ALF Argues “Justice Delayed Is Justice Denied” In FTC Constitutional Challenge

The Atlantic Legal Foundation has filed an amicus brief urging the Supreme Court to hold, contrary to the Ninth Circuit, that federal district courts have jurisdiction to hear constitutional challenges to the structure of the Federal Trade Commission’s civil administrative enforcement process.

In a divided opinion, a Ninth Circuit panel held in Axon Enterprise, Inc. v. FTC, 986 F.3d 1183 (9th Cir. 2021), that an FTC antitrust enforcement target such as Axon can have its day in court to raise structural constitutional claims—but only in a federal court of appeals, and only after the company endures the costs and burdens of a fully adjudicated FTC administrative enforcement hearing and suffers an adverse FTC administrative judgment. The Supreme Court has agreed to address the issue of whether federal district courts have been "stripped" of jurisdiction to consider constitutional claims that challenge the FTC enforcement process's structure.

Axon contends that it does not have to subject itself to the administrative process that it contends is unconstitutional in order to challenge its constitutionality. Instead, Axon argues that it can mount, in federal district court, a threshold constitutional challenge to the structure of FTC enforcement proceedings. Axon wishes to challenge, for example, the opaque "clearance process" by which the Justice Department's Antitrust Division and the FTC allocate antitrust matters between themselves.

ALF’s amicus brief supports Axon. The brief explains that the question of where and when structural constitutional claims not only can be heard by an Article III court, but also afforded meaningful judicial review, goes to the heart of due process, civil justice, and the rule of law. It is a question of whether justice delayed is justice denied.

ALF's amicus brief argues that judicial review of a constitutional challenge to the FTC administrative enforcement process cannot be “meaningful”—a prerequisite to implied preclusion (i.e., “stripping”) of district court federal question jurisdiction—if the enforcement target first must be subjected to the same constitutional injuries that it seeks to avoid.

In addition, ALF's amicus brief discusses why enabling district courts to review threshold structural challenges to the FTC’s administrative enforcement process would help mitigate the deleterious effects of the FTC’s extensive, coercive, and sometimes abusive use of consent orders to resolve antitrust enforcement complaints. In the Axon case, for example, the FTC insisted that the company not only set up a competitor "clone," but also provide it with with Axon's intellectual property and proprietary technology.
For additional background, please click here.