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High court empowers bids to curb authority of federal agencies

Posted On: Apr. 14, 2023 11:09 AM CST

Supreme Court

(Reuters) — The U.S. Supreme Court on Friday made it easier to challenge the regulatory power of federal agencies in two important rulings backing Axon Enterprise Inc.’s bid to sue the Federal Trade Commission and a Texas accountant’s gripe with the Securities and Exchange Commission.

A 9-0 ruling by the justices revived Axon’s lawsuit contesting the constitutionality of the FTC’s structure in a bid to counter an antitrust action related to the Scottsdale, Arizona-based company’s acquisition of a rival, overturning a lower court’s decision to dismiss the case.

The justices also unanimously upheld a lower court’s decision allowing the accountant, Michelle Cochran, to sue the SEC, challenging the legality of its in-house judges, after the agency faulted her audits of publicly traded companies.

At issue in both cases was whether targets of an agency’s enforcement action may challenge its structure or processes in a federal district court or must first endure the agency’s administrative proceeding, which may be costly and time-consuming.

The FTC’s role is to protect consumers against anticompetitive and fraudulent business practices. The SEC’s job is to maintain fair, orderly markets and enforce investor protection laws.

Paring back the regulatory authority of federal agencies — which can enforce laws and rules in important areas such as energy, the environment, climate policy and workplace safety — has been a major goal of many business and conservative groups, which complain about what they call the “administrative state.”