Federal Communications Commission et al. v.
Consumers’ Research et al.

T. DANIEL LOGAN & JUSTINE E. LENEHAN *

Why It Made the List

“Die Geister, die ich rief,” meaning “the spirits I have summoned,” is a common German saying reflecting the inability to control those whom one has brought forth. This saying comes from Goethe’s poem “The Sorcerer’s Apprentice” (Der Zauberlehrling), in which an apprentice sorcerer enchants a broom to fetch water as a substitute for doing the chore himself, but, alas, does not have mastery over the spell to stop it.[1] When the apprentice splits the broom with an ax, both halves continue their tireless work. Only the master can disenchant the errant broom and resolve the quagmire. Here, the nondelegation doctrine is the master’s return: Congress may not set its brooms in motion without telling them when to stop. In FCC v. Consumers’ Research, the Supreme Court confronted the nondelegation doctrine—the constitutional principle that Congress may not cede its legislative power to executive agencies without providing adequate guidance. Given that FDA operates under broad statutory delegations, the potential implications for the agency warranted close attention following the Fifth Circuit’s rejection of FCC’s Universal Service Fund contribution scheme as unconstitutional. Ultimately, the Court declined to overhaul its nearly century-old framework—and in doing so, it offered important guidance on the boundaries of permissible delegation that has implications for all executive branch agencies.

Discussion

Background: The Nondelegation Doctrine

Article I of the Constitution provides, “All legislative Powers herein granted shall be vested in a Congress of the United States.” Courts have long interpreted this provision to prohibit Congress from transferring its legislative power to other branches of government (i.e., “nondelegation”). Nevertheless, from a practical and structural standpoint, Congress must be able to enlist executive agencies to implement the laws it enacts. To reconcile these imperatives, the Supreme Court articulated the “intelligible principle” test as an exception to the nondelegation doctrine: Congress may confer discretion on an agency so long as it provides an intelligible principle to guide the agency’s exercise of that discretion.[2] To do so, Congress must clearly delineate both the “general policy” and the “boundaries of this delegated authority,” with greater specificity needed as the scope of the delegated power increases.[3]

In practice, this intelligible principle standard has proven to be quite permissive. With limited exceptions, the Court has consistently upheld statutory delegations containing broad directives—such as instructing agencies to regulate in the “public interest” or to set “just and reasonable” rates—finding that the surrounding statutory context provided sufficient guidance to satisfy the intelligible principle test.[4] It had become so rarely deployed that it had, at various points, been called “dead,” having not been invoked since 1935 (although that was the first and last year in which it was deployed to invalidate a statute).[5]

For proponents of a stricter nondelegation doctrine, Consumers’ Research presented an appealing vehicle: a federal agency authorized to raise billions in revenue from private carriers, with the assistance of a private corporation, pursuant to a statute containing no numeric limit on the agency’s collection authority.

Procedural History

The factual backdrop of Consumers’ Research centers on the Universal Service Fund (USF), a longstanding program through which FCC subsidizes telecommunications services for underserved populations. The Communications Act of 1934 established FCC and charged it with making communications services available “to all the people of the United States” at “reasonable charges.”[6] In 1996, Congress enacted the Telecommunications Act of 1996, which, under Section 254, created an explicit funding mechanism requiring carriers providing interstate telecommunications services to contribute to the USF, with those funds directed to subsidizing services for low-income consumers, rural communities, schools, libraries, and rural hospitals.[7] The statute guides FCC’s discretion in selecting which services to subsidize: among other things, the service must be essential to education, public health, or public safety; subscribed to by a substantial majority of residential customers; and available at affordable rates. FCC appointed the Universal Service Administrative Company (USAC), a private, not-for-profit corporation, to manage day-to-day operations of the USF and compile the financial projections used in determining each carrier’s required contribution—calculated based on its projected revenue and a “contribution factor” devised by USAC but subject to FCC review and approval.

