Justice Thomas Again Suggests SCOTUS Should Interpret Section 230's Plain Text

On Monday, the Supreme Court denied certiorari in Jane Doe v. Facebook, and Justice Thomas wrote another statement suggesting the possibility that the Supreme Court ought to review Section 230 of the Communications Act in an appropriate future case. Justice Thomas's statement in Doe makes the same point he did in his earlier statement in Malwarebytes, Inc. v. Enigma Software Group – that courts interpreting Section 230 have often made policy and purposivist arguments to deny common law distributor liability, arguably contradicting the statute's plain text. 

In Doe, the Texas Supreme Court dismissed common law claims against Facebook brought by a then 15-year-old girl lured into sex trafficking by an adult male sexual predator on Facebook. In dismissing these claims, the Texas Supreme Court treated Facebook's actions as the "publication of information created by third parties" for which Section 230(c)(1) provides immunity.

But Doe's dismissed common law claims were "negligence, negligent undertaking, gross negligence, and products liability based on Facebook's alleged failure to warn of, or take adequate measures to prevent, sex trafficking on its internet platforms." As Justice Thomas noted in Malwarebytes, these types of claims, and particularly the products liability claim, may have involved actions or omissions by Facebook entirely outside the scope of "publication of information created by third parties," to which Section 230's immunity applies.

However, Justice Thomas respected denial of certiorari in Doe for procedural reasons, because the Texas Supreme Court permitted Doe's statutory claim to proceed, making the case unripe. He believes the Supreme Court should interpret Section 230 in the appropriate future case.

Justice Thomas continues to be a prolific commentator on communications law, also penning certiorari statements and opinions on applying common carriage and public accommodations law to Internet platforms, Brand X v. NCTA, the FCC's independence, and FCC preemption in recent years.

Free State Foundation President Randolph May has written at length on Justice Thomas's views on Section 230 and platform common carriage in his Thinking Clearly About Speaking Freely series. The Free State Foundation also cosponsored Catholic University's inaugural Seigenthaler Debate on platform common carriage. Director of Policy Studies Seth Cooper wrote an October 2021 Perspectives from FSF Scholars about a circuit split over whether there is an exception to Section 230 immunity for claims pertaining to state intellectual property law – a split that could provide future occasion for the Supreme Court to interpret Section 230.

High Court Again Declines to Rule on State-Level Price Controls for Broadband

On February 24, the Supreme Court issued an order denying a petition for a rehearing on its order to deny a writ of certiorari in New York State Telecommunications Association v. James. That is a wordy way of saying the Court declined to change its mind about its earlier refusal to take up the case. The Court's order leaves in place an April 2024 decision by the U.S. Court of Appeals for the Second Circuit rejecting ISPs' claims that the New York broadband price control law is subject to field preemption and conflict preemption.

The Supreme Court's prior order denying certiorari in NYSTA v. James is the subject of my blog post from December 18, 2024. Reconsideration was requested by the petitioners following the January 2, 2025, decision by the Sixth Circuit in In re: MCP No. 185. The Sixth Circuit's decision vacated the FCC's April 2024 order that reclassified broadband services as Title II "telecommunications services" and thereby left in place the agency’s prior order that classified broadband as a Title I "information service." The petitioners argued that the result in the Sixth Circuit constituted intervening circumstances substantial enough to warrant the granting of a rehearing and certiorari. But the Court declined to see it that way. 

 

New York's Affordable Broadband Act imposes price ceilings—a type of rate regulation—on broadband Internet service providers (ISPs) offering service in the state. Under the law, ISPs must offer low-income individuals plans of $15 per month and $20 per month. After being involved in litigation, the law finally went into effect on January 15 of this year. As a result of the Supreme Court's recent order, it appears the New York price control law will remain in effect for the foreseeable future. 

 

There are early signs that the New York law has unintended consequences for broadband competition and new deployments in that state. For more, see my February 20 FedSoc Blog post, "States Should Keep Broadband Internet Services Free From Price Controls."

ISPs Request High Court Ruling on State-Level Rate Regulation of Broadband

On August 10, a handful of trade associations representing broadband Internet service providers (ISPs) filed a petition for a writ of certiorari with the Supreme Court in New York State Telecommunications Association v. James. The petition presents the question of whether the Communications Act preempts New York's broadband rate-regulation law.

New York's Affordable Broadband Act imposes price ceilings – a form of rate regulation – on broadband ISPs offering service within the state. Under the New York law, ISPs offering service in the state must offer $15-per-month and $20-per-month plans to low-income individuals. 

