FCC v. Consumers' Research

Majority — Kagan

Joined by: Roberts, Sotomayor, Kavanaugh, Barrett, Jackson

The majority held that the standard for evaluating congressional delegations of authority is the longstanding "intelligible principle" test — which asks whether Congress gave the agency a clear enough policy goal and meaningful boundaries — and that no special, stricter rule applies just because a statute involves raising revenue. The Court reasoned that the word "sufficient" in the statute sets both a floor and a ceiling on what the FCC can collect: the agency may raise no less and no more than what is needed to fund the specific universal-service programs Congress authorized. The majority further held that Congress provided determinate standards for those programs by specifying who the beneficiaries are (rural and low-income consumers, schools, libraries, rural hospitals) and what services qualify (those that are widely used, affordable, and essential to education, public health, or safety). As for the FCC's use of the private Universal Service Administrative Company, the Court found no constitutional problem because the company functions in a subordinate, advisory role — making initial financial projections that the FCC reviews, revises if needed, and must formally approve — meaning the FCC, not the private company, holds final authority. The Court also rejected the Fifth Circuit's "combination" theory, explaining that a permissible public delegation and a permissible private delegation do not operate on the same constitutional axis and therefore cannot add up to a single unconstitutional violation.

Dissent reasoning

The dissent argued that the power to tax is among the most significant powers the Constitution assigns to Congress, and that the intelligible-principle test must therefore demand more meaningful constraints when Congress delegates taxing authority to an executive agency. In the dissent's view, historical practice shows that Congress has virtually always set a specific tax rate or at least a firm numerical cap when delegating revenue-raising power — and Section 254 does neither, leaving the FCC free to determine both which programs to fund and how much to collect, a rate that has grown from under 4% to nearly 37% of carrier revenues without any change to the statute. The dissent contended that the majority's reliance on other agency fee-collection statutes was misplaced because those involve fees — payments tied to a specific benefit received or cost imposed on the payor — which carry a built-in intelligible principle, whereas universal-service contributions are a classic tax that takes money from carriers and redistributes it to others. The dissent also criticized the majority for effectively rewriting the statute by declaring that all of Section 254's criteria must each be independently satisfied before the FCC can fund a service, when the statute's text and the FCC's own longstanding interpretation say the agency need only "consider" those factors without being bound by any one of them. Finally, the dissent noted that even the majority could not bring itself to defend two provisions of the statute — Sections 254(c)(3) and (h)(2) — that allow the FCC to fund "advanced" and "additional" services with no meaningful constraints at all, which the dissent viewed as an implicit concession that the statute as a whole fails the nondelegation test.