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 April 15, 2023

Supreme Court paves the path for more challenges to federal regulation enforcement

The Supreme Court ruled to allow direct challenges to the way two federal agencies enforce regulations, the Daily Caller reported. The unanimous decision Friday will permit compaints to go through courts rather than staying within the agencies' governing bodies.

Going forward, the federal courts will be able to rule on the constitutionality of violations issued by the Federal Trade Commission and the Securities and Exchange Commission without first waiting for adjudication within the agencies. Justice Elena Kagan issued the majority opinion.

The left-leaning Kagan wrote that the "ordinary statutory review scheme does not preclude a district court from entertaining these extraordinary claims." However, the issue had garnered mixed results in lower courts, the Associated Press reported.

One of the cases originated with the FTC's decision that Axon Enterprise, which developed the Taser, was in violation of regulations with its $13 million purchase of competing company Vievu. Axon sued on the grounds that the FTC is an unconstitutional government agency.

Similarly, Michelle Cochran, a certified public accountant, filed a lawsuit against the SEC's basic structure. Both plaintiffs argue that the separation of powers provided for in the constitution as well as accountability to the executive branch negates the agencies' power.

Kagan noted in her opinion that the central question of the lawsuits was whether the high court is able to "resolve the parties’ constitutional challenges to the Commissions’ structure." She found that it was.

"The answer is yes," Kagan wrote. That decision will take the power out of the hands of unelected bureaucrats and allow matters to be decided in the legal system where citizens and entities can be adequately represented.

"For decades, Americans have been hauled before agencies which act as investigator, prosecutor, judge and their first court of appeal," New Civil Liberties Alliance Senior Litigation Counsel Peggy Little said in a statement. "Michelle Cochran had the courage to insist that any hearing that put her CPA license at stake must be constitutional," Little, who represented Cochran, added.

"And today, the Supreme Court unanimously agreed that she is entitled to her day in court before the constitutional injury takes place." Little described her client as being "stuck" for seven years pleading her case within the SEC and is "thrilled" with the decision.

"From the first hearing forward, it was clear that the odds were stacked against me," Cochran said. "I am thrilled that every one of the Supreme Court justices agrees that whether this costly, bruising, and biased system is constitutional must be heard by a real judge before I have to undergo a second one."

Justices Clarence Thomas and Neil Gorsuch filed their own opinions. Thomas expressed "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."

Thomas added that Chochran's case where private rights are at stake means "the Con­stitution likely requires plenary Article III adjudication." Gorsuch agreed with the decision but based his objection on the letter of the law in how these agencies act.

For too long, these government agencies have had the power to destroy lives and livelihoods. The only recourse for those caught up in violations imposed by the agencies was more red tape and more time pleading in front of the same agency that issued the violations.

Now the process for reversing their decisions will be streamlined and head straight to the courts. This is a win for businesses and ordinary Americans who would otherwise be bogged down in bureaucratic runaround.

Written By:
Christine Favocci

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