The U.S. Supreme Court has agreed to take two cases of note challenging the powers of the FHFA and the FTC.
We are well-familiar by now with Seila Law v. CFPB, a case that held that the structure of the Bureau violates the separation of powers required by the U.S. Constitution. When that case was issued, some suggested it called in to question the constitutionality of other agencies, like the FHFA. Today, the Supreme Court agreed to take up that very question when it granted cert to two cases, Mnuchin v. Collins and Collins v. Mnuchin. Here, the Court will address whether the FHFA’s structure violates the separation of powers, and whether the courts must set aside final agency actions made while the Agency was unconstitutionally structured.
Following a recent decision in Liu v. SEC where the Supreme Court narrowed the definition of equitable relief that can be given to securities fraud victims, the Court agreed to take two cases from the Seventh and Ninth Circuits that call in to question the FTC’s power to impose injunctions under the FTC Act. These two Circuits take two different paths on whether Sec. 13(b) of the FTC Act allows the agency to demand restitution. The cases are FTC v. Credit Bureau Center LLC (7th Cir.), and AMG Capital Management LLC et al. v. FTC (9th Cir.).
Late last year, the FTC asked the Supreme Court to hear FTC v. Credit Bureau Center, marking only the fifth time since 1975 that the Commission petitioned the Court on its own, rather than being represented by the Solicitor General. The FTC said that the Seventh Circuit decision “threatens the FTC’s ability to carry out its mission by eliminating one of its most important and effective enforcement tools.” As noted in a SCOTUSblog “the FTC’s petition undermined the argument made by Solicitor General Noel Francisco on behalf of the federal government in two other cases involving the same issue, and it hints at a divide within the government on the central question in the petitions.”