Axon Enterprise, Inc. v. FTC

The Court applies the Thunder Basin factors to determine if Congress intended to limit jurisdiction of claims regarding federal agency actions to the statutory administrative review structure or if they may be litigated under 28 U.S.C. § 1331.

Petitioners filed separate actions in district court to enjoin enforcement actions of SEC and FTC against them.  Petitioners argued the SEC and FTC Commissions’ structure and functions are unconstitutional, and bypassed the Commissions' administrative review structures to seek hearing of their claims under 28 U.S.C. § 1331. Both actions were dismissed for lack of jurisdiction by district courts.  On appeal, the Ninth Circuit affirmed dismissal of petitioner Axon’s claim against the FTC, while the Fifth Circuit reversed the dismissal of petitioner Cochran’s action against the SEC.  The question presented is if the district courts have jurisdiction to review petitioners' constitutional claims.   Congress provided an alternative administrative review process for claims arising from the Commissions' actions, but this statutory scheme does not preclude ordinary jurisdiction in district court for certain claims about the Commissions' actions.  The Supreme Court applied the three Thunder Basin factors to determine if the current actions represented the type of claims for which Congress designed an alternate statutory review structure.  The Court reasoned that, analogous to its decision in Free Enterprise Fund, (1) denial of district court jurisdiction could prevent “meaningful judicial review” because petitioners are claiming an imminent injury that will be beyond a remedy if administrative proceedings were to proceed, (2) petitioners’ claims are collateral to the issues the Commissions’ have authority to adjudicate, and (3) petitioners’ constitutional claims are fully “outside the [Commissions’] expertise.  Thunder Basin Coal Co. v. Reich, 510 U.S. 200, at 212. REVERSED and REMANDED the Ninth Circuit decision for petitioner Axon Enterprises, Inc.  AFFIRMED AND REMANDED the Fifth Circuit decision for petitioner Cochran.