Consumers’ Research, a nonprofit organization, as well as a carrier and several consumers, challenged the contribution scheme in the Fifth Circuit, raising two constitutional objections: first, that Congress had impermissibly delegated its legislative—and specifically its taxing—power to FCC without an intelligible principle; and second, that FCC had, in turn, impermissibly subdelegated authority to USAC, a private entity.[8] A three-judge panel rejected both challenges, finding that Section 254 contained an intelligible principle and that USAC operated in a subordinate capacity to FCC.[9] The Fifth Circuit, sitting en banc, reversed, holding that the “combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to USAC” was unconstitutional—a theory the court characterized as a “double-layered delegation” with “no foothold in history or tradition” and “incompatible with our constitutional structure.”[10] The Fifth Circuit’s decision split with the Sixth and Eleventh Circuits, which had rejected substantially identical challenges.[11] The Supreme Court granted certiorari.

The Supreme Court’s Analysis

In a 6–3 decision authored by Justice Kagan, the Court reversed the Fifth Circuit and upheld the USF contribution scheme.[12]

The Court rejected the argument, outlined by both respondents and the dissent, that revenue-raising statutes must satisfy a heightened nondelegation standard requiring Congress to specify a numeric cap or fixed rate. In reaching this conclusion, the Court found that existing precedent foreclosed this argument and adopting a proposed numeric-limit requirement would not only lead to absurd results but also imperil numerous existing federal revenue statutes that similarly lack quantitative limits. The Court further declined to distinguish between taxes and fees as a means to limit the reach of such a ruling, finding the line between the two “unbelievably murky in practice” and irrelevant to the nondelegation inquiry.

The Court held that Section 254 adequately constrains FCC’s discretion, applying the traditional intelligible principle test to determine that the statutory direction that contributions be “sufficient” to support universal service programs operates as both a floor and a ceiling on the funding Congress authorized FCC to raise. Critically, in the Court’s view, the “sufficiency” ceiling is given substantive heft by the statute’s detailed provisions defining the scope of universal service—including the designated beneficiaries, the criteria for eligible services (essential, widely used, and affordable), and certain governing principles. Further, the Court found that FCC’s ability to update the definition of universal service and articulate additional principles was constrained by the requirement that any additions be “consistent with” the rest of the statute.

The Court also rejected respondents’ private nondelegation challenge, holding that FCC’s use of USAC did not confer governmental power on a private entity. The Court found that USAC functions subordinately to FCC, subject to its appointment authority, budget approval, and substantive oversight, and makes only non-binding recommendations that FCC retains full authority to revise. The Court likewise dispatched the Fifth Circuit’s “combination theory” of “dual-layered delegation,” reasoning that the public and private nondelegation doctrines “do not operate on the same axis” and therefore a measure implicating but not violating each does not compound to create a constitutional violation.

Concurring and dissenting opinions add important texture. Justice Kavanaugh concurred to emphasize that the intelligible principle test’s “staying power” may reflect both the difficulty of devising a workable alternative and concerns that a stricter test could diminish the President’s Article II authority to implement legislation. He also suggested that concerns about expansive delegations have been “substantially mitigated” by other recent developments in administrative law—namely, the elimination of Chevron deference in Loper Bright and the rise of the major questions doctrine. In a potentially notable signal, Justice Kavanaugh separately argued that delegations to independent agencies headed by officers who are not subject to at-will removal by the President (as compared to agencies under an Executive department) may raise distinct constitutional concerns.

Justice Jackson wrote a brief concurrence to question whether the private nondelegation doctrine is a constitutionally grounded doctrine at all.

Justice Gorsuch penned a dissent, joined by Justices Thomas and Alito. He characterized universal service contributions as taxes and maintained that the Constitution requires Congress to specify a tax rate or cap before authorizing an agency to collect revenue. Moreover, the dissent found Section 254’s qualitative standards too indeterminate to constrain FCC’s discretion, accused the majority of reading the statutory criteria more narrowly than either the text or FCC’s own past practice would support, and criticized the Court’s continued reluctance to enforce the nondelegation doctrine with the vigor it applies to other constitutional principles.

