Case: 23-60167 Document: 128 Page: 1 Date Filed: 06/12/2023
`
`No. 23-60167
`
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
`
`
`
`
`ILLUMINA, INC., AND GRAIL, INC.,
`Petitioners,
`
`v.
`
`FEDERAL TRADE COMMISSION,
`Respondent.
`
`
`
`PETITION FOR REVIEW OF
`AN ORDER OF THE FEDERAL TRADE COMMISSION
`
`
`
`AMICUS BRIEF OF INDIANA AND UTAH, ALASKA, ARKANSAS,
`GEORGIA, IDAHO, IOWA, KENTUCKY, LOUISIANA,
`NEBRASKA, SOUTH CAROLINA, AND VIRGINIA, IN SUPPORT
`OF PETITIONERS
`
`
`
`
`
`SEAN D. REYES
`Utah Attorney General
`State Capitol, Rm. 236
`Salt Lake City, UT 84114-0810
`
`
`THEODORE E. ROKITA
`Attorney General of Indiana
`
`THOMAS M. FISHER
`Solicitor General
`
`Office of the Attorney General
`IGC South, Fifth Floor
`302 W. Washington Street
`Indianapolis, IN 46204
`(317) 232-6255
`Tom.Fisher@atg.in.gov
`
`Counsel for Amici States
`(Additional Counsel Below)
`
`
`
`
`
`
`No. 23-60167
`
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
`
`
`
`
`ILLUMINA, INC., AND GRAIL, INC.,
`Petitioners,
`
`v.
`
`FEDERAL TRADE COMMISSION,
`Respondent.
`
`
`
`PETITION FOR REVIEW OF
`AN ORDER OF THE FEDERAL TRADE COMMISSION
`
`
`
`AMICUS BRIEF OF INDIANA AND UTAH, ALASKA, ARKANSAS,
`GEORGIA, IDAHO, IOWA, KENTUCKY, LOUISIANA,
`NEBRASKA, SOUTH CAROLINA, AND VIRGINIA, IN SUPPORT
`OF PETITIONERS
`
`
`
`
`
`SEAN D. REYES
`Utah Attorney General
`State Capitol, Rm. 236
`Salt Lake City, UT 84114-0810
`
`
`THEODORE E. ROKITA
`Attorney General of Indiana
`
`THOMAS M. FISHER
`Solicitor General
`
`Office of the Attorney General
`IGC South, Fifth Floor
`302 W. Washington Street
`Indianapolis, IN 46204
`(317) 232-6255
`Tom.Fisher@atg.in.gov
`
`Counsel for Amici States
`(Additional Counsel Below)
`
`
`
`
`
`
`Case: 23-60167 Document: 128 Page: 2 Date Filed: 06/12/2023
`
`JAMES A. BARTA
`Deputy Solicitor General
`
`MELINDA R. HOLMES
`REBEKAH P. DURHAM
`Deputy Attorneys General
`
`Office of the Attorney General
`IGC South, Fifth Floor
`302 W. Washington Street
`Indianapolis, IN 46204
`(317) 232-6255
`Tom.Fisher@atg.in.gov
`
`
`
`
`
`
`
`
`
`
`Case: 23-60167 Document: 128 Page: 3 Date Filed: 06/12/2023
`
`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ...................................................................... ii
`
`INTEREST OF AMICI STATES ............................................................... 1
`
`SUMMARY OF ARGUMENT ................................................................... 2
`
`ARGUMENT ............................................................................................. 4
`
`I. Under Jarkesy, Congress’s standardless delegation
`of power allowing FTC to choose whether it will file
`its cases in its own tribunals or in federal court
`violates Article I ............................................................................... 4
`
`II. The Commission’s Structure Violates Article II .............................. 7
`
`A. Humphrey’s Executor does not shield FTC from
`accountability .......................................................................... 7
`
`
`
`1. In 1935, FTC held amorphous capabilities to investigate
`and prevent “unfair methods of competition” .................... 8
`
`2. The modern FTC exercises executive power beyond the
`President’s control ............................................................ 12
`
`
`B. Precedents since Humphrey’s Executor undermine its
`validity and suggest removal protections violate
`Article II ................................................................................ 15
`
`
`CONCLUSION ........................................................................................ 21
`
`
`
`
`
`i
`
`
`
`
`Case: 23-60167 Document: 128 Page: 4 Date Filed: 06/12/2023
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Am. Power & Light Co. v. SEC,
`329 U.S. 90 (1946) ................................................................................. 5
`
`AMG Cap. Mgmt., LLC v. FTC,
`141 S. Ct. 1341 (2021) ................................................................... 12, 14
`
`Collins v. Yellen,
