?The U.S. Supreme Court is considering whether constitutional challenges to federal agency power can be brought in federal courts before administrative proceedings are completed. The high court heard oral arguments in two cases involving the Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC) on this issue on Nov. 7. We’ve gathered articles on the news from SHRM Online and other outlets.
SEC Case
The SEC case involved an accountant accused of misconduct by the agency. The accountant sought to challenge the agency’s structure in federal court before administrative procedures were completed. An appeals court ruled that she should be able to bring her claims then, creating a conflict among appellate court decisions.
Most of the Supreme Court justices seemed prepared to say that people and companies subject to agencies’ enforcement actions should not have to wait until administrative proceedings are completed before raising some constitutional objections to agencies’ structures in federal courts.
FTC Case
The FTC case involved a Taser manufacturer’s lawsuit contesting the constitutionality of the FTC’s structure to counter an antitrust action related to its acquisition of a rival.
(Reuters)
Powerful Regulators
A SEC and the FTC are among two of the most powerful federal agencies. Last fiscal year, the SEC filed more than 700 enforcement actions and won judgments and orders worth $6.4 billion. The SEC has numerous offices, including the Office of the Whistleblower. The SEC also requires human capital disclosures at public companies. The FTC returned $2.4 billion to consumers last year.
(Bloomberg), (SEC Office of the Whistleblower) and (SHRM Online)
Larger Issue
The larger issue in the two cases is an attempt by business interests to weaken the federal administrative state. The plaintiffs hope to build on a string of Supreme Court decisions that have advanced that cause. The importance of the issue was underscored by amicus briefs by industry groups.
Supreme Court Has Placed Limits on Federal Agencies
This year, the Supreme Court has chipped away at federal agency authority in a decision blocking the Department of Labor (DOL) Occupational Safety and Health Administration’s vaccine-or-testing rule for large employers and in a case limiting the rulemaking authority of the Environmental Protection Agency (EPA). The EPA decision may result in some courts granting less deference to DOL, Equal Employment Opportunity Commission and National Labor Relations Board regulations.
