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SCOTUS Hears Cases That Could Make Challenging FTC & SEC Rulings Easier

 |  November 7, 2022

The US Supreme Court on Monday began hearing arguments in two cases that could make it easier to challenge the regulatory power of federal agencies in disputes involving the Federal Trade Commission and the Securities and Exchange Commission.

The justices are weighing an appeal by Scottsdale, Arizona-based Axon after a lower court dismissed the Taser manufacturer’s lawsuit contesting the constitutionality of the FTC’s structure in a bid to counter an antitrust action related to its acquisition of a rival.

In a separate case, the justices will consider the SEC’s appeal of a lower court’s decision reviving a challenge brought by a Texas accountant named Michelle Cochran to the legality of its in-house tribunal after it faulted her audits of publicly traded companies.

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At issue in both cases is whether targets of an agency’s enforcement action may challenge its structure or processes in a federal district court or must first endure the agency’s administrative proceedings, which may be costly and time-consuming.

“The agency can’t help us with that claim,” Paul Clement, Axon’s lawyer, told the justices. “They’re powerless to do anything with that claim, but the district court isn’t.”

Some members of the court’s 6-3 conservative majority appeared sympathetic. “What sense does it make for a claim that goes to the very structure of the agency having to go through the administrative process?” conservative Justice Samuel Alito asked.