Public versions of the parties’ pleadings and motions, as well the Commission and Administrative Law Judge orders may be found at: https://www.ftc.gov/enforcement/cases-proceedings/1810162/axonvievu-matter
The administrative proceedings began January 3, 2020 and were stayed by the Ninth Circuit on October 2, 2020, just days before the hearing was set to begin on October 13, 2020. Full fact and expert discovery had been completed at that time. The proceedings remained stayed during the Supreme Court proceedings and the antitrust merits have yet to be tried.
Summary of Claims. Axon’s Complaint raised three distinct challenges to the FTC’s structure and processes:
1. The constitutionality of the uncodified, black box “clearance” process by which the FTC and the DOJ divvy up merger investigations—thereby arbitrarily subjecting similarly situated companies to vastly different rights, standards, and consequences—in violation of Fifth Amendment due process and equal protection guarantees;
2. The constitutionality of the FTC’s structure—combining investigative, prosecutorial, adjudicative, and appellate functions—together with its undisputed 25-year win streak in its own administrative forum, in violation of Fifth Amendment due process; and
3. The authority of the FTC’s Administrative Law Judge to preside over the administrative case in the first instance based on impermissible dual-layer for-cause removal protections, in violation of Article II of the U.S. Constitution.
Status: The case was dismissed on jurisdictional grounds in April 2020, requiring Axon to endure the very forum it contends is unconstitutional before having its claims—acknowledged by the district court as “substantial and topical”—decided by an Article III court. Axon appealed.
Summary of Issues on Appeal. Whether the district court erred as a matter of law in holding the FTC Act stripped its jurisdiction where Axon’s substantive constitutional claims do not depend on the antitrust merits in the FTC administrative proceedings, do not challenge any FTC order, do not require agency interpretation of any statute or rule it is charged with enforcing, and do not seek any remedy under the FTC Act. Each of Axon’s constitutional claims presents an issue of first impression in this Circuit.
Status. The Ninth Circuit granted expedited briefing and heard oral argument in July 2020. In October 2020, the Ninth Circuit stayed the FTC’s administrative proceedings pending its ruling. On January 28, 2021, a 3-judge panel issued a split decision affirming the district court. On March 15, 2021, Axon filed a petition for rehearing en banc, which was supported by multiple amicus briefs filed by the Atlantic Legal Foundation, the Washington Legal Foundation, the Americans for Prosperity Foundation, the US Chamber of Commerce, and New Civil Liberties Alliance. The petition argued that the panel’s majority opinion conflicts with both Supreme Court and Ninth Circuit precedent. The Court denied the petition on April 15, 2021 but then granted Axon’s motion to stay the appellate mandate pending the filing of a certiorari petition with the U.S. Supreme Court. The FTC’s administrative case will remain stayed throughout the course of the Supreme Court proceedings.
2021-3-23 Americans for Prosperity Foundation/US Chamber of Commerce Amicus Brief
2020-05-08 Amicus Brief of NCLA and TechFreedom in Support of Axon
On January 24, 2022 the Supreme Court granted Axon’s petition for writ of certiorari on the following important jurisdictional issue:
1. Whether Congress impliedly stripped federal district courts of jurisdiction over constitutional challenges to the Federal Trade Commission’s structure, procedures, and existence by granting the courts of appeals jurisdiction to “affirm, enforce, modify, or set aside” the Commission’s cease-and-desist orders.
“The Court’s action today is a critical first step for all businesses seeking to vindicate their constitutional rights and hold government regulators accountable. Without access to federal courts, upfront, there simply is no remedy on the backend of unconstitutional administrative proceedings. We look forward to the Court’s resolution of this important jurisdictional issue.” – Pam Petersen, Axon’s VP of Litigation
On April 14, 2023, Axon secured a unanimous United States Supreme Court victory allowing its constitutional challenges to the FTC’s structure and existence to proceed in Federal court.
“The high Court’s decision vindicates what Axon has said all along: threshold constitutional challenges to the FTC’s structure belong in Federal court where unconstitutional action can be enjoined before it inflicts irreparable harm. We are heartened that no Justice endorsed the alternative of making parties endure unconstitutional agency action before it can be challenged in court.”
- Pam Petersen, Vice President of Litigation and National Appellate Counsel at Axon
2022-05-10 Washington Legal Foundation & Allied Educational Foundation Amicus Brief
2021-08-23 Chamber of Commerce of the United States Amicus Brief
2021-08-17 Atlantic Legal Foundation/ Cato Institute Amicus Brief
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