`141 S. Ct. 1761 (2021) ............................................................. 16, 17, 18
`
`Free Enter. Fund v. Pub. Co. Acct. Oversight Bd.,
`561 U.S. 477 (2010) ................................................................. 15, 16, 17
`
`Humphrey’s Executor v. United States,
`295 U.S. 602 (1935) ..................................................................... passim
`
`J.W. Hampton, Jr., & Co. v. United States,
`276 U.S. 394 (1928) ............................................................................... 5
`
`Jarkesy v. SEC,
`34 F.4th 446 (5th Cir. 2022) ....................................................... passim
`
`Loving v. United States,
`517 U.S. 748 (1996) ............................................................................... 5
`
`Morrison v. Olson,
`487 U.S. 654 (1988) ................................................................. 15, 16, 17
`
`Myers v. United States,
`272 U.S. 52 (1926) ................................................................................. 4
`
`Nat’l Petroleum Refiners Ass’n v. FTC,
`482 F.2d 672 (D.C. Cir. 1973) ............................................................. 13
`
`Seila Law, LLC, v. CFPB,
`140 S. Ct. 2183 (2010) ................................................................. passim
`
`ii
`
`
`
`
`Case: 23-60167 Document: 128 Page: 5 Date Filed: 06/12/2023
`
`Wayman v. Southard,
`23 U.S. (10 Wheat.) 1 (1825) ................................................................. 5
`
`STATUTES
`
`5 U.S.C. § 7521 .................................................................................. 19, 20
`
`15 U.S.C. § 18 .......................................................................................... 14
`
`15 U.S.C. § 41 ............................................................................................ 7
`
`15 U.S.C. § 45(b) ........................................................................................ 6
`
`15 U.S.C. § 53(b) ........................................................................................ 6
`
`15 U.S.C. § 78u-3a ..................................................................................... 6
`
`15 U.S.C. §§ 2301–2312 (2012) ............................................................... 13
`
`Federal Trade Commission Act of 1914, Pub. L. No. 63-203,
`38 Stat. 717 ....................................................................................... 8, 9
`
`Magnuson-Moss Warranty-Federal Trade Commission Im-
`provement Act, Pub. L. No. 93-637, 88 Stat. 2183 (1975) .................. 13
`
`OTHER AUTHORITIES
`
`Christine S. Wilson, Commissioner, U.S. Federal Trade
`Commission, The Neo-Brandeisian Revolution: Unforced
`Errors and the Diminution of the FTC (November 9, 2021) .............. 20
`
`Crosby et al., Early Detection of Cancer, 375 SCIENCE 1244
`(2022) ..................................................................................................... 1
`
`Daniel A. Crane, Debunking Humphrey’s Executor, 83 GEO.
`WASH. L. REV. 1835 (2015) ...................................................... 10, 11, 15
`
`Dissenting Statement of Commissioners Christine S. Wilson
`and Noah Joshua Phillips Regarding the Commission
`Statement on the Adoption of Revised Section 18 Rulemak-
`ing Procedures, Federal Trade Commission (July 9, 2021). .............. 12
`
`iii
`
`
`
`
`Case: 23-60167 Document: 128 Page: 6 Date Filed: 06/12/2023
`
`Guide to Antitrust Laws: The Enforcers,
`FEDERAL TRADE COMMISSION, https://www.ftc.gov/advice-
`guidance/competition-guidance/guide-antitrust-laws/en-
`forcers ............................................................................................ 12, 13
`
`THE FEDERALIST NO. 51 (James Madison) (New American Li-
`brary ed., 1961) ..................................................................................... 1
`
`JUSTICE & FED. TRADE COMM’N, Vertical Merger Guidelines
`(June 30, 2020) .................................................................................... 13
`
`Steven G. Calabresi & Christopher S. Yoo, The Unitary Exec-
`utive in Historical Perspective, 31 ADMIN. & REGUL. L.
