September 22, 2023


The Supreme Court held Friday that a party involved in a dispute with the Federal Trade Commission or the Securities and Exchange Commission does not have to wait until a final determination in the proceeding has been issued before bringing a constitutional challenge to the agency’s structure in federal court.

The ruling is a win for critics of the so-called administrative state who are seeking to scale back the power of agencies that they believe are too insulated from the usual checks and balances essential to the separation of powers.

The court’s decision means that targets of investigative actions do not have to wait long periods of time before lodging constitutional challenges to the proceedings that could ultimately weaken the agency.

Although the court’s opinion could weaken the power of federal agencies, liberal justices likely signed onto the opinion because it will only apply to a small subset of cases.

The decision of the court is unanimous and was penned by Justice Elena Kagan.

“The question presented is whether the district courts have jurisdiction to hear those suits — and so to resolve the parties’ constitutional challenges to the Commission’ structure,” Kagan wrote. “The answer is yes. The ordinary statutory review scheme does not preclude a district court from entertaining these extraordinary claims.”


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