No, not quite. Frequent readers of my Truth on the Market posts (and I hope that the plural form is not self-delusion) may recall my March musings about “What Changes Might, and Should, a New FTC Majority Bring?” I wondered whether a new Federal Trade Commission (FTC) majority might drop, among other things, the rushed and ill-considered Robinson Patman Act (RPA) case against Pepsi. Just remember, you read it here first.
As I noted at the time:
Ferguson and Holyoak were none too pleased with the circulation. Writing his dissent in his last days as a minority commissioner, Ferguson was clear that the presented case seemed nowhere near the enforcement margin:
The gaping holes in the evidence that Commission staff collected in its limited investigation make it impossible to determine whether the defendant, PepsiCo, Inc. (“Pepsi”), has broken the law. The Commission majority sues Pepsi nonetheless. The paucity of evidence is not a problem for the majority, because the law is beside the point.
Also dissenting (very dissenting), Holyoak called it “the worst case” she had seen as a member of the commission:
Today’s Complaint against Pepsi is wholly deficient, not only because the pleadings fail to state a claim, but because the Majority rushed the case out the door before it had evidence to support the allegations. I am astounded that the Majority has such little regard for our staff that it is willing to send them to court like a lamb to the slaughter.
Lo and behold, the commission has indeed voted to withdraw the case, and it’s done so unanimously (if with an asterisk, given the ongoing case and controversy regarding the dismissal of Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter, about which there is more below). A statement by Chairman Andrew Ferguson, joined by Commissioner Melissa Holyoak, is here. And the new kid on the block—Commissioner Mark Meador—issued a separate concurring statement here.
As I’ve said before (perhaps ad nauseam), the potential for bad RPA cases seems high; and the potential for good RPA cases that could not be brought under the antitrust laws without citing to RPA seems low, indeed. But the commission did the right thing in withdrawing this case, saving its limited staff resources for more promising and pro-consumer matters.
Humphrey’s Revisited
Reader(s) may also recall my late-March discussion of Humphrey’s Executor and President Donald Trump’s (announced) dismissal of Slaughter and Bedoya. On the one hand, I thought that Humphrey’s Executor might not be long for this precedential realm (or, at least, that if it were not bound for execution, then the Supreme Court would likely decline to find that it still fit—and justified—today’s FTC).
At the same time, I (and everyone) recognized that the plain statutory language of the FTC Act limited the president’s dismissal power and, of course, that Humphrey’s had been modified, but not overturned. There were legal and policy arguments pushing both ways.
While those include strong arguments behind current trends at the Court, I couldn’t help but think the firings were both unnecessary and something of a shame, not least because the bipartisan and “independent” FTC had functioned rather well as such for at least several decades, running from the latter decades of the 20th Century up until about 2020 at any rate. “Independent” in name, that is, and to an extent, if never wholly independent from either the executive or Congress.
I continue to lack a crystal ball, but my best guess had been that Commissioners Slaughter and Bedoya would win their challenge to their dismissals at the district court but lose on appeal—if not at the U.S. Circuit Court of Appeals for the D.C. Circuit, then before the Supremes. With a three-day weekend—and Memorial Day—looming, I’ll be uncharacteristically brief. While their case is still pending, other matters in the federal courts suggest that my predictions may come to pass.
I write, of course, about litigation involving dismissals from other (at least nominally) independent agencies; that is, Trump’s Jan. 27 dismissal of Gwynne Wilcox from the National Labor Relations Board (NLRB) and his Feb. 10 dismissal of Cathy Harris from the Merit Systems Protection Board (MSPB). Both Wilcox and Harris lodged complaints citing statutory “for-cause” dismissal requirements and Humphrey’s Executor. Neither complaint has been fully resolved, although both plaintiffs were granted summary judgement by the U.S. District Court, with a memorandum and order issued March 4 in the MSPB case, Harris v. Bessent and March 7 in the NLRB case, Wilcox v. Trump. As one might have guessed.
