Episode description

Welcome to Supreme Court Opinions. In this episode, you’ll hear the Court’s opinion in Axon Enterprise, Inc. v Federal Trade Commission. 

In this case, the court considered this issue: Do federal courts have jurisdiction to hear constitutional challenges to the Federal Trade Commission’s structure, procedure, and existence, or must such challenges be raised first in the administrative proceeding?

The case was decided on April 14, 2023. The Supreme Court held that Federal courts have federal-question jurisdiction to hear constitutional challenges to the structure or existence of the SEC or FTC notwithstanding statutory review schemes set out in the Securities Exchange Act and Federal Trade Commission Act. Justice Elena Kagan authored the majority opinion holding that the Federal Trade Commission Act (in 21-86) and the Securities Exchange Act (in 21-1239) did not preclude district courts’ ordinary subject-matter jurisdiction to hear challenges to those agencies’ structure, procedure, or existence.

The Court considered three factors, known as the Thunder Basin factors, to determine whether particular claims concerning agency action are “of the type Congress intended to be reviewed within the statutory structure,” and thus would preclude district court jurisdiction. The three factors are: (1) Could precluding district court jurisdiction “foreclose all meaningful judicial review” of the claim? (2) Is the claim “wholly collateral” to the statute’s review provisions? (3) Is the claim “outside the agency’s expertise”?

The Court concluded that all three factors supported the conclusion that district courts retained subject-matter jurisdiction.

First, preclusion of district court jurisdiction “could foreclose all meaningful judicial review” because Axon and Cochran will lose their rights not to undergo the complained-of agency proceedings if they cannot assert those rights until the proceedings are over.

Second, the claims are “wholly collateral” to the statutes’ review provisions because challenges to the Commissions’ authority have nothing to do with either the enforcement-related matters the Commissions regularly adjudicate or those they would adjudicate in assessing the charges against Axon and Cochran.

Finally, the claims are outside the agencies’ expertise because neither specializes in constitutional issues like separation of powers.

Justice Clarence Thomas authored a concurring opinion to express “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.”

Justice Neil Gorsuch authored an opinion concurring in the judgment, arguing that he would reach the same conclusion as the majority by applying only 28 U.S.C. § 1331, which establishes federal-question jurisdiction of federal courts.

The opinion is presented here in its entirety, but with citations omitted. If you appreciate this episode, please subscribe. Thank you.