"Supreme Court to examine power of Congress to delegate authority"

Part of an ongoing series on some momentous changes in Washington D.C.

If you understand these changes there is money to be made in the interstices and at the intersection of power and responsibility.

From the Washington Post via MSN, November 23:

The Supreme Court announced Friday it will hear a pair of cases that will examine how far Congress can go in delegating powers to federal agencies, decisions that could chip away at the authority of the executive branch.

The cases explore whether Congress violated the Constitution when it allowed the Federal Communications Commission to gather fees to help pay for critical telecommunications service in communities that might not otherwise have it. 

Consumers’ Research, a free-market advocacy organization, and other plaintiffs are challenging the law, saying the setup runs afoul of the “non-delegation doctrine,” which forbids Congress from delegating its legislative powers to federal agencies or private entities unless it provides an “intelligible principle” that gives guidance on how those powers should be exercised.

“The statute delegates Congress’s revenue-raising and taxing powers to an unelected agency bureaucracy without clear and meaningful limitations,” the plaintiffs write in their filing.

The plaintiffs contend that violation was compounded when the FCC created an independent, nonprofit company, the Universal Service Administrative Co., to administer the program. They also say the program, which collects nearly $10 billion a year, is prone to waste and abuse.

Conservative groups and scholars who argue that executive agencies have grown too powerful have pushed for the expansion of the non-delegation doctrine to try to trim that authority and reset the balance of powers between the branches of government. 

The Supreme Court has sharply curtailed the power of federal agencies in a series of major rulings in recent terms. Most notably, the conservative majority on the court struck down last term a 40-year-old principle that requires courts to give wide latitude to federal agencies when they are implementing laws in areas where they have not been given explicit guidance by Congress.

The Chevron doctrine, as it was known, underpinned thousands of federal rules.

Some conservative groups have identified the non-delegation doctrine as the next frontier in the fight over administrative power.

The current case revolves around the Telecommunications Act of 1996, which expanded an earlier law requiring everyone in the United States to have access to critical telecommunications services. The law also mandated that all interstate telecommunications providers contribute funding to the goal of universal service....

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Or as Reuters puts it, November 25: 

First Chevron, now another arcane doctrine is ready for its closeup

America suddenly discovered the phrase Chevron deference when the U.S. Supreme Court decided last June to overturn longstanding precedent that required courts to bow to federal agencies in the interpretations of the laws they enforce.

Now nondelegation doctrine is poised to become the new Chevron.

 

You need some basics to understand what I’m talking about. Nondelegation doctrine is rooted in Article I of the U.S. Constitution, which empowers Congress to enact federal laws. The doctrine, broadly speaking, bars Congress from delegating that power to the executive branch — which, these days, means to federal agencies.

But that's not all there is to the nondelegation doctrine. A related constitutional principle known as private nondelegation doctrine holds that neither Congress nor federal agencies can authorize non-government entities to exercise governmental power. This doctrine has become a critical issue in constitutional challenges to private regulation of the securities and horse-racing industries, both of which are overseen by membership group wielding significant rulemaking, investigatory and enforcement power.

The Supreme Court has already agreed to hear a case raising nondelegation and private nondelegation issues, as my Reuters colleague John Kruzel reported on Friday.

The case involves a constitutional challenge to a law authorizing the U.S. Federal Communications Commission to levy fees from telecoms to broaden nationwide access to phone and internet services. The FCC relies on a private company to administer the multibillion-dollar fund.

 

A group led by conservative nonprofit Consumers’ Research persuaded the en banc 5th U.S. Circuit Court of Appeals last July that, in combination, Congress’s delegation of taxing authority to the FCC and the FCC’s subdelegation of administrative authority to a private company is unconstitutional.

 

The U.S. Justice Department asked the Supreme Court in September to review the 5th Circuit decision, citing a split between the conservative appellate court and two other federal circuits, the 6th and 11th Circuits, that have recently sided with the government on the constitutionality of the FCC program.

