NOTICE: This opinion is subject to
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SUPREME COURT OF THE UNITED STATES
_________________
Nos. 21–86 and 21–1239
_________________
AXON ENTERPRISE, INC., PETITIONER
21–86
v.
FEDERAL TRADE COMMISSION,
et al.
on writ of certiorari to the united states
court of appeals for the ninth circuit
SECURITIES AND EXCHANGE COMMISSION,
et al., PETITIONERS
21–1239
v.
MICHELLE COCHRAN
on writ of certiorari to the united states
court of appeals for the fifth circuit
[April 14, 2023]
Justice Kagan delivered the opinion of the
Court.
In each of these two cases, the respondent in an
administrative enforcement action challenges the constitutional
authority of the agency to proceed. Both respondents claim that the
agencies’ administrative law judges (ALJs) are insufficiently
accountable to the President, in violation of separation-of-powers
principles. And one respondent attacks as well the combination of
prosecutorial and adjudicatory functions in a single agency. The
challenges are fundamental, even existential. They maintain in
essence that the agencies, as currently structured, are
unconstitutional in much of their work.
Our task today is not to resolve those
challenges; rather, it is to decide where they may be heard. The
enforcement actions at issue were initiated in the Securities and
Exchange Commission (SEC) and the Federal Trade Commission (FTC).
Most objections to those Commissions’ proceedings follow a
well-trod path. As prescribed by statute, a party makes its claims
first within the Commission itself, and then (if needed) in a
federal court of appeals. The parties here, however, sidestepped
that review scheme. Seeking to stop the administrative proceedings,
they instead brought their claims in federal district court. The
question presented is whether the district courts have jurisdiction
to hear those suits—and so to resolve the parties’ constitutional
challenges to the Commissions’ structure. The answer is yes. The
ordinary statutory review scheme does not preclude a district court
from entertaining these extraordinary claims.
I
Congress established the SEC to protect
investors in securities markets, and created the FTC to promote
fair competition. The Commissions enforce, respectively, the
Securities Exchange Act and the FTC Act (among other laws). See 15
U. S. C. §78a
et seq. (Exchange Act); 15
U. S. C. §41
et seq. (FTC Act). Those Acts
authorize the Commissions to address statutory violations either by
bringing civil suits in federal district court or by instituting
their own administrative proceedings. See §§78u(d), 78u–1, 78u–2,
78u–3; §§45(b), (m).
When a Commission elects the latter option—as in
these two cases—it typically delegates the initial adjudication to
an ALJ. See §78d–1(a); note following §41. To foster independence,
each Commission’s ALJs are removable “only for good cause” as
determined by the Merit Systems Protection Board (MSPB)—a separate
agency whose members are themselves removable by the President only
for cause, such as “neglect of duty” or “malfeasance.” 5
U. S. C. §§7521(a), 1202(d). An ALJ assigned to hear an
SEC or FTC enforcement action has authority, much like a regular
trial judge, to resolve motions, hold a hearing, and then issue a
decision. See 16 CFR §§3.21–3.56 (2021); 17 CFR §§201.221–201.360
(2021).
A losing party may appeal the ALJ’s ruling to
the Commission; alternatively, the Commission may undertake review
on its own initiative. See 16 CFR §§3.52–3.53; 17 CFR
§§201.410–201.411. Upon completion of internal review, the
Commission enters a final decision. See 16 CFR §3.54; 17 CFR
§201.411(a). Or if no such review has occurred, the ALJ’s ruling
itself becomes the decision of the Commission. See 15
U. S. C. §78d–1(c); 16 CFR §3.51(a).
The Exchange Act and FTC Act both provide for
review of a final Commission decision in a court of appeals, rather
than a district court. Under the Exchange Act, “[a] person
aggrieved by [an SEC] final order . . . may obtain review
of the order” by filing a petition in a court of appeals. 15
U. S. C. §78y(a)(1). That petition gives the appellate
court “jurisdiction” to “affirm or modify and enforce or to set
aside the order in whole or in part.” §78y(a)(3). The FTC Act
similarly provides that the party subject to an FTC order may
“obtain a review of such order” in a court of appeals, and grants
the court “jurisdiction” to “affirm[ ], modify[ ], or
set[ ] aside the order.” §45(c).