`NEWS 5 (2005) .................................................................................... 10
`
`U.S. Const. Article I .................................................................................. 4
`
`U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, Horizontal
`Merger Guidelines (Aug. 19, 2010) .................................................... 13
`
`
`
`
`
`iv
`
`
`
`
`Case: 23-60167 Document: 128 Page: 7 Date Filed: 06/12/2023
`
`INTEREST OF AMICI STATES
`
`The States of Indiana and Utah, Alaska, Arkansas, Georgia, Idaho,
`
`Iowa, Kentucky, Louisiana, Nebraska, South Carolina, and Virginia
`
`respectfully submit this brief as amici curiae in support of Petitioners.
`
`The Federal Trade Commission’s decision to block the merger of
`
`Illumina, Inc., and Grail, Inc.—and thus delay novel, lifesaving cancer
`
`screening technology from entering the market—arises from an
`
`unconstitutional delegation of power to an agency having no political
`
`accountability. Unaccountable federal agency power undermines liberty,
`
`and overzealous, unfair agency enforcement impedes technological
`
`advancements benefitting citizens’ wellbeing. As co-equal sovereigns
`
`charged with providing “double security” for individual liberty, THE
`
`FEDERALIST NO. 51, at 323 (James Madison) (New American Library ed.,
`
`1961), amici States have strong interests in preserving separation of
`
`powers and preventing federal agency overreach.
`
`Moreover, early detection cancer screening technologies could save
`
`the lives of countless citizens. See generally Crosby et al., Early Detection
`
`of Cancer, 375 SCIENCE 1244 (2022). Amici States, who administer public
`
`healthcare programs, are interested in avoiding unjustified delay in
`
`
`
`1
`
`
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`Case: 23-60167 Document: 128 Page: 8 Date Filed: 06/12/2023
`
`bringing to market breakthrough products that can detect cancer before
`
`it reaches more serious stages. This Court should vacate the Final Order
`
`and allow the Illumina-Grail merger to proceed.
`
`
`
`SUMMARY OF ARGUMENT
`
`Six years ago, Illumina, a large life sciences company with
`
`expansive manufacturing and distribution capacity, spun off its
`
`subsidiary Grail so that it could independently research and develop
`
`promising early-detection cancer screening technology. Not long after,
`
`Grail announced Galleri, a test that can screen for more than fifty types
`
`of cancer in asymptomatic patients from one blood draw, but, realizing it
`
`lacked the manufacturing and distribution capacity to achieve wide-scale
`
`commercialization, sought assistance from Illumina. It ultimately agreed
`
`to be reacquired by Illumina to help bring Galleri to the market. The
`
`merger would streamline and reduce costs of production and distribution,
`
`while Grail management would retain full control of the company.
`
`Now, however, the Federal Trade Commission, in an extraordinary
`
`move, has decided to blow up the deal and prevent Illumina from
`
`assisting Grail with bringing Galleri to the broader market. Even after
`
`losing its case in front of an administrative law judge (ALJ), the
`
`2
`
`
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`Case: 23-60167 Document: 128 Page: 9 Date Filed: 06/12/2023
`
`Commission persisted in its agenda. To win, FTC complaint counsel
`
`brought the case to the friendliest tribunal possible—the FTC Board of
`
`Commissioners—which ordered divestiture of the two companies.
`
`This case demonstrates alarming results of the excessive free rein
`
`enjoyed by FTC, an agency whose power has grown significantly since its
`
`inception in 1914. Congress has impermissibly delegated to FTC
`
`discretion to pick its forum—an Article III court or its own agency
`
`adjudicator—which mirrors the delegation to the Securities and
`
`Exchange Commission this Court already held unconstitutional in
`
`Jarkesy v. SEC, 34 F.4th 446, 461–63 (5th Cir. 2022). Congress’s
`
`standardless forum-choice delegation to FTC must go the same way.