The administration fared rather better in a March 28 consolidated case before a panel of the D.C. Circuit, being granted emergency stays of the orders issued in both cases below. The pendulum swung again with a rehearing en banc, with a 7-4 majority denying the panel’s stay. And then, yesterday, Chief Justice John Roberts turned the tables yet again:
The application for stay presented to THE CHIEF JUSTICE and by him referred to the Court is granted.
No, it’s not over. That is not a Supreme Court decision on the merits. There’s more back and forth to come. But recall my earlier discussion of some of the Supreme Court’s developing jurisprudence regarding Humphrey’s Executor and, especially, Seila Law. I noted that the majority there “observes that the Humphrey’s Executor court’s ‘conclusion that the FTC did not exercise executive power has not withstood the test of time.’” Moreover:
At least three justices sitting on the court have said that they would overrule Humphrey’s Executor outright. Concurring in part and dissenting in part with the majority’s Seila Law opinion, Justice Clarence Thomas, joined by Justice Neil Gorsuch, left no room for doubt:
The decision in Humphrey’s Executor poses a direct threat to our constitutional structure and, as a result, the liberty of the American people. The Court concludes that it is not strictly necessary for us to overrule that decision. … But with today’s decision, the Court has repudiated almost every aspect of Humphrey’s Executor. In a future case, I would repudiate what is left of this erroneous precedent.
Justice Brett Kavanaugh, when sitting on the U.S. Court of Appeals for the D.C. Circuit, at least hinted that he would do the same.
Now, in deciding in favor of the government (and the executive), Roberts duly notes that the Court did “not ultimately decide” the question “whether the NLRB or MSPB falls within such a recognized exception” to the president’s power to remove executive officials without cause.
To quote the late, great “Professor” Irwin Corey: HOWEVER . . .
Roberts did note that his May 22 decision reflected the Court’s “judgment that the Government is likely to show that both the NLRB and MSPB exercise considerable executive power.” And, citing Seila Law, that “the President . . . may remove without cause executive officers who exercise that power on his behalf, subject to narrow exceptions recognized by our precedents.” And there was, of course, that observation in Seila Law that Humphrey’s Executor’s “conclusion that the FTC did not exercise executive power has not withstood the test of time.”
This may all take some time. And it’s still not clear whether the Court will overrule Humphrey’s Executor or limit it further, such that it no longer applies to the FTC (or NLRB or MSPB). The writing seems to be on the wall, and not merely wall-adjacent. Which, as I’ve written, is understandable, justifiable, and, in various regards, unfortunate.
Ok, there’s more to follow next week.
In the meantime, please check out ICLE’s comments to the FTC’s request for information (RFI) on “Technology Platform Censorship,” drafted by Ben Sperry, Geoff Manne, and yours truly. In brief, the inquiry might produce information of interest, and it’s possible that, down the road (the RFI is not a law-enforcement investigation or a rigorous study), there could be a law-enforcement action sounding in either antitrust or the commission’s consumer protection authority.
But the facts and circumstances that would support a strong antitrust case seem highly unlikely, a viable consumer protection case also seems unlikely, and First Amendment protections would likely trump many possible interventions in any case (for more, in addition to our comments, see me here; Ben Sperry here; and, not incidentally, the Supreme Court here).
And stay tuned for ICLE comments in response to the FTC and U.S. Justice Department (DOJ) RFIs on anticompetitive regulations.
Memorial Day: In the meantime, enjoy the long weekend. And take a moment to recognize the “memorial” part of Memorial Day. Our freedoms—not least those protected by the First Amendment—rest on those who have given that last full measure of devotion. I’ll remember my dad and my father-in-law, both of whom served honorably in uniform, with dad volunteering “fresh off the boat,” before he’d earned citizenship. And the millions of U.S. and Allied troops mobilized during World War II. Without their sacrifice, my children and I would not exist.
