Amicus Curiae Brief — Consumers' Research, et al., Petitioners v. Federal Communications Commission, et al.

No. 23-456

IN THE

Supreme Court of the United States

_________________________________________________

CONSUMERS’ RESEARCH, ET AL.,

Petitioners,

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.,

Respondents.

____________________________________________________________________________________________________

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

____________________________________________________________________________________________________

BRIEF OF AMICUS CURIAE

AMERICANS FOR PROSPERITY FOUNDATION

IN SUPPORT OF PETITIONERS

————

Michael Pepson

Counsel of Record

AMERICANS FOR PROSPERITY FOUNDATION

4201 Wilson Blvd., Ste. 1000

Arlington, VA 22203

(571) 329-4529

mpepson@afphq.org

Counsel for Amicus Curiae

November 30, 2023

i

TABLE OF CONTENTS

Table of Authorities ...................................................... ii

Interest of Amicus Curiae ............................................ 1

Summary of Argument ................................................. 1

Argument ....................................................................... 3

I.

The Separation of Powers Protects Liberty .... 3

II.

The Constitution Bars Congress From

Transferring Its Legislative Power .................. 6

III.

The Universal Service Fund Makes a Mockery

of the Constitution ............................................. 8

IV.

This Case Is an Ideal Vehicle to Restore

Equilibrium Among the Branches ................. 14

A. Delegation Run Riot Has Had Awful Effects on

Our Constitutional Republic........................... 14

B. The Time Has Come to Jettison the “Intelligible

Principle” Remark ........................................... 16

C. Line-Drawing Questions Cannot Justify

Ignoring the Constitution’s Demands ............ 17

V.

The FCC’s Subdelegation of Congress’s

Legislative and Taxing Powers to a Private

Company

Run

By

Industry

Insiders

Independently Warrants Review ................... 20

Conclusion ................................................................... 23

ii

TABLE OF AUTHORITIES

Page(s)

Cases

A.L.A. Schechter Poultry Corp. v. United

States,

295 U.S. 495 (1935) .............................................12

Alexander v. Sandoval,

532 U.S. 275 (2001) .............................................22

Allstates Refractory Contractors, LLC v. Su,

79 F.4th 755 (6th Cir. 2023) .................. 4, 5, 6, 19

Ass’n of Am. R.Rs. v. U.S. Dep’t of Transp.,

721 F.3d 666 (D.C. Cir. 2013).............................21

AT&T Corp. v. Iowa Utils. Bd.,

525 U.S. 366 (1999) ........................................ 9, 10

Baldwin v. United States,

140 S. Ct. 690 (2020) .............................................8

Biden v. Nebraska,

143 S. Ct. 2355 (2023) ...........................................1

Carter v. Carter Coal Co.,

298 U.S. 238 (1936).............................................. 2, 21

Chevron, U.S.A., Inc. v. NRDC, Inc.,

467 U.S. 837 (1984) .............................................10

iii

City of Arlington v. FCC,

569 U.S. 290 (2013) ...............................................8

Collins v. Yellen,

141 S. Ct. 1761 (2021) ...........................................5

Consumers’ Rsch. v. FCC,

63 F.4th 441 (5th Cir. 2023) .......................... 9, 10

DOT v. Ass’n of Am. R.R.,

575 U.S. 43 (2015) ........................ 8, 18, 19, 21, 22

Free Enter. Fund v. Pub. Co. Accounting

Oversight Bd.,

561 U.S. 477 (2010) ...............................................4

Gundy v. United States,

139 S. Ct. 2116 (2019) .................... 4, 8, 16, 17, 18

Huawei Techs. USA, Inc. v. FCC,

2 F.4th 421 (5th Cir. 2021) .................................11

Indus. Union Dep’t, AFL-CIO v. API,

448 U.S. 607 (1980) ...........................................3, 6

INS v. Chadha,

462 U.S. 919 (1983) ...............................................5

In re Incomnet, Inc.,

463 F.3d 1064 (9th Cir. 2006) ..................... 11, 13

J.W. Hampton, Jr., & Co. v. United States,

276 U.S. 394 (1928) .............................................16

iv

Little Sisters of the Poor Saints Peter &

Paul Home v. Pennsylvania,

140 S. Ct. 2367 (2020) .........................................12

Mistretta v. United States,

488 U.S. 361 (1989) .............................................17

Morrison v. Olson,

487 U.S. 654 (1988) ................................ 2, 4, 5, 14

Myers v. United States,

272 U.S. 52 (1926) .................................................4

Nat’l Cable Television Ass’n v. United

States,

415 U.S. 336 (1974) ...........................................2, 6

Nat’l Horsemen’s Benevolent & Protective

Ass’n v. Black,

53 F.4th 869 (5th Cir. 2022) ........................ 20, 22

Nat’l Labor Relations Bd. v. Canning,

573 U.S. 513 (2014) ...............................................4

NFIB v. OSHA,

142 S. Ct. 661 (2022) .............................................6

Perez v. Mortg. Bankers Ass’n,

575 U.S. 92 (2015) .................................................5

Pittston Co. v. United States,

368 F.3d 385 (4th Cir. 2004) ..............................21

v

Seila Law LLC v. Consumer Fin. Prot.

