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

Nos. 24-354, 24-422

In the

Supreme Court of the United States

FEDERAL COMMUNICATIONS COMMISSION, et al.,

Petitioners,

v.

CONSUMERS’ RESEARCH, et al.,

Respondents.

SCHOOLS, HEALTH & LIBRARIES

BROADBAND COALITION, et al.,

Petitioners,

v.

CONSUMERS’ RESEARCH, et al.,

Respondents.

On Writs of Certiorari to the United States

Court of A ppeals for the Fifth Circuit

BRIEF OF REASON FOUNDATION

AS AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

A lexander Volokh

Counsel of Record

Emory University

School of Law

1301 Clifton Road NE

Atlanta, GA 30322

(404) 727-5225

avolokh@emory.edu

Attorney for Amicus Curiae

336048

A

(800) 274-3321 • (800) 359-6859

i

TABLE OF CONTENTS

Page

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . i

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . . iv

INTEREST OF AMICUS CURIAE . . . . . . . . . . . . . . . . 1

SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . 1

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

I.

The Fifth Circuit Was Right for the Wrong

Reason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

II. There Is No “Private Nondelegation

Doctrine” (Nor Should There Be) . . . . . . . . . . . . 7

A. This Court Has Repeatedly Upheld

Private Delegations . . . . . . . . . . . . . . . . . . . . 8

B. This Court Has Been Right to Treat

P ubl ic a nd P r ivat e Delegat ions

Equivalently . . . . . . . . . . . . . . . . . . . . . . . . . 11

C. Schechter Poultry and Carter Coal Do

Not Support a Private Nondelegation

Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

III. USAC’s Exercise of Government Power

Is Unconstitutional Because Its Members

Weren’t Appointed Consistently with

the Appointments Clause . . . . . . . . . . . . . . . . . . 13

ii

Table of Contents

Page

A. Whether the Appointments Clause

Applies Is Governed by a Simple

Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

B. Whether the Members of USAC Are

Part of the Structure of the Federal

Government Is Irrelevant . . . . . . . . . . . . . . 16

IV. USAC’s Exercise of Power Violates the

Due Process Clause Because There Is

No Protection Against USAC Members’

Self-Interested Bias . . . . . . . . . . . . . . . . . . . . . . . 18

A. Basic Due Process Principles Prevent

Self-Interested Parties, Whether

P ublic or P r ivat e, f rom Hav ing

Coercive Power over the Rights of

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

B. USAC’s Composition Introduces

the Possibility of Self-Interested

Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

V.

Getting the Doctrinal Basis Right Is

Important . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

A. The Various Doctrines Serve Different

Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

iii

Table of Contents

Page

B. The Var ious Doctr ines Apply to

Different Entities and Have Different

Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

C. The Appointments and Due Process

Theories Don’t Require Any PublicPrivate Inquiry . . . . . . . . . . . . . . . . . . . . . . . 25

VI. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

iv

TABLE OF CITED AUTHORITIES

Page

Cases

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

295 U.S. 495 (1935) . . . . . . . . . . . . . . . . . . . . . . 8, 11, 12

Aetna Life Ins. Co. v. Lavoie,

475 U.S. 813 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Am. Mfrs. Mut. Ins. Co. v. Sullivan,

526 U.S. 40 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Ass’n of Am. R.R.s v. U.S. DOT,

721 F.3d 666 (D.C. Cir. 2013) . . . . . . . . . . . . . . . . . . . 23

Auffmordt v. Hedden,

137 U.S. 310 (1890) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Bivens v. Six Unknown Named Agents

of Federal Bureau of Narcotics,

403 U.S. 388 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Bowsher v. Synar,

478 U.S. 714 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Buckley v. Valeo,

424 U.S. 1 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 17

Butte City Water Co. v. Baker,

196 U.S. 119 (1905) . . . . . . . . . . . . . . . . . . . . . . . . . 9, 11

v

Cited Authorities

Page

Buttfield v. Stranahan,

192 U.S. 470 (1904) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Carter v. Carter Coal Co.,

298 U.S. 238 (1936) . . . . . . . . . . . . . . . . . . . 8, 12, 13, 19

Chrysafis v. Marks,

141 S. Ct. 2482 (2021) . . . . . . . . . . . . . . . . . . . . . . . . . 20

Concrete Pipe & Prods. of Cal., Inc. v.

Construction Laborers Pension Trust for S. Cal.,

508 U.S. 602 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Connally v. Georgia,

429 U.S. 245 (1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Consumers’ Research v. FCC,

109 F.4th 743 (5th Cir. 2024) . . . . 3, 7, 8, 15, 21, 22, 29

Currin v. Wallace,

306 U.S. 1 (1939) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10

DOT v. Ass’n of Am. R.R.s,

575 U.S. 43 (2015) . . . . . . . . . . . . . . . . . . . . . . . 7, 26, 29

Edmonson v. Leesville Concrete Co., Inc.,

500 U.S. 614 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Eubank v. City of Richmond,

226 U.S. 137 (1912) . . . . . . . . . . . . . . . . . . . . . . . . 13, 19

vi

Cited Authorities

Page

Free Enter. Fund v. PCAOB,

561 U.S. 477 (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Fuentes v. Shevin,

407 U.S. 67 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Gibson v. Berryhill,

411 U.S. 564 (1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Haw. Housing Auth. v. Midkiff,

467 U.S. 229 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

In re Murchison,

349 U.S. 133 (1955) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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

276 U.S. 394 (1928) . . . . . . . . . . . . . . . . . . . . . . . . . 8, 10

Jackson v. Metro. Edison Co.,

419 U.S. 345 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Lebron v. National Railroad Passenger Corp.,

513 U.S. 374 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Marshall v. Jerrico,

446 U.S. 238 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Miller v. Schoene,

276 U.S. 272 (1928) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

vii

Cited Authorities

Page

Mistretta v. United States,

488 U.S. 361 (1989) . . . . . . . . . . . . . . . . . . . . . . . . 11, 13

Mitchell v. W.T. Grant Co.,

416 U.S. 600 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

N. Ga. Finishing, Inc. v. Di-Chem, Inc.,

419 U.S. 601 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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

Black,

53 F.4th 869 (5th Cir. 2022) . . . . . . . . . . . . . . . . . . . . . 7

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

Black,

107 F.4th 415 (5th Cir. 2024) . . . . . . . . . . . . . . 7, 23, 27

New Motor Vehicle Bd. of Calif. v.