The cases before us, though, did not take the
above- described course. In each, the respondent in an
administrative enforcement action sued in district court prior to
an ALJ decision, seeking to enjoin the Commission’s proceeding.
Each suit charged that some fundamental aspect of the Commission’s
structure violates the Constitution; that the violation made the
entire proceeding unlawful; and that being subjected to such an
illegitimate proceeding causes legal injury (independent of any
rulings the ALJ might make). Finally, each suit premised
jurisdiction on district courts’ ordinary federal-question
authority—their power, under 28 U. S. C. §1331, to
resolve “civil actions arising under the Constitution, laws, or
treaties of the United States.” We describe the two cases in turn,
but what we have just said they have in common is really all it is
necessary to know.
The first case arises from an SEC enforcement
action brought against Michelle Cochran, a certified public
accountant. In an earlier round of that proceeding, an ALJ found
that Cochran had failed to comply with auditing standards, in
violation of the Exchange Act. But soon after that decision issued,
this Court held that the SEC’s ALJs had been improperly appointed.
See
Lucia v.
SEC, 585 U. S. ___, ___ (2018). In
compliance with that ruling, the SEC ordered a fresh hearing,
conducted by a now validly appointed ALJ. That was the last straw
for Cochran. Before the new ALJ hearing began, she sued the
Commission in federal district court, asserting jurisdiction under
§1331. Cochran’s complaint focused on the two layers of tenure
protection all ALJs hold: By statute, those officials may be
removed only “for good cause as determined by the [MSPB], whose
members themselves can only be removed by the President for good
cause.” App. 60; see
supra, at 2. That arrangement, Cochran
asserted, so greatly insulates ALJs from presidential supervision
as to violate the separation of powers—more specifically, Article
II’s vesting of executive power in the President. See App. 53–54,
60–62. And because that was true (Cochran continued), ALJs could
not constitutionally exercise power: They could neither hold any
hearings nor make any decisions. Cochran thus sought declaratory
and injunctive relief freeing her of the obligation “to submit to
an unconstitutional proceeding.”
Id., at 60; see
id.,
at 64.
The second case arises from an FTC enforcement
action against Axon Enterprise, a company that makes and sells
policing equipment. In its complaint, the FTC alleged that Axon’s
purchase of its closest competitor violated the FTC Act’s ban on
unfair methods of competition. To stop the FTC from pursuing that
charge, Axon did just what Cochran had—brought suit against the
Commission in district court, premised on federal-question
jurisdiction. Like Cochran, Axon asserted that the Commission’s
ALJs could not constitutionally exercise governmental authority
because of their dual-layer protection from removal. In addition,
Axon claimed that the combination of prosecutorial and adjudicative
functions in the Commission renders all of its enforcement actions
unconstitutional. See Complaint in No. 2:20–cv–00014 (D Ariz.), ECF
Doc. 1, p. 26 (protesting that “the FTC will act as prosecutor,
judge, and jury”). Again similarly to Cochran, Axon asked the court
to enjoin the FTC “from subjecting” it to the Commission’s “unfair
and unconstitutional internal forum.”
Id., at 7; see
id., at 28.[
1]
Cochran’s and Axon’s suits met an identical fate
in district court: dismissal for lack of jurisdiction. The district
court in Cochran’s case held that the review scheme specified in
the Exchange Act—“administrative review followed by judicial review
in a federal court of appeals”—“implicitly divest[s] district
courts of jurisdiction” over “challenges to SEC proceedings,”
including Cochran’s constitutional ones. App. to Pet. for Cert. in
No. 21–1239, p. 141a. Likewise, the district court in Axon’s case
found that the FTC Act’s comparable review scheme displaces §1331
jurisdiction for claims concerning the FTC’s adjudications. So Axon
had to raise its structural constitutional claims “during the
administrative process and then renew them” if and when “seeking
review in the Court of Appeals.” App. to Pet. for Cert. in No.
21–86, pp. 50–51.
On appeal from those decisions, the United
States Courts of Appeals for the Fifth and Ninth Circuits split.
The Ninth Circuit, considering Axon’s case, reached the same
conclusion as the district courts. See 986 F.3d 1173 (2021).
Reviewing this Court’s precedents, the Ninth Circuit acknowledged
that a statutory review scheme precluding district court
jurisdiction—like the FTC Act’s—might not extend to every “type of
claim[ ].”