Bureau,

140 S. Ct. 2183 (2020) ...........................................4

Texas v. Commissioner,

142 S. Ct. 1308 (2022) .................................. 13, 20

Texas v. Rettig,

993 F.3d 408 (5th Cir. 2021) ............. 5, 13, 14, 22

Tex. Office of Pub. Util. Counsel v. FCC,

183 F.3d 393 (5th Cir. 1999) ................................9

Tex. Office of Pub. Util. Counsel v. FCC,

265 F.3d 313 (5th Cir. 2001) ..............................10

Tiger Lily, LLC v. HUD,

5 F.4th 666 (6th Cir. 2021) .......................... 15, 20

United States v. Nichols,

784 F.3d 666 (10th Cir. 2015) ............... 11, 12, 19

United States v. Pheasant,

No. 21-cr-00024, 2023 U.S. Dist. LEXIS

72572 (D. Nev. Apr. 26, 2023) ............................19

United States ex rel. Shupe v. Cisco Sys.,

759 F.3d 379 (5th Cir. 2014) ....................... 11, 12

United States Telecom Ass’n v. FCC,

359 F.3d 554 (D.C. Cir. 2004).............................20

Wayman v. Southard,

23 U.S. (10 Wheat.) 1 (1825) ..................... 2, 6, 18

vi

West Virginia v. EPA,

142 S. Ct. 2587 (2022) .................................. 14, 19

Whitman v. Am. Trucking Ass’ns,

531 U.S. 457 (2001) ...................................... 12, 17

Constitution

U.S. Const. art. I, § 1 ....................................... 2, 6, 17

U.S. Const. art. I, § 8 ..............................................2, 6

U.S. Const. art. II, § 1, cl. 1 ...................................7, 8

U.S. Const. art. III, § 1 ...............................................7

Statutes

47 U.S.C. § 254(b) ................................................ 9, 10

47 U.S.C. § 254(b)(7) .................................................10

47 U.S.C. § 254(c)(1) .................................................10

47 U.S.C. § 254(d) .....................................................10

Regulations

47 C.F.R. § 54.701 .....................................................12

47 C.F.R. § 54.701(a) ......................................... 12, 13

47 C.F.R. § 54.703 .....................................................12

47 C.F.R. § 54.704(a) ................................................13

vii

47 C.F.R. § 54.705 .....................................................13

47 C.F.R. § 54.709(a) ......................................... 11, 12

47 C.F.R. § 54.709(a)(3) ............................................12

47 C.F.R. § 54.715 .....................................................13

Rules

Sup. Ct. R. 37.2 ...........................................................1

Other Authorities

Aaron Gordon,

Nondelegation Misinformation: A Reply

to the Skeptics,

75 Baylor L. Rev. 152 (2023) ..............................18

Aditya Bamzai,

Tenure of Office and the Treasury: The

Constitution and Control over National

Financial Policy, 1787 to 1867,

87 Geo. Wash. L. Rev. 1299 (2019) ....................22

Antonin Scalia,

A Note on the Benzene Case,

Reg., July/Aug. 1980 .............................................3

Brett M. Kavanaugh,

Our Anchor for 225 Years and Counting:

The Enduring Significance of the Precise

Text of the Constitution,

89 Notre Dame L. Rev. 1907 (2014) ....................5

viii

Cong. Research Serv., LSB10904, Fifth

Circuit Considers Constitutionality of

the Universal Service Fund (2023) ......................9

Federalist No. 75 (Hamilton) ...................................18

Federalist 78 (Hamilton) ..........................................19

Gary Lawson,

Delegation and Original Meaning,

88 Va. L. Rev. 327 (2002)......................................8

Jennifer Mascott,

Private Delegation Outside of Executive

Supervision,

45 Harv. J.L. & Pub. Pol’y 837 (2022) ...............22

John O. McGinnis & Michael B. Rappaport,

Presidential Polarization,

83 Ohio St. L.J. 5 (2022) .....................................16

Naomi Rao,

Administrative Collusion: How

Delegation Diminishes the Collective

Congress,

90 N.Y. U. L. Rev. 1463 (2015)...........................15

Noah Webster,

An American Dictionary of the English

Language (New York, S. Converse 1828) ..........18

Paul Larkin,

Revitalizing the Nondelegation Doctrine,

23 Federalist Soc’y Rev. 238 (2022) ...................19

ix

Philip Hamburger,

Is Administrative Law Unlawful? (2014)........6, 7

Philip Hamburger,

Nondelegation Blues,

91 Geo. Wash. L. Rev. 1083 (2023)….3, 4, 7, 8, 14,

15, 16, 17, 19

Ronald A. Cass, Separating Powers in the

Administrative State: Understanding

Delegation, Discretion, and Deference,

C. Boyden Gray Center for the Study of

the Administrative State Research

Paper No. 23-22 (Sept. 20, 2023) ................ 18, 19

Ronald J. Krotoszynski, Jr.,

Reconsidering the Nondelegation

Doctrine: Universal Service, the Power to

Tax, and the Ratification Doctrine,

80 Ind. L.J. 239 (2005) ............................. 9, 10, 11

Steven G. Calabresi & Gary Lawson,

The Depravity of the 1930s and the

Modern Administrative State,

94 Notre Dame L. Rev. 821 (2019).......................3

The Administrative State Before the

Supreme Court: Perspectives on the

Nondelegation Doctrine (Peter J.

Wallison & John Yoo eds. 2022).........................19

The Declaration of Independence (1776) ..................4

1

BRIEF OF AMICUS CURIAE

IN SUPPORT OF PETITIONERS

Under Supreme Court Rule 37.2, Americans for

Prosperity Foundation (“AFPF”) respectfully submits

this amicus curiae brief in support of Petitioners.1

INTEREST OF AMICUS CURIAE

Amicus curiae AFPF is a 501(c)(3) nonprofit

organization committed to educating and training

Americans to be courageous advocates for the ideas,

principles, and policies of a free and open society.

Some of those key ideas include the separation of

powers and constitutionally limited government. As

part of this mission, it appears as amicus curiae before

federal and state courts. Here, AFPF writes to

highlight the critical importance of answering the

questions presented by Petitioners and the stakes for

representative self-government, separation of powers,

federalism, and individual liberty.

SUMMARY OF ARGUMENT

This case is not about what constitutes sound

telecommunications policy or the wisdom of universal

services. “The question here is not whether something

should be done; it is who has the authority to do it.”

