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  • Brian Walsh

SCOTUS Case Could Restructure Agency Enforcement Proceedings

On a monumental day of cert. petitions involving affirmative action and the Clean Water Act, the case that has flown under-the-radar the most has massive implications. The Supreme Court granted certiorari on a critical administrative law question that asks whether federal district courts have jurisdiction to hear constitutional challenges by FTC targets to the agency’s “structure, procedures, and existence.” This theme asks whether a targeted party must endure a complete agency enforcement proceeding before raising constitutional challenges to the agency on appeal in a federal circuit court or whether the target can go to a federal district court and bypass the agency proceeding to raise constitutional defenses.

Axon Enterprise v. FTC involves an FTC challenge to Axon Enterprise’s completed merger with VieVu LLC. Axon sells Tasers and other law enforcement equipment. The FTC alleges that Axon bought a rival company to “reduce competition in an already concentrated market.” The FTC then demanded Axon spin-off its newly acquired company and provide this independent company with Axon’s intellectual property. In response, Axon sued the FTC in Arizona federal district court, alleging multiple constitutional defects with the FTC’s administrative process. The first claim was that the FTC’s role in bringing and reviewing such a case violated its due process rights. The second claim was that the administrative law judge (ALJ) appointment process violated the separation of power principles in the Constitution because the President cannot fire an ALJ (or the commissioners who appoint an ALJ) at will.