Federal Communications Commission et al. v. Consumers' Research et al.
No. 24-354 · Decided June 27, 2025 · reversed and remanded
Does the universal-service contribution scheme established by Section 254 of the Communications Act violate the nondelegation doctrine? The universal-service contribution scheme does not violate the nondelegation doctrine because Section 254 provides an intelligible principle to guide the FCC and the private administrator remains subordinate to the Commission's final authority.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT · Argued March 26, 2025
Parties — Petitioner: FEDERAL COMMUNICATIONS COMMISSION et al. · Respondent: CONSUMERS' RESEARCH et al.
Vote & lineup6–3 on the judgment. Kagan delivered the opinion of the Court, joined by Roberts, Sotomayor, Kavanaugh, Barrett, Jackson (6). Dissent(s): Gorsuch (joined by Thomas, Alito). Concurrence(s): Kavanaugh, Jackson.
Who prevailed — The petitioners (FCC et al.) prevailed on the challenge to the constitutionality of the universal-service contribution scheme.
The question

Does the universal-service contribution scheme established by Section 254 of the Communications Act violate the nondelegation doctrine? Specifically, did Congress impermissibly delegate legislative power to the FCC or did the FCC impermissibly subdelegate that power to a private administrator? Additionally, does the combination of these delegations violate the separation of powers?

Petitioner's argument
  • Section 254 provides an "intelligible principle" by requiring contributions to be "sufficient" to support specific programs.
  • The FCC is constrained by mandatory statutory criteria regarding which services are essential, affordable, and widely used.
  • The Universal Service Administrative Company acts as a subordinate entity providing non-binding recommendations rather than exercising independent governmental power.
  • The combination of delegations does not create a constitutional violation because the individual components are lawful.
Respondent's argument
  • Revenue-raising statutes must satisfy a special nondelegation rule requiring a numeric cap or fixed tax rate, which Section 254 lacks.
  • The FCC possesses boundless authority to redefine universal service and set contribution amounts without objective limits.
  • The FCC violated the private nondelegation doctrine by delegating the setting of the contribution factor to a private corporation.
  • Even if each delegation is independently permissible, their combination violates the separation of powers under the logic of *Free Enterprise Fund v. Public Company Accounting Oversight Bd*.
The decision
  • The Court held that the universal-service contribution scheme does not violate the nondelegation doctrine.
  • It applied the "intelligible principle" test from *J. W. Hampton, Jr., & Co. v. United States*, which asks whether Congress has made clear both "the general policy" the agency must pursue and "the boundaries of [its] delegated authority."
  • The Court rejected the argument for a special numeric-limit rule for taxes, citing *J. W. Hampton, Jr., & Co.* and *Skinner v. Mid-America Pipeline Co.* to hold that the same test applies to all revenue-raising legislation regardless of whether a charge is a tax or a fee.
  • The Court reasoned that the statutory requirement that contributions be "sufficient" (§§ 254(b)(5), (d), (e)) creates both a floor and a ceiling, preventing the FCC from raising funds in excess of what is necessary to finance its programs.
  • This "sufficiency" limit is meaningful because Section 254 provides determinate standards for subsidies: services must be essential to education, public health, or safety; subscribed to by a substantial majority of residential customers; and available at affordable rates (§§ 254(b)(1), (3), (c)(1)(A)–(B)).
  • Regarding the private administrator, the Court relied on *Sunshine Anthracite Coal Co. v. Adkins* to find that the arrangement is valid because the Administrator functions subordinately to the FCC and provides only recommendations that the Commission may review or revise.
  • The Court rejected the "combination" theory based on *Free Enterprise Fund v. Public Company Accounting Oversight Bd.*, stating that public nondelegation (authorizing an agency to legislate) and private nondelegation (allowing private entities to govern) operate on different axes and do not compound one another.
Separate opinions
Kavanaugh, concurring
  • Argues that while the intelligible principle test is appropriate, delegations to independent agencies raise substantial Article II accountability issues because their heads are not removable at will by the President.
  • Notes that the FCC is not technically an independent agency in this case because it lacks statutory for-cause removal protections, citing *Myers v. United States*.
Jackson, concurring
  • Expresses skepticism regarding whether the private nondelegation doctrine is a viable and independent constitutional doctrine based on a lack of support in history and precedents.
Gorsuch, dissenting (joined by Thomas, Alito)
  • Argues that delegations of taxing power must include a prescribed tax rate or numeric cap to be constitutional, asserting that the "intelligible principle" test requires more significant limits when taxation is involved.
  • Contends that "universal service" is an evolving concept without a fixed meaning, rendering the FCC's authority unconstrained and effectively giving it a "blank check."
  • Asserts that the majority effectively rewrote Section 254 by treating its "consideration" factors as mandatory requirements rather than mere suggestions.
Read the full opinion on supremecourt.gov (PDF) →