Eleventh Circuit rejects nondelegation-doctrine challenge to Universal Service Fund with two concurrences

In 1996, Congress directed the FCC to create a fund by which it ensures that Americans throughout the country have access to telecommunications services, to be funded by contributions from carriers. The FCC relies on the Universal Service Administration Company (USAC) to help administer the fund, including by calculating necessary contributions that are submitted to the FCC for approval.

Libertarian group Consumers’ Research, a telecommunications services resellers, and individuals challenged the calculation of the contribution for the fourth quarter of 2022 as unconstitutional under the nondelegation doctrine. A three-judge panel of the Eleventh Circuit unanimously rejected their arguments, finding the statute provides the FCC with sufficiently intelligible principles to govern the creation and administration of the fund, and that the involvement of USAC did not violate the private nondelegation doctrine given that the entity remained subordinate to the FCC–joining the Sixth Circuit in this conclusion.

Concurring, Judge Newsom wrote that under “Constitutional first principles,” he would have reached a different conclusion, but that the statutory delegation was no less intelligible than those the Supreme Court had found sufficient in other cases, and that while the USAC wasn’t impermissibly exercising legislative power, there may be other problems with its operations that the petitioners had not raised — that its involvement was not authorized by the statute, and that the USAC was impermissibly exercising executive power as it was not sufficiently controlled by the President.

Judge Lagoa filed her own shorter concurrence noting that the nondelegation doctrine “has strayed from constitutional first principles,” but that under current case law, it was satisfied.

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