Orrin W. Fox Co.,

439 U.S. 96 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Sniadach v. Family Finance Corp. of Bay View,

395 U.S. 337 (1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

St. Louis, Iron Mountain, & S. Ry. Co. v. Taylor,

210 U.S. 281 (1908) . . . . . . . . . . . . . . . . . . . . . . 9, 10, 11

Synar v. United States,

626 F. Supp. 1374 (D.D.C. 1986) . . . . . . . . . . . . . . . . . 13

viii

Cited Authorities

Page

Texas v. Rettig,

993 F.3d 408 (5th Cir. 2021) . . . . . . . . . . . . . . . . . . . . 28

Tumey v. Ohio,

273 U.S. 510 (1927) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

United States v. Arthrex, Inc.,

141 S. Ct. 1970 (2021) . . . . . . . . . . . . . . . . . . . . . . . . . 18

United States v. Germaine,

99 U.S. 508 (1879) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

United States v. Hartwell,

73 U.S. (6 Wall.) 385 (1867) . . . . . . . . . . . . . . . . . . . . .14

United States v. Maurice,

26 F. Cas. 1211 (C.C.D. Va. 1823) (No. 15,747) . . . . . 17

United States v. Mazurie,

419 U.S. 544 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

United States v. Rock Royal Co-op., Inc.,

307 U.S. 553 (1939) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Washington ex rel. Seattle Title Trust Co. v.

Roberge,

278 U.S. 116 (1928) . . . . . . . . . . . . . . . . . . . . . . . . 13, 19

Whitman v. Am. Trucking Ass’ns, Inc.,

531 U.S. 457 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ix

Cited Authorities

Page

Constitutional Provisions

U.S. Const. amend. I . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

U.S. Const. amend. V . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

U.S. Const. amend. XIV . . . . . . . . . . . . . . . . . . . . . . . . . 25

U.S. Const. art. I . . . . . . . . . . . . . . . . . . . . . . 2, 8, 9, 11, 25

U.S. Const. art. II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 25

U.S. Const. art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 18

Statutes, Rules and Regulations

42 U.S.C. § 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 25

47 C.F.R. § 54.703(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

47 C.F.R. § 54.703(b)(1)-(6) . . . . . . . . . . . . . . . . . . . . . . . 21

47 C.F.R. § 54.703(b)(7)-(10) . . . . . . . . . . . . . . . . . . . . . . 21

47 C.F.R. § 54.703(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

47 C.F.R. § 54.709(a)(3) . . . . . . . . . . . . . . . . . . . . . 15, 22, 23

47 C.F.R. § 54.711(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 27

x

Cited Authorities

Page

Other Authorities

Officers of the United States Within the Meaning

of the Appointments Clause, 31 Op. OLC 73

(2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 17

Alexander Volokh, The Myth of the Federal Private

Nondelegation Doctrine, 99 Notre Dame L.

Rev. 203 (2023) . . . . . . . . . . . . . . . . . . . . . . . 8, 12, 18, 19

Alexander Volokh, The New Private-Regulation

Skepticism: Due Process, Non-Delegation,

and Antitrust Challenges, 37 Harv. J.L. &

Pub. Pol’y 931 (2014) . . . . . . . . . . . . . . . . . . . . . . . . . . 23

1

INTEREST OF AMICUS CURIAE1

Reason Foundation (“Reason”) is a national,

nonpartisan, and nonprofit public policy think tank,

founded in 1978. Reason’s mission is to advance a free

society by applying and promoting libertarian principles

and policies—including free markets, individual liberty,

and the rule of law. Reason supports dynamic marketbased public policies that allow and encourage individuals

and voluntary institutions to flourish. Reason advances

its mission by publishing Reason Magazine, online

commentary, and policy research reports. To further

Reason’s commitment to “Free Minds and Free Markets,”

Reason selectively participates as amicus curiae in cases

raising significant constitutional issues.

SUMMARY OF ARGUMENT

1.

Respondents are correct on the bottom line, and so

was the en banc Fifth Circuit: the administration of

the Universal Service Fund (USF) Tax mechanism

is unconstitutional. But the Fifth Circuit got it

right for the wrong reason. The problem is not

that the FCC’s reliance on the Universal Service

Administrative Company (USAC) as administrator of

the USF violates the “private nondelegation doctrine.”

Rather, the problem is twofold: (1) The arrangement

violates the Appointments Clause, because the USAC

members can exercise significant governmental power

1. No counsel for a party authored this brief in whole or in

part, and no such counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief.

No person other than the amicus curiae made a monetary

contribution to its preparation or submission.

2

under federal law without having gone through the

proper appointment process. (2) The arrangement

violates the Due Process Clause, because various

members of USAC have an interest in the contribution

amounts they project.

2.

The Fifth Circuit was wrong that the FCC’s reliance

on USAC violates the “private nondelegation

doctrine.” There is no such doctrine. The idea that

delegations of power to private parties are judged

by a stricter standard than delegations to public

parties has no support in any holdings of this Court.

Any decisions that seem to the contrary have either

been misinterpreted or were in fact based on other

doctrines, like the Due Process Clause. And the

lack of such a doctrine makes sense, because the

nondelegation doctrine, which is rooted in Article

I, is aimed at controlling Congress; it sensibly asks

whether Congress has given up too much power, not

who the recipient of such power is.

Assuming that the FCC is authorized to subdelegate

to USAC, that subdelegation should be judged by the

same standard as a subdelegation to a public body.

(Amicus takes no position here on the statutory issue,

or on whether the subdelegation to USAC would

survive under the public-delegation standard.)

3.

USAC exercises substantial federal power, because

its projections go into effect automatically if the FCC

does nothing within 14 days, and this determines the

amount and distribution of the tax. This makes the

members of USAC Officers of the United States. But

because they weren’t appointed as Officers in the way

3

that Article II requires, this arrangement violates the

Appointments Clause.

That USAC members are nominally private is

unimportant for Officer status. The labeling of USAC

as private, and the fact that USAC is organized

as a private organization under Delaware law,

are constitutionally irrelevant, and in any event

Appointments Clause doctrine doesn’t demand that

an Officer formally be a public employee.

4.

The Fifth Circuit was right to point out that there is

a conflict of interest inherent in having USAC—which

contains members of telecommunications companies,

“who stand to benefit financially when universal

service subsidies grow”—determine contribution

amounts. Consumers’ Research v. FCC, 109 F.4th

743, 772 (5th Cir. 2024). But this problem should be

located in the Due Process Clause, not in a private

nondelegation doctrine. The Due Process Clause has

for a century been interpreted to bar exercises of

regulatory power by self-interested parties, whether

public or private.

