On July 17, the U.S. Court of Appeals for the Ninth Circuit heard argument in Axon Enterprise v. FTC, where the plaintiff, Axon, argued that it should not be precluded from bringing constitutional claims challenging the FTC’s structure and administrative processes in federal court. The underlying dispute stems from the FTC’s investigation of Axon after it acquired Vievu, a competitor that sold body cameras and digital evidence management systems to law enforcement. After an internal investigation, the FTC allegedly requested a “blank check” settlement that would reverse the acquisition and force Axon to give the newly independent Vievu some of its intellectual property. According to Axon, the FTC threatened to file an administrative complaint if the company refused to comply.

On the same day the FTC issued an administrative complaint, Axon filed its own complaint in the District of Arizona, seeking to enjoin the administrative proceedings and presenting three constitutional challenges to the FTC’s structure and procedures. First, Axon argued that the “clearance” process the FTC and DOJ use to distribute merger investigations between the agencies violates the Fifth Amendment’s equal protection clause because it arbitrarily subjects similarly situated companies to different rights, standards, and consequences. Second, Axon challenged the FTC’s structure, arguing that it allows the agency to serve in investigative, prosecutorial, adjudicative and appellate functions in violation of the Fifth Amendment’s due process clause. Finally, Axon argued that the two layers of for-cause protection afforded to the FTC’s administrative law judges (ALJs) is in violation of Article II of the Constitution.