Consumers' Research, Cause Based Commerce, Inc. v. Fed. Commc'ns Comm'n

88 F.4th 917

CONSUMERS' RESEARCH, CAUSE BASED COMMERCE, INC.,Edward J. Blum, Kersten Conway, Suzanne Bettac, et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION, United States of America, Respondents,Benton Institute for Broadband & Society, et al., Intervenors.

No. 22-13315

United States Court of Appeals, Eleventh Circuit

Filed: December 14, 2023

Petition for Review of a Decision of the Federal Communications Commission, Agency No. 96-45

R. Trent McCotter, Jonathan Berry, Michael B. Buschbacher, C. Boyden Gray, Jared Kelson, Boyden Gray, PLLC, Washington, DC, for Petitioners.

James M. Carr, Attorney, Adam Crews, Marlene H. Dortch, Federal Communications Commission, Office of General Counsel, Washington, DC, Jacob Matthew Lewis, Associate General Counsel, Federal Communications Commission, Public Safety and Homeland Security Bureau, Washington, DC, U.S. Attorney General, U.S. Attorney General's Office, Washington, DC, for Respondent Federal Communications Commission.

Marlene H. Dortch, Federal Communications Commission, Office of General Counsel, Washington, DC, U.S. Attorney General's Office, Washington, DC, for Respondent United States of America.

Andrew Schwartzman, Law Office of Andrew Schwartzman, Washington, DC, for Intervenors Benton Institute for Broadband & Society, Center for Media Justice dba MediaJustice, National Digital Inclusion Alliance.

Jennifer Tatel, Brian William Murray, Wilkinson Barker & Knauer, LLP, Washington, DC, for Intervenors USTelecom - The Broadband Association, National Telecommunications Cooperative Association, Competitive Carriers Association.

Jason Neal, Hwg, LLP, Washington, DC, for Intervenor Schools, Health & Libraries Broadband Coalition.

Jeffrey Steven Beelaert, Stein Mitchell Beato & Missner, LLP, Washington, DC, for Amici Curiae Competitive Enterprise Institute, Free State Foundation, Christopher C. Demuth, Harold Furchtgott-Roth, Michael S. Greve, Randolph J. May.

Corbin Barthold, TechFreedom, Washington, DC, for Amicus Curiae TechFreedom.

Eric P. Gotting, Keller & Heckman, Washington, DC, for Amicus Curiae Robert Frieden.

Matthew S. Hellman, Jenner & Block, LLP, Washington, DC, for Amicus Curiae NCTA - The Internet & Television Association.

Before Wilson, Newsom, and Lagoa, Circuit Judges.

Wilson, Circuit Judge:

In this petition for review of final agency action, the Petitioners ask us to declare 47 U.S.C. § 254—the Telecommunications Act of 1996's universal service requirements—unconstitutional as a violation of the non-delegation doctrine. Additionally, they argue that the Federal Communications Commission (FCC), the agency Congress put in charge of § 254, has impermissibly delegated authority over the universal service fund to a private entity in violation of the private nondelegation doctrine.

Because § 254 provides an intelligible principle and the FCC maintains control and oversight of all actions by the private entity, we hold that there are no unconstitutional delegations and therefore DENY the petition.

I. Background

The FCC was created in 1934 "[f]or the purpose of regulating interstate . . . commerce in communication . . . so as to make available, so far as possible, to all the people of the United States, without discrimination . . . a rapid, efficient, Nationwide, and world-wide wire and radio communication service with adequate facilities at reasonable charges." 47 U.S.C. § 151. In 1996, Congress instructed the FCC to establish and maintain a universal service fund in furtherance of this purpose. Id. § 254. Congress enacted § 254 to provide equitable universal services. Id. The Act instructs the FCC to determine the requisite level of universal service based on an "evolving" evaluation of four statutory factors. Id. § 254(c). The FCC requires contributors to submit a specified amount of money to the Fund per quarter. Id. § 254(d).

The FCC depends on the Universal Service Administrative Company (USAC), a private entity, to carry out Congress' instruction. The USAC assists the FCC in determining the amount each contributor must provide to the fund. See 47 C.F.R. §§ 54.701, 54.709. The USAC uses the FCC's detailed formulas to determine projections and demand for the universal service fund per quarter. See id. §§ 54.303, 54.901, 54.1301, 54.711(a). The USAC must submit its "projections of demand for the federal universal service support mechanisms" to the FCC 60 days before the start of the quarter, and then submit the total contribution base (i.e., the percentage of revenues that each carrier will have to pay) to the agency at least 30 days before the start of the quarter. Id. § 54.709(a)(3). Only after the FCC approves the USAC's proposal is the USAC's valuation used to calculate that quarter's contribution factor. Id. Then, the contribution factor is used to determine the amount of individual contributions. Id.