5.

The distinction between the “private nondelegation

doctrine,” the Appointments Clause, and the Due

Process Clause, isn’t just of academic interest.

First, the doctrines are motivated by different

theories. The nondelegation doctrine is giver-focused,

asking whether Congress has given up too much

power; the public-private question fits poorly with

this concern. By contrast, the Appointments Clause

is recipient-focused, asking, from a democratic

accountability perspective, whether the recipient

4

of major power has been validly authorized by the

proper political process. And the Due Process Clause

is application-focused, asking whether the use of the

power implicates fairness concerns. The problem here

fits more naturally with the Appointments Clause and

Due Process issues.

Second, the doctrines apply in different contexts

and have different remedies. For instance, a Due

Process theory (unlike the nondelegation doctrine

or the Appointments Clause) would apply even

if this were a state regulatory scheme. It could

also support damages under 42 U.S.C. § 1983 or

Bivens v. Six Unknown Named Agents of Federal

Bureau of Narcotics, 403 U.S. 388 (1971). And an

Appointments Clause theory asks whether someone

is “exercising significant authority pursuant to the

laws of the United States.” Thus, an Appointments

Clause approach will turn on how much power the

agent exercises, ignoring trivial cases and requiring

political accountability for significant ones. This is

a sensible approach—otherwise, countless private

delegations could be indiscriminately invalidated,

from qui tam suits to private prison contracting to

incorporation of private actuarial standards into

healthcare regulation. Whether these are valid should

depend on an inquiry into “significant authority.”

Third, a private nondelegation doctrine requires

tough judgment calls about whether an organization

is public or private, so the results will depend on the

vagaries of public-private doctrines like the State

Action Doctrine. (Indeed, it is not at all obvious that

USAC is actually private here.) By contrast, the

Appointments Clause and Due Process Clause depend

5

on functional questions, such as whether significant

power exists and whether there is a danger that it will

be used self-interestedly. In today’s world of hybrid

public-private organizations and nominally private

organizations wielding coercive power, it makes more

sense to rely on doctrines that do not hinge on formal

public-private categorization.

6.

Therefore, if this Court invalidates this regulatory

scheme, it should do so on Due Process and/or

Appointments Clause grounds. Regardless, this

Court should not endorse any “private nondelegation

doctrine” theory. (Amicus takes no position here

on the ordinary nondelegation doctrine theory that

the Fifth Circuit relied on to invalidate the initial

delegation from Congress to the FCC. Amicus merely

disagrees with the “private nondelegation doctrine.”)

ARGUMENT

I.

The Fifth Circuit Was Right for the Wrong Reason.

The en banc Fifth Circuit was right was that the

administration of the USF Tax is unconstitutional.

However, it was wrong to rely on the private nondelegation

doctrine, which, as discussed in Part II infra, has no

basis in any decisions of this Court and is also ill-advised

on its own merits. The involvement of USAC is indeed

constitutionally problematic, but for different reasons,

both of which were hinted at in the Fifth Circuit’s opinion

(though without naming the proper doctrines).

First, as discussed in Part III infra, USAC exercises

significant federal power: its projections and contribution

6

factor are “deemed approved” if the FCC takes no action

on them within fourteen days, and then that factor is used

to calculate contributors’ taxes. This is enough to make

USAC’s members Officers of the United States, who must

be appointed according to the methods specified in the

Appointments Clause. Because they were not so appointed,

this arrangement violates the Appointments Clause.

Second, as discussed in Part IV infra, USAC is

composed of members that have a financial interest in their

projections of how much it will cost to achieve universal

service. Some represent telecommunications carriers;

some represent beneficiaries of projects that can be funded

by the USF. This is enough to make USAC’s control over

the amount of taxes a violation of the Due Process Clause.

This is not some purely academic exercise in doctrinal

categorization: as discussed in Part V infra, the different

theories differ in their purpose, in what remedies are

available, in whether they apply only against federal

entities or also against state entities, and in whether they

require a difficult threshold public-private inquiry.

Finally, as discussed in Part VI infra, it is true that

the Fifth Circuit did not rule on the Due Process and

Appointments Clause theories. But there are various

ways this Court could respond to the concerns raised in

this brief; amicus takes no position on which is preferable.

This Court could, for instance, (1) invalidate the

system as having no “intelligible principle” solely on the

basis of Congress’s delegation to the FCC (making no

reference to FCC’s subdelegation to USAC); (2) invalidate

the FCC’s subdelegation to USAC solely based on the Fifth

7

Circuit’s statutory argument, see Consumers’ Research,

109 F.4th at 774-77; (3) hold that USAC is actually public

because determining the amount and incidence of a tax is

a “traditionally exclusive public function” and therefore

state action, similarly to its holding in DOT v. Ass’n of

Am. R.R.s, 575 U.S. 43, 55 (2015); (4) reject both the

public and private nondelegation challenges and remand

to the Fifth Circuit for analysis under the Due Process

and Appointments Clauses; or (5) reject both the public

and private nondelegation challenges, note that there

are plausible Due Process and Appointments Clause

arguments that remain open, and leave those arguments

for another day.

In any event, this Court should not establish bad

precedent by endorsing a private nondelegation doctrine

that has no support in the prior decisions of this Court

and that is ill-advised on its own merits.

II. There Is No “Private Nondelegation Doctrine” (Nor

Should There Be).

The Fifth Circuit held that the Constitution bars

delegations of governmental power to private bodies.

Consumers’ Research, 109 F.4th at 768-70; see also Nat’l

Horsemen’s Benevolent & Protective Ass’n v. Black, 53

F.4th 869, 880-90 (5th Cir. 2022) (Horsemen I); Nat’l

Horsemen’s Benevolent & Protective Ass’n v. Black, 107

F.4th 415, 423-35 (5th Cir. 2024) (Horsemen II). Because

the FCC subdelegated some of its power to USAC, a

private organization, this private subdelegation—if

not itself unconstitutional—at least contributed to

the unconstitutionality of the USF Tax at issue here.

Consumers’ Research, 109 F.4th at 770-73.

8

The Fifth Circuit purported to find this private

nondelegation principle in two of this Court’s precedents:

A.L.A. Schechter Poultry Corp. v. United States, 295 U.S.

495 (1935), and Carter v. Carter Coal Co., 298 U.S. 238

(1936). Consumers’ Research, 109 F.4th at 768-69.

