SCOTUS Takes on the Nondelegation Doctrine: Surprising Reactions and What They Mean for Agency Power

The Supreme Court recently heard arguments in Federal Communication Commission (FCC) v Consumers’ Research, a case that I covered in February and one that could dramatically reshape federal agency authority through the nondelegation doctrine.

Read Part 1 and Part 2 here.

This case raises fundamental questions about where regulatory decision-making authority should reside—with specialized agencies staffed by subject matter experts or with Congress as the constitutionally designated legislative body.

As a brief recap, at issue in FCC v Consumers’ Research is the FCC’s Universal Service (USF) fund, an $8 billion program that subsidizes telecommunications services for rural areas, low-income users, schools, libraries, and clinics. Critics argue the FCC’s funding mechanism violates the nondelegation doctrine by allowing an agency to effectively impose taxes without sufficient congressional guidance.¹

The nondelegation doctrine—the principle that Congress cannot delegate its legislative powers to agencies without clear limits—has remained largely dormant since 1935, when the Supreme Court struck down provisions of the National Industrial Recovery Act in the "sick chicken" case (Schechter Poultry). Since then, courts have generally accepted broad delegations to agencies with vague directives like "protect public health" or "promote the public interest."²

The case presents a paradox within the Trump administration. While President Trump aims to curtail agency power through executive orders, budget cuts, and staff reductions, his Justice Department is defending the FCC's authority to administer the USF program.¹ This tension highlights the complex reality of administrative governance: even administrations committed to reducing the "administrative state" recognize the necessity of certain agency programs.

Several conservative justices, including Neil Gorsuch, Clarence Thomas, and Brett Kavanaugh, have previously signaled interest in reviving this doctrine.³ A reinvigorated nondelegation principle would add another constraint on agency power beyond the elimination of Chevron deference: first limiting how agencies interpret their authority, then questioning whether they should have that authority at all.

For health care stakeholders, the implications could be profound. The Centers for Medicare and Medicaid Services (CMS) operates under broad congressional delegations, particularly in areas like:

• Setting Medicare payment rates and coverage rules
• Implementing demonstration projects through the Center for Medicare and Medicaid Innovation (CMMI)
• Defining drug approval standards through the US Food and Drug Administration (FDA)
• Establishing specialty drug pricing regulations

If the Court strengthens the nondelegation doctrine, these delegations could face new scrutiny. Health care regulation might become more rigid, as agencies would hesitate to act without explicit statutory instruction. Many CMS actions that currently modernize health care delivery—such as new value-based payment models or adjustments to provider reimbursement formulas—could be stalled or invalidated.

What we heard last week during the oral arguments provided important insights into how the justices are likely to rule. Interestingly, Justices Kavanaugh and Barrett appeared skeptical of invalidating the fund, suggesting concerns about disrupting established programs that benefit rural and low-income communities.¹

Conversely, Justice Gorsuch expressed skepticism regarding the FCC's funding mechanism, referring to it as a "tax unlike any other," which aligns with his interest in revisiting the nondelegation doctrine. Overall, the Court seems inclined to uphold the USF, though the final decision will depend on how the justices balance concerns about agency authority and the potential impact on essential services.¹

Moreover, this reinforces what lawyer Paul Clement told the justices on behalf of telecommunications associations: “This is simply not the right case for the court to revamp the nondelegation doctrine.”¹ (To be fair, I didn’t think Loper Bright was the appropriate case to overturn the Chevron doctrine, either, but here we are.) Perhaps Justice Kavanaugh, who has expressed openness to reviving the nondelegation doctrine in the past, is thinking along similar lines—that this case may not be the right one to take that step. This response was not one I expected, but we’re not out of the woods yet: the justices will issue their opinion at the end of their session in June 2025.

All this aside, it’s clear that some recalibration is due. Agencies have, at times, overreached their authority, and stronger congressional oversight could enhance their legitimacy. But it’s equally clear that we benefit from a certain degree of expert delegation. Our health care system has thrived on the ability of agencies like the FDA and CMS to refine programs and respond to emergent needs.

The challenge is to strike a balance: ensuring agencies aren’t acting without authority or accountability, while not crippling their capacity to carry out complex, essential programs. The path to strike this balance might result in a recognition that perhaps not all delegations of power are created equal.

Join me every Wednesday as I highlight key court decisions, review notable health policies, and analyze what's behind the bill in health care.

References

1. Sherman M. Supreme Court seems likely to OK $8 billion phone and internet subsidy for rural, low-income areas. AP News. Updated March 26, 2025. Accessed April 1, 2025. https://apnews.com/article/supreme-court-telecommunications-fee-internet-c51526ec5c78ed913064b1c4d3399ba2

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

3. Perks T. US supreme court may revive doctrine that would curb federal agencies’ power. The Guardian. February 6, 2025. Accessed April 1, 2025. https://www.theguardian.com/us-news/2025/feb/06/nondelegation-doctrine-supreme-court