D.C. Circuit Grants Stay in Meta-FTC Appeal, Pending SCOTUS Jarkesy Decision

The U.S. Appeals Court for the D.C. Circuit granted Meta's unopposed motion to hold its appeal against the FTC in abeyance until 21 days after the U.S. Supreme Court issues its decision in SEC v. Jarkesy, said a clerk's order Tuesday (docket 24-5054). The underlying Meta-FTC case in the district court similarly has been stayed (see 2404180029). The D.C. Circuit appeal arises from the district court’s denial of Meta’s motion for a preliminary injunction to block the FTC’s administrative proceeding into its privacy practices. In the same decision, the district court also denied the FTC’s motion to dismiss. The district court denied that motion without prejudice, concluding that it would be premature to dismiss Meta’s claims before SCOTUS has issued its decision in Jarkesy, as it’s possible that the SCOTUS decision may have some bearing on the Meta-FTC case. Though Jarkesy involves a different agency, it concerns many of the same constitutional challenges asserted by Meta against the FTC, said Meta's motion Monday. The D.C. Circuit should similarly stay the appeal pending the Supreme Court’s Jarkesy decision, it said. Holding the appeal in abeyance temporarily will accomplish the goal of judicial efficiency in at least two ways, it said. First, granting the stay will allow the parties to brief the appeal with the benefit of the Supreme Court’s ruling, it said. Second, within weeks of the Jarkesy decision, the parties must determine next steps in the district court action, including whether the FTC will renew its motion to dismiss, it said. A second motion to dismiss “has the potential to give rise to a second appeal raising similar questions concerning the state of the law and how it applies to Meta’s claims,” it said. It thus may provide an opportunity for the parties to discuss “whether the instant appeal should continue to be held in abeyance pending resolution of that motion,” it said. An abeyance to give the parties time to determine the best course forward “will therefore accomplish judicial efficiency,” it said. Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners exercise executive authority while being “unconstitutionally insulated from removal” by the president. The questions at stake in Jarkesy (docket 22-859) include whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.