In February, we highlighted constitutional challenges that Axon Enterprise, Inc. (“Axon”) brought against the FTC related to a merger challenge against Axon. To briefly recap: Axon brought a declaratory judgment action alleging that the administrative trial procedures and the structure of the FTC violated Axon’s due process rights and Article II of the Constitution. Last week, the District of Arizona dismissed Axon’s claims, finding the Court lacked subject matter jurisdiction over Axon’s declaratory judgment claims where the administrative proceedings before the FTC were still pending. The Court’s lengthy opinion, which was consistent with prior unsuccessful challenges to the FTC’s administrative trial process, demonstrates the importance of raising a constitutional challenge early in a proceeding, even if that is the very proceeding, before the very agency, being challenged.
As previously discussed, Axon makes two constitutional arguments. First, the procedures authorizing the FTC to bring an enforcement action before an FTC Administrative Law Judge violate Axon’s Fifth Amendment due process rights. Second, the structure of the FTC violates the president’s “at will” removal power under Article II because FTC commissioners and administrative law judges are not subject to such removal. Though the Court acknowledged in dismissing the case that Axon’s constitutional claims “are significant and topical[,]” the Court determined that it “is not the appropriate forum to address Axon’s claims.”