Biden v. Nebraska, 143 S. Ct. 2355, 2372 (2023). “That

1 All parties have received timely notice of amicus curiae’s intent

to file this brief. Amicus curiae states that no counsel for any

party authored this brief in whole or in part, and no entity or

person, aside from amicus curiae or its counsel, made any

monetary contribution intended to fund the preparation or

submission of this brief.

2

is what this suit is about. Power.” Morrison v. Olson,

487 U.S. 654, 699 (1988) (Scalia, J., dissenting).

In this country, all governmental power must flow

from its proper source: We the People. Our system of

government relies on the consent of the governed,

memorialized in the Constitution. Our Constitution

exclusively tasks the People’s elected representatives

with making policy choices and accessing the People’s

pocketbooks. And under the Constitution, the political

branches may only do so through duly enacted

legislation

that

survives

bicameralism

and

presentment, a deliberately difficult process designed

to ensure such laws reflect broad political consensus.

Toward this end, the Constitution flatly prohibits

Congress from transferring any of its legislative

power to other entities, U.S. Const. art. I, § 1,

including the power “to lay and collect Taxes, Duties,

Imposts, and Excises,” U.S. Const. art. I, § 8. This

means that such matters “must be entirely regulated

by the legislature itself[.]” Wayman v. Southard, 23

U.S. (10 Wheat.) 1, 43 (1825) (Marshall, C.J.).

Congress “is the sole organ for levying taxes[.]” Nat’l

Cable Television Ass’n v. United States, 415 U.S. 336,

340 (1974). And a fortiori Congress cannot transfer

“power to regulate the affairs of an unwilling

minority” to private parties; this is “legislative

delegation in its most obnoxious form[.]” Carter v.

Carter Coal Co., 298 U.S. 238, 311 (1936).

Here, Congress has done that which the

Constitution prohibits by transferring the power to

make legislative policy choices and levy taxes to

unelected administrators who, in turn, transferred

these powers to a private company staffed by industry

3

insiders. As Petitioners explain, see Pet. 2–6, 19–20,

the Universal Service Fund (“USF”) is both

unprecedented

and

uniquely

constitutionally

offensive. It is also emblematic of a broader problem:

“the vast subdelegation of legislative authority that

permeates modern government.” Steven G. Calabresi

& Gary Lawson, The Depravity of the 1930s and the

Modern Administrative State, 94 Notre Dame L. Rev.

821, 853 (2019).

“The administrative degradation of consensual

lawmaking is eating away at our government’s

legitimacy.” Philip Hamburger, Nondelegation Blues,

91 Geo. Wash. L. Rev. 1083, 1108 (2023). There is no

way to sweep this constitutional disorder under the

rug. It is long past time for the judiciary to “reshoulder

the burden of ensuring that Congress itself make the

critical policy decisions,” Indus. Union Dep’t, AFLCIO v. API, 448 U.S. 607, 687 (1980) (Rehnquist, C.J.,

concurring in judgment), by “hewing” the

nondelegation doctrine “from the ice,” Antonin Scalia,

A Note on the Benzene Case, Reg., July/Aug. 1980, at

28. This case provides an ideal opportunity to do so.

For the foregoing reasons, this Court should grant

the Petition.

ARGUMENT

I.

The Separation

Liberty.

of

Powers

Protects

It bears reminding that “[t]he key principle

underlying the formation of the United States was

consent—in particular, consent by an elected

representative body.” Hamburger, 91 Geo. Wash. L.

4

Rev. at 1108 (citing The Declaration of Independence

(U.S. 1776)). Toward that end, “[o]ur Constitution was

adopted to enable the people to govern themselves,

through their elected leaders.” Free Enter. Fund v.

Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 499

(2010). Underscoring this, it “begins by declaring that

‘We the People . . . ordain and establish this

Constitution.’ At the time, that was a radical claim,

an assertion that sovereignty belongs not to a person

or institution or class but to the whole of the people.”

Gundy v. United States, 139 S. Ct. 2116, 2133 (2019)

(Gorsuch, J., dissenting). In that document, the

People agreed on a system of checks and balances.

“[T]he Constitution’s core, government-structuring

provisions are no less critical to preserving liberty

than are the later adopted provisions of the Bill of

Rights.” Nat’l Labor Relations Bd. v. Canning, 573

U.S. 513, 571 (2014). Indeed, “[o]f all ‘principle[s] in

our Constitution,’ none is ‘more sacred than . . . that

which separates the legislative, executive and judicial

powers.’” Allstates Refractory Contractors, LLC v. Su,

79 F.4th 755, 769 (6th Cir. 2023) (Nalbandian, J.,

dissenting) (quoting Myers v. United States, 272 U.S.

52, 116 (1926)), petition for rehearing en banc filed,

No. 22-3772 (6th Cir. Oct. 6, 2023).

“The Constitution sets out three branches of

Government and provides each with a different form

of power—legislative, executive, and judicial.” Seila

Law LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct.

2183, 2216 (2020) (Thomas, J., concurring) (citations

omitted). “The purpose of the separation and

equilibration of powers” required by the Constitution

is “not merely to assure effective government but to

5

preserve individual freedom.”2 Morrison, 487 U.S. at

727 (Scalia, J., dissenting); see Collins v. Yellen, 141

S. Ct. 1761, 1780 (2021) (“[T]he separation of powers

is designed to preserve the liberty of all the people.”).

It also protects “democratic values.” Allstates, 79

F.4th at 769 (Nalbandian, J., dissenting).

This separation “might seem inconvenient and

inefficient to those who wish to maximize

government’s coercive power.” Texas v. Rettig, 993

F.3d 408, 409 (5th Cir. 2021) (Ho, J., joined by Jones,

Smith, Elrod, and Duncan, JJ., dissenting from denial

of rehearing en banc). But “[t]o the Framers, the

separation of powers and checks and balances were

more than just theories. They were practical and real

protections for individual liberty in the new

Constitution.” Perez v. Mortg. Bankers Ass’n, 575 U.S.

