The Axon Side-Step: Defendants' New Dance To Avoid Agency Enforcement Actions

The FTC and SEC have their own administrative dispute resolution regime, presided over by their own administrative judges ("ALJs"). Until now, those regimes were virtually immune from attack on a constitutional basis, because any such challenge had to wait until appeal to the federal courts (which only happened after a full trial and appeal to the agency itself). No longer. On April 14, 2023, the Supreme Court held that the Federal Trade Commission Act and the Securities Exchange Act do not create an alternative review scheme in which constitutional challenges must first go through the agencies, and only later receive federal court review in a court of appeals.

The Supreme Court's decision likely heralds a tumultuous period—perhaps limited—for not only the FTC and SEC, but for any agency with a statutory scheme that previously precluded federal court jurisdiction in the first instance. Companies and individuals subject to administrative agency review now have a