Id., at 1187 (citing
Thunder Basin Coal
Co. v.
Reich,
510 U.S.
200, 212 (1994)). But the court decided that Axon’s
constitutional challenges fell within the FTC Act’s scheme, mainly
because the scheme guaranteed them “meaningful judicial review.”
986 F. 3d, at 1181, 1187. The en banc Fifth Circuit disagreed
as to the equivalent SEC question. See 20 F. 4th 194 (2021). The
court maintained that “Cochran’s removal power claim is not the
type of claim Congress intended to funnel through the Exchange
Act’s statutory-review scheme.”
Id., at 206–207 (also citing
Thunder Basin, 510 U. S., at 212). Drawing on
considerations identified in this Court’s opinions, the Fifth
Circuit reasoned that Cochran’s claim would not receive “meaningful
judicial review” in a court of appeals; that the claim was “wholly
collateral to the Exchange Act’s statutory-review scheme”; and that
the claim fell “outside the SEC’s expertise.” 20 F. 4th, at
207–208.
We granted certiorari in both cases to resolve
the division. 595 U. S. ___ (2022); 596 U. S. ___ (2022).
We now conclude that the review schemes set out in the Exchange Act
and the FTC Act do not displace district court jurisdiction over
Axon’s and Cochran’s far-reaching constitutional claims.
II
A
A special statutory review scheme, this Court
has recognized, may preclude district courts from exercising
jurisdiction over challenges to federal agency action. See,
e.g.,
Thunder Basin, 510 U. S., at 207. District
courts may ordinarily hear those challenges by way of 28
U. S. C. §1331’s grant of jurisdiction for claims
“arising under” federal law. Congress, though, may substitute for
that district court authority an alternative scheme of review.
Congress of course may do so explicitly, providing in so many words
that district court jurisdiction will yield. But Congress also may
do so implicitly, by specifying a different method to resolve
claims about agency action. The method Congress typically chooses
is the one used in both the Exchange Act and the FTC Act: review in
a court of appeals following the agency’s own review process. We
have several times held that the creation of such a review scheme
for agency action divests district courts of their ordinary
jurisdiction over the covered cases. See
Thunder Basin, 510
U. S., at 207–212;
Elgin v.
Department of
Treasury,
567 U.S.
1, 10–15 (2012); see also
Free Enterprise Fund v.
Public Company Accounting Oversight Bd.,
561 U.S.
477, 489 (2010) (noting that statutory schemes for agency
review “[g]enerally” are “exclusive”). The agency effectively fills
in for the district court, with the court of appeals providing
judicial review.
But a statutory review scheme of that kind does
not necessarily extend to every claim concerning agency action. Our
decision in
Thunder Basin made that point clear. After
finding that Congress’s creation of a “comprehensive review
process” like the ones here ousted district courts of jurisdiction,
the Court asked another question: whether the particular claims
brought were “of the type Congress intended to be reviewed within
this statutory structure.” 510 U. S., at 208, 212. The Court
identified three considerations designed to aid in that inquiry,
commonly known now as the
Thunder Basin factors. First,
could precluding district court jurisdiction “foreclose all
meaningful judicial review” of the claim?
Id., at 212–213.
Next, is the claim “wholly collateral to [the] statute’s review
provisions”?
Id., at 212 (internal quotation marks omitted).
And last, is the claim “outside the agency’s expertise”?
Ibid. When the answer to all three questions is yes, “we
presume that Congress does not intend to limit jurisdiction.”
Free Enterprise Fund, 561 U. S., at 489. But the same
conclusion might follow if the factors point in different
directions. The ultimate question is how best to understand what
Congress has done—whether the statutory review scheme, though
exclusive where it applies, reaches the claim in question. The
first
Thunder Basin factor recognizes that Congress rarely
allows claims about agency action to escape effective judicial
review. See,
e.g.,
Bowen v.
Michigan Academy of
Family Physicians,
476 U.S.
667, 670 (1986). The second and third reflect in related ways
the point of special review provisions—to give the agency a
heightened role in the matters it customarily handles, and can
apply distinctive knowledge to.