But, as explained below, this Court’s precedents

don’t support any private nondelegation doctrine that

is stricter than the ordinary nondelegation doctrine

that applies to federal agencies. See also Alexander

Volokh, The Myth of the Federal Private Nondelegation

Doctrine, 99 Notre Dame L. Rev. 203, 229-33 (2023).

USAC’s powers are indeed unconstitutional, but—as

explained in Parts III and IV infra—the problem lies in

the Appointments Clause and the Due Process Clause,

not in the nondelegation doctrine.

A.

This Court Has Repeatedly Upheld Private

Delegations.

Delegations of authority are ubiquitous in government;

the Article I Vesting Clause merely bars delegations of

legislative power. What makes a permissible delegation of

authority into a forbidden delegation of legislative power

is the lack of an “intelligible principle.” J.W. Hampton, Jr.,

& Co. v. United States, 276 U.S. 394, 409 (1928). However,

Fifth Circuit caselaw holds that private entities are

subject to a more stringent doctrine, under which private

actors must never have final decisionmaking authority

and must always be supervised by a governmental actor.

Consumers’ Research, 109 F.4th at 769-70.

But this Court has never invalidated a delegation to

private parties under any version of the nondelegation

9

doctrine, and certainly has never stated any version that

resembles the Fifth Circuit’s strong private nondelegation

doctrine. On the contrary, it has upheld delegations to

private parties against nondelegation challenges at least

four times. See Butte City Water Co. v. Baker, 196 U.S.

119 (1905); St. Louis, Iron Mountain, & S. Ry. Co. v.

Taylor, 210 U.S. 281 (1908); Currin v. Wallace, 306 U.S. 1

(1939); United States v. Rock Royal Co-op., Inc., 307 U.S.

553 (1939). (The Fifth Circuit was thus quite wrong to

state, “Only four times has the Supreme Court considered

whether a delegation to private entities violates Article I’s

Vesting Clause.” Consumers’ Research, 109 F.4th at 769.

Its listing of four cases manages to omit three of the four

cases listed above.)

In two of those cases—Butte City Water and Rock

Royal—this Court simply upheld the delegation without

much discussion. In Butte City Water, this Court upheld

the power of Congress, as part of its power to make

regulations for public lands, to delegate rulemaking

authority to miners in local mining districts. 196 U.S. at

125-26. And in Rock Royal, this Court upheld the power

of agricultural producers or handlers to vote on whether

certain agricultural marketing orders would go into effect.

307 U.S. at 577-78.

Two other times—in St. Louis Railway and Currin—

this Court went even further, and upheld the delegation

by explicitly analogizing it to a similar case where the

delegation was to the President or an executive official:

• St. Louis Railway concerned a nondelegation

challenge to a statute that authorized the

American Railway Association, a private

group, to “designate to the Interstate

10

Commerce Commission the standard

height of draw bars for freight cars.” 210

U.S. at 286. The ICC was then directed

to promulgate that height as law. Id. This

Court upheld the delegation to the American

Railway Association simply by appealing

to the precedent of Buttfield v. Stranahan,

192 U.S. 470 (1904), which had upheld a

delegation of tea-inspecting authority to

the Secretary of the Treasury; this Court

wrote that the public-delegation Buttfield

case, “in principle, is completely in point.”

St. Louis Railway, 210 U.S. at 287.

• Cur r in concerned a challenge to the

Tobacco Inspection Act of 1935. The Act

authorized the Secretary of Agriculture to

establish uniform standards for tobacco, and

designate tobacco markets where no tobacco

could be sold unless it was inspected and

certified according to those standards. But

the Secretary couldn’t designate a market

unless two-thirds of the growers in that

market voted in favor of the designation in

a referendum. Industry members thus held

an “on-off” power to decide whether certain

predetermined regulations would go into

effect. This Court upheld the delegation

to industry members by analogizing it to a

delegation to the President of the power to

set equalizing tariffs, which had been upheld

in J.W. Hampton; see Currin, 306 U.S. at 16.

This Court concluded that the delegation

of the on-off power was not a forbidden

“delegation of legislative authority.”

11

This Court upheld both of these delegations—

concluding that they were not delegations of legislative

power—without even mentioning the difference between

public and private status, and indeed by relying on publicdelegation precedents. Thus, in those cases, this Court

cannot have endorsed any special nondelegation principle

that would apply more strictly against private delegates—

quite to the contrary.

Butte City Water and St. Louis Railway were even

explicitly cited in Schechter Poultry as examples of cases

where private delegation would be constitutional. 295

U.S. at 537 nn.14-15. No later case has taken a contrary

approach.

B. This Court Has Been Right to Treat Public and

Private Delegations Equivalently.

And this is the correct rule: because the nondelegation

doctrine is rooted in the Article I Vesting Clause, it

is about controlling Congress; the question is whether

Congress has given away too much power. The focus is on

how much power Congress has given away (i.e., whether

the delegation is adequately constrained), not on who is

the recipient of such power.

Thus, though this Court’s nondelegation doctrine cases

have usually concerned executive officials or agencies,

they have also concerned the judiciary, see Mistretta,

Indian tribes, see United States v. Mazurie, 419 U.S. 544

(1975), and (as discussed above) private parties. Indeed,

Congress’s dynamic incorporation of state law in many

areas is a sort of delegation to state legislatures, which,

by altering their tort law or definitions of marriage, affect

12

the scope of the federal government’s sovereign immunity

or the amount of federal taxpayers’ liability.

There are indeed constitutional problems with USAC’s

rulemaking power, but those problems are properly

located in the Appointments Clause or the Due Process

Clause, not in the nondelegation doctrine.

C.

Schechter Poultry and Carter Coal Do Not

Support a Private Nondelegation Doctrine.

Though the Fifth Circuit purported to rely on

Schechter Poultry and Carter Coal, neither of these cases

is on point. See Volokh, supra, at 233-36.

Schechter Poultry did not involve any delegation to

private parties: the only power involved in the case was

the President’s power to adopt codes of fair competition—

which private industries were merely allowed to propose.

So this Court cannot possibly have held anything relevant

to private delegations. (Respondents characterize

Schechter Poultry as involving “a dual-layer delegation—

which involved private parties, too,” Br. for Resps. at 89,

but this is incorrect.) It is true that, in dictum, this Court

denied that Congress could give unrestricted power to

industry. 295 U.S. at 537. But then it went on to strike

down the challenged statute on the ground that it gave

unrestricted power to the President. Id. at 537-42. So,

if anything, Schechter Poultry stands for the rule that

Congress cannot give anyone unrestricted power; it does

not support any rule that would treat private and public

delegations differently.