`
`The structure of FTC
`
`itself
`
`is even more fundamentally
`
`problematic. FTC is an executive agency, so the Constitution requires
`
`that it be directly accountable to the President, meaning that its
`
`members must be subject to removal by him without cause. Instead, FTC
`
`is headed by a board of five commissioners who, being insulated from
`
`removal, can carry out their own policies and economic agendas without
`
`political accountability. Although the Supreme Court concluded in
`
`Humphrey’s Executor v. United States, 295 U.S. 602 (1935), that FTC did
`
`3
`
`
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`Case: 23-60167 Document: 128 Page: 10 Date Filed: 06/12/2023
`
`not exercise executive power when all it could do was advise Congress,
`
`subsequent enactments granting FTC enforcement power have made
`
`clear that it now executes laws that bind individual citizens.
`
`This case highlights the harm caused by this structure: an agency
`
`committed to pursuing its own agenda has wielded significant federal
`
`power to impede the progress of a company seeking to develop life-saving
`
`cancer screening tests. The Court should rein in the “headless fourth
`
`branch” by eliminating the unconstitutional statutory haven that shields
`
`FTC Commissioners from political accountability.
`
`ARGUMENT
`
`I. Under Jarkesy, Congress’s standardless delegation of power
`allowing FTC to choose whether it will file its cases in its
`own tribunals or in federal court violates Article I
`
`
`
`“If there is a principle in our Constitution, indeed in any free Con-
`
`stitution more sacred than another, it is that which separates the legis-
`
`lative, executive and judicial powers.” Myers v. United States, 272 U.S.
`
`52, 116 (1926) (quoting 1 ANNALS OF CONGRESS, 581). To that end, Article
`
`I provides that “[a]ll legislative Powers herein granted shall be vested in
`
`a Congress of the United States.” U.S. Const. art. I. The Vesting Clause
`
`prohibits Congress from delegating its lawmaking responsibilities, but
`
`here Congress has granted FTC unfettered discretion to choose whether
`
`4
`
`
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`Case: 23-60167 Document: 128 Page: 11 Date Filed: 06/12/2023
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`to bring enforcement actions in its own administrative tribunals or in
`
`federal district court.
`
`Article I grants legislative authority to Congress alone. Congress
`
`may not “delegate . . . powers which are strictly and exclusively legisla-
`
`tive.” Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 42 (1825). Only by
`
`providing “an intelligible principle” binding executive discretion can Con-
`
`gress avoid “a forbidden delegation of legislative power.” J.W. Hampton,
`
`Jr., & Co. v. United States, 276 U.S. 394, 409 (1928). In that regard, Con-
`
`gress must “clearly delineate[] the general policy, the public agency
`
`which is to apply it, and the boundaries of this delegated authority.” Am.
`
`Power & Light Co. v. SEC, 329 U.S. 90, 105 (1946); see also Loving v.
`
`United States, 517 U.S. 748, 771 (1996) (collecting cases where the Court
`
`has “struck down . . . delegations for lack of an intelligible principle.”).
`
`Applying the “intelligible principle” standard, this Court in Jarkesy
`
`v. SEC, 34 F.4th 446 (5th Cir. 2022), held that agency enforcement pro-
`
`ceedings were unconstitutional because the SEC’s discretion to “bring an
`
`action in an agency tribunal instead of an Article III court” was an im-
`
`permissible delegation of legislative power. Id. at 461. Critically, the
`
`5
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`Case: 23-60167 Document: 128 Page: 12 Date Filed: 06/12/2023
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`Court observed that the decision over which forum will host agency adju-
`
`dication—fundamentally a determination of “which defendants should
`
`receive certain legal processes”—is a legislative, not executive, power. Id.
`
`at 462. From that premise, it concluded that Congress impermissibly af-
`
`forded SEC “absolute discretion to decide whether to bring securities
`
`fraud enforcement actions within the agency instead of in an Article III
`
`court.” Id.
`
`Likewise, here, Congress has broadly empowered FTC to pick its
`
`forum as between its own administrative law judge and an Article III
`
`court. 15 U.S.C. §§ 45(b), 53(b). There is no daylight between Congress’s
`
`delegation to the SEC on choice of forum struck down in Jarkesy and its
`
`delegation to FTC here. The Congressional grant of forum-selection dis-
`
`cretion to the two agencies is substantively identical in its language.
`
`Compare 15 U.S.C. § 78u-3a (authorizing the SEC to bring administra-
`
`tive proceedings against “any person [who] is violating, has violated, or
`
`is about to violate” securities law), with 15 U.S.C. § 45(b) (authorizing the
`
`FTC to bring administrative proceedings against “any such person, part-
`
`nership, or corporation [that] has been or is using any unfair method of
`
`competition”).