92, 118 (2015) (Thomas, J., concurring in the

judgment). “The choices . . . made in the

Constitutional Convention impose burdens on

governmental processes that often seem clumsy,

inefficient, even unworkable, but those hard choices

were consciously made by men who had lived under a

form of government that permitted arbitrary

governmental acts to go unchecked.” INS v. Chadha,

462 U.S. 919, 959 (1983). History has confirmed that

the Framers were right.

2 Indeed, “[t]he primary protection of individual liberty in our

constitutional system comes from the separation of powers in the

Constitution[.]” Brett M. Kavanaugh, Our Anchor for 225 Years

and Counting: The Enduring Significance of the Precise Text of

the Constitution, 89 Notre Dame L. Rev. 1907, 1915 (2014).

6

II.

The Constitution Bars Congress From

Transferring Its Legislative Power.

Congress may not duck the Constitution’s

accountability checkpoints by divesting itself of its

legislative responsibilities. See NFIB v. OSHA, 142 S.

Ct. 661, 669 (2022) (per curiam) (Gorsuch, J.,

concurring). “Article I vests the ‘Senate and House of

Representatives’ (and them alone) with ‘[a]ll

legislative powers.’” Allstates, 79 F.4th at 769

(Nalbandian, J., dissenting) (quoting U.S. Const. art.

I, § 1). The Constitution bars Congress from

transferring “powers which are strictly and

exclusively legislative” to other entities. Wayman, 23

U.S. (10 Wheat.) at 42. That includes Congress’s

power “to lay and collect Taxes, Duties, Imposts, and

Excises.” U.S. Const. art. I, § 8; see Nat’l Cable

Television Ass’n, 415 U.S. at 340 (“Taxation is a

legislative function, and Congress, [] is the sole organ

for levying taxes[.]”).

Instead, such matters “must be entirely regulated

by the legislature itself[.]” Wayman 23 U.S. (10

Wheat.) at 43. This means “the hard choices” “must be

made by the elected representatives of the people.”

Indus. Union Dep’t, 448 U.S. at 687 (Rehnquist, J.,

concurring in judgment). And “Congress, not some

official in the Executive Branch, creates laws.”

Allstates, 79 F.4th at 769.

The Constitution’s text makes this pellucidly clear.

To begin, Article I unequivocally provides: “All

legislative Powers herein granted shall be vested in a

Congress[.]” U.S. Const. art. I, § 1; see Philip

Hamburger, Is Administrative Law Unlawful? 388

(2014) (“Americans clearly understood how to write

7

constitutions

that

expressly

permitted

the

subdelegation of legislative power to the executive,

and they did not do this in the federal constitution.”).

This provision “speaks of what shall be vested and

thereby bars delegation of the legislative powers.”3

Hamburger, 91 Geo. Wash. L. Rev. at 1168. “The

phrase shall be vested is decisive. It emphatically

reinforces what already should be clear, that the

Constitution’s vesting of powers is not just an initial

distribution—like an initial dealing out of cards.” Id.

at 1174 (emphasis in original).

The Constitution’s structure reenforces this

conclusion. For example, by contrast to Article I’s

Vesting Clause, the Constitution “expressly

acknowledged” circumstances “when Congress can

designate the location of one of the tripartite powers,

this is expressly acknowledged,” such as in Article

III’s judicial vesting clause. Hamburger, 91 Geo.

Wash. L. Rev. at 1175; see U.S. Const. art. III, § 1. As

Professor Hamburger put it: “Given that Article III

spells out that Congress may determine the location

of some judicial power, it is nearly comic to observe so

much scholarship strive to show that Article I did this

for legislative power.” Hamburger, 91 Geo. Wash. L.

Rev. at 1175. Article II’s executive vesting clause

“provides a third textual basis for rejecting transfers

of legislative power,” making clear that the President

“This conclusion is reinforced by other portions of the text:

Article III’s vesting of judicial power and Article II’s vesting of

executive power.” Hamburger, 91 Geo. Wash. L. Rev. at 1168

(citing U.S. Const. art. II, § 1, cl. 1; id. art. III, § 1). The

Constitution’s “shall be vested” language “textually emphasizes

that its powers cannot be rearranged.” Id. at 1071.

3

8

“is not and cannot be vested with either of the other

tripartite powers.” Id. at 1176; see City of Arlington v.

FCC, 569 U.S. 290, 304 n.4 (2013) (“[U]nder our

constitutional

structure”

federal

agencies’

activities “must be exercises of—the ‘executive

Power.’” (quoting Art. II, § 1, cl. 1)).

In sum, “the Vesting Clauses are exclusive,” which

means “that the branch in which a power is vested

may not give it up or otherwise reallocate it.” DOT v.

Ass’n of Am. R.R., 575 U.S. 43, 74 (2015) (Thomas, J.,

concurring). “If Congress could pass off its legislative

power to the executive branch, the ‘[v]esting [c]lauses,

and indeed the entire structure of the Constitution,’

would ‘make no sense.’” Gundy, 139 S. Ct. at 2134–35

(Gorsuch, J., dissenting) (quoting Gary Lawson,

Delegation and Original Meaning, 88 Va. L. Rev. 327,

340 (2002)); see Baldwin v. United States, 140 S. Ct.

690, 691 (2020) (Thomas, J., dissenting from denial of

certiorari) (“[T]he exercise of power free of” the

Constitution’s structural “restraints subverts the

design of the Constitution’s ratifiers.”).

III.

The Universal Service Fund Makes a

Mockery of the Constitution.

Section 254 of the Telecommunications Act of 1996

runs roughshod over the Constitution’s structural

guardrails. It not only transfers to the FCC power to

make legislative policy choices but authorizes the

agency to fund those choices by levying taxes.