13

As for Carter Coal, that case is most properly

characterized as a Due Process case: the problem

there was that power to regulate wages and prices was

delegated to self-interested groups of competitors. Carter

Coal thus fits naturally into a line of Due Process cases

stretching back to Eubank v. City of Richmond, 226 U.S.

137 (1912), and Washington ex rel. Seattle Title Trust Co.

v. Roberge, 278 U.S. 116 (1928), disapproving of coercive

power being wielded by financially self-interested parties.

This Court has repeatedly declined to classify Carter Coal

as a nondelegation doctrine case. See Mistretta v. United

States, 488 U.S. 361, 373 (1989); Whitman v. Am. Trucking

Ass’ns, Inc., 531 U.S. 457, 474 (2001); cf. Synar v. United

States, 626 F. Supp. 1374, 1383 n.8 (D.D.C. 1986) (Scalia,

J.), aff’d sub nom. Bowsher v. Synar, 478 U.S. 714 (1986).

T he Due P rocess concer ns here a re i ndeed

substantial—see Part IV infra. But Carter Coal does

not contribute much to an argument based on the

nondelegation doctrine. And even if Carter Coal were

considered a nondelegation doctrine case, its holding

could be explained in very conventional terms: because

the delegation to industry was unrestricted, it would

have been unconstitutional under the ordinary rule that

delegations require an “intelligible principle.”

III. USAC’s Exercise of Gover nment Power Is

Unconstitutional Because Its Members Weren’t

Appointed Consistently with the Appointments

Clause.

USAC exercises significant federal power: USAC’s

projections and contribution factor are “deemed approved”

if the FCC takes no action on them within fourteen days,

14

and then that factor is used to calculate contributors’

taxes. Because of this, USAC’s members are Officers of

the United States. This is so whether USAC is public or

private and whether its members are formally part of the

federal government.

If USAC members are principal Officers, their

appointment is necessarily unconstitutional because they

did not go through presidential nomination and Senate

confirmation. But even if USAC members are inferior

officers, their appointment is still unconstitutional: they

are appointed by the FCC Chair, who is not a “Head[] of

Department[]” under the Appointments Clause. See Free

Enter. Fund v. PCAOB, 561 U.S. 477, 511-12 (2010) (the

FCC as a whole is a Head of Department). Even beyond

these clear problems, the appointment of the USAC

members was vested in the Chair not by Congress (as the

Clause requires) but by the FCC itself under 47 C.F.R.

§ 54.703(c)(3). And in any event, the regulation strictly

limits the appointment discretion of the FCC Chair, who

is required to appoint members nominated by particular

groups of constituents under § 54.703(c)(3) (unless “an

industry or non-industry group does not reach consensus

on a nominee or fails to submit a nomination”).

Because USAC’s members weren’t appointed

consistently with the Appointments Clause (and thus did

not take the oath required under Article VI), USAC’s

exercise of power violates the Appointments Clause.

A.

Whether the Appointments Clause Applies Is

Governed by a Simple Test.

In Buckley v. Valeo, 424 U.S. 1, 126 (1976), this

Court held that Officers of the United States are those

15

who “exercis[e] significant authority pursuant to the

laws of the United States.” Other cases establish that,

to be an Officer, one must exercise such authority as a

“continuing and permanent” (rather than “occasional and

intermittent”) matter. See United States v. Hartwell, 73

U.S. (6 Wall.) 385, 393 (1867); United States v. Germaine,

99 U.S. 508, 512 (1879). Officer status is significant,

because only Officers are subject to the requirements of

the Appointments Clause.

By this standard, the members of USAC are

Officers. USAC’s projections and contribution factor

are “deemed approved” if the FCC takes no action on

them within fourteen days. 47 C.F.R. § 54.709(a)(3). At

that point, with a minor exception, USAC is required

to apply that contribution factor to contributors’

telecommunications revenues “to calculate the amount

of individual contributions.” Id. (This in fact happened

in this case. Consumers’ Research, 109 F.4th at 752.) In

other words, USAC can be responsible for a tax going

into effect—and for the amount of tax that individual

contributors must pay—as long as the FCC does nothing,

which could be because it has too much on its plate and

hasn’t gotten around to evaluating whether USAC’s

projections are correct. This power to set a tax is a core

governmental power that isn’t available to ordinary

citizens. And USAC is a continually existing organization.

It is inconceivable that a standing organization with

the power to set the amount of a tax isn’t “exercising

significant authority pursuant to the laws of the United

States.” If the members of USAC were federal employees,

this result wouldn’t be controversial. Any possible

subordination of USAC to the FCC affects, at most,

16

whether USAC members are inferior officers, not whether

they are officers at all.

B. Whether the Members of USAC Are Part of

the Structure of the Federal Government Is

Irrelevant.

The above factors—whether, as a “continuing and

permanent” matter, one “exercis[es] significant authority

pursuant to the laws of the United States”—don’t depend

on whether one is formally within the federal government.

If actors formally outside the federal government

couldn’t count as Officers—and could thus be granted

governmental powers exempt from Appointments Clause

requirements—some classic cases could have been

radically simplified. Consider, for instance, Auffmordt v.

Hedden, 137 U.S. 310 (1890), where an importer challenged

the appointment of an expert merchant appraiser on the

grounds that the appraiser should have been appointed as

an Officer. This Court ruled that the appraiser wasn’t an

Officer and was thus exempt from Appointments Clause

constraints, but it didn’t simply rely on the fact that he

wasn’t a federal employee. Rather, the Court focused on

factors like the tenure, duration, compensation, and duties

of the office, and particularly whether the appraiser’s

duties were “occasional and temporary” or “continuing

and permanent.” None of that discussion would have been

necessary if the Appointments Clause simply didn’t apply

to parties outside the federal governmental structure.

The Office of Legal Counsel (OLC), after canvassing

caselaw and voluminous historical evidence, has also

taken the same view. “[I]t is not within Congress’s

17

power to exempt federal instrumentalities from . . . the

Appointments Clause; . . . Congress may not, for example,

resort to the corporate form as an artifice to evade the

solemn obligations of the doctrine of separation of powers.”

