that their concurrences should not be read to suggest that their refusal to overrule Auer necessarily implies the same result if the Court reconsiders the Chevron doctrine. As the Chief Justice stated: " Issues surrounding judicial deference to agency interpretations of their own regulations are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress."

Now, with this background in mind, I want to highlight my two much earlier law review articles that no longer appear, jurisprudentially, to be so bold. Indeed, I hope that one day in the not too distant future, the positions I articulated in 2001 and 2006 will be accepted by the Court.

First, in The Public Interest Standard: Is It Too Indeterminate to Be Constitutional?, 53 Fed. Comm. L. J. 427 (2001), I answered "yes." I rehearsed the history of the nondelegation doctrine and addressed the major precedents, acknowledging that the Supreme Court long ago rejected the claim that the public interest standard – which appears in the Communications Act over 100 times – is too amorphous to be constitutional. See FCC v. Pottsville Broadcasting Co., 309 U.S. 134 (1940) and National Broadcasting Co., Inc. v. United States, 319 U.S. 190 (1943).

In Pottsville, Justice Frankfurter thought it sufficient to conclude that the public interest standard "is as concrete as the complicated factors for judgment in such a field of delegated authority permit." You can read that formulation over and over until the proverbial cows come home and not discern any intelligible principle. Indeed, it calls to mind the old saw: "The public interest standard is whatever three of the five FCC commissioners decide on any given day." Just so. It is difficult to discern an "intelligible principle" in a delegation simply directing agency officials to act in the public interest. I am optimistic that when the Court reconsiders, in an appropriate case, the contours of the nondelegation doctrine, it will hold the public interest standard, under which so much of the FCC's regulatory activity takes place, out of bounds.

Second, in Defining Deference Down: Independent Agencies and Chevron Deference, 58 Admin. L. J. 429 (2006), I argued that the decisions of the so-called independent agencies, like the FCC, SEC, FTC, and others, should receive less deference under the Chevron doctrine than those of regular executive branch agencies. The argument is fully explained in the article. In short, the contention is that any fair reading of Chevron shows that the principal (even if not exclusive) rationale for granting deference to the agencies – EPA in that case – is the notion that Chief Executive, as opposed to the courts, is politically accountable. Because the independents are less politically accountable to the Chief Executive than are the executive agencies, it follows that their decisions should be accorded less deference upon review.

Well, if you're skeptical, it may give you comfort to know, as I point out in my Defining Deference Down article, that then-Harvard Law School dean – now Supreme Court Justice – Elena Kagan agreed with me in her notable Presidential Administration article published in the Harvard Law Review in 2001. There Justice Kagan suggested that a variable Chevron doctrine "would begin by distinguishing between actions taken by executive branch agencies and those taken by independent commissions." She concluded that the Chevron doctrine "attuned to the role of President would respond to the disparity by giving greater deference to executive than to independent agencies."

I've suggested many times that, based on my view of fundamental separation of powers principles, that the Chevron doctrine should be reconsidered as it applies to all agencies, not just the independents. But, at the same time, I've envisioned that barring such broader reconsideration, giving less deference to the decisions of the independents, would be a modest incremental step, as I said in my Defining Deference Down article, that would be "more consistent with our constitutional system."

Neither Gundy nor Kisor effected any revolution in administrative or constitutional law. But both involve fundamental separation of powers principles that go to the core of our tripartite system of government in which certain discrete responsibilities are assigned – and must be largely confined – to each of the separate branches. So, for now, it is enough to hope that, all things considered, the two decisions moved us some steps closer to the Framers' original constitutional understanding.