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Axon Enter. v. FTC

Axon Enter. v. FTC

United States Court of Appeals for the Ninth Circuit

July 17, 2020, Argued; January 28, 2021, Filed

No. 20-15662

Opinion

 [*1176]  OPINION

LEE, Circuit Judge:

Over the past century, Congress has established an array of quasi-independent executive agencies that enjoy partial insulation from presidential oversight and wield tremendous enforcement power. Instead of filing lawsuits in federal court, these agencies can commence administrative enforcement proceedings against companies and individuals, and make their cases before their own administrative law judges (ALJs). Not surprisingly, ALJs overwhelmingly rule for their own agencies.

Here, the Federal Trade Commission (FTC) investigated and filed an administrative complaint challenging Axon Enterprise, Inc.'s acquisition of a competitor. The FTC demanded that Axon spin-off its newly acquired company and provide it with Axon's own intellectual property. Axon responded by filing a lawsuit in federal district court, arguing that the FTC's administrative enforcement process violates Axon's due process rights and runs afoul of separation-of-powers principles.

The narrow question presented here is whether the district court has [**4]  jurisdiction to hear Axon's constitutional challenge to the FTC's structure. The district court dismissed Axon's complaint, ruling that the FTC's statutory scheme requires Axon to  [*1177]  raise its constitutional challenge first in the administrative proceeding.

We affirm the district court's dismissal because the Supreme Court's Thunder Basin trilogy of cases mandates that result. ] The structure of the FTC Act suggests that Congress impliedly barred jurisdiction in district court and required parties to move forward first in the agency proceeding. And because the FTC statutory scheme ultimately allows Axon to present its constitutional challenges to a federal court of appeals after the administrative proceeding, Axon has not suffered any cognizable harm. We join every other circuit that has addressed a similar issue in ruling that Congress impliedly stripped the district court of jurisdiction.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

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986 F.3d 1173 *; 2021 U.S. App. LEXIS 2394 **; 2021-1 Trade Cas. (CCH) P81,523; 2021 WL 281664

AXON ENTERPRISE, INC., a Delaware corporation, Plaintiff-Appellant, v. FEDERAL TRADE COMMISSION, a federal administrative agency; JOSEPH J. SIMONS; NOAH PHILLIPS; ROHIT CHOPRA; REBECCA SLAUGHTER; CHRISTINE WILSON, in their official capacities as Commissioners of the Federal Trade Commission, Defendants-Appellees.

Subsequent History: Stay granted by Axon Enter. v. FTC, 2021 U.S. App. LEXIS 11803 (9th Cir. Ariz., Apr. 21, 2021)

US Supreme Court certiorari granted by, in part, Writ of certiorari denied, in part Axon Enter., Inc. v. FTC, 2022 U.S. LEXIS 599 (U.S., Jan. 24, 2022)

Prior History:  [**1] D.C. No. 2:20-cv-00014-DWL. Appeal from the United States District Court. for the District of Arizona. Dominic Lanza, District Judge, Presiding.

Axon Enter. v. FTC, 2020 U.S. App. LEXIS 13409 (9th Cir. Ariz., Apr. 24, 2020)

CORE TERMS

district court, judicial review, clearance, constitutional claim, statutory scheme, collateral, merits, administrative proceeding, violates, questions, expertise, agency expertise, due process, challenges, antitrust, factors, constitutional challenge, court of appeals, courts, FTC Act, discernible, preclusion, words, meaningful review, impliedly, remedies, cases, administrative process, federal court, adjudicate

Antitrust & Trade Law, Public Enforcement, US Federal Trade Commission Actions, Judicial Review, Civil Procedure, Jurisdiction, Jurisdictional Sources, Statutory Sources, Appeals, Standards of Review, De Novo Review, Subject Matter Jurisdiction, Jurisdiction Over Actions, Administrative Law, Judicial Review, Reviewability, Jurisdiction & Venue, Governments, Courts, Judicial Precedent, Preclusion, Federal Trade Commission Act, Reviewable Agency Action, Deference to Agency Statutory Interpretation, Agency Rulemaking, State Proceedings, Constitutional Law, Case or Controversy, Constitutional Questions, Necessity of Determination, Separation of Powers, Executive Controls