`
`6
`
`
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`Case: 23-60167 Document: 128 Page: 13 Date Filed: 06/12/2023
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`Accordingly, under Jarkesy, the Court should vacate the Commis-
`
`sion’s decision because it arose from an unconstitutional delegation of
`
`legislative power. 34 F.4th at 462–63.
`
`II. The Commission’s Structure Violates Article II
`
`FTC’s “independent” structure violates Article II by shielding its
`
`commissioners, who manifestly exercise executive power, from removal
`
`by the President except for cause. 15 U.S.C. § 41 (permitting removal only
`
`for “inefficiency, neglect of duty, or malfeasance in office”). Although the
`
`Supreme Court once concluded that the President’s “illimitable power of
`
`removal” did not extend to FTC as it existed in 1935, Humphrey’s
`
`Executor v. United States, 295 U.S. 602, 629–30 (1935), subsequent
`
`additions to FTC’s authority—as well as more recent doctrinal
`
`developments—undermine that decision’s continued vitality.
`
`A. Humphrey’s Executor does not shield FTC from
`accountability
`
`In Humphrey’s Executor, the Supreme Court concluded that Article
`
`II did not require that the President enjoy plenary removal authority over
`
`FTC Commissioners because the agency was “wholly disconnected from
`
`the executive department” and “was created by Congress . . . as an agency
`
`of the legislative and judicial departments.” 295 U.S. at 629–30. Removal
`
`7
`
`
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`Case: 23-60167 Document: 128 Page: 14 Date Filed: 06/12/2023
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`protections were not an “unconstitutional interference with the executive
`
`power of the President,” the Court said, because FTC Commissioners
`
`were “officer[s] who occup[y] no place in the executive department and
`
`who exercise[] no part of the executive power vested by the Constitution
`
`in the President.” Id. at 628. That may or may not have been an accurate
`
`description of the FTC in 1935, but it certainly is not today.
`
`1. In 1935, FTC held amorphous capabilities to
`investigate and prevent “unfair methods of
`competition”
`
`In the Federal Trade Commission Act of 1914, Congress “declared
`
`unlawful” “unfair methods of competition in commerce.” Most significant,
`
`the Act “created and established . . . the Federal Trade Commission,”
`
`which was “empowered and directed” “to prevent persons, partnerships,
`
`or corporations . . . from using unfair methods of competition in
`
`commerce.” Federal Trade Commission Act of 1914, Pub. L. No. 63-203,
`
`38 Stat. 717, 717–19. The Act directed the Commission to carry out its
`
`mandate by “issu[ing] . . . a complaint stating its charges” of unfair
`
`methods of competition; conduct[ing] a “hearing” on those charges; and
`
`issu[ing] a “report” or “order” afterward. Id. at 719–20. The Act also
`
`granted to the Commission broad investigatory and equitable powers,
`
`8
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`including to “gather and compile information” and “investigate”
`
`businesses and their practices on its own initiative or “[u]pon the
`
`direction of the President or either House of Congress”; and to “subpoena”
`
`witnesses and documents related to its investigations or proceedings. Id.
`
`at 720–23. The Act further empowered the Commission “[f]rom time to
`
`time to classify corporations and to make rules and regulations for the
`
`purpose of carrying out the provisions of this Act.” Id.
`
`The Humphrey’s Court examined these various powers granted to
`
`FTC and concluded that it “c[ould not] in any proper sense be
`
`characterized as an arm or an eye of the executive.” Humphrey’s
`
`Executor, 295 U.S. at 628. The Court viewed FTC’s powers as “quasi
`
`legislative” and “quasi judicial,” id. at 624, namely “filling in and
`
`administering the details embodied by th[e] general standard” set out in
`
`the FTC Act, “making investigations and reports thereon for the
`
`information of Congress,” and operating “as a master in chancery under
`
`rules prescribed by the court.” Id. at 628. Accordingly, the Court
`
`discerned no Article II violation in the Act’s protection of FTC
`
`Commissioners from presidential removal, as their functions were not
`
`exercises of “executive power in the constitutional sense.” Id. at 628, 632.
