Supreme Court allows challenges to federal agencies to go forward in court

The Supreme Court is allowing challenges to the structure of two federal agencies to go forward in federal court.

The high court ruled unanimously Friday to allow challenges to the structures of the Federal Trade Commission and the Securities and Exchange Commission to go forward in federal court. Lower courts had split on whether those challenges could proceed.

In one case, the FTC had brought an enforcement action against Axon Enterprise, the Arizona-based company best known for developing the Taser, arguing that its purchase of its competitor Vievu for approximately $13 million was improper. The other case involved an SEC enforcement action against Michelle Cochran, a certified public accountant. Axon and Cochran responded by suing in federal court and arguing that the structure of the FTC and SEC respectively are unconstitutional. Each said that the administrative law judges that oversee enforcement actions are insufficiently accountable to the president, in violation of separation-of-powers principles in the Constitution.

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Both lawsuits were initially dismissed. Axon and Cochran appealed and while a federal appeals court in California said Axon’s lawsuit could not go forward, a federal appeals court based in New Orleans said Cochran’s case could move ahead.

Justice Elena Kagan wrote in an opinion that the question for the court was whether federal courts can “resolve the parties’ constitutional challenges to the Commissions’ structure.” “The answer is yes,” she wrote, saying federal courts are not barred from “entertaining these extraordinary claims.”

The cases the court ruled in are Axon Enterprise v. Federal Trade Commission, 21-86, and Securities and Exchange Commission et. al. v. Cochran, 21-1239.