This Court has twice held specific claims to fit
within a statutory review scheme, based on the
Thunder Basin
factors. In
Thunder Basin itself, a coal company subject to
the Mine Act filed suit in district court instead of asserting its
claims—as a statutory scheme prescribed—before a mine safety
commission and then (if needed) a court of appeals. The crux of the
dispute concerned the company’s refusal to provide
employee-designated union officials with access to the workplace,
as the Mine Act apparently required. The company claimed a right to
exclude the officials under another statute; it also objected on
due process grounds to the agency’s imposing a fine before holding
a hearing. See 510 U. S., at 205; see also
Elgin, 567
U. S., at 17, n. 6. We held the district court to lack
jurisdiction over those claims, and thus directed the company back
to the statutory review scheme. The Commission, we emphasized, had
“extensive experience” in addressing the statutory issues raised,
and could resolve them in ways that “brought to bear” its
“expertise” over the mining industry. 510 U. S.
, at
214–215; see
Free Enterprise Fund, 561 U. S., at 491.
All that was less so, we acknowledged, of the company’s
constitutional challenge; but that claim could be “meaningfully
addressed in the Court of Appeals.” 510 U. S., at 215.
We applied similar reasoning in
Elgin.
The statutory review scheme there directed federal employees
challenging discharge decisions to seek review in the MSPB and
then, if needed, in the Federal Circuit (a specific court of
appeals). But Elgin filed suit in district court when he was fired
by the government for failing to register for the draft. We held
that the court lacked jurisdiction even though Elgin mainly claimed
that the draft law, in excluding women, violated the Equal
Protection Clause. Although the MSPB might not be able to hold the
draft law unconstitutional, we stated, the Court of Appeals
could—and that was sufficient to ensure “meaningful review” of
Elgin’s claim. 567 U. S., at 21. Still more, Elgin’s claim was
neither collateral to the MSPB’s ordinary proceedings nor unrelated
to its expertise. We reasoned that a “challenge to [a discharge] is
precisely the type of personnel action regularly adjudicated by the
MSPB.”
Id., at 22. And we observed that such an action could
involve “threshold” and other “questions unique to the employment
context” that “fall[ ] squarely within the MSPB’s expertise.”
Id., at 22–23.
But in
Free Enterprise Fund, this Court
went the opposite way, holding that certain claims landed
outside a statutory review scheme. The scheme was the
Exchange Act’s—the same as in Cochran’s case. And the main claim in
Free Enterprise Fund bears more than a passing resemblance
to one Axon and Cochran raise: It, too, alleged that officials with
two layers of tenure protection were unconstitutionally insulated
from presidential control. The officials challenged, though, were
different. They were members of the Public Company Accounting
Oversight Board—an agency regulating the accounting industry under
the SEC’s oversight. When the Board opened an investigation of an
accounting firm’s auditing practices, the firm took its Article II
claim to district court. This time we held that the court had
jurisdiction of the action, based on the
Thunder Basin
factors. We found that the Exchange Act provided no “meaningful
avenue of relief ” for the firm, given the separation between
the Board and the Commission. 561 U. S., at 490–491 (internal
quotation marks omitted). Not every Board action, we explained,
culminates in Commission action—which alone the statute makes
reviewable in a court of appeals. And even supposing the SEC took
up a matter arising from the Board’s investigation, the firm’s
constitutional challenge would be “collateral” to the subject of
that proceeding. The firm, we observed, “object[s] to the Board’s
existence, not to any of its auditing standards.”
Id., at
490. Finally, we held, the firm’s claim was “outside the
Commission’s competence and expertise.”
Id., at 491. It
raised only a “standard” issue of administrative and constitutional
law, relating not at all to “considerations of agency policy.”
Ibid. (internal quotation marks and alterations
omitted).
B
One way of framing the question we must decide
is whether the cases before us are more like
Thunder Basin
and
Elgin or more like
Free Enterprise Fund. The
answer appears from 30,000 feet not very hard. Recall our task: to
decide if a claim is “of the type” Congress thought belonged within
a statutory scheme.
Thunder Basin, 510 U. S., at 212.
