The Nondelegation Doctrine: The Next Constitutional Showdown (Part 1)

Just when you thought the dust had settled from the Chevron decision, the Supreme Court is gearing up to hear arguments in Federal Communications Commission v Consumers' Research next month, potentially reviving the long-dormant nondelegation doctrine. While this case, like Chevron and Loper Bright before it, doesn't directly involve health care, its implications for our industry could be profound.^1,2

The Latest Constitutional Challenge

The case centers on the Federal Communication Commission's (FCC's) Universal Service Fund (USF), a program that collects fees from telecommunications providers to expand phone and internet access in underserved areas. The 5th Circuit ruled last July that Congress improperly delegated its taxing authority to the FCC, and, furthermore, the FCC improperly subdelegated administration of the multibillion-dollar fund to a private company.³

At its core, the nondelegation doctrine holds that Congress cannot delegate its legislative powers to other entities. It's rooted in Article I of the Constitution, which vests "all legislative powers" in Congress.⁴ Think of it as a constitutional guardrail preventing Congress from passing the buck on tough decisions to federal agencies.⁴ Sound familiar? It should—this was one of the key arguments used to overturn Chevron last June.

Consider how this might affect health care regulation. The Food, Drug, and Cosmetic Act (FDCA) gives the US Food & Drug Administration (FDA) broad authority to ensure drug safety and efficacy, but many of its specific powers come from relatively vague statutory language.⁴ The same goes for the Center of Medicare & Medicaid Services’ (CMS's) authority to test new payment models under the Center for Medicare and Medicaid Innovation (CMMI). If the Court strengthens the nondelegation doctrine, these delegations of power could face new scrutiny.⁵

NIRA’s Fatal Flaw

The doctrine's last major appearance came in 1935, when the Supreme Court struck down provisions of the National Industrial Recovery Act (NIRA) in what became known as the "sick chicken" case (ALA Schechter Poultry Corp v United States). The case earned its colorful nickname because it involved a kosher poultry slaughterhouse in Brooklyn challenging President Roosevelt's New Deal legislation.⁶

Under NIRA, Congress had authorized the President to approve detailed "codes of fair competition" for virtually every American industry. These codes could regulate wages, working hours, trade practices, and even prices. The law's only real guidance? That these codes should promote "fair competition."⁶ Talk about vague!

In Schechter's case, they were prosecuted for violating the "Live Poultry Code," which, among other things, prohibited selling sick chickens to customers (hence the nickname). The code went so far as to dictate how customers could select chickens and banned certain industry practices. The Supreme Court unanimously ruled that this delegation went too far—Congress had essentially given the President carte blanche to write laws for the entire American economy with virtually no guidelines.

As Chief Justice Hughes wrote, this was "delegation running riot." The Court found that NIRA's authorization was little more than "delegation in its most extreme form," allowing the President to make whatever laws he thought might help economic recovery.⁶ The same year, in Panama Refining, the Court struck down another NIRA provision that let the President prohibit the transportation of petroleum products produced in excess of state quotas, again finding the delegation too broad and standardless.⁷

Since then? The Court has become remarkably more permissive about congressional delegations. Modern statutes routinely grant agencies broad authority with vague directives like "protect public health" or "promote the public interest," and courts have consistently found these to provide sufficient "intelligible principles" to guide agency action.⁸

The doctrine became what many scholars call a "paper tiger"—theoretically powerful but practically toothless.⁸

Fast forward to today, and we're seeing renewed interest in the doctrine, particularly from conservative legal scholars and judges. Justice Thomas has openly questioned whether the Court's approach to nondelegation has strayed too far from the Founders' understanding of separation of powers. Justice Gorsuch has written extensively about the need to reinvigorate the doctrine.⁸ And now, with FCC v Consumers' Research, the Court has its first real opportunity in decades to breathe new life into this constitutional principle.⁸

Chevron’s Fall and the Nondelegation Connections

The connection to Chevron here is crucial. Under Chevron, courts deferred to agencies' reasonable interpretations of ambiguous statutes. Now that Chevron is gone, agencies face stricter scrutiny of their interpretive choices. A revived nondelegation doctrine would add another layer of constraint by questioning whether Congress can give agencies broad authority in the first place. It's like a one-two punch to agency power: first limiting how agencies interpret their authority, then questioning whether they should have that authority at all.^9,10

For health care stakeholders, this could have far-reaching consequences. Think about the FDA's authority to regulate tobacco products, which relies on a broad interpretation of "drugs" and "devices" under the FDCA. Or consider CMS's ability to implement value-based payment models, which stems from general statutory authority to test "innovative payment and service delivery models." Under a stricter nondelegation doctrine, these kinds of broad delegations might not pass constitutional muster.¹³

Next week, I’ll explore these health care implications in more detail, looking at specific examples of how a revived nondelegation doctrine could affect drug regulation, Medicare payment policy, and public health protection. I'll also examine some fascinating parallels between the current moment and the New Deal era, when the Court last seriously wielded this doctrine. (Spoiler alert: the similarities between our current political climate and the 1930s might surprise you!)

References

1. Chevron USA Inc v Natural Resources Defense Council, 467 US 837 (1984).

2. FCC v Consumers' Research, No 22-453 (2024).

3. Consumers' Research v FCC, 87 F. 4th 656 (5th Cir 2024).

4. Food, Drug, and Cosmetic Act, 21 USC §301 et seq.

5. Lawson G. Delegation and original meaning. Virginia Law Review. 2002;88(2):327-404.

6. Schechter Poultry Corp v United States, 295 US 495 (1935).

7. Panama Refining Co v Ryan, 293 US 388 (1935).

8. Sunstein CR. Nondelegation canons. University of Chicago Law Review. 2000;67(2):315-343.

9. Merrill TW, Hickman KE. Chevron's domain. Georgetown Law Journal. 2001;89(4):833-921.

10. Barron DJ, Kagan E. Chevron's nondelegation doctrine. Supreme Court Review. 2001;2001(1):201-265.

11. Manning JF. The nondelegation doctrine as a canon of avoidance. Supreme Court Review. 2000:223-277.