`
`9
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`
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`Modern scholarship disputes the Humphrey’s Court’s claim that the
`
`FTC in 1935 held “no part of the executive power.” According to Profes-
`
`sors Steven Calabresi and Christopher Yoo, at its inception, “the Federal
`
`Trade Commission (FTC) Act reflected [President] Wilson’s insistence
`
`that the FTC was ‘an executive agency charged with executive and ad-
`
`ministrative duties’ by specifically authorizing the President to direct the
`
`FTC’s investigatory activities.” Steven G. Calabresi & Christopher S.
`
`Yoo, The Unitary Executive in Historical Perspective, 31 ADMIN. & REGUL.
`
`L. NEWS 5, 6 (2005). Professor Daniel Crane has asserted “the Court’s
`
`quartet of assumptions in Humphrey’s Executor were . . . largely incor-
`
`rect—or, at least, fail to capture the dominant character of the FTC over
`
`time.” Daniel A. Crane, Debunking Humphrey’s Executor, 83 GEO. WASH.
`
`L. REV. 1835, 1838 (2015).
`
`For example, FTC’s authority to issue substantive rules, a so-called
`
`“quasi-legislative” function, was unsettled at the time of Humphrey’s Ex-
`
`ecutor, as it was scarcely—if ever—used in FTC’s early days and was not
`
`clarified until 1973 in the Magnuson-Moss Act. Crane, supra, at 1860–
`
`63. As for its rulemaking activity in the antitrust realm—the relevant
`
`10
`
`
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`Case: 23-60167 Document: 128 Page: 17 Date Filed: 06/12/2023
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`context in Humphrey’s Executor—“the quasi-legislative claim has no his-
`
`torical support at all.” Id. at 1863.
`
`What is more, the Supreme Court itself recently acknowledged that
`
`“[p]erhaps the FTC possessed broader rulemaking, enforcement, and ad-
`
`judicatory powers than the Humphrey’s Court appreciated.” Seila Law,
`
`LLC, v. CFPB, 140 S. Ct. 2183, 2200 n.4 (2010) (adding “[p]erhaps not”).
`
`But as it explains, “[e]ither way, what matters is the set of powers the
`
`Court considered as the basis for its decision.” Id. The “present FTC” is
`
`“hardly a mere legislative or judicial aid,” even if it was appropriately
`
`characterized as such in 1935. Id. at 2200 & n.4.
`
`In short, two observations about FTC at the time Humphrey’s Ex-
`
`ecutor was decided are worthwhile: (1) its “powers,” such as they were,
`
`lacked any form comparable to traditional executive powers, and (2) still,
`
`the Supreme Court in Humphrey’s Executor misunderstood what FTC
`
`was doing. Both points undermine the ongoing vitality of Humphrey’s Ex-
`
`ecutor. Regardless, whatever FTC’s powers were in 1935, its powers and
`
`practices today have expanded dramatically to encompass traditional ex-
`
`ecutive authority that, under the Constitution, must be accountable to
`
`the President.
`
`11
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`
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`Case: 23-60167 Document: 128 Page: 18 Date Filed: 06/12/2023
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`2. The modern FTC exercises executive power beyond
`the President’s control
`
`
`
`Congress amended the Federal Trade Commission Act in 1973, add-
`
`ing court-ordered permanent injunctions and civil penalties as remedies
`
`available for the Commission to seek against violators. AMG Cap. Mgmt.,
`
`LLC v. FTC, 141 S. Ct. 1341, 1346 (2021). These changes, together with
`
`the Magnuson-Moss Act’s addition of rulemaking powers in 1975, sent
`
`FTC into a “flurry of rulemaking activity that sought to regulate broad
`
`swaths of the economy in the wake of Magnuson-Moss.” Dissenting State-
`
`ment of Commissioners Christine S. Wilson and Noah Joshua Phillips
`
`Regarding the Commission Statement on the Adoption of Revised Section
`
`18 Rulemaking Procedures 2, Federal Trade Commission (July 9, 2021).
`
`Fifty years later, FTC is indistinguishable from any other executive
`
`branch agency either in its statutory mandate or in its practical execution
`
`of that mandate. The Commission itself made the point clear in its opin-
`
`ion below, asserting that it exercises “fundamentally an executive—not
`
`legislative—function” when it selects the forum to bring an action. Op. of
`
`the Commission at 88 (March 31, 2023).
