ALF Brief Supports Supreme Court Review of “Justice Delayed is Justice Denied” Appeal

In light of recent Supreme Court precedent, there is a substantial question about whether administrative enforcement proceedings prosecuted by independent federal regulatory agencies such as the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) violate the separation of powers. This constitutional issue arises because the administrative law judges (ALJs) who conduct such proceedings, and their superiors, can be removed from their positions only “for cause” rather than at the discretion of the President.  Several federal courts of appeals have held that federal district courts have been impliedly stripped of federal question jurisdiction to consider such structural constitutional claims.  According to these appellate courts, a corporate or individual defendant in an SEC and FTC administrative enforcement proceeding must be subjected to the litigation burdens, financial costs, and reputational harm attendant to such a proceeding, and then suffer a final adverse administrative judgment, before being able to challenge the constitutionality of the proceeding in an Article III court.

Axon Enterprise, Inc., the defendant in a pending FTC administrative enforcement proceeding, has filed a certiorari petition seeking Supreme Court review of this important jurisdictional issue – – an issue which implicates the question of whether justice delayed is justice denied. The Atlantic Legal Foundation, joined by the Cato Institute, has filed an amicus brief supporting Axon’s certiorari petition.

Issue Areas:

Amicus Briefs, Free Enterprise, Limited Government

Case:

Axon Enterprise, Inc. v. Federal Trade Commission, No. 21-86 (Supreme Court) (petition stage)

Read the Amicus Brief:
Question(s) Presented:

Whether the respondent in an FTC administrative enforcement proceeding can obtain judicial review of claims that the proceeding is structurally unconstitutional without first having to participate in the entire proceeding and suffer an adverse administrative judgment. 


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 federal district courts of federal question subject-matter jurisdiction to consider structural constitutional challenges to the FTC administrative enforcement scheme. The Ninth Circuit denied Axon’s petition for rehearing en banc, and Axon now has filed a petition for a writ of certiorari in the Supreme Court.  Additional case background is on the Cato Institute’s website.

ALF’s Amicus Brief:

ALF’s petition-stage amicus brief was authored by ALF Executive Vice President & General Counsel Lawrence S. Ebner, and filed jointly with Ilya Shapiro,  Vice President & Director of the Cato Institute’s Robert A. Levy Center for Constitutional Studies.  Cato Research Fellow William Yeatman also contributed to the brief.  The brief urges the Supreme Court to grant review because (i) the question of whether federal district courts have jurisdiction to consider structural constitutional claims concerning independent federal agencies’ administrative enforcement proceedings 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, including because delayed judicial review of structural constitutional claims cannot be meaningful. 

Status:

The petition for a writ of certiorari is pending.

Date Originally Posted: August 17, 2021

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