ALF Amicus Brief Argues That Justice Delayed Is Justice Denied

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. ALF has filed an amicus brief supporting the petition.

Issue Areas:

Free Enterprise, Limited Government

Case:

Axon Enterprise, Inc. v. Federal Trade Commission, No. 20-15662 (Ninth Circuit)

Read the Amicus Brief:
Question(s) Presented:

Whether the respondent in an FTC administrative enforcement proceeding can obtain judicial review of its structural constitutional claims without first having to participate in the proceeding that it claims is unconstitutional.


Additional 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’s Amicus Brief:

The amicus brief, authored by ALF Executive Vice President & General Counsel Larry Ebner, 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 on article discussing ALF’s amicus brief.

Status:

The Ninth Circuit denied the petition for rehearing en banc on April 15, 2021.

Date Originally Posted: March 17, 2021

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