Court Opinion

ID: 4655491
Source: CourtListenerOpinion
Date Created: 2021-01-28 19:00:37.341771+00
Date Added: 2024-06-11T08:00:19.585365
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

AXON ENTERPRISE, INC., a Delaware         No. 20-15662
corporation,
               Plaintiff-Appellant,          D.C. No.
                                          2:20-cv-00014-
                  v.                           DWL

FEDERAL TRADE COMMISSION, a
federal administrative agency;              OPINION
JOSEPH J. SIMONS; NOAH PHILLIPS;
ROHIT CHOPRA; REBECCA
SLAUGHTER; CHRISTINE WILSON, in
their official capacities as
Commissioners of the Federal Trade
Commission,
                 Defendants-Appellees.

      Appeal from the United States District Court
               for the District of Arizona
       Dominic Lanza, District Judge, Presiding

          Argued and Submitted July 17, 2020
              San Francisco, California

                 Filed January 28, 2021
2                  AXON ENTERPRISE V. FTC

        Before: Eugene E. Siler, * Kenneth K. Lee, and
             Patrick J. Bumatay, Circuit Judges.

                 Opinion by Judge Lee;
Partial Concurrence and Partial Dissent by Judge Bumatay

                          SUMMARY **

                  Federal Trade Commission

    The panel affirmed the district court’s dismissal for lack
of subject matter jurisdiction of an action filed by Axon
Enterprises, Inc. arguing that the Federal Trade Commission
(“FTC”)’s administrative enforcement process violated
Axon’s constitutional rights.

    The FTC investigated and filed an administrative
complaint challenging Axon’s acquisition of a competitor.
The FTC demanded that Axon spin-off its newly acquired
company and provide it with Axon’s intellectual property.
Axon responded by filing this lawsuit. Axon alleged that the
FTC’s administrative enforcement process violated its due
process rights, and ran afoul of separation-of-powers
principles.

    The panel held that the district court did not have
jurisdiction to hear Axon’s constitutional challenges to the

    *
     The Honorable Eugene E. Siler, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                 AXON ENTERPRISE V. FTC                      3

FTC’s structure. Specifically, the panel affirmed the district
court’s dismissal because the Supreme Court’s Thunder
Basin Coal Co. v. Reich, 510 U.S. 200 (1994), trilogy of
cases mandated that result. The panel further held that
Congress and the FTC Act impliedly barred jurisdiction in
the district court and required parties to move forward first
in the agency proceeding. Because the FTC statutory
scheme ultimately allowed Axon to present its constitutional
challenges to a federal court of appeals after the
administrative proceeding, Axon did not suffer any
cognizable injury. The panel joined every other circuit that
considered a similar issue, and held that Congress impliedly
stripped the district court of jurisdiction.

    Judge Bumatay concurred in the judgment and dissented
in part. He would hold that Axon was entitled to bring its
claims representing broad constitutional claims not requiring
review of the merits on individual agency action before the
district court, and the district court erred in dismissing them
at the outset. In contrast, Axon’s claim against the FTC’s
adjudicatory structure contested the agency’s antitrust
determinations and must be brought before the FTC.

                         COUNSEL

Pamela B. Petersen (argued), Axon Enterprise Inc.,
Scottsdale, Arizona, for Plaintiff-Appellant.

Daniel Aguilar (argued), Mark B. Stern, Joshua M. Salzman,
and Amanda L. Mundell, Appellate Staff; Civil Division,
United States Department of Justice, Washington, D.C.; for
Defendants-Appellees.
4                AXON ENTERPRISE V. FTC

                          OPINION

LEE, Circuit Judge:

    Over the past century, Congress has established an array
of quasi-independent executive agencies that enjoy partial
insulation from presidential oversight and wield tremendous
enforcement power. Instead of filing lawsuits in federal
court, these agencies can commence administrative
enforcement proceedings against companies and
individuals, and make their cases before their own
administrative law judges (ALJs). Not surprisingly, ALJs
overwhelmingly rule for their own agencies.

    Here, the Federal Trade Commission (FTC) investigated
and filed an administrative complaint challenging Axon
Enterprise, Inc.’s acquisition of a competitor. The FTC
demanded that Axon spin-off its newly acquired company
and provide it with Axon’s own intellectual property. Axon
responded by filing a lawsuit in federal district court, arguing
that the FTC’s administrative enforcement process violates
Axon’s due process rights and runs afoul of separation-of-
powers principles.

     The narrow question presented here is whether the
district court has jurisdiction to hear Axon’s constitutional
challenge to the FTC’s structure. The district court
dismissed Axon’s complaint, ruling that the FTC’s statutory
scheme requires Axon to raise its constitutional challenge
first in the administrative proceeding.