On appeal, the Petitioners—a nonprofit organization that aims to increase consumer knowledge of issues, a corporation that resells telecommunications services, and various individuals who pay into the universal service fund through monthly phone bills—challenge the FCC's and USAC's roles in creating the 4th Quarter 2022 Contribution Factor. They argue that the actions taken by both entities are unconstitutional under nondelegation doctrine jurisprudence.

II. Jurisdiction

Because we have "an independent obligation to ensure that subject-matter jurisdiction exists before reaching the merits of a dispute," we begin with a jurisdictional analysis before addressing the Petitioners' claims. Jacobson v. Fla. Sec'y of State, 974 F.3d 1236, 1245 (11th Cir. 2020).

The FCC challenges our jurisdiction to hear this appeal under the Hobbs Act. A "proceeding to enjoin, set aside, annul, or suspend any order of the Commission . . . shall be brought as provided by and in the manner prescribed in [the Hobbs Act]." 47 U.S.C. § 402(a).¹ The Hobbs Act gives Courts of Appeal exclusive jurisdiction to "determine the validity of . . . all final orders of the Federal Communications Commission." 28 U.S.C. § 2342(1); see also FCC v. ITT World Commc'ns, Inc., 466 U.S. 463, 468, 104 S.Ct. 1936, 80 L.Ed.2d 480 (1984) ("Exclusive jurisdiction for review of final FCC orders . . . lies in the Court of Appeals."). However, the aggrieved party has only 60 days after the order's entry to file a petition for review. 28 U.S.C. § 2344.

The FCC argues that the Hobbs Act bars us from exercising jurisdiction for two reasons. First, because the Petitioners' true challenge is to the constitutionality of the entire statutory delegation scheme, and not the 4th Quarter Contribution Factor specifically. The FCC asserts that analyzing jurisdiction under the Hobbs Act requires looking at the impact of a proceeding rather than the reason a plaintiff brought a suit. Thus, because the statute was last amended in 2011, the Petitioners are far beyond their 60-day jurisdictional limit to file this petition. Second, the FCC argues that a challenge to a Contribution Factor is an invalid pre-enforcement challenge because the Petitioners will not be harmed by the announcement of the Contribution Factor since it has not yet been applied to them. We disagree on both points.

First, even if Petitioners challenge the entire statutory scheme, we agree with the Sixth and D.C. Circuits that administrative regulations "are capable of continuing application." Functional Music, Inc. v. FCC, 274 F.2d 543, 546 (D.C. Cir. 1958); see also Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997); State v. Rettig, 987 F.3d 518, 529 (5th Cir. 2021). When considering a challenge to FCC rules under the Hobbs Act, the D.C. Circuit reasoned that the 60-day limit does not affect review of the validity of agency action that re-applies a rule. See Functional Music, 274 F.2d at 546. This is true because "limiting the right of review of the underlying rule would effectively deny many parties ultimately affected by a rule an opportunity to question its validity." Id. Such is the case here. The Fourth Quarter Contribution Factor re-applies the statutory delegation in § 254. Thus, "Petitioners' challenge to the FCC's constitutional authority to implement § 254, reapply its prior regulations, and issue the [4th Quarter 2022 Contribution Factor] restarts the sixty-day clock." Consumers' Rsch. v. FCC, 67 F.4th 773, 786 (6th Cir. 2023).

Here, the challenge is timely. The Petitioners filed their challenge to the 4th Quarter Contribution Factor twenty-one days after public notice, and seven days after the Contribution Factor was deemed approved by the FCC and therefore became effective. The Petitioners were well within their 60-day jurisdictional limit.

Second, we find that the Contribution Factor is ripe for review. The Contribution Factor itself is a final and judicially reviewable agency action—Petitioners need not wait for "harm." According to FCC regulations, "Commission action shall be deemed final, for purposes of seeking reconsideration at the Commission or judicial review, on the date of public notice." 47 C.F.R. § 1.103(b) (emphasis added); see also Bennett, 520 U.S. at 177-78, 117 S.Ct. 1154; Consumers' Rsch., 67 F.4th at 785 (finding the text of 47 C.F.R. § 1.103(b) to be sufficient indication that an FCC contribution factor is final and reviewable). Further, as we have explained, "[o]rders 'adopted by the Commission in the avowed exercise of its rule-making power' that 'affect or determine rights generally . . . have the force of law and are orders reviewable under the' Hobbs Act." Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110, 1121 (11th Cir. 2014) (quoting Columbia Broad. Sys. v. United States, 316 U.S. 407, 417, 62 S.Ct. 1194, 86 L.Ed. 1563 (1942)). Here, the challenge is properly brought because the Petitioners filed their challenge after the Contribution Factor's public notice date, and the Contribution Factor affects or determines their rights.

Even it was not ripe for review, however, Petiti...