Resurrected Consumer Group Leads Next Attack on Regulators

A group that’s spent the last four years attacking companies for promoting diversity, equity, inclusion and other “woke” policies is now taking aim at federal regulators in the next big swipe at the administrative state to reach the Supreme Court.

Consumers’ Research’s immediate target is a federal program that forces telecom carriers to contribute to a fund that makes telephone and internet services affordable for rural and low-income people. The ultimate goal of the case being argued March 26 is to revive a long-dormant legal principle that prohibits Congress from delegating its legislative power to federal agencies.

Consumers’ Research Executive Director Will Hild says the work is consistent with the nonprofit’s origin’s as a consumer protection organization, but critics say conservatives are using the group’s distant history to mask another attack on administrative power.

“This is ‘Invasion of the Body Snatchers’ where a group set up originally to provide consumers tangible product information has become a right-wing advocacy group with an anti-consumer agenda,” said Jon Golinger, who investigates corporate influence on elections and the government for Public Citizen, a progressive consumer advocacy group.

Delegating Authority

Founded in 1929, Consumers’ Research was the first independent organization to test and report on consumer products. It published bulletins and later Consumers’ Research Magazine.

A year after taking over the organization in 2020, Hild, who formerly led the Federalist Society’s Regulatory Transparency Project, launched the Consumers First Initiative, which accused companies like State Farm and BlackRock Inc. of putting “woke” progressive politics above consumer interests.

Bloomberg Law/Cordelia Gaffney

Litigation has become another main focus of the group that’s closely connected to Leonard Leo, who helped President Donald Trump choose his three Supreme Court nominees during his first term. Hild described the Federalist Society’s former vice president as “a good friend and adviser to the organization.”

Consumers’ Research’s case challenging the constitutionality of the Federal Communications Commission’s multi-billion-dollar Universal Service Fund is the latest attack on administrative power to come from a web of groups tied to Leo since Trump solidified a 6-3 conservative majority on the court.

There is a Leo network pushing an agenda that’s taking away the power to protect consumers, the environment, and workers, and giving it to corporate special interests, said Tony Carrk, Accountable.US executive director.

Last term, the justices overturned a legal principle that directed courts to defer to an agency’s reasonable interpretation when laws are ambiguous in Loper Bright Enterprises v. Raimondo.

Cause of Action Institute, a group Hild helped found, was the public interest law firm behind Loper Bright, one of two cases challenging that principle known as the Chevron doctrine. New Civil Liberties Alliance, which is also backed by groups tied to Leo, was behind the other challenge, Relentless v. Department of Commerce. Neither group would comment on Consumers’ Research or its work.

Legal scholars say its case against the FCC is the next step after Loper Bright to further hobble regulators by eliminating the leeway Congress has to let agencies determine what public health and safety standards are necessary to protect the public.

“It’s an attempted assault on Congress’ power,” said Nicholas Bagley, a University of Michigan law professor, who submitted a brief supporting the FCC with a colleague.

Three federal appeals courts rejected the group’s attempts to resurrect the nondelegation doctrine, which hasn’t been used to invalidate a federal law since 1935. Consumers’ Research found a more sympathetic bench at the US Court of Appeals for the Fifth Circuit.

Since the fund worked like a tax and that’s a “quintessentially legislative power,” Congress couldn’t give it away to a federal agency, the appeals court said.

Name Recognition

Consumers’ Research still touts itself as the nation’s oldest consumer protection organization.

“We have a 90-year pedigree of standing up for the consumer and amplifying their voice in the marketplace,” Hild said at the Conservative Political Action Conference, CPAC, in 2022.

The organization brought a constitutional challenge to the Consumer Product Safety Commission in 2021 that argued against its structure, but lost at the Fifth Circuit. The Supreme Court then refused to hear its appeal last year.

In its case against the FCC, Hild said Consumers’ Research doesn’t object to the Universal Services Fund as a subsidy program, only how it’s administered, or to federal regulations overall.

The group’s current work is a “natural evolution,” he said, pushing back on the assertion it’s latest work is at odds with its legacy.

Co-founder Stuart Chase was an adviser to President Franklin D. Roosevelt who coined the phrase ''a New Deal,” according to his 1985 New York Times obituary. Despite the similar sounding name, it didn’t publish Consumer Reports, which started after a 1935 unionization fight led workers to form Consumers Union.

The shift to policy work happened after a new owner took over in 1981, Hild said.

“As technology and society, frankly, caught up with Consumers’ Research, the need for a product review magazine declined,” he said.

But critics point out the group was largely dormant for about a decade during the early 2000s when revenue dropped from $113,000 in 2001 to about $5,200 in 2006. It then reported $0 in contributions from 2002 through 2006 and in 2010, reported no revenue or contributions, according to tax filings obtained through ProPublica’s Nonprofit Explorer.

Consumers’ Research started receiving money again in 2011 and then got $8.02 million in 2021, the most it had gotten in grants and contributions in two decades.

“Someone knew this group was laying around with this legacy that could be deployed to try to sound consumer friendly,” said Lisa Graves, director of the investigative watchdog group True North Research and managing director of Court Accountability, which works to combat corrupt abuses of judicial power.

The name, she said, helps give the group credibility with the public and the press when it’s targeting companies for “woke” politics or attacking regulators in court.

“They could have called it something else,” Graves said. “But they already had this asset.”