The claims here are of the same ilk as the one in
Free
Enterprise Fund. There, the complaint alleged that the Board’s
“freedom from Presidential oversight” rendered unconstitutional
“all power and authority [the Board] exercised.” 561 U. S., at
508 (internal quotation marks omitted). Only the Court’s ability to
sever the relevant statute’s for-cause removal provision enabled
the Board to keep running. See
ibid. The Article II
challenges in Axon’s and Cochran’s cases would likewise prevent
ALJs—through whom the Commissions do much of their work—from
exercising any power, unless they lose their double-for-cause
tenure protection. And Axon’s combination-of-functions claim
similarly goes to the core of the FTC’s existence, given that the
agency indeed houses (and by design) both prosecutorial and
adjudicative activities. The challenges here, as in
Free
Enterprise Fund, are not to any specific substantive
decision—say, to fining a company (
Thunder Basin) or firing
an employee (
Elgin). Nor are they to the commonplace
procedures agencies use to make such a decision. They are instead
challenges, again as in
Free Enterprise Fund, to the
structure or very existence of an agency: They charge that an
agency is wielding authority unconstitutionally in all or a broad
swath of its work. Given that equivalence, it would be surprising
to treat the claims here differently from the one in
Free
Enterprise Fund—which we held belonged in district court.
And when we apply the
Thunder Basin
factors, we indeed come out in the same place as
Free Enterprise
Fund. Our reasoning differs in some particulars, reflecting
variations between that case and the two here. But the 30,000-foot
view of the issue before us ends up a good proxy for the more
granular one. Each of the three
Thunder Basin factors
signals that a district court has jurisdiction to adjudicate Axon’s
and Cochran’s (like the accounting firm’s) sweeping constitutional
claims.
We begin with the factor whose application here
is least straightforward: whether preclusion of district court
jurisdiction “could foreclose all meaningful judicial review.”
Thunder Basin, 510 U. S., at 212–213.
Thunder
Basin and
Elgin both make clear that adequate judicial
review does not usually demand a district court’s involvement.
Review of agency action in a court of appeals can alone
“meaningfully address[ ]” a party’s claims.
Thunder
Basin, 510 U. S., at 215; see
Elgin, 567
U. S., at 21 (holding that Congress provided “meaningful
review” in authorizing the Federal Circuit “to consider and decide
petitioners’ constitutional claims”).[
2] Still more, we agree with the Government that the
reason
Free Enterprise Fund gave for departing from
Thunder Basin and
Elgin on the judicial review issue
does not apply to the cases before us. See Brief for Federal
Parties 39–40. As just described,
Free Enterprise Fund’s
analysis on that score relied on the separation between the Board
and the SEC. See
supra, at 10. The accounting firm, recall,
was enmeshed in a Board investigation. But some Board actions never
go to the SEC—and the statutory scheme, we explained, “provides
only for judicial review of
Commission action.” 561
U. S., at 490 (emphasis in original). That meant the
accounting firm, absent district court jurisdiction, might never
have had judicial recourse. But no such worry exists here. Cochran
and Axon are parties in ongoing SEC and FTC proceedings, and the
statutes at issue provide for judicial review of SEC and FTC
action. See 15 U. S. C. §§45(c), 78y(a). Under those
statutes, Axon and Cochran can (eventually) obtain review of their
constitutional claims through an appeal from an adverse agency
action to a court of appeals. So
Free Enterprise Fund’s
analysis of the judicial review factor does not control.
Yet a problem remains, stemming from the
interaction between the alleged injury and the timing of review. To
see the difficulty, think first about
Thunder Basin and
Elgin. If an appellate court had ruled in favor of the coal
company or the federal employee on review of an agency decision,
the court could have remedied the party’s injury. It could have
revoked the fine assessed on the company or reinstated the employee
with backpay. But not so here. The harm Axon and Cochran allege is
“being subjected” to “unconstitutional agency authority”—a
“proceeding by an unaccountable ALJ.” Brief for Axon 36; see Brief
for Cochran 37 (contending she suffers harm from “having to appear
in proceedings” before an unconstitutionally insulated ALJ). That
harm may sound a bit abstract; but this Court has made clear that
it is “a here-and-now injury.”
Seila Law LLC v.
Consumer
Financial Protection Bureau, 591 U. S. ___, ___ (2020)
(slip op., at 10) (internal quotation marks omitted). And—here is
the rub—it is impossible to remedy once the proceeding is over,
which is when appellate review kicks in. Suppose a court of appeals
agrees with Axon, on review of an adverse FTC decision, that
ALJ-led proceedings violate the separation of powers. The court
could of course vacate the FTC’s order. But Axon’s
separation-of-powers claim is not about that order; indeed, Axon
would have the same claim had it
won before the agency. The
claim, again, is about subjection to an illegitimate proceeding,
led by an illegitimate decisionmaker. And as to that grievance, the
court of appeals can do nothing: A proceeding that has already
happened cannot be undone. Judicial review of Axon’s (and
Cochran’s) structural constitutional claims would come too late to
be meaningful.