 

On April 26 of this year, a Second Circuit panel's 2-1 majority rejected broadband ISPs' claims that the New York rate regulation law was subject to field preemption and conflict preemption. My summary of the court's decision in NYTSA v. James is presented in a May 3 Perspectives from FSF Scholars, "Second Circuit Rejects Preemption Challenge to New York's Broadband Rate Regulation."

 

At the time it was released, the Second Circuit's decision in NYSTA v. James was expected to be short-lived because the ruling was based on the FCC's Title I "information services" classification of broadband Internet access services under the Restoring Internet Freedom Order. The court's decision was issued a day after the Commission repealed the RIF Order and made its Title II "telecommunications services" reclassification decision in the Securing and Safeguarding the Open Internet Order. As I observed in a June 20 blog post, the petitioners in NYSTA v. James declined to file a petition for a rehearing en banc at the Second Circuit. They similarly declined to file a motion for reconsideration by the panel in light of the FCC’s new Title II Order. 

 

However, the legal ground shifted dramatically once again following the Supreme Court's decision in Loper Bright Enterprises v. Raimondo overturning the "Chevron doctrine" and especially after the Sixth Circuit's August 1 order staying the new Title II Order pending a decision on the merits in that case. For more, see Free State Foundation President Randolph May's August 23 Perspectives from FSF Scholars, "The Sixth Circuit Stays the FCC's Latest Net Neutrality Flip Flop."

 

On August 2, the petitioners in NYSTA v. James filed an emergency petition with Supreme Court Justice Sotomayor, seeking a stay on the Second Circuit's decision. On August 8, the petitioners filed a letter with an attached stipulated agreement by the parties. Under the stipulation, New York agreed to not enforce its rate regulation law pending the Supreme Court's decision on the ISPs' now-pending petition for a writ of certiorari. In their cert petition, filed on August 10, the ISPs renewed their arguments that New York's rate regulation law is subject to both field preemption and conflict preemption. According to the docket, New York is required to file its response by September 13.

 

For a critique of the Second Circuit's narrow understanding of conflict preemption, check out a May 10 Perspectives from FSF Scholars titled "Second Circuit Preemption Decision Won't Save New York Broadband Rate Regulation Scheme," by Law Professor Daniel Lyons, a member of the Free State Foundation's Board of Academic Advisors.  

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. 

Supreme Court Ends Legal Challenge to Limits on Cable Franchising Authorities

On February 22, the Supreme Court denied a petition for certiorari in City of Eugene v. FCC. The Supreme Court's denial of the petition leaves standing a decision by the Sixth Circuit Court of Appeals that upheld most of a 2019 order by the Commission that clarified limits on local franchising authorities (LFAs) with respect to cable infrastructure. This is welcome news because the Commission's 2019 order is an important reform that helps keep state and local governments from regulating broadband Internet access services.   

As explained in my blog post from June 2021, the Sixth Circuit upheld the Commission's "mixed use rule" – which clarifies that LFA's may not use their cable franchising authority to regulate non-cable services such as broadband Internet access services. Also, the Sixth Circuit upheld the Commission's determination that in-kind obligations imposed by LFAs on cable operators count toward Section 622(b)'s limit on how much LFAs can charge cable operators. Under Section 622(b), LFA's can charge cable operators no more than an amount equal to 5% of their gross revenues during any 12-month period.

 

Additionally, Free State Foundation Legal Fellow Andrew Magloughlin wrote a blog post on January 12 of this year about the certiorari petition in City of Eugene v. FCC and offered solid reasons why the Supreme Court should deny it. 

The Latest on State Cable Bill Prorating Requirements

There have been two recent developments of note regarding legal challenges to state-level requirements that cable operators prorate customers' last-month bills – obligations that, as I argued in "State Cable Bills Prorating Requirements Clearly Are Preempted," an April 2021 Perspectives from FSF Scholars, constitute a form of rate regulation preempted by the 1984 Cable Act, not an otherwise permissible customer service standard or consumer protection law.

Both Maine and New Jersey require that cable operators – but not any of the countless other distributors of video programming, whether facilities-based (such as the two Direct Broadcast Satellite operators, DIRECTV and DISH Network, or telco TV providers, like Verizon FiOS) or streamed over the Internet (Netflix, Hulu, Amazon Prime Video, Disney+, and so on) – bill canceling customers on a per-day basis during their final month of service.