9

Since 1934,“Congress has made universal service

a basic goal of telecommunications regulation.”4 Tex.

Office of Pub. Util. Counsel (TOPUC I) v. FCC, 183

F.3d 393, 405 (5th Cir. 1999). Today, it remains “a

significant part of U.S. telecom policy.” Cong.

Research Serv., LSB10904, Fifth Circuit Considers

Constitutionality of the Universal Service Fund 4

(2023).5 To further this broad goal, “Congress enacted

§ 254 of the Telecommunications Act of 1996, which

established the USF and entrusted its administration

to the FCC.” Consumers’ Research v. FCC, 63 F.4th

441, 445 (5th Cir. 2023), vacated and rehearing en

banc granted, 72 F.4th 107 (5th Cir. 2023).

Problematically, the 1996 Act—which “profoundly

affects a crucial segment of the economy worth tens of

billions of dollars”—“is in many important respects a

model of ambiguity,” granting “‘most promiscuous

rights’ to the FCC[.]” AT&T Corp. v. Iowa Utils. Bd.,

525 U.S. 366, 397 (1999). That well describes § 274.

There, Congress tasked the FCC (and a FederalState Joint Board) with setting “policies for the

preservation and advancement of universal service[.]”

47 U.S.C. § 254(b). Congress, however, said precious

little about how to do this, instead punting the policy

choices necessary to achieve these broad, abstract

aims to unelected Executive officials, who, in turn,

promptly punted this duty to a private corporation. In

4 “Universal service . . . is a social welfare subsidy program that

benefits certain consumers . . . by imposing taxes on other

consumers.” Ronald J. Krotoszynski, Jr., Reconsidering the

Nondelegation Doctrine: Universal Service, the Power to Tax, and

the Ratification Doctrine, 80 Ind. L.J. 239, 278 (2005).

5 https://crsreports.congress.gov/product/pdf/LSB/LSB10904.

10

47 U.S.C. § 254(b) Congress used “lofty and expansive

language” to announce seven “aspirational”

principles, “reflect[ing] congressional intent to

delegate difficult policy choices to the Commission’s

discretion.” Tex. Office of Pub. Util. Counsel (TOPUC

II) v. FCC, 265 F.3d 313, 321 (5th Cir. 2001) (cleaned

up). That was by design: “Congress is well aware that

the ambiguities it chooses to produce in a statute will

be resolved by the implementing agency.” Iowa Utils.

Bd., 525 U.S. at 397 (citing Chevron, U.S.A., Inc. v.

NRDC, Inc., 467 U.S. 837, 842–43 (1984)).

Section

254

mandates

that

“[e]very

telecommunications carrier that provides interstate

telecommunications services shall contribute, on an

equitable and nondiscriminatory basis, to the specific,

predictable, and sufficient mechanisms established by

the [FCC] to preserve and advance universal service.”

47 U.S.C. § 254(d). But Congress did not define

“universal service.” 47 U.S.C. § 254(c)(1) (“Universal

service is an evolving level . . . that the Commission

shall establish periodically[.]”). For that matter,

Congress empowered the FCC with boundless

discretion to add universal service principles it deems

“necessary and appropriate for the protection of the

public interest, convenience, and necessity[.]” 47

U.S.C. § 254(b)(7); see also Krotoszynski, 80 Ind. L.J.

at 312 (“Congress has not established the precise

services to be subsidized and . . . has urged the

Commission to add new services over time.”).

Making matters worse, Congress also established

a “unique revenue raising mechanism,” Consumers’

Research, 63 F.4th at 450, empowering the FCC to

effectively tax carriers to fund its social welfare

program. The FCC does this by regulation at a rate

11

set quarterly known as the Contribution Factor. See

47 C.F.R. § 54.709(a); In re Incomnet, 463 F.3d 1064,

1066 (9th Cir. 2006). “The money in the USF is

provided by private telecommunication providers[.]”

United States ex rel. Shupe v. Cisco Sys., 759 F.3d 379,

387–88 (5th Cir. 2014). “The telecommunications

companies pass this cost through to their subscribers;

the charge generally appears on phone bills as the

‘Universal Service Fund Fee.’” In re Incomnet, Inc.,

463 F.3d at 1066.

Section “254 limits neither the objects of the

universal service program nor the funds to be

expended to achieve them[.]” Krotoszynski, 80 Ind.

L.J. at 318. “[B]ecause Congress has failed to limit

either the amount of revenue to be raised or the

particular purposes to which the revenue may be

used, it has essentially given the Commission a blank

check.”6 Id. at 246. Indeed, the FCC has argued “that

so long as the Commission does not violate an express

statutory command, it may use the universal-service

mechanism to achieve policy objectives contained

elsewhere in the Act.” Huawei Techs. USA, Inc. v.

FCC, 2 F.4th 421, 436 (5th Cir. 2021) (cleaned up).

In short, “Congress pointed to a problem that

needed fixing and more or less told the Executive to

This arrangement “permits Congress to take credit for the

benefits it provides without being accountable for the taxes used

to pay for them.” Krotoszynski, 80 Ind. L.J. at 246.

6

12

go forth and figure it out.”7 United States v. Nichols,

784 F.3d 666, 674 (10th Cir. 2015) (Gorsuch, J.,

dissenting from denial of rehearing en banc). “This is

delegation running riot.” A.L.A. Schechter Poultry

Corp. v. United States, 295 U.S. 495, 553 (Cardozo, J.,

concurring).

On top of this, the FCC has re-delegated its

authority over the USF to the Universal Service

Administrative Company (“USAC”). See 47 C.F.R.

§ 54.701(a). “USAC is a not-for-profit private

organization that is structured pursuant to the FCC’s

regulations,” Pet. App. 13a (citing 47 C.F.R.