The limits of that conclusion are important to
emphasize. The Government, in disputing our position, notes that
many review schemes—involving not only agency action but also civil
and criminal litigation—require parties to wait before appealing,
even when doing so subjects them to “significant burdens.” Brief
for Federal Parties 47–49. That is true, and will remain so:
Nothing we say today portends newfound enthusiasm for interlocutory
review. Return, for example, to
Thunder Basin and
Elgin. There, the coal company and federal employee could
both have argued that the statutory review process would subject
them to greater litigation costs than their preferred suit in
district court. But that would not have mattered. We have made
clear, just as the Government says, that “the expense and
disruption” of “protracted adjudicatory proceedings” on a claim do
not justify immediate review.
FTC v.
Standard Oil Co. of
Cal.,
449 U.S.
232, 244 (1980); see,
e.g.,
Myers v.
Bethlehem
Shipbuilding Corp.,
303 U.S.
41, 51 (1938). What makes the difference here is the nature of
the claims and accompanying harms that the parties are asserting.
Again, Axon and Cochran protest the “here-and-now” injury of
subjection to an unconstitutionally structured decisionmaking
process. See
supra, at 13. And more, subjection to that
process irrespective of its outcome, or of other decisions made
within it. A nearer analogy than any the Government offers is to
our established immunity doctrines. There, we have identified
certain rights “not to stand trial” or face other legal processes.
Mitchell v.
Forsyth,
472 U.S.
511, 526 (1985). And we have recognized that those rights are
“effectively lost” if review is deferred until after trial.
Ibid. So too here, Axon and Cochran will lose their rights
not to undergo the complained-of agency proceedings if they cannot
assert those rights until the proceedings are over.
The collateralism factor favors Axon and Cochran
for much the same reason—because they are challenging the
Commissions’ power to proceed at all, rather than actions taken in
the agency proceedings. That distinction, as noted earlier, guided
Free Enterprise Fund’s view that the accounting firm’s
challenge qualified as “collateral.” See 561 U. S., at 490;
supra, at 10. The firm, the court reasoned, “object[ed] to
the Board’s existence, not to any of [the] auditing standards” it
might apply in regulating accountants. 561 U. S., at 490.
Likewise here, both parties object to the Commissions’ power
generally, not to anything particular about how that power was
wielded. The parties’ separation-of-powers claims do not relate to
the subject of the enforcement actions—in the one case auditing
practices, in the other a business merger. Cf.
Mohawk
Industries, Inc. v.
Carpenter,
558
U.S. 100, 106 (2009) (considering as part of the “collateral
order doctrine,” which governs appeals in non-agency litigation,
whether a question is “separate from the merits”). Nor do the
parties’ claims address the sorts of procedural or evidentiary
matters an agency often resolves on its way to a merits decision.
Cf.
Florida Power & Light Co. v.
Lorion,
470 U.S.
729, 743 (1985) (favoring review of such preliminary matters
along with the agency’s final order). The claims, in sum, have
nothing to do with the enforcement-related matters the Commissions
“regularly adjudicate[ ]”—and nothing to do with those they
would adjudicate in assessing the charges against Axon and Cochran.
Elgin, 567 U. S., at 22. Because that is so, the
parties’ claims are “ ‘collateral’ to any Commission orders or
rules from which review might be sought.”
Free Enterprise
Fund, 561 U. S., at 490.