In "Maine Cable Law, Ignoring Competition, Is 'Unambiguously Preempted'," an October 2020 Perspectives, I reported that the U.S. District Court for the District of Maine had found the Maine statute to be "unambiguously preempted." The Court of Appeals for the First Circuit, however, reversed that decision on January 4, 2022. For more information, please see "First Circuit Wrongly Concludes Maine's Prorated Billing Requirement Is Not Unlawful."

And last week, on January 9, 2023, the U.S. Supreme Court announced that it had denied Charter Communications' petition for certiorari.

New Jersey's "virtually identical" rule likewise, and for similar reasons, was deemed preempted by the Superior Court of New Jersey, Appellate Division, in an October 15, 2021, unpublished opinion. I discussed this decision in "NJ State Court Concurs: Requirement to Prorate Cable Bills Equals Preempted Rate Regulation," a contemporaneous post to the Free State Foundation blog.

The New Jersey Board of Public Utilities and Division of Rate Counsel appealed to the New Jersey Supreme Court, which held oral arguments on Tuesday (subscription required). Should the lower court decision be reversed, this case potentially could make its way to the Supreme Court.

A decision is expected as early as late next month.

USF Tax Rises to Record High 36.6%

On March 13, the FCC's Office of Managing Director announced that the Universal Service Fund (USF) contribution factor for the second quarter of 2025 will be 36.6%. Absent intervention by the FCC's Commissioners, the proposed rate will soon go into effect. 

The expected rate hike to 36.6% appears to result in another new all-time high for the "USF Tax." It is far higher than the rate from a few years ago. 

 

The U.S. Court of Appeals for the Fifth Circuit rightly called USF surcharges an unconstitutional "USF Tax." They are imposed on voice consumers based on a percentage of the long-distance part of their monthly bills. The money paid by consumers is collected by the voice carriers and passed on to the Universal Service Administrative Company (USAC), the private corporation established by the FCC to administer the USF program and dole out subsidies to program recipients. 

 

The Supreme Court granted a writ of certiorari in FCC v. Consumers' Research, a case involving the issue of whether the USF contribution mechanism is constitutional under the Article I, Section 1 Legislative Vesting Clause. The Court will hold oral arguments in the case on March 26. 

 

USF reform is one of the topics that is sure to be part of the discussion at the Free State Foundation's upcoming Seventeenth Annual Policy Conference – #FSFConf17. The conference will be held in Washington, D.C. on March 25. Conference registration and the conference agenda are available online. 

Judge Silberman's Straight Talk on New York Times v. Sullivan and One-Sided Media

On April 8, Free State Foundation President Randolph May posted a blog bout Justice Clarence Thomas's concurring statement in Biden v. Knight First Amendment Institute at Columbia University. Justice Thomas's concurring statement is both intriguing and provocative. For another intriguing and provocative judicial opinion, look no further than Senior Judge Laurance Silberman's dissent in Tah v. Global Witness Publishing, Inc. 

 

The D.C. Circuit's decision in Tah was released on March 19. The court affirmed a dismissal of a defamation case for failing to plausibly allege actual malice. Senior Judge Silberman's partial dissent gets really interesting in Part III, in which he calls into question the legal standard for proving defamation of public figures that was created by the Supreme Court in New York Times v. Sullivan (1969): 

I am prompted to urge the overruling of New York Times v. Sullivan. Justice Thomas has already persuasively demonstrated that New York Times was a policy-driven decision masquerading as constitutional law. See McKee v. Cosby, 139 S. Ct. 675 (2019) (Thomas, J., concurring in denial of certiorari). The holding has no relation to the text, history, or structure of the Constitution, and it baldly constitutionalized an area of law refined over centuries of common law adjudication. See also Gertz v. Robert Welch, Inc., 418 U.S. 323, 380–88 (1974) (White, J., dissenting). As with the rest of the opinion, the actual malice requirement was simply cut from whole cloth. New York Times should be overruled on these grounds alone.  

The foregoing paragraph is only the warm-up, as Senior Judge Silberman has much more to say about the Supreme Court making up new legal standards and leveraging its institutional legitimacy to resist any subsequent careful re-evaluation of its precedents. 