Impact of the Decision

Consumers’ Research will not be remembered as the watershed moment in the nondelegation story that some anticipated after Gundy v. United States. In that 2019 case, four Justices appeared to signal a willingness to revisit the intelligible principle framework. Justice Gorsuch, in dissent, suggested replacing the principle with a significantly more stringent standard that would have permitted delegations of power to agencies solely to: (1) “fill up the details” of an already decided scheme; (2) to make fact findings triggering a congressionally defined consequence; or (3) exercise genuinely executive functions.[13] Indeed, Consumers’ Research suggests that, at least for the foreseeable future, the Court is unwilling to revisit the nondelegation doctrine. As signaled by Justice Kavanaugh in his concurrence in Consumers’ Research, this may be due, at least in part, to the absence of a viable replacement framework that is both more stringent and administrable, as well as the Court’s recent jurisprudence constraining and narrowing broad congressional delegations.

The overruling of Chevron deference in Loper Bright means that courts now exercise greater independent judgment in determining the reach of agency authority under a statute, rather than deferring to the agency’s own interpretation of ambiguous text. And the major questions doctrine, as articulated in West Virginia v. EPA, requires agencies to point to clear congressional authorization before asserting authority over matters of vast economic or political significance. Together, these doctrines arguably accomplish indirectly what a reinvigorated nondelegation doctrine would do directly: they cabin agency authority not by invalidating the underlying statutory grant, but by constraining the scope of discretion the agency may claim under it. Justice Kavanaugh suggested that these developments have, collectively, addressed the structural concerns that might otherwise warrant tightening the nondelegation standard.

For agencies such as FDA, a practical consequence of the Court’s preservation of the intelligible principle test is that the status quo remains: the primary battleground will concern interpretation of the scope of statutory delegations, rather than their constitutionality. The intelligible principle test remains intact and forgiving, but courts are now more willing to read delegating statutes narrowly to avoid constitutional concerns.

For the food and drug bar specifically, several aspects of the decision merit attention. FDA operates under broad delegations from Congress in the Federal Food, Drug, and Cosmetic Act—the kind of expansive grants of authority that, as the Court emphasized, require proportionally greater specificity from the delegating statute.

The Court’s treatment of the revenue-raising question may bear on FDA’s user fee programs. PDUFA, MDUFA, GDUFA, and related statutes each authorize FDA to collect fees from industry to support review activities, and like the contribution scheme at issue in Consumers’ Research, these statutes rely on qualitative criteria to channel agency discretion. Moreover, private industry negotiates directly with FDA to determine the amount of revenue raised under user fee programs. Had the Court adopted the respondents’ proposed rule requiring a numeric cap or fixed rate for any revenue-raising delegation, these programs could have faced novel constitutional challenges. But unlike the USF contribution scheme—which lacked any numeric constraint—the user fee statutes contain quantitative guardrails of their own. Each program includes statutory “trigger” conditions requiring that FDA’s non-user-fee appropriations meet certain thresholds before the agency may collect or obligate user fee revenue. These triggers arguably function as a sort of numeric constraint, suggesting that even under a stricter nondelegation framework, the user fee programs may rest on solid constitutional ground. Indeed, the Gorsuch dissent’s own tax-versus-fee distinction reinforces this conclusion. The dissent recognized that fees carry a “built-in intelligible principle” because they compensate for a specific government service—precisely the relationship between FDA user fees and the cost of review activities.

