The
Supreme Court
ruled unanimously Friday to allow a wider scope of legal defense options against the
Securities and Exchange Commission
and the
Federal Trade Commission
.
In a 9-0 opinion authored by Justice
Elena Kagan
, the justices said corporations and people confronting investigations and complaints from the powerful federal regulatory agencies can head immediately to federal court with some constitutional challenges.
“The ordinary statutory review scheme does not preclude a district court from entertaining these extraordinary claims,” Kagan
wrote
.
The ruling allows Arizona-based weapons technology maker Axon Enterprise to revive its lawsuit contesting the constitutionality of the FTC’s structure in a bid to counter an antitrust action related to the company’s acquisition of a rival, overturning a lower court’s decision to dismiss the case.
SUPREME COURT WEIGHS WHETHER TO RESTRAIN AGENCY POWER IN FTC AND SEC CASES
The justices also upheld a lower court’s decision allowing accountant Michelle Cochran to sue the SEC, challenging the legality of its use of in-house judges, after the agency faulted her audits of publicly traded companies.
Justices
Clarence Thomas
and
Neil Gorsuch
wrote separate concurrences on the matter, with the latter agreeing that challengers are entitled to their day in court but disagreeing with how the majority reached that decision.
“We have no authority to froth plain statutory text with factors of our own design, all with an eye to denying some people the day in court the law promises them.”
Thomas wrote separately that he had “grave doubts about the constitutional propriety of Congress vesting administrative agencies with primary authority to adjudicate core private rights with only deferential judicial review on the back end.”
Both cases confronted the question of whether an agency’s enforcement action could challenge its structure or processes in a federal district court or whether it must first go through the agency’s administrative proceeding, also known as administrative law judges.
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Friday’s decision compiles on a trend for the Supreme Court to cast skepticism on unbridled administrative agency authority.
The high court ruled last year to limit the
Environmental Protection Agency
‘s authority to implement broad regulations to reduce carbon emissions from power plants. And in spring 2021, a unanimous court made it
more difficult for the FTC
to force companies that engage in deceptive business techniques to return any questionable gains to purchasers.
