This is Part 4 of a four-part series. Start with Part 1, Part 2 and Part 3.
The overruling of Humphrey’s Executor, discussed in Part 1 of this series, addresses presidential removal power, not the constitutionality of administrative adjudication itself. The Supreme Court’s decision in Trump v. Slaughter held that FTC commissioners may not be insulated from at-will presidential removal, but the court also described the FTC as an agency that exercises “rulemaking, enforcement, and adjudicatory powers.” This indicates that the existence of adjudicatory functions was not itself the constitutional defect.
That said, the FTC’s administrative court system faces challenges from a different line of cases. The more significant question for FTC administrative litigation is the Supreme Court’s 2024 decision in SEC v. Jarkesy. Jarkesy limited agencies’ ability to seek certain civil penalties through in-house administrative proceedings when the claims are analogous to traditional common-law actions that would ordinarily be tried before a jury. As a result, even before Slaughter, there was already significant debate about how much enforcement activity agencies can constitutionally keep within their own administrative tribunals.
Assuming there remains political will to keep the FTC’s doors open, the FTC will likely be able to continue to:
- Employ Administrative Law Judges
- Issue administrative complaints
- Develop factual records through agency proceedings
The stronger constitutional questions concern what remedies may be imposed through those proceedings, and whether particular claims must instead be brought in federal district court.
Link to An interesting irony An interesting irony
For 90 years, one of the traditional justifications for FTC administrative adjudication was that the FTC was supposedly not exercising purely executive power—it was said to have “quasi-judicial” characteristics. The court’s reasoning in Trump v. Slaughter substantially rejects that conceptual framework. The court treated FTC commissioners as executive officers exercising executive power and therefore subject to presidential control. Of course, that raises a natural follow-up question:
If FTC commissioners are executive officers who must remain accountable to the president, can they simultaneously exercise judicial-type functions through an internal adjudicative system?
The court did not answer that question in Slaughter. But I would expect future litigants to press exactly that argument.
The importance of the FTC’s administrative adjudication depends on your perspective. For antitrust specifically, the practical answer is that administrative adjudication is already of diminishing importance. Most major FTC merger challenges and conduct cases are now litigated in federal court, so the long-term significance of the FTC’s in-house court may be greater for consumer protection and regulatory matters than for merger enforcement.
As we said in Part 3, time will tell how all this shakes out. But one thing is certain, the FTC will continue to be challenged, both politically and legally.
If you have any questions, please contact Jay at 202-778-3021 or jlevine@porterwright.com