 

Senior Judge Silberman's dissent gets more interesting still when he identifies the effects of New York Times v. Sullivan in increasing the power of one-sided professional mass media organizations. Here is his first paragraph dealing with those effects: 

As the case has subsequently been interpreted, it allows the press to cast false aspersions on public figures with near impunity. It would be one thing if this were a two-sided phenomenon. Cf. New York Times, 376 U.S. at 305 (Goldberg, J., concurring) (reasoning that the press will publish the responses of public officials to reports or accusations). But seeSuzanne Garment, The Culture of Mistrust in American Politics 74–75, 81–82 (1992) (noting that the press more often manufactures scandals involving political conservatives). The increased power of the press is so dangerous today because we are very close to one-party control of these institutions. Our court was once concerned about the institutional consolidation of the press leading to a "bland and homogenous" marketplace of ideas. See Hale v. FCC, 425 F.2d 556, 562 (D.C. Cir. 1970) (Tamm, J., concurring). It turns out that ideological consolidation of the press (helped along by economic consolidation) is the far greater threat. 

No blog summary can do justice to Senior Judge Silberman's dissent in Tah. Part III of his dissent deserves a full reading – and some pondering. 

High Court Declines to Hear Challenge to State-Level Rate Regulation of Broadband

On December 16, the Supreme Court issued an order denying a petition for certiorari in New York State Telecommunications Association v. James. The petition presented the question of whether the Communications Act preempts New York's broadband rate-regulation law. The Court's order leaves in place an April 2024 decision by the U.S. Court of Appeals for the Second Circuit rejecting ISPs' claims that the New York rate regulation law was subject to field preemption and conflict preemption. 

New York's Affordable Broadband Act imposes price ceilings – a type of rate regulation – on broadband Internet service providers (ISPs) offering service in the state. Under the state's law, ISPs must offer $15-per-month and $20-per-month plans to low-income individuals. 

 

My summary of the lower court's decision in NYTSA v. James is provided in my May 3 Perspectives from FSF Scholars, "Second Circuit Rejects Preemption Challenge to New York's Broadband Rate Regulation." As explained in my August 28 blog post, when the Second Circuit issued its decision in NYSTA v. James, it was widely expected to have a short life because the decision was based on the FCC's Title I "information services" classification of broadband Internet access services under the Restoring Internet Freedom Order. The court's decision was issued only a day after the agency repealed the RIF Order and made its Title II "telecommunications services" reclassification decision in the Securing and Safeguarding the Open Internet Order. 

 

However, the Sixth Circuit's August 1 order in MPC No. 185 Open Internet Rule has stayed the new Title II Order pending a decision on the merits in that case. Oral arguments in that case were held before the Sixty Circuit on October 31. Thus, broadband Internet access services remain Title I "information services" for now. Also, the electoral victory of President-elect Donald Trump and his nomination of Commissioner Brendan Carr to be the next Chairman of the FCC is likely to ensure that broadband services remain Title I "information services" for the foreseeable future. 

At this point, it is difficult to make predictions. As a result of the court's denial of certaiorari in NYSTA v. James, it appears that New York's rate regulation law may go into effect in the near future. But a newly-constituted FCC, under the leadership of Chairman Brendan Carr, is likely to take a different view about the preemptive effect of the Commission's Title I classification decision than the Second Circuit -- and may act on those views through a future declaratory ruling or by some other means. Due to the upcoming change in the Administration, NYTSA v. James is not likely to be the last word on the subject of federal preemption and state-level rate regulation of broadband services. 

After Court Ruling on USF's Unconstitutionality, Congress Should Pass Reforms

On August 26, the U.S. Court of Appeals for the Fifth Circuit issued an order staying the issue of a mandate for its July 24 decision holding that the Universal Service Fund’s (USF) contribution mechanism – or "USF tax" – violated the U.S. Constitution's Article I Legislative Vesting Clause. The stay order anticipates that the FCC will be filing a petition for certiorari with the Supreme Court and that the stay will then be extended until the court final disposition.

The lengthy Fifth Circuit en banc decision in Consumers' Research v. FCC, as well as the concurring and dissenting opinions that were issued, are summarized in my August 5, 2024 Perspectives from FSF Scholars, "Fifth Circuit Rules USF Contribution Scheme Violates Legislative Vesting Clause."

 

My August 9 Perspectives from FSF Scholars, "Court Ruling on USF's Unconstitutionality Should Spur Reform in Congress" explained that Congress should not wait for the Supreme Court to act. As I wrote: 

Congress should act promptly to make the USF program fiscally sustainable and constitutionally sound for the broadband era. It should fund the USF via direct appropriations and intelligibly define broadband as a service eligible for support. If needed, Congress should consider requiring major online companies to make USF contributions under principles that limit subsidy amounts. Along with stronger curbs on waste and abuse, such reforms would preserve universal service, eliminate or at least reduce significantly the USF tax on consumers – which now stands at 34.4% – and enable future downsizing of the USF into a primarily voucher-like program supporting low-income consumers.