`
`FTC enforces federal antitrust laws through investigations, consent
`
`decrees, and administrative complaints. Guide to Antitrust Laws: The
`
`12
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`
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`Case: 23-60167 Document: 128 Page: 19 Date Filed: 06/12/2023
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`Enforcers, FEDERAL TRADE COMMISSION, https://www.ftc.gov/advice-guid-
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`ance/competition-guidance/guide-antitrust-laws/enforcers.
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`Together
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`with the Department of Justice, it issues vertical and horizontal merger
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`guidelines that flesh out the two agencies’ enforcement policies in a man-
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`ner analogous to agency rulemaking. See U.S. DEP’T OF JUSTICE & FED.
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`TRADE COMM’N, Horizontal Merger Guidelines (Aug. 19, 2010); U.S. DEP’T
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`OF JUSTICE & FED. TRADE COMM’N, Vertical Merger Guidelines (June 30,
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`2020).
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`Further, FTC can promulgate substantive rules of business conduct
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`under the FTC Act, and it has rulemaking authority under the Mag-
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`nuson-Moss Act regarding its consumer protection duties. See Nat’l Pe-
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`troleum Refiners Ass’n v. FTC, 482 F.2d 672, 673 (D.C. Cir. 1973) (citing
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`15 U.S.C. 46(g)); Magnuson-Moss Warranty-Federal Trade Commission
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`Improvement Act, Pub. L. No. 93-637, 88 Stat. 2183 (1975) (codified as
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`amended at 15 U.S.C. §§ 2301–2312 (2012)).
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`FTC is tasked with enforcement of the Federal Trade Commission
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`Act and the Clayton Act, and it is authorized to commence administrative
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`proceedings against private actors, issue cease and desist orders, obtain
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`permanent injunctions and seek civil penalties against violators. See
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`13
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`Case: 23-60167 Document: 128 Page: 20 Date Filed: 06/12/2023
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`AMG Cap. Mgmt., 141 S. Ct. at 1346. FTC’s most direct analog is to the
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`DOJ’s Antitrust Division, with which it shares enforcement authority on
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`civil antitrust law. See 15 U.S.C. § 18.
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`These responsibilities point to an agency that broadly exercises ex-
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`ecutive power, comparable to, for example, the Consumer Financial Pro-
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`tection Bureau, which the Supreme Court described as “vested with sig-
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`nificant executive power” because it possessed “significant administra-
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`tive authority,” including “the power to seek daunting monetary penal-
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`ties against private parties . . . in federal court.” Seila Law, 140 S. Ct. at
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`2200–01. Specifically, that “significant administrative authority” con-
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`sisted of the ability to “issue final regulations, oversee adjudications, set
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`enforcement priorities, initiate prosecutions, and determine what penal-
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`ties to impose on private parties.” Id. at 2203–04. FTC is the same.
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`FTC is no longer limited to “making investigations and reports
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`thereon for the information of Congress,” Humphrey’s Executor, 295 U.S.
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`at 628. Scholars and courts alike have observed that “the FTC is very far
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`from the quartet of qualities announced in Humphrey’s Executor”; today,
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`its “predominant character is executive, with an increasing amount of the
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`Commission's effort dedicated to consent decrees and federal district
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`14
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`Case: 23-60167 Document: 128 Page: 21 Date Filed: 06/12/2023
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`court enforcement.” Crane, supra, at 1869. Accordingly, the reasoning of
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`Humphrey’s Executor cannot extend to the modern FTC.
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`B. Precedents since Humphrey’s Executor undermine its
`validity and suggest removal protections violate
`Article II
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`More recent Supreme Court decisions have diverged significantly
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`from the Humphrey’s Executor’s “quasi-legislative” and “quasi-judicial”
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`analysis. They recognize that, because Article II places both executive
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`power and executive accountability solely with the President, the Presi-
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`dent must possess “the authority to remove those who assist him in car-
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`rying out his duties.” Free Enter. Fund v. Pub. Co. Acct. Oversight Bd.,
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`561 U.S. 477, 513–14 (2010); see also Morrison v. Olson, 487 U.S. 654,
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`705 (1988) (Scalia, J., dissenting) (“‘The executive Power shall be vested
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`in a President of the United States.’ . . . [T]his does not mean some of the
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`executive power, but all of the executive power.”).