§§ 54.701, 54.703), and “owned by an industry trade

group,” Cisco Sys., 759 F.3d at 387. Cf. Schechter, 295

U.S. at 537 (“[W]ould it be seriously contended that

Congress could delegate its legislative authority to

trade or industrial associations or groups[?]”).

This private entity is tasked by regulation with

calculating the Contribution Factor and thus for all

practical purposes decides the rate at which the

carriers—and, by extension, the general public—are

taxed.8 See generally 47 C.F.R. § 54.709(a). “USAC

Any effort by the FCC to save the statute by proposing a

limiting construction should be rejected. See Whitman v. Am.

Trucking Ass’ns, 531 U.S. 457, 472 (2001). “It is [also] a

fundamental principle of statutory interpretation that absent

provisions cannot be supplied by the courts.” Little Sisters of the

Poor Saints Peter & Paul Home v. Pennsylvania, 140 S. Ct. 2367,

2381 (2020) (cleaned up).

8 For all practical purposes, the FCC has transferred final

decision-making authority to USAC, subject to an illusory veto

power with a 14-day time limit. See 47 C.F.R. § 54.709(a)(3).

7

13

sets its own budget” and subject to limited FCC

oversight “decides if, when, and how it disburses

funds on behalf of the USF’s beneficiaries.” In re

Incomnet, 463 F.3d at 1076 (citing 47 C.F.R.

§§ 54.701(a), 54.704(a), 54.705, 54.715). In short, a

private company determines the tax rate that yields

ten billion dollars a year—about 25 times the FCC’s

own budget. See Pet. App. 12. That, too, is legislative

power.9 Through this novel arrangement, “[t]he

federal government forces” carriers—and, by

extension, the general public—to pony up this

exorbitant sum “not by an act of their elected

representatives in Congress, but by private entities

acting in collusion with unelected public bureaucrats.”

Rettig, 993 F.3d at 418 (Ho, J., dissenting from denial

of rehearing en banc).

This makes a mockery of the Constitution’s

separation of powers. And it breaks the Constitution’s

promise that only the People’s elected representatives

in Congress may make legislative choices restricting

their liberty and imposing obligations upon them.

Cf. Texas v. Commissioner, 142 S. Ct. 1308, 1309 (2022)

(statement of Alito, J., joined by Thomas, Gorsuch, JJ.,

respecting denial of certiorari) (“What was essentially a

legislative determination—the actuarial standards that a State

must meet in order to participate in Medicaid—was made not by

Congress or even by the Executive Branch but by a private group.

And this was no inconsequential matter. It has cost the States

hundreds of millions of dollars.”).

9

14

IV.

This Case Is an Ideal Vehicle to Restore

Equilibrium Among the Branches.

This Court should not turn a blind eye to these

serious constitutional problems. “The modern

administrative state illustrates what happens when

we ignore the Constitution: Congress passes problems

to the executive branch and then engages in fingerpointing for any problems that might result. The

bureaucracy triumphs—while democracy suffers.” Id.

at 409 (Ho, J., dissenting from denial of rehearing en

banc) (cleaned up). That well describes the sweeping

and unprecedented dual-layer subdelegation of

legislative power at issue here. “[T]his wolf comes as

a wolf.” Morrison, 487 U.S. at 699. And it should not

be allowed to stand. It is past time for this Court to

protect our Republic by enforcing the Constitution’s

structural protections.

A. Delegation Run Riot Has Had Awful

Effects on Our Constitutional Republic.

The stakes here could not be higher and involve

“basic questions about self-government, equality, fair

notice, federalism, and the separation of powers.”

West Virginia v. EPA, 142 S. Ct. 2587, 2620 (2022)

(Gorsuch, J., concurring). Among other things,

“[t]ransfers of the Constitution’s tripartite powers

violate the principle of representative consent” and

“come with profound social and governmental

dangers.” Hamburger, 91 Geo. Wash. L. Rev. at 1090;

see West Virginia v. EPA, 142 S. Ct. at 2618 (Gorsuch,

J., concurring) (surveying dangers). Unconstitutional

“[d]elegations

have

weakened

accountable

government in both political branches, allowing

agencies to initiate policy and congressmen to serve as

15

shadow administrators.” Naomi Rao, Administrative

Collusion: How Delegation Diminishes the Collective

Congress, 90 N.Y. U. L. Rev. 1463, 1508 (2015). This

“drives a wedge between the personal interests of

legislators and the institutional interests of Congress,

undermining the collective legislative process

established to promote the public good.” Id. at 1477.

In addition, “[b]y shifting responsibility to a less

accountable branch, Congress protects itself from

political censure—and deprives the people of the say

the framers intended them to have.” Tiger Lily, LLC

v. HUD, 5 F.4th 666, 674 (6th Cir. 2021) (Thapar, J.,

concurring). Put another way, “the transfer of

legislative power to agencies dilutes voting rights.”

Hamburger, 91 Geo. Wash. L. Rev. at 1181. Such

power-transfers are also slanted against disfavored

groups. See id. at 1183–87. In short, “[d]elegation is

never just about delegation. It also is about rendering

legislation unrepresentative, diluting the value of

equal suffrage, and disenfranchising mere hoi

polloi[.]” Id. at 1187 (2023). On top of this,

unconstitutional delegations of legislative power to

putative agency experts undermines rational

decisionmaking—the supposed justification for these

delegations—as these administrators often labor

under confirmation, specialization, and size biases.

See id. at 1187–92.

Even

worse,

unconstitutional

delegations

undermine

political

stability,

leading

to

“administratively induced irresponsibility, alienation,

and political conflict.” Id. at 1192. This state of affairs

“tends to infantilize the Constitution’s elements of

government,” “leaving Americans with ever less

confidence in government.” Id. at 1193. It “deprives

16

Americans of their sense of connection to

government,”

leaving

“growing

numbers

of

Americans, left and right, feel politically alienated.”

Id. at 1194.

Finally, delegation of legislative power to

administrative bodies contributes to political

polarization. See John O. McGinnis & Michael B.

