In light of recent Supreme Court precedent, there is a substantial question about whether administrative enforcement proceedings prosecuted by independent regulatory agencies such as the Securities and Exchange Commission(SEC) and the Federal Trade Commission (FTC) before their own removal-for-cause-only administrative law judges (ALJs) violate the separation of powers, and thus are unconstitutional. Federal courts of appeals in several circuits have held, however, that federal district courts have been impliedly stripped of federal question jurisdiction to consider such structural constitutional claims. These courts of appeals have held that instead, respondents in SEC and FTC ALJ-conducted administrative enforcement proceedings must endure the costs and burdens of such a proceeding, suffer an adverse Commission judgment, and only then seek judicial review of their constitutional claims in a court of appeals.
In one of these cases, the respondent in an FTC administrative enforcement proceeding has filed a petition for rehearing en banc in the Ninth Circuit. Capital Appellate Advocacy founder Lawrence S. Ebner has authored an amicus brief on behalf of the Atlantic Legal Foundation (ALF) in support of the petition.
Issue Areas: Free Enterprise, Limited Government
Case: Axon Enterprise, Inc. v. Federal Trade Commission, No. 20-15662 (9th Cir.)
Question Presented: Whether the respondent in an FTC administrative enforcement proceeding can obtain judicial review of its structural constitutional claims
Background: In Axon v. FTC, 986 F.3d 1173 (9th Cir. 2021), a Ninth Circuit panel, in a 2 to 1 decision, affirmed an Arizona federal district court’s holding that the FTC Act, which provides for court of appeals review of FTC cease and desist orders issued after an administrative hearing, impliedly strips district courts of jurisdiction to consider structural constitutional challenges to the FTC administrative enforcement scheme.
ALF Amicus Brief: ALF’s amicus brief urges the Ninth Circuit to grant en banc review because (i) the jurisdictional issue is exceptionally important, (ii) the majority’s ambivalent opinion, coupled with the strong dissenting opinion, cries out for further review, and (iii) district courts have not been impliedly stripped of federal question jurisdiction because delayed judicial review of structural constitutional claims cannot be meaningful. Law360 has published an article discussing ALF’s amicus brief and quoting Larry Ebner.
Status: The petition for rehearing en banc is pending.
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Read more Atlantic Legal Foundation amicus briefs authored by Larry Ebner
Capital Appellate Advocacy founder Larry Ebner serves as Executive Vice President & General Counsel of the Atlantic Legal Foundation.