Officers of the United States Within the Meaning of

the Appointments Clause, 31 Op. OLC 73, at *2 (2007)

(cleaned up). A key element in whether one is an Officer

is whether one exercises “delegated sovereign authority,”

which “one could define . . . as power lawfully conferred by

the Government to bind third parties, or the Government

itself, for the public benefit. . . . [S]uch authority primarily

involves the authority to administer, execute, or interpret

the law,” id. at *11, and generally includes “functions

in which no mere private party would be authorized to

engage,” id. at *14.

“A person’s status as an independent contractor,” the

OLC continued, “does not per se provide an exemption

from the Appointments Clause,” id. at *18, though most

contractors turn out to be exempt because they usually

merely provide goods and services rather than wielding

power, and “in most cases . . . their actions . . . have no

legal effect on third parties or the Government absent

subsequent sanction,” id. at *19. Appointments Clause

constraints, OLC stressed, do apply “in those rare cases

where a mere contractor did exercise delegated sovereign

authority (and did so on a continuing basis).” Id. at *20

(citing United States v. Maurice, 26 F. Cas. 1211, 121620 (C.C.D. Va. 1823) (No. 15,747) (Marshall, Cir. Justice)).

Likewise, whether someone is paid by the government isn’t

relevant to whether they are an Officer. Id. at *36-*38.

It is true that this Court has occasionally characterized

Officers as being “appointees,” Buckley, 424 U.S. at

18

126, or implied that they are “functionaries,” id. at 126

n.162; a recent opinion contrasted Officers with “‘lesser

functionaries’ such as employees or contractors,” United

States v. Arthrex, Inc., 141 S. Ct. 1970, 1980 (2021). Even

if these words clearly excluded private parties, the publicprivate question wasn’t at issue in those cases. The vast

majority of cases concern the Officer status of traditional

governmental employees, and so statements assuming

that Officers formally work for the government should

be interpreted with that context in mind; anything those

cases might say about private Officers is dictum. See

Volokh, supra, at 240-47.

Thus, the members of USAC are Officers of the United

States because of their significant authority (i.e., setting

the amount and the distribution of a tax if the FCC doesn’t

act), despite their position outside of the formal structure

of the federal government. They should follow the proper

appointment procedure (and take the oath required of

officers under Article VI).

IV. USAC’s Exercise of Power Violates the Due Process

Clause Because There Is No Protection Against

USAC Members’ Self-Interested Bias.

USAC’s exercise of power also violates the Due

Process Clause, because several of the members of

USAC are self-interested telecommunications industry

participants who can benefit financially from how USAC

sets its projections and contribution factor.

19

A.

Basic Due Process Principles Prevent SelfInterested Parties, Whether Public or Private,

from Having Coercive Power over the Rights

of Others.

The basic Due Process principles that are relevant

here were formulated in a line of cases that began over

a century ago; and though the problem of bias shows up

in a variety of factual settings, the caselaw is consistent.

See Volokh, supra, at 256-59.

In the zoning context, this Court has established that

a legislature may not delegate a power to some property

owners to “virtually control and dispose of the property

rights of others” when they can “do so solely for their own

interest.” Eubank v. City of Richmond, 226 U.S. 137, 14344 (1912); see also Washington ex rel. Seattle Title Trust

Co. v. Roberge, 278 U.S. 116, 121-22 (1928).

In the context of industrial regulation, a “majority”

of industry participants may not “regulate the affairs of

an unwilling minority”: “This is legislative delegation in

its most obnoxious form, for it is not even delegation to

an official or an official body, presumptively disinterested,

but to private persons whose interests may be and

often are adverse to the interests of others in the same

business.” Carter Coal, 298 U.S. at 311. Such a delegation

to self-interested parties clearly violates Due Process

because, “in the very nature of things, one person

may not be entrusted with the power to regulate the

business of another, and especially of a competitor.” Id.

(emphasis added). Carter Coal may not be a useful case

for nondelegation analysis, but it is highly relevant for

Due Process.

20

In the context of creditor remedies like wage

garnishment or prejudgment replevin procedures, a

creditor—obviously a self-interested party—may not

simply freeze a debtor’s wages or seize his goods without

making some showing before a judge. See Sniadach v.

Family Finance Corp. of Bay View, 395 U.S. 337 (1969);

Fuentes v. Shevin, 407 U.S. 67, 80-81, 83, 92-93 (1972); N.

Ga. Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 606-07

(1975). This Court has recently reaffirmed the rule in the

context of landlord-tenant law: the ability of a tenant to

unilaterally stave off eviction by self-certifying financial

hardship, where the landlord has no access to a hearing to

contest that certification, violates the command that “‘no

man can be a judge in his own case.’” Chrysafis v. Marks,

141 S. Ct. 2482, 2482 (2021) (quoting In re Murchison, 349

U.S. 133, 136 (1955)).

This isn’t just a rule against private regulators: the

rule is substantially the same when public actors are

involved. A judge can’t rule on a case if he has a pecuniary

interest in the result. Tumey v. Ohio, 273 U.S. 510 (1927);

Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 825 (1986); see

also Connally v. Georgia, 429 U.S. 245, 250 (1977) (finding

a Due Process violation where a magistrate was paid $5

for each search warrant issued). This principle applies

equally in quasi-judicial proceedings like administrative

adjudications, as when a State Board of Optometry

controlled by independent optometrists tried to revoke the

licenses of corporate-employed optometrists in Gibson v.

Berryhill, 411 U.S. 564, 579 (1973); see also Marshall v.

Jerrico, 446 U.S. 238, 248 (1980). Thus, it does not matter

whether USAC is characterized as private or (because it

wields governmental power) as public.

21

B. USAC’s Composition Introduces the Possibility

of Self-Interested Bias.

The Fifth Circuit pointed out the conflicts of interest

present in the structure of USAC:

Moreover, t he ent it y most responsible

for snuff ing out wasteful or fraudulent

disbursements—USAC—is run almost entirely

by stakeholders who stand to benefit financially

when universal service subsidies grow. And that

is no accident. USAC is run by self-interested

stakeholders because FCC regulations require

it. See 47 C.F.R. § 54.703(b). FCC mandates that

nine of USAC’s nineteen directors represent

companies in the telecommunications industry

who are compensated by the very same USF

funds they raise. See id. § 54.703(b)(1)-(6). It

mandates that another seven represent the

schools, libraries, health care providers, and

low-income consumers who are direct recipients

of USF funds. See id. § 54.703(b)(7)-(10).

Because the telecommunications industry

polices its own compliance with FCC universal

service policy, and responsibility for monitoring

the industry falls most heavily on a board

composed of industry representatives and

consumer groups with a direct financial interest

in the size of USF taxes, private entities have

a far more important and discretionary role in

determining the size of the contribution amount

(which controls the level of universal service

taxation) than FCC would have you believe.