Rappaport, Presidential Polarization, 83 Ohio St. L.J.

5, 7 (2022) (“Delegation by Congress probably has the

most pervasive polarizing effects.”). “The breadth of

centralized legislative power” housed within the

Executive branch today “displaces much state politics.

It also reaches deep into private institutions and life.”

Hamburger, 91 Geo. Wash. L. Rev. at 1195. This “not

only nationalizes American politics but also politicizes

American life,” turning Presidential elections into “door-die battles” in which “[a]n almost irresistible

incentive exists to suppress opponents and their

views—abandoning all traditions of cooperation,

tolerance, and freedom of speech.” Id.

B. The Time Has Come to Jettison the

“Intelligible Principle” Remark.

This Court should confront the root cause of these

serious constitutional problems: the modern,

judicially created intelligible-principle regime.

Today’s “nondelegation doctrine serves as little more

than an open gate for the delegation of legislative

power—even if the sign above the gate declares the

opposite.” Id. at 1091. It is long past time to close and

padlock it. This case provides an ideal vehicle to make

clear “th[e] mutated version of the ‘intelligible

principle’ remark” in J.W. Hampton, Jr., & Co. v.

United States, 276 U.S. 394 (1928), that forms the

17

basis of the modern “intelligible principle” test “has no

basis in the original meaning of the Constitution, in

history, or even in the decision from which it was

plucked.” Gundy, 139 S. Ct. at 2139 (Gorsuch, J.,

dissenting); see Hamburger, 91 Geo. Wash. L. Rev. at

1095 (“[T]he current nondelegation doctrine has no

originalist foundation.”).

This Court should clearly announce the end of this

failed experiment. After all, “[a]lthough this Court

since 1928 has treated the ‘intelligible principle’

requirement as the only constitutional limit on

congressional grants of power to administrative

agencies, the Constitution does not speak of

‘intelligible principles.’ Rather, it speaks in much

simpler terms: ‘All legislative Powers herein granted

shall be vested in a Congress.’” Whitman, 531 U.S. at

487 (Thomas, J., concurring) (quoting U.S. Const. art.

I, § 1). While the “doctrine long seemed acceptable

while the shift of legislative and judicial powers to the

executive was moderated by political restraint,” “such

restraint has been thrown to the winds[.]”

Hamburger, 91 Geo. Wash. L. Rev. at 1093. And “a

constitutional reckoning cannot be put off

indefinitely.” Id. at 1094. Why wait?

C. Line-Drawing Questions Cannot Justify

Ignoring the Constitution’s Demands.

Nor should line-drawing challenges stand in the

way of enforcing the Constitution’s bar against

subdelegation of legislative power. “Strictly speaking,

there is no acceptable delegation of legislative power.”

Mistretta v. United States, 488 U.S. 361, 419–20

(1989) (Scalia, J., dissenting). This raises the question

what is “legislative power” that Congress may not

18

delegate.10 To be sure, “[t]he line has not been exactly

drawn” between “important subjects, which must be

entirely regulated by the legislature itself” and

matters of “less interest” that Congress can delegate

to others “to fill up the details.” Wayman, 23 U.S. (10

Wheat.) at 43. And “the hard question is how to specify

clearly—at least, as clearly as possible—what power

the Congress can and cannot assign to others.” Ronald

A. Cass, Separating Powers in the Administrative

State: Understanding Delegation, Discretion, and

Deference, C. Boyden Gray Center for the Study of the

Administrative State Research Paper No. 23-22, at 36

(Sept. 20, 2023).11 Indeed, “[i]t may never be possible

perfectly to distinguish between legislative and

executive power[.]” Ass’n of Am. R.R., 575 U.S. at 86

(Thomas, J., concurring).

10 “When it came to the legislative power, the framers understood

it to mean the power to adopt generally applicable rules of

conduct governing future actions by private persons[.]” Gundy,

139 S. Ct. at 2133 (Gorsuch, J., dissenting); see Federalist No. 75

(Hamilton). “[T]he core of the legislative power that the Framers

sought to protect from consolidation with the executive is the

power to make ‘law’ in the Blackstonian sense of generally

applicable rules of private conduct.” Ass’n of Am. R.R., 575 U.S.

at 76 (Thomas, J., concurring in the judgment); see also Aaron

Gordon, Nondelegation Misinformation: A Reply to the Skeptics,

75 Baylor L. Rev. 152, 158 (2023) (“The original meaning of

‘legislative power’ was the authority to issue ‘rule[s] of civil

conduct . . . commanding what’ a polity’s citizens ‘are to do, and

prohibiting what they are to forbear[.]’” (quoting Noah Webster,

An American Dictionary of the English Language (New York, S.

Converse 1828) (defining “law”)).

11 https://administrativestate.gmu.edu/wpcontent/uploads/2023/08/23-22_Cass-1.pdf.

19

“But the inherent difficulty of line-drawing is no

excuse for not enforcing the Constitution.” Id. at 61

(Alito, J., concurring); see id. at 86 (Thomas, J.,

concurring). Cf. Federalist 78 (Hamilton) (Courts

“duty it must be to declare all acts contrary to the

manifest tenor of the Constitution void.”). And “the

difficulty of the inquiry doesn’t mean it isn’t worth the

effort.” Nichols, 784 F.3d at 671 (Gorsuch, J.,

dissenting from denial of rehearing en banc).

No matter the difficulty of the task, the Judiciary

is dutybound to search for the line and could do so on

a case-by-case basis. Cf. Allstates, 79 F.4th at 789

(Nalbandian, J., dissenting) (finding nondelegation

violation); United States v. Pheasant, No. 21-cr-00024,

2023 U.S. Dist. LEXIS 72572, at *19-22 (D. Nev. Apr.

26, 2023) (unpublished) (same). More than sufficient

ink has been spilled to allow this Court to articulate

judicially manageable standards.12 See, e.g.,

Hamburger, 91 Geo. Wash. L. Rev. 1083; The

Administrative State Before the Supreme Court:

Perspectives on the Nondelegation Doctrine (Peter J.

