Most of Federal Government Action Would Survive Even Strict ‘Gundy’ Analysis

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The Supreme Court’s recent decision in Gundy v. United States “suggests that the way our government works will be substantially changed towards greater democratic involvement,” as my colleague Devin Watkins explained on these pages last week. Although the Constitution permits Congress to pass laws that “leave the executive the responsibility to find facts and fill up details,” as Justice Gorsuch wrote in his Gundy dissent, “Congress must set forth standards ‘sufficiently definite and precise to enable Congress, the courts, and the public to ascertain’ whether Congress’s guidance has been followed.” Congress knows how to abide by this constitutional requirement; it has done so time and time again in the 84 years since the Supreme Court last invalidated an agency’s exercise of power as a violation of the nondelegation doctrine.

Justice Gorsuch’s dissent caused some commentators to ring the alarm bells. For instance, Prof. Nicholas Bagley, in an op-ed in The New York Times, argues that the Court’s “conservative wing” in Gundy “called into question the whole project of modern American governance.” Congress’s power to “delegate authority and discretion to federal agencies,” Bagley contends, “serves as the foundation of the American state.” Similarly, Mark Joseph Stern, writing for Slate, argues that the court’s “conservative justices are eager to take a hatchet to the federal bureaucracy that governs much of modern America.”

These ominous warnings rest on the assumption that the modern administrative state rests entirely on capacious, open-ended statutes in which Congress gives federal agencies little to no guidance as to how they carry out their powers. In some cases, Congress has failed to give agencies anything resembling an intelligible principles—but this is hardly a universal truth when it comes to the tens of thousands of pages of federal laws from which federal agencies derive their powers.

Indeed, as Congress has created federal agencies and expanded their powers over the past 100-plus years, hard-fought legislative compromises have resulted in hundreds of statutes that abound with specific principles to which agency must adhere in carrying out their duties. The House of Representatives Office of the Legislative Counsel maintains a list of “frequently requested” statutory compilations, most of which are administered by independent agencies or executive departments, that links to nearly 300 federal laws. For example, the Food and Drug Administration’s enabling statute, the Federal Food, Drug, and Cosmetic Act, is 829 pages long. The Federal Communications Commission’s enabling statute, the Communications Act as amended, comes in at 387 pages. And the Federal Deposit Insurance Corporation’s enabling statute contains 297 pages.

How do agencies carry out the principles laid out in their enabling statutes in practice?

Consider the Federal Communications Commission. The FCC’s enabling statute, the Communications Act of 1934 as amended, sets forth how the agency should regulate communications by wire and radio. The statute imposes lots of limits on the FCC’s exercise of its powers. For instance, the FCC is empowered to preempt local authorities that seek to regulate cable television providers, but the scope of these powers is limited. Congress has specified the maximum amount (five percent of gross revenues) that cable companies may be forced to pay in franchise fees. Congress has also specified in law how the FCC must go about regulating the manner in which cable and satellite providers transmit local broadcast stations. And Congress has set forth how the FCC should regulate broadcast television advertising in shows aimed at children.

On the other hand, some of the Communications Act’s delegations of power to the FCC are quite open-ended and, thus, potentially in conflict with a revitalized nondelegation doctrine. For example, the law empowers the FCC to review proposed transfers of wireline telecom licenses, tasking the agency with deciding whether such proposals are consistent with the “public convenience and necessity” as conceived by the FCC. Former FCC Chairman Michael Powell discussed this vague standard in a 1998 speech, explaining that after considerable analysis, he concluded that the “public interest standard is a bit like modern art, people see in it what they want to see.”

For another example of how an agency carries out its congressionally delegated powers, take the Federal Trade Commission. Congress has empowered the FTC to, among other things, prohibit “acts or practices” that are “unfair” in 15 U.S.C. § 45(a)(1). What makes an act or practice “unfair”? For many years, the FTC Act, the agency’s enabling statute, didn’t define this seemingly open-ended term. During the 1970s, the FTC sought to use its unfairness authority to ban all advertising directed to children. This controversial move resulted in Congress shutting down the agency for several days.

But in 1994, Congress passed a law amending the FTC Act to clarify that an act is unfair only if it causes “substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.” 15 U.S.C. § 45(n). By adding these principles to the FTC Act, Congress exercised its legislative powers to rein in an agency that had gone too far without adequate guidance. Instead of letting the FTC decide what unfairness means in practice, Congress set forth criteria for the FTC to follow in determining whether an act is unlawful. In individual cases, the FTC must still act as a fact-finder, carefully analyzing whether a particular act meets the statutory test.

The FTC is also empowered to police “deceptive” acts. The FTC Act doesn’t define the term “deceptive.” But in 1983, the FTC, under pressure from Congress, issued a policy statement explaining in detail the factors that the agency considers in determining whether an act is deceptive. The principles laid out in this policy statement, which the FTC follows to this day, could be incorporated into the FTC Act by Congress with a straightforward piece of legislation.

As the Communications Act and the FTC Act illustrate, congressional delegations of authority to agencies vary widely in terms of their specificity—and, thus, their vulnerability to judicial review under a revitalized nondelegation doctrine. Much of the modern administrative state would likely remain intact even if a future majority of the Supreme Court agrees with the views espoused by Justice Gorsuch in Gundy.