The resolution of the private nondelegation claim likewise has implications for FDA. The agency regularly delegates its authorities to carry out aspects of its statutory mission, some of which do not appear to comport with the Court’s guidance regarding acceptable private nondelegations. For example, it is difficult to square the generally recognized as safe (GRAS) self-determination pathway with the private nondelegation doctrine. Unlike assistance by a private entity in the form of “non-binding” advice, such as that provided by USAC, GRAS self-determinations empower private entities to make a substantive determination regarding the permissibility of food ingredients under the Federal Food, Drug, and Cosmetic Act (FDCA). Similarly, the FDCA’s incorporation by reference of the United States Pharmacopeia (USP) into the definition of “drug” and the drug adulteration and misbranding provisions has been argued to be an impermissible delegation to a private entity.[14] Under Consumers’ Research, the key question is whether the agency retains genuine decision-making authority—it is unclear whether FDA retains that authority in the above examples.

In sum, Consumers’ Research suggests that the master has already returned to the workshop. Loper Bright and the major questions doctrine may supply courts with tools adequate to scrutinize agency action and constrain statutory authorities, leaving the nondelegation doctrine, for now, an incantation that need not be spoken.

 

*   T. Daniel Logan, a Partner at Kleinfeld, Kaplan & Becker, LLP, and Justine E. Lenehan, an Associate at Kleinfeld, Kaplan & Becker, LLP, counsel clients on a variety of FDA regulatory issues relating to the food, cosmetic, drug, dietary supplement, and tobacco industries and advise FDA-regulated companies throughout the product lifecycle, including labeling, advertising/promotion, enforcement risk, and regulatory strategy and compliance.

[1]   Johann Wolfgang von Goethe, Der Zauberlehrling (1797). Readers may also be aware of the famous adaptations of this poem, in which the sorcerer’s apprentice is portrayed by a cartoon mouse.

[2]   See J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928).

[3]   American Power & Light Co. v. Securities & Exchange Commission, 329 U.S. 90, 105 (1946); Whitman v. American Trucking Assns., Inc., 531 U.S. 457, 475 (2001).

[4]   See, e.g., National Broadcasting Co. v. United States, 319 U.S. 190, 225–26 (1943).

[5]   Cass R. Sunstein, Nondelegation Canons, 67 U. Chi. L. Rev. 315 (2000).

[6]   Communications Act of 1934, Pub. L. No. 73-416, § 151, 48 Stat. 1064, 1064 (1934) (codified at 47 U.S.C. § 151).

[7]   Telecommunications Act of 1996, Pub. L. No. 104-104, § 254, 110 Stat. 56, 71 (1996) (codified at 47 U.S.C. § 254).

[8]   A law violates the private nondelegation doctrine when it permits a non-governmental entity to govern without meaningful oversight by a politically accountable agency. See FCC v. Consumers’ Research, 606 U.S. 656, 692 (2025) (building on Carter v. Carter Coal Co., 298 U.S. 238 (1936), Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (1940)).

[9]   See Consumers’ Research v. FCC, 63 F.4th 441 (5th Cir. 2023).

[10] See Consumers’ Research v. FCC, 109 F.4th 743, 778, 782 (5th Cir. 2024) (en banc) (emphasis in original, internal quotations omitted).

[11] See Consumers’ Research v. FCC, 67 F.4th 773 (6th Cir. 2023); Consumers’ Research v. FCC, 88 F.4th 917 (11th Cir. 2023).

[12] FCC v. Consumers’ Research, 606 U.S. 656 (2025).

[13] See Gundy v. United States, 588 U.S. 128, 148–49 (Alito, J., concurring in the judgment), 157–59 (Gorsuch, J., dissenting).

[14] Anne Stark, Is the Incorporation of the United States Pharmacopeia into the Food, Drug, and Cosmetic Act an Unconstitutional Delegation of Legislative Power?, 73 Food & Drug L.J. 134, 134 (2018) (citing to 21 U.S.C. §§ 321(g), 351(b), 352(e)(3)).

In sum, Consumers’ Research suggests that the master has already returned to the workshop. Loper Bright and the major questions doctrine may supply courts with tools adequate to scrutinize agency action and constrain statutory authorities, leaving the nondelegation doctrine, for now, an incantation that need not be spoken.