On April 14, 2023, the Supreme Court unanimously held in Axon Enterprise v. FTC & SEC v. Cochran that federal district courts have federal question jurisdiction to consider constitutional challenges to the structure of FTC & SEC civil administrative enforcement proceedings. ALF filed four amicus briefs in these cases: in Axon, ALF filed in the 9th Circuit and then in the Supreme Court at both the petition and merits stages; in Cochran ALF filed in the Supreme Court at the merits stage.
ALF’s amicus briefs argued that justice delayed is justice denied, i.e., that judicial review of an administrative enforcement proceeding claimed to be unconstitutional cannot be meaningful if the challenging party (the respondent in the administrative proceedings) first must endure the burdens, costs, and other harms imposed by the very proceeding claimed to be unconstitutional. The Supreme Court agreed, stating in a key passage as follows:
“Axon would have the same claim had it won before the agency. The claim, again, is about subjection to an illegitimate proceeding, led by an illegitimate decisionmaker. And as to that grievance, the court of appeals can do nothing: A proceeding that has already happened cannot be undone. Judicial review of Axon’s (and Cochran’s) structural constitutional claims would come too late to be meaningful.”
In addition to the Court’s opinion, Justice Thomas’ concurring opinion is important reading. It broadly questions the constitutionality of administrative enforcement proceedings involving “core private rights that must be adjudicated by Article III courts.” In Justice Thomas’ view, deferential review by a court of appeals following an administrative adjudication of private rights (such as proceedings involving assessment of civil penalties) does not satisfy this Article III constitutional requirement.
Justice Gorsuch filed a separate opinion, concurring only in the judgment. In his view, the Court’s “Thunder Basin factors” (including the “meaningful judicial review” factor) for determining whether a statute impliedly strips district courts of subject-matter jurisdiction is irrelevant. Instead, Justice Gorsuch contends all that is required is a straightforward application of 28 USC § 1331 – the federal-question statute.
Finally, it should be emphasized that the Court did not rule on the merits of the structural constitutional claims, but instead, only the important question of district court jurisdiction to consider those claims.