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`At the heart of the separation of powers doctrine is accountability:
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`“The purpose of the separation and equilibration of powers in general,
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`and of the unitary Executive in particular, was not merely to assure ef-
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`fective government but to preserve individual freedom.” Morrison, 487
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`U.S. at 727 (Scalia, J., dissenting). Preventing the President from firing
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`15
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`Case: 23-60167 Document: 128 Page: 22 Date Filed: 06/12/2023
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`agency official without “cause” limits the President’s ability to control the
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`actions of officials exercising the executive power vested solely in him.
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`Restrictions on removal also threaten the balance of separated powers of
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`government and, by implication, individual liberty. Id.
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`As Congress has created more independent agencies to add to the
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`“vast and varied federal bureaucracy,” the danger that authority “may
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`slip from the Executive’s control, and thus from that of the people” has
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`become real. Free Enter. Fund, 561 U.S. at 499. “[B]ecause the President,
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`unlike agency officials, is elected, this control is essential to subject Ex-
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`ecutive Branch actions to a degree of electoral accountability.” Collins v.
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`Yellen, 141 S. Ct. 1761, 1784 (2021).
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`Humphrey’s Executor and Morrison, which permitted “good cause”
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`removal protections for independent counsel because the protections did
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`not “impermissibly burden[] the President’s power to control or super-
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`vise” “inferior officers,” 487 U.S. at 691–92, represented “the outermost
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`constitutional limits of permissible congressional restrictions on the
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`President’s removal power.” Seila Law, 140 S. Ct. at 2199. Since Morri-
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`son, the Supreme Court has not endorsed any additional restrictions on
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`16
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`Case: 23-60167 Document: 128 Page: 23 Date Filed: 06/12/2023
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`the executive removal power—and indeed has declared that “an inde-
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`pendent agency that wields significant executive power and is run by a
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`single individual who cannot be removed by the President . . . violates the
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`separation of powers.” Id. at 2192.
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`Recently, the Supreme Court has recognized a robust removal
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`power and created distance from Humphreys’ Executor and Morrison. In
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`Free Enterprise Fund, the Court determined that members of the Public
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`Company Accounting Oversight Board, which operates under the
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`Securities and Exchange Commission, exercised executive power in their
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`statutory charge to enforce the Sarbanes-Oxley Act, securities laws and
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`rules, and professional accounting standards. 561 U.S. at 485, 498. It
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`held that insulating SEC board members behind two layers of removal
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`protections—requiring an SEC Commission finding of “cause” for a board
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`member’s removal, and the Commissioners’ own for-cause protection
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`from removal by the President, id. at 486–87—rendered them
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`unconstitutionally unaccountable in their exercise of executive power. Id.
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`at 498, 513–14.
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`And in Collins v. Yellen, the Court similarly struck down a for-cause
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`requirement to remove the single-director head of the Federal Housing
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`17
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`Case: 23-60167 Document: 128 Page: 24 Date Filed: 06/12/2023
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`Finance Agency. 141 S. Ct. at 1771, 1784. In so doing, it expressly
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`rejected arguments that removal restrictions are constitutional if they
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`are “modest” or if the executive agency in question is relatively small and
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`“administers only 1” statute. Id. at 1784–87.
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`These cases illustrate two critical decision-making dynamics: First,
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`the Court has refused to extend Humphrey’s Executor and generally has
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`been bolstering executive removal power; second, the Court has
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`determined removal protections for agencies exercising executive power
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`trigger constitutional concern, even where those exercises are of a
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`smaller degree.
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`As for FTC, the Supreme Court has acknowledged that its 1935
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`“conclusion that the FTC did not exercise executive power has not with-
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`stood the test of time.” Seila Law, 140 S. Ct. at 2198 n.2. To be sure, the
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`Court modestly suggested that perhaps Humphrey’s Executor can be sal-
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`vaged by reference to FTC’s multi-member directorship (as distinct from
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`agencies with a single director). Id. at 2204 (“[T]he agency’s single-Direc-
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`tor structure means the President will not have the opportunity to ap-
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`point any other leaders—such as a chair or fellow members of a Commis-
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`sion or Board—who can serve as a check on the Director's authority and
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`18
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`Case: 23-60167 Do
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