The Atlantic Legal Foundation has filed an amicus brief urging the Supreme Court to hold, contrary to the Ninth Circuit, that federal district courts can exercise their federal question jurisdiction over constitutional challenges to the structure of the Federal Trade Commission’s civil administrative enforcement process. In a divided opinion, a Ninth Circuit panel held in Axon Enterprise, Inc. v. FTC, 986 F.3d 1183 (9th Cir. 2021), that an FTC antitrust enforcement target such as Axon can have its day in court to raise structural constitutional claims—but only in a federal court of appeals, and only after the defendant company endures the costs and burdens of a fully adjudicated FTC administrative enforcement hearing and suffers an adverse FTC administrative judgment in the form of a cease-and-desist order. The Supreme Court has agreed to address the issue of whether federal district courts have been “stripped” of jurisdiction to consider constitutional claims that challenge the FTC enforcement process’s structure.
Axon contends that it does not have to subject itself to an administrative process that it contends is unconstitutional in order to challenge its constitutionality. Instead, Axon argues that it can mount, in federal district court, a threshold constitutional challenge to the structure of FTC enforcement proceedings. More specifically, Axon contends that (i) the opaque “clearance process” by which the FTC and the Justice Department’s Antitrust Division allocate antitrust enforcement matters between themselves; (ii) the all-in-one administrative process by which the FTC investigates, prosecutes, and adjudicates antitrust (and consumer protection) enforcement matters, and then hears, in the first instance, appeals challenging its own cease and desist orders; and (iii) the dual-layer, for-cause-only removal protection afforded to the FTC’s sole administrative law judge (“ALJ”).
ALF’s amicus brief, authored by Capital Appellate Advocacy founder and ALF Executive Vice President & General Counsel Larry Ebner, explains that the question of where and when structural constitutional claims not only can be heard by an Article III court, but also afforded meaningful judicial review, goes to the heart of due process, civil justice, and the rule of law. It is a question of whether justice delayed is justice denied.
More specifically, the amicus brief argues that judicial review of a constitutional challenge to the FTC administrative enforcement process cannot be “meaningful”—a prerequisite to implied preclusion (i.e., “stripping”) of district court subject-matter jurisdiction—if the enforcement target first must be subjected to the same constitutional injuries that it seeks to avoid. In addition, the amicus brief discusses why enabling district courts to review threshold structural challenges to the FTC’s administrative enforcement process would help mitigate the deleterious effects of the FTC’s extensive reliance on consent orders to resolve antitrust enforcement complaints.