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Americans for Prosperity Foundation urges U.S. Supreme Court to remove barrier to review of unconstitutional administrative actions

Oct 5, 2020 by AFP

On Friday, October 2, 2020, Americans for Prosperity’s sister organization, Americans for Prosperity Foundation, filed a friend-of-the-court brief in the U.S. Supreme Court in Gibson v. SEC, urging the court to grant Mr. Gibson’s cert petition.

Mr. Gibson, who is represented pro bono by the New Civil Liberties Alliance, which has teamed up with former U.S. Solicitor General Greg Garre of Latham & Watkins, has asked the court to grant review of an Eleventh Circuit decision that the federal courts lack jurisdiction over constitutional questions if an administrative enforcement proceeding is pending.

At its core, this case raises the question whether enforcement activities of so-called independent federal agencies are subject to any checks and balances by any branch of government — the president, Congress, or even the federal courts — under any circumstances so long as their inhouse enforcement proceedings are ongoing.

Unlike criminal cases in traditional state and federal courts, where the judge and jury are independent from the prosecutor, in administrative enforcement actions the agency wears multiple hats, acting as investigator, prosecutor, and judge. A respondent is thus at a severe  disadvantage, as the same administrative body that investigates the target and chooses to bring administrative charges also argues the case, decides its merits, and makes the rules of the game, tilting the scales in its own favor.

This extraconstitutional arrangement rigs the game in favor of the federal agency, stacking the chips against the respondent, which knows its chances of prevailing before this administrative body are slim, as the results are often preordained.

These administrative processes may take years to complete and can be ruinously expensive and life-altering for the respondent, whose business may be destroyed and reputation sullied — even when they didn’t do anything wrong — long before they have any ability to seek review in a U.S. Court of Appeals. As a practical matter, this means that in many cases the process itself is the punishment.

For these reasons, it is critical that federal district courts have authority to act as a safety valve in extreme cases of agency abuse, where the agency’s actions are clearly unjustified by law or are unconstitutional. Until very recently, the federal courts have recognized this authority, interceding in rare cases.

However, in recent years several U.S. courts of appeals have, in response to various constitutional challenges to agencies’ administrative enforcement processes, created a new rule: essentially barring the federal district courthouse doors to those subject to agency enforcement proceedings — a process that may take years and destroy the lives and livelihoods of innocent citizens and businesses — no matter how unconstitutional, unlawful, and abusive the agency’s actions are until the agency itself chooses to make a decision on way or the other.

In crafting this new rule, these appellate courts have reversed several district court decisions finding jurisdiction, also drawing two well-reasoned dissents regarding this newly minted abdication of the judicial role. As NCLA’s petition on behalf of Mr. Gibson argues, this new judicially created rule irreconcilably conflicts with the U.S. Supreme Court’s ruling in Free Enterprise Fund v. PCAOB, wrongly misapplying and expanding other U.S. Supreme Court precedent to justify this error.

As Americans for Prosperity Foundation’s friend-of-the-court brief explains, it is also important for the U.S. Supreme Court to review this case because the practical real-world implications of the appellate courts’ new bright line rule against judicial review of unconstitutional agency overreach extend far beyond the facts and circumstances of this specific case and threaten to be extended to insulate other agencies’ enforcement activities from all oversight.

The appellate courts’ new judicially-created rule conflicts with the U.S. Constitution, the separation of powers, and the rule of law, also ignoring Congress’s decision to grant federal courts authority to police ongoing administrative agency enforcement activities in cases where agency staff has clearly exceeded its lawful authority or violated constitutional rights.

The brief notes that “[i]t cannot be the law that an agency can do whatever it wants for as long as it wants to a business or individual — no matter how ultra vires, abusive, or unconstitutional — without being subject to review by . . . [a federal] court unless and until that abusive process ends.”

The brief adds that “AFPF believes that judicially-created barriers to timely and meaningful . . . [judicial] review of agency actions are inconsistent with the separation of powers and the text, structure, and history of the U.S. Constitution.”  Instead, “[d]ue process and fairness demand that those facing ultra vires or unconstitutional agency enforcement actions should not have to face years of potentially ruinous costs just to have their day in . . . court.”

Read the full brief here.