Today, the U.S. Supreme Court voted 9-0 that plaintiffs may challenge the constitutionality of a federal agency’s structure in federal district court without first having to go through an administrative hearing. The decision consolidated cases involving two separate agencies, the Securities and Exchange Commission (SEC), and the Federal Trade Commission (FTC). In both, those subject to administrative hearings challenged the constitutionality of the structures of those agencies, which bring administrative proceedings overseen by Administrative Law Judges (ALJs). 

In 2020, TechFreedom joined an amicus brief supporting Axon before the Court of Appeals for the Ninth Circuit, which was chiefly authored by the New Civil Liberties Alliance. This marks the second occasion in as many years that the Supreme Court has unanimously rejected the FTCʼs legal arguments.

“Justice Kagan’s opinion in Axon v. FTC creates a significant roadblock in the Commission’s efforts to revise relatively well settled propositions of antitrust law,” said Bilal Sayyed, TechFreedom’s Senior Competition Counsel and former Director of the FTC’s Office of Policy Planning. “The Commission’s best path to remaking antitrust law, and reviving a broad application of its unfair methods of competition authority, is to bring cases in its administrative system, wherein the Commissionʼs factual findings and legal interpretations get deference from the appellate courts.” 

“Now it seems likely that every respondent sued in the FTC’s administrative court will immediately initiate a constitutional challenge to the FTC’s structure, which makes the FTC both prosecutor and judge,” Sayyed, a 25-year veteran antitrust lawyer, continued. “This will undoubtedly divert FTC resources but may also lead the agency to limit its use of its administrative court, and thus its ability to write opinions on the scope of what constitutes an unfair method of competition.”  

“The district courts and appellate courts are less likely to accept the Commission’s efforts to turn back antitrust and unfair methods of competition doctrine to the pre-Sylvania, pre-BMI, pre-General Dynamics era,” concluded Sayyed. “In short, this opinion, while not a merits opinion, seems destined to impact the Commission’s enforcement agenda.”


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