In NCLA Amicus Win, Fifth Circuit Rules Against FCC’s Unlawful Control of Universal Service Fund
24 Julio 2024 - 5:05PM
Today, the en banc U.S. Court of Appeals for the Fifth Circuit
ruled in Consumers’ Research v. Federal Communications Commission
that Congress unconstitutionally delegated legislative power by
allowing FCC to create and control a system for extracting
Americans’ money to finance the Universal Service Fund (USF). The
New Civil Liberties Alliance filed an amicus curiae brief calling
for this result, identifying core legal problems with that
illegitimate arrangement. NCLA applauds the Fifth Circuit for
taking a positive step toward restoring proper constitutional
order.
The Telecommunications Act of 1996 authorized
FCC to define and fund “universal” telecommunications and
information services on an “evolving” basis “consistent with the
public interest, convenience, and necessity” and in line with
policies FCC itself could adopt. As NCLA advised, the Fifth Circuit
held this vague standard does not provide an adequate “intelligible
principle” to limit the delegation of legislative power to FCC
under the Vesting Clause in Art. I of the Constitution. The Court
also held that the Universal Service fee is really a tax.
“Congress delegated its taxing power to the
Federal Communications Commission. FCC then subdelegated the taxing
power to a private corporation,” Judge Andrew S. Oldham wrote for
the Fifth Circuit. “That private corporation, in turn, relied on
for-profit telecommunications companies to determine how much
American citizens would be forced to pay for the ‘universal
service’ tax that appears on cell phone bills across the Nation. We
hold this misbegotten tax violates Article I, § 1 of the
Constitution.”
Today’s en banc ruling reverses a Fifth Circuit
panel decision that wrongly upheld the statute giving FCC this
power. Citing the Fifth Circuit’s May 2022 Jarkesy v.
SEC ruling, the panel had said the “nondelegation doctrine
applies where Congress has provided ‘no guidance whatsoever.’”
This misinterpretation of the Jarkesy decision, another case in
which NCLA filed successful amicus briefs that culminated
in a historic U.S. Supreme Court ruling last month, would have
rendered the “intelligible principle” standard effectively
meaningless. Here, while Congress provided some level of guidance
to FCC, the Fifth Circuit found that it had not provided a
“sufficiently intelligible” principle. NCLA commends the en banc
Court for enforcing the Vesting Clause.
NCLA released the following
statements:
“Today’s Fifth Circuit Consumers Research
opinion appropriately rejected Congress’s vesting the FCC with the
power ‘to exact as much tax revenue for universal service as FCC
thinks is good.’ There is no doubt that every agency would love to
have that power and no question that the Constitution forbids
it.”— Zhonette Brown, General Counsel and Senior Litigation
Counsel, NCLA
“The taxing power is a core legislative power.
Congress cannot divest such core legislative powers to independent
executive branch agencies like FCC. The en banc Fifth Circuit is
correct to rein in this improper delegation.”— Mark Chenoweth,
President, NCLA
For more information visit the amicus page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights
group founded by prominent legal scholar Philip Hamburger to
protect constitutional freedoms from violations by the
Administrative State. NCLA’s public-interest litigation and other
pro bono advocacy strive to tame the unlawful power of state and
federal agencies and to foster a new civil liberties movement that
will help restore Americans’ fundamental rights.
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Ruslan Moldovanov
New Civil Liberties Alliance
202-869-5237
ruslan.moldovanov@ncla.legal