Wallison & John Yoo eds. 2022); Cass, supra; see West

Virginia v. EPA, 142 S. Ct. at 2625 n.11 (Gorsuch, J.,

concurring) (collecting scholarship). This case

provides an ideal vehicle to do so.

12 As Paul Larkin has suggested, there may well be “multiple

nonexclusive” nondelegation principles that, if enforced, would

“force Congress to do its job, to prevent the President from doing

Congress’s work, and to avoid taking on that responsibility

themselves.” Paul Larkin, Revitalizing the Nondelegation

Doctrine, 23 Federalist Soc’y Rev. 238, 263 (2022).

20

The sky will not fall if this Court enforces the

Constitution’s demands. Common strawman critiques

advanced by proponents of the administrative state—

“Congress is incapable of acting quickly in response to

emergencies” and “modern society is too complex to be

run by legislators”—are constitutionally irrelevant

and, in any event, lack merit on their own terms. See

Tiger Lily, 5 F.4th at 674–75 (Thapar, J., concurring).

V.

The FCC’s Subdelegation of Congress’s

Legislative and Taxing Powers to a

Private Company Run By Industry

Insiders Independently Warrants Review.

This Court should grant the Petition for a second

reason: “This case presents a fundamental question

about the limits on the Federal Government’s

authority to delegate its powers to private actors.”

Texas v. Commissioner, 142 S. Ct. at 1308 (statement

of Alito, J., respecting denial of certiorari).

“A cardinal constitutional principle is that federal

power can be wielded only by the federal government.”

Nat’l Horsemen’s Benevolent & Protective Ass’n v.

Black, 53 F.4th 869, 872 (5th Cir. 2022). “To ensure

the Government remains accountable to the public, it

cannot delegate regulatory authority to a private

entity.”13 Texas v. Commissioner, 142 S. Ct. at 1309

13 “[W]hen an agency delegates power to outside parties, lines of

accountability may blur, undermining an important democratic

check on government decision-making. . . . [S]ubdelegation to

outside entities aggravates the risk of policy drift inherent in any

principal-agent relationship.” United States Telecom Ass’n v.

FCC, 359 F.3d 554, 565–66 (D.C. Cir. 2004) (cleaned up).

21

(statement of Alito, J., respecting denial of certiorari)

(cleaned up); see Ass’n of Am. R.Rs. v. U.S. Dep’t of

Transp., 721 F.3d 666, 670 (D.C. Cir. 2013) (“Federal

lawmakers cannot delegate regulatory authority to a

private entity.”), vacated and remanded on other

grounds, 575 U.S. 43 (2015); see also Ass’n of Am.

R.Rs., 575 U.S. at 61 (Alito, concurring) (“Even the

United States accepts that Congress cannot delegate

regulatory authority to a private entity.” (cleaned

up)). “This is legislative delegation in its most

obnoxious form; for it is not even delegation to an

official or an official body[.]”Carter Coal, 298 U.S. at

311. And “there is not even a fig leaf of constitutional

justification” for it. Ass’n of Am. R.Rs., 575 U.S. at 62

(Alito, J., concurring).

To the contrary, the Vesting Clauses categorically

bar private parties from exercising government

power. See id. at 87–88 (Thomas, J., concurring in the

judgment). This “nondelegation principle serves both

to separate powers as specified in the Constitution

and to retain power in the governmental Departments

so that delegation does not frustrate the

constitutional design.” Pittston Co. v. United States,

368 F.3d 385, 394 (4th Cir. 2004).

Put simply, as Justice Thomas has explained:

Because a private entity is neither

Congress, nor the President or one of his

agents, nor the Supreme Court or an

inferior court established by Congress,

the Vesting Clauses would categorically

preclude it from exercising the

22

legislative, executive, or judicial powers

of the Federal Government.14

Ass’n of Am. R.Rs., 575 U.S. at 87–88 (concurring in

judgment).

“Congress defies this basic safeguard by vesting

government power in a private entity not accountable

to the people.” Nat’l Horsemen’s, 53 F.4th at 872–73.

And a fortiori an administrative body cannot transfer

government power to a private party. After all,

“[a]gencies may play the sorcerer’s apprentice but not

the sorcerer himself.” Alexander v. Sandoval, 532 U.S.

275, 291 (2001). But that is what the FCC has done

here. See Pet. App. 13a. The FCC’s broad redelegation

of its authority to administer the USF to a private

company populated with industry representatives “is

uniquely offensive to the Constitution—and

unsupported by precedent—for three reasons: (1) It

subdelegates substantive lawmaking power, rather

than some minor factual determination or ministerial

task; (2) the subdelegation is authorized by an

administrative agency, rather than by Congress; and

(3) the agency is subdelegating power to a private

entity.” Rettig, 993 F.3d at 410 (Ho, J., dissenting from

denial of rehearing en banc). This should not stand.

Founding-era practice appears to be in accord. See Aditya

Bamzai, Tenure of Office and the Treasury: The Constitution and

Control over National Financial Policy, 1787 to 1867, 87 Geo.

Wash. L. Rev. 1299, 1386 (2019); Jennifer Mascott, Private

Delegation Outside of Executive Supervision, 45 Harv. J.L. &

Pub. Pol’y 837, 925 (2022).

14

23

CONCLUSION

This Court should grant the Petition.

Respectfully submitted,

Michael Pepson

Counsel of Record

AMERICANS FOR PROSPERITY FOUNDATION

4201 Wilson Blvd., Ste. 1000

Arlington, VA 22203

(571) 329-4529

mpepson@afphq.org

Counsel for Amicus Curiae

November 30, 2023