The Government’s contrary argument would strip
the collateralism factor of its appropriate function. In the
Government’s view, no claim “directed at” a pending Commission
proceeding can qualify as collateral to it, even if wholly
disconnected in subject. Tr. of Oral Arg. in No. 21–86, p. 75; see
Brief for Federal Parties 39, 52–53. The Government thinks that
position consistent with
Free Enterprise Fund because there
an SEC proceeding had not yet begun. See Brief for Federal Parties
38–39 (noting that the accounting firm remained enmeshed in a Board
investigation). But the Government’s argument still conflicts with
Free Enterprise Fund’s reasoning. In addressing why the
firm’s claim was collateral, the Court focused solely on what it
was about—again, that the firm challenged “the Board’s existence,”
not “its auditing standards.” 561 U. S., at 490. And anyway,
the Government’s theory ill fits the point of the
Thunder
Basin inquiry—to decide when a particular claim is “of the
type” to fall outside a statutory review scheme. 510 U. S., at
212. That inquiry, just as
Free Enterprise Fund recognized,
requires considering the nature of the claim, not the status
(pending or not) of an agency proceeding. Or said another way, the
inquiry contemplates (as our collateral-order doctrine also does)
that even when a proceeding is pending, an occasional claim may get
immediate review—in part because it involves something discrete.
Cf.
Cohen v.
Beneficial Industrial Loan Corp.,
337 U.S.
541, 546 (1949) (allowing an interlocutory appeal from a
district court’s “collateral” ruling, “independent of the cause
itself ”). The Government’s redefinition of what counts as
collateral would effectively foreclose that possibility.
Third and finally, Cochran’s and Axon’s claims
are “outside the [Commissions’] expertise.”
Thunder Basin,
510 U. S., at 212. On that issue,
Free Enterprise Fund
could hardly be clearer. Claims that tenure protections violate
Article II, the Court there determined, raise “standard questions
of administrative” and constitutional law, detached from
“considerations of agency policy.” 561 U. S., at 491 (internal
quotation marks and alterations omitted); see
supra, at 10.
That statement covers Axon’s and Cochran’s claims that ALJs are too
far insulated from the President’s supervision. And Axon’s
constitutional challenge to the combination of prosecutorial and
adjudicative functions is of a piece—similarly distant from the
FTC’s “competence and expertise.” 561 U. S., at 491. The
Commission knows a good deal about competition policy, but nothing
special about the separation of powers. For that reason, we
observed two Terms ago, “agency adjudications are generally ill
suited to address structural constitutional challenges”—like those
maintained here.
Carr v.
Saul, 593 U. S. ___,
___ (2021) (slip op., at 9).
On this last factor, even the Government mostly
gives up the ghost. Its argument goes: “Even when an agency lacks
expertise in interpreting the Constitution, it can still ‘apply its
expertise’ by deciding other issues”—whether “statutory,
regulatory, or factual”—“that ‘may obviate the need to address the
constitutional challenge.’ ” Brief for Federal Parties 54
(quoting
Elgin, 567 U. S., at 22–23). The first clause
of that sentence concedes the expertise point—and the rest cannot
reclaim it. True enough, we partly relied in
Elgin on the
MSPB’s expertise on a raft of ordinary employment issues
surrounding the employee’s contention that the Equal Protection
Clause barred his discharge. See 567 U. S., at 22–23;
supra, at 9. But the Government here does not pretend that
Axon’s and Cochran’s constitutional claims are similarly
intertwined with or embedded in matters on which the Commissions
are expert. (It is precisely because those claims are not so
entangled that the Government must try to redefine what it means
for claims to be “collateral” to an agency action. See
supra, at 15–16.) And unlike in
Elgin, ruling for
Axon and Cochran on expertise-laden grounds would not “obviate the
need” to address their constitutional claims—which, again, allege
injury not from this or that ruling but from subjection to all
agency authority. Those claims of here-and-now harm would remain no
matter how much expertise could be “brought to bear” on the other
issues these cases involve.
Thunder Basin, 510 U. S.,
at 215.
All three
Thunder Basin factors thus
point in the same direction—toward allowing district court review
of Axon’s and Cochran’s claims that the structure, or even
existence, of an agency violates the Constitution. For the reasons
given above, those claims cannot receive meaningful judicial review
through the FTC Act or Exchange Act. They are collateral to any
decisions the Commissions could make in individual enforcement
proceedings. And they fall outside the Commissions’ sphere of
expertise. Our conclusion follows: The claims are not “of the type”
the statutory review schemes reach.
Id., at 212. A district
court can therefore review them.
* * *
We accordingly reverse the judgment of the
Court of Appeals for the Ninth Circuit, affirm the judgment of the
Court of Appeals for the Fifth Circuit, and remand the two cases
for further proceedings consistent with this opinion.
It is so ordered.
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