The Fifth Circuit's stay order avoids any sudden disruption to the USF program. It also provides window of time for Congress to exercise its authority and finally pass reforms that will modernize the USF program. Congress should make the program more efficient in supporting broadband access for those who are most deserving of help and ensure its future financial sustainability.   

Supreme Court Declines to Hear Case on Direct Copyright Infringement

On October 2, the Supreme Court denied certiorari in ABKCO Music, Inc. v. Sagan (2022). I wrote about this case in my September 20 Perspectives from FSF Scholars, "Supreme Court Should Clarify the Law on Direct Infringement of Copyrighted Works." By declining to grant review of the case, the court unfortunately passed up the opportunity to set the law straight that a defendant that orders and participates in an infringement can be liable for direct infringement even if the defendant did not personally perform the literal act of copying the copyrighted work. 

As explained in my Perspectives paper, the Second Circuit went off course in Sagan by improperly applying the "volitional conduct" requirement for direct infringement liability. The lower court wrote that "direct liability attaches only to 'the person who actually presses the button.'" But that is at odds with a copyright owner's "exclusive rights to do and to authorize" under Section 106 of the Copyright Act. As the Supreme Court observed, in Sony Corp. of America v. Universal City Studios, Inc. (1984), "an infringer is not merely one who uses a work without authorization by the copyright owner, but also one who authorizes the use of a copyrighted work without actual authority from the copyright owner."

 

By refusing to hear the case, the court lets stand the Sixth Circuit's decision that unduly narrows the traditional understanding direct infringement and that conflicts with decisions in at least other circuits. For instance, in Society of the Holy Transfiguration Monastery, Inc. v. Gregory (2012), the First Circuit emphasized that an infringer includes "one who authorizes the use of the copyright work without actual authority from the copyright owner" – quoting Sony. And in Lewis Galoob Toys, Inc. v. Nintendo of America, Inc. (1992), the Ninth Circuit recognized that "infringement by authorization is a form of direct infringement."

 

For now, it is to be hoped that other lower courts will decline to follow the Sixth Circuit's misapplication of the volitional conduct requirement and unduly narrow definition of direct infringement that undermines the ability of copyright owners to enforce their exclusive rights. 

Supreme Court Denies Petition in Case Involving State Takings of Copyrighted Property

On March 21, the Supreme Court denied a petition for certiorari in the case of Jim Olive Photography v. University of Houston System. The case involved important and interesting legal issues regarding judicial enforcement of the Fifth and Fourteenth Amendments' prohibitions against state government takings of copyrighted property without just compensation. Unfortunately, the court's denial of the petition means that those issues will have to wait for another time.  

In Allen v. Cooper (2020), the Supreme Court concluded that the Eleventh Amendment generally bars federal courts from hearing infringement claims against state governments. But the Eleventh Amendment does not bar federal courts from hearing claims against states for takings of private property without just compensation or for deprivations of due process. As explained in my December 2021 Perspectives from FSF Scholars, "States Should Not Take Intellectual Property Without Justice Compensation: The Constitution's Fifth and Fourteenth Amendments Protect Copyrights." 

In Jim Olive Photography, the petitioning copyright owner's taking claims were denied by the Texas Supreme Court. He sought an order by the U.S. Supreme Court to vacate that decision and have the lower court reconsider his taking claims in light of the high court's decision in Cedar Point Nursery v. Hassid (2021). In Hassid, the court determined that regulations requiring government access to private property constitute per se physical takings similar to an easement in property because they appropriate the "right to exclude." And the copyright owner in Jim Olive Photography made a well-founded argument a state's appropriation of a copyright owner's exclusive rights, either by making unauthorized reproductions of the work or by publicly displaying it, is analogous to a state's appropriation of a portion of a property owner's land or crops. 

 

The Supreme Court's denial of the petition in Jim Olive Photography is unfortunate for copyright owners whose works have been infringed by state government agencies. But I stand by the legal principles and reasoning about takings of copyrighted property that are set forth in my December 2021 Perspectives:

Copyrights are a type of property that are expressly recognized in the Constitution. This understanding of copyrights as property provides a principled basis for Takings Clause claims when states intentionally or recklessly appropriate exclusive rights in copyrighted property. Such claims also appear consonant with Supreme Court decisions that prohibit states from appropriating personal property and an owner's "right to exclude." The Court should extend its Takings Clause jurisprudence to include takings of copyrighted property. 

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.   

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).

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)