Consumers’ Research, 109 F.4th at 772 (some citations

omitted).

22

The Fifth Circuit placed this discussion in the private

nondelegation doctrine section, writing elsewhere that

the Due Process cases “present a question different

from the one before us.” Id. at 768 n.14. But in fact,

the Fifth Circuit’s observations are relevant to Due

Process. If beneficiaries play a role in determining the

quarterly USF contribution amount under 47 C.F.R.

§ 54.709(a)(3), they have an incentive to overestimate

what will be required to achieve universal service—a

sort of self-dealing akin to tenants’ ability to self-certify

financial hardship, the situation at issue in Chrysafis. If

telecommunications companies play a role, they likewise

have an incentive to inflate the necessary amounts. And if

some telecommunications companies have representatives

and USAC and others don’t, those companies that are

represented on USAC can affect the incidence of the tax on

their competitors by choosing whether and how to verify

contributors’ self-reported revenue projections under 47

C.F.R. § 54.711(a).

This is all the predictable result of giving the power

to determine the tax to people who are financially selfinterested. If the FCC signs off on USAC’s projections and

contribution ratio, there is no Due Process problem: the

involvement of a neutral decisionmaker usually cures any

previous problem of bias. For this reason, Due Process is

not implicated when private parties (even self-interested

ones) merely have the power to set (disinterested) legal

machinery in motion, see, e.g., Miller v. Schoene, 276

U.S. 272, 281 (1928); Mitchell v. W.T. Grant Co., 416 U.S.

600, 616-17 (1974); New Motor Vehicle Bd. of Calif. v.

Orrin W. Fox Co., 439 U.S. 96, 109 (1978); Haw. Housing

Auth. v. Midkiff, 467 U.S. 229, 243 n.6 (1984); Concrete

Pipe & Prods. of Cal., Inc. v. Construction Laborers

23

Pension Trust for S. Cal., 508 U.S. 602, 618-20 (1993). See

generally Alexander Volokh, The New Private-Regulation

Skepticism: Due Process, Non-Delegation, and Antitrust

Challenges, 37 Harv. J.L. & Pub. Pol’y 931, 944-50 (2014)

(discussing the “mandatory-discretionary distinction”).

But if the FCC takes no action and USAC’s projections

and contribution ratio are “deemed approved” under 47

C.F.R. § 54.709(a)(3) (as happened here), the self-interested

bias of the various USAC members leads to a Due Process

violation.

V. Getting the Doctrinal Basis Right Is Important.

One might think the precise doctrinal basis doesn’t

much matter if the bottom line is the same. Indeed, one

court in a private nondelegation case once remarked that

a nondelegation/Due Process distinction merely “evokes

scholarly interest” but wouldn’t “effect a change in the

inquiry.” Ass’n of Am. R.R.s v. U.S. DOT, 721 F.3d 666,

671 n.3 (D.C. Cir. 2013). Another court wrote that one

didn’t need to worry about holding that private parties

are exempt from the Appointments Clause; the private

nondelegation doctrine would “corral any attempts to . . .

giv[e] unaccountable governmental power to a pre-existing

private entity.” Horsemen II, 107 F.4th at 440. But this

is too cavalier: in these sorts of cases, the doctrinal basis

can actually make a difference.

A.

The Various Doctrines Ser ve Different

Purposes.

Most basically, the various doctrines should be

kept analytically distinct because they serve different

24

purposes. The nondelegation doctrine is a giver-based

doctrine. Its purpose is to control Congress—ensuring

that Congress doesn’t give up too much power. This

concern is valid no matter who the delegate is—whether

Congress delegates to executive agencies, Indian tribes,

the judiciary, state governments, or private organizations.

Provided Congress adequately narrows its delegation (to

comply with the “intelligible principle” test or whatever

other test might be adopted in the future), it should have

the flexibility to select a delegate of its choice.

The Appointments Clause, on the other hand, is a

recipient-based doctrine. Its purpose is to control the

recipients of federal power—ensuring that nobody,

whatever their status, can exercise “significant authority

under the laws of the United States” without being

personally approved by the necessary federal officials.

Provided Congress delegates that sort of significant

authority, the recipient of that authority should be held

to the requisite degree of accountability; alternatively,

Congress should be able to dispense with that degree of

accountability if it chooses to delegate some more trivial

power.

And the Due Process Clause is an application-based

doctrine. Its purpose is to ensure fundamental fairness

in the application of law; if the presence of financial bias

leads to a Due Process violation, Congress can cure the

problem by changing the composition of USAC to ensure

that it is staffed only by disinterested people, or perhaps

by ensuring that USAC cannot make any decisions that

affect people’s life, liberty, or property rights without

disinterested review (or by changing how the actors are

compensated, though that option is not relevant here).

25

B. The Various Doctrines Apply to Different

Entities and Have Different Remedies.

The nondelegation doctrine and Appointments Clause

apply to federal entities, because the sources of those

doctrines are Articles I and II of the U.S. Constitution

(respectively), which delineate the legislative and

executive powers of the federal government. By contrast,

the Due Process Clause applies equally whether a state

or a federal entity is involved, because—at least when it

comes to the self-interested bias branch of Procedural Due

Process doctrine—the versions of the Clause in the Fifth

and Fourteenth Amendments are interpreted identically.

This may not make a difference in this case (where the

entity is federal), but the doctrinal basis of any holding in

this case will affect its precedential effect going forward.

Violations of the Due Process Clause can also lead

to damages for victorious plaintiffs under 42 U.S.C.

§ 1983 (against a state entity) or Bivens (against a federal

entity). There is no monetary remedy for violations of the

nondelegation doctrine or Appointments Clause.

C.

The Appointments and Due Process Theories

Don’t Require Any Public-Private Inquiry.

The Fifth Circuit’s private nondelegation inquiry

would apparently invalidate any exercise of power by

non-subordinate private parties. That would require

a threshold inquiry that depends on the application of

public-private doctrines like the State Action Doctrine.

“Unfortunately,” as Justice O’Connor once wrote, “[this

Court’s] cases deciding when private action might

be deemed that of the state have not been a model of

26

consistency.” Edmonson v. Leesville Concrete Co., Inc.,

500 U.S. 614, 632 (1991).

Prior decisions already illustrate the hazards of

public-private inquiries. In Ass’n of American Railroads,

the D.C. Circuit determined that Amtrak was private

for purposes of the private nondelegation doctrine.