 

The FCC case seems likely to focus on Supreme Court precedent allowing Congress to authorize federal agencies to implement federal statutes as long as lawmakers codify an “intelligible principle” to guide and limit agency power. The justices most recently endorsed that principle in 2019’s Gundy v. United States, which confirmed the constitutionality of the federal sex offender registry, although four justices signaled interest in Gundy in reinvigorating the nondelegation doctrine.

 

The private nondelegation doctrine seems to be a secondary issue in the FCC case — but it is at the heart of a different case that the Supreme Court is likely to agree to hear this term.

In that litigation, Texas and a plethora of horse-racing groups challenged the constitutionality of the federal statute in which Congress empowered a private entity, the Horseracing Integrity and Safety Authority, to act under the auspices of the U.S. Federal Trade Commission to regulate the horse-racing industry.

 

The 5th Circuit ruled in July that the horse-racing authority was acting within constitutional bounds when it promulgated rules governing its members, because those rules had to be approved by the FTC. But the appeals court, splitting from two other federal circuits, also held that the private group’s enforcement power was unconstitutional under the private nondelegation doctrine because the horse-racing authority can conduct investigations, impose sanctions and bring lawsuits without consulting the FTC.

 

The Justice Department, the horse-racing authority and several challengers separately filed petitions asking the Supreme Court to reconsider different pieces of the 5th Circuit’s decision. Crucially, though, all of the petitioners seem to agree that the justices need to take a look at the constitutionality of the authority’s mandate from Congress in light of the 5th Circuit’s split with the 6th and 8th Circuits.

 

The issue for the justices, in other words, is probably not whether it will take a look at the private nondelegation issue but how broad its review will be.

Lurking in the background, moreover, is a ruling  on Friday from the D.C. Circuit in a similar constitutional challenge to Wall Street’s private regulator, the Financial Industry Regulatory Authority....

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, open  If interested see also April 2023's "Is the Securities and Exchange Commission Unconstitutional?":
There was a purpose behind all our blather about dismantling the Administrative State last year. If interested see after the jump....

November 2023 -  "SEC's in-house enforcement powers at risk in US Supreme Court case" 

If they are doing the job that Congress or the Courts are supposed to be doing they should be at risk.
The whole issue comes down to the vast amount of power that has been abandoned to the executive branch. If interested see April 2023's:
"Is the Securities and Exchange Commission Unconstitutional?"
And a slightly different case from 2016: "Appeals Court Holds That SEC Administrative Law Judges Are Unconstitutional"

June 2024 - The Supreme Court's Other Business-Focused Decision: "SECURITIES AND EXCHANGE COMMISSION v. JARKESY ET AL."

Following on yesterday's post re: 'Chevron Deference': "Supreme Court delivers blow to power of federal agencies, overturning 40-year-old precedent"  the court also ruled in SEC v. Jarkesy, which, if you read some of the headlines will open the nation to rape, pillage and plunder by hedge funds. Or something:

In late November as the Court was about to hear the arguments in Jarkesy The Atlantic went with: "The Case That Could Destroy the Government"

CBS News: "Supreme Court strips SEC of key enforcement power to penalize fraud" 

New York Times: "The Supreme Court Neuters a Vital Public Watchdog"

Good grief, get a grip.

The decision was pretty straightforward: In many instances where regulators bring an  enforcement action, tribunals hear the case without juries. The Court said that is unconstitutional in some cases, that the Seventh Amendment guarantees a jury trial in a court.

And the American Academy of Arts & Sciences journal, Dædalus, Summer 2021 issue, tying all these cases together a few years ago, linked in 2022:

 Background On The Supreme Court's EPA/CO2 Ruling: The Administrative State

As part of  our look at what the Court actually decided in the decision released on June 30 we will be diving into the nuts and bolts of government bureaucracy, AKA the Administrative State, AKA The Swamp....

First though, a recapitulation of the introduction to last Thursday's "Supreme Court curbs EPA climate authority":

The headline is a bit of a mischaracterization. The Court ruled the EPA did not have the authority it claimed to have, a different situation from reining in an existing authority, and that the EPA could not simply adopt the Affordable Clean Energy rule; that the agency had exceeded its mandate under the Clean Air Act with the proposal  and that if Congress wanted the outcome of the Rule under CAA it would have to legislate same rather than have the administrative state simply write rules.....