The D.C. Circuit recognized that Lebron v. National

Railroad Passenger Corp., 513 U.S. 374 (1995), a State

Action Doctrine case, had held that Amtrak was public

for purposes of the First Amendment; but it concluded

that the purposes of the private nondelegation doctrine

called for a different public-private analysis. Ass’n of Am.

R.R.s, 721 F.3d at 676-77. This Court reversed the D.C.

Circuit, holding that Amtrak was public for purposes of

the nondelegation doctrine. DOT v. Ass’n of Am. R.R.s,

575 U.S. at 55. This Court wrote that Lebron “provides

necessary instruction” on Amtrak’s characterization as

public or private, id. at 54, but it stopped short of saying

that the State Action Doctrine applies wholesale to such

inquiries. Thus, it is even unclear what public-private

inquiry is required for private nondelegation purposes.

In Horsemen II, the Fifth Circuit determined under

the State Action Doctrine—relying on Lebron—that the

Horseracing Integrity and Safety Authority (HISA) was

private. Horsemen II, 107 F.4th at 437-39. It came to this

conclusion even though HISA exercised significant federal

rulemaking, investigation, and enforcement authority,

which seem to easily qualify as state action under the

“traditionally exclusive public function” test. See Am.

Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 55 (1999);

Jackson v. Metro. Edison Co., 419 U.S. 345, 352 (1974). A

petition for a writ of certiorari is currently pending in that

27

case, see No. 24-433; the important point here is that, in

this era of mixed public-private associations and private

groups wielding coercive power, such inquiries will be

ubiquitous and often difficult.

Thus, it is quite plausible that the assumption that

USAC is private is incorrect. (“Assumption,” because the

Fifth Circuit apparently did not analyze the question—

perhaps relying on USAC’s formalistic labeling and

organization under state nonprofit law—and the FCC

and respondents seem to assume this as well, see Br. for

Fed. Petrs. at 4, Br. for Resps. at 74-75.) Anyone who

can determine the size and incidence of a tax seems to

exercise a “traditionally exclusive public function,” and

that act should be considered state action on that ground.

Surely, if USAC discriminated among contributors

based on race, sex, religion, or viewpoint (for instance,

what if it discriminatorily chose which contributors’ selfreported revenue projections to verify under 47 C.F.R.

§ 54.711(a)?), it could be sued for constitutional violations.

Thus, assuming the Horsemen II court was right that the

State Action Doctrine governs public-private inquiries

for private nondelegation purposes (which, as discussed

above, is still an open question), then perhaps USAC’s tax

determination should be treated as state action after all,

and so we are dealing with a public delegation.

But it is hard to predict how such inquiries will come

out. Moreover, respondents argue that “even ministerial

governmental powers cannot be delegated to private

parties,” Br. for Petrs. at 77; if they are right, a private

nondelegation doctrine extends substantially further than

a Due Process or Appointments Clause theory. Embracing

a private nondelegation doctrine may thus have expansive

28

and unpredictable effects—in such disparate areas as

private prison contracting, qui tam relators, or actuarial

standard-setting associations. (On that last example, see

Texas v. Rettig, 993 F.3d 408, 410, 412 (5th Cir. 2021) (Ho,

J., dissenting from denial of rehearing en banc).)

On the other hand, an advantage of the Appointments

Clause and Due Process Clause approaches is that they

apply functionally. As discussed in Part III supra,

the Appointments Clause analysis depends on whether

someone (public or private) exercises significant federal

power; the question is properly how much federal power

the challenged party wields. And as discussed in Part

IV supra, the Due Process Clause analysis depends on

whether someone (public or private) exercises coercive

power over another’s life, liberty, or property interests

when that exercise could be biased by their self-interest;

the question is properly the extent of the challenged

party’s self-interest.

The Appointments Clause and Due Process Clause

approaches thus avoid unnecessary engagement with the

vagaries of State Action Doctrine.

VI. Conclusion.

For these reasons, this Court should affirm the

judgment of the Fifth Circuit that the administration of

the USF Tax is unconstitutional.

It is true that the Fifth Circuit did not rule on the

Due Process and Appointments Clause theories. And

respondents did not raise Due Process arguments as

petitioners in the Fifth Circuit. Respondents mentioned

29

the Appointments Clause briefly in their Fifth Circuit brief,

see Opening Br. for Petrs., Consumers’ Research v. FCC,

No. 22-60008 (5th Cir. Apr. 11, 2022), 2022 WL 1129534,

at *66 (“Moreover, USAC’s board members are nominated

by those interest groups and appointed by the FCC Chair.

This fails to comply with the Constitution’s Appointments

Clause, which does not authorize appointment of ‘Officers’

by a single member of a multi-member commission.”

(citation omitted)). But this was a fallback argument

(apparently aimed at the possibility that USAC could be

argued to be a public entity, and based on the assumption,

disputed in Part III.B supra, that the Appointments

Clause does not apply to private parties), and the Fifth

Circuit did not reach it.

This Court might be unwilling to rule based on

theories that were not pressed (or barely pressed) below.

But there are various other ways this Court could respond

to the concerns raised in this brief.

This Court could, for instance, (1) invalidate the

system as having no “intelligible principle” solely on

the basis of Congress’s delegation to the FCC (again

making no reference to FCC’s subdelegation to USAC);

(2) invalidate the FCC’s subdelegation to USAC solely

based on the Fifth Circuit’s statutory argument, see

Consumers’ Research, 109 F.4th at 774-77; (3) hold that

USAC is actually public because determining the amount

and incidence of a tax is a “traditionally exclusive public

function” and therefore state action, similarly to its

holding in DOT v. Ass’n of Am. R.R.s, 575 U.S. at 55; (4)

reject both the public and private nondelegation challenges

and remand to the Fifth Circuit for analysis under the

Due Process and Appointments Clauses; or (5) reject both

30

the public and private nondelegation challenges, note that

there are plausible Due Process and Appointments Clause

arguments that remain open, and leave those arguments

for another day.

Amicus does not now take any position on which

approach is preferable, if this Court is unwilling to

rule on these theories directly. In any event, this Court

should not establish bad precedent by endorsing a private

nondelegation doctrine that has no support in the prior

decisions of this Court and that is ill-advised on its own

merits.

Respectfully submitted,

A lexander Volokh

Counsel of Record

Emory University

School of Law

1301 Clifton Road NE

Atlanta, GA 30322

(404) 727-5225

avolokh@emory.edu

Attorney for Amicus Curiae