    We affirm the district court’s dismissal because the
Supreme Court’s Thunder Basin trilogy of cases mandates
that result. The structure of the FTC Act suggests that
Congress impliedly barred jurisdiction in district court and
required parties to move forward first in the agency
                   AXON ENTERPRISE V. FTC                          5

proceeding. And because the FTC statutory scheme
ultimately allows Axon to present its constitutional
challenges to a federal court of appeals after the
administrative proceeding, Axon has not suffered any
cognizable harm. We join every other circuit that has
addressed a similar issue in ruling that Congress impliedly
stripped the district court of jurisdiction.

  FACTUAL BACKGROUND AND PROCEDURAL
               HISTORY

    Axon makes, among other things, body cameras for use
by law enforcement. In May 2018, it acquired a competitor
body camera company called Vievu LLC. About a month
later, the FTC sent Axon a letter stating that the Vievu
acquisition raised antitrust concerns. For about eighteen
months, Axon cooperated with the FTC’s investigation. In
December 2019, the FTC demanded that Axon turn Vievu
into a “clone” of Axon using Axon’s intellectual property.
If Axon refused this settlement demand, the FTC threatened
to initiate an administrative proceeding to obtain this relief.

    In response, Axon filed this action in the district court on
January 3, 2020. 1 Axon made three substantive claims:
(1) the FTC’s administrative proceeding violates Axon’s
Fifth Amendment due process rights, (2) the FTC’s structure
violates Article II by providing improper insulation from the
president, and (3) Axon’s acquisition of Vievu did not
violate antitrust law.

   Axon argued that the FTC’s administrative enforcement
scheme violates its due process rights because the agency

    1
      The FTC filed an administrative complaint challenging the Vievu
acquisition later that same day.
6                 AXON ENTERPRISE V. FTC

effectively acts as the prosecutor, judge, and jury, and that it
is entitled to a trial in district court. Axon notes that the FTC
has not lost an administrative proceeding trial in the past
quarter-century. It also maintains that the FTC’s ALJs
impermissibly enjoy dual-layer insulation from presidential
control because only the FTC commissioners can remove
them for cause and the commissioners, in turn, can be
removed only for cause by the President.

    Axon later filed a motion for preliminary injunction. The
FTC opposed the preliminary injunction motion, relying
mainly on jurisdictional grounds. The district court agreed
with the FTC and dismissed Axon’s complaint without
prejudice due to a lack of subject matter jurisdiction. It
determined that Congress impliedly precluded jurisdiction
over Axon’s claims when it enacted the FTC administrative
review scheme.

    Axon timely filed its notice of appeal to this court.

                STANDARD OF REVIEW

   We review de novo a district court’s determination of
subject matter jurisdiction. See Gingery v. City of Glendale,
831 F.3d 1222, 1226 (9th Cir. 2016).

                        DISCUSSION

    The FTC Act does not expressly state that a party cannot
sue in federal district court to challenge the agency’s
administrative enforcement process. But that does not rule
out that Congress may still have impliedly precluded district
court jurisdiction when it enacted a statutory scheme of
administrative review. See, e.g., Bennett v. U.S. Sec. and
Exch. Comm’n, 844 F.3d 174, 181 (4th Cir. 2016); Jarkesy
                 AXON ENTERPRISE V. FTC                     7

v. U.S. Sec. and Exch. Comm’ 803 F.3d 9, 15 (D.C. Cir.
2015).

    Courts have fashioned a two-step inquiry to determine
whether Congress impliedly precluded jurisdiction. First, a
court asks “whether Congress’s intent to preclude district-
court jurisdiction is ‘fairly discernible in the statutory
scheme.’” Bennett, 844 F.3d at 181 (quoting Thunder Basin
Coal Co. v. Reich, 510 U.S. 200, 207 (1994)). Second, a
court considers “whether plaintiffs’ ‘claims are of the type
Congress intended to be reviewed within this statutory
structure.’” Id. (quoting Thunder Basin, 510 U.S. at 212).

    We conclude that, following this two-step analysis,
Congress impliedly precluded district court jurisdiction over
claims of the type brought by Axon when it enacted the FTC
Act. We are guided and constrained by the so-called
Thunder Basin factors set out by the Supreme Court in
assessing this question.

I. The Thunder Basin / Free Enterprise / Elgin trilogy
   for determining implied preclusion of jurisdiction.

    The Supreme Court set out the modern standard for
implied preclusion of district court jurisdiction in three
cases: Thunder Basin Coal Co. v. Reich, 510 U.S. 200
(1994), Free Enter. Fund v. Pub. Co. Acct. Oversight Bd.,
561 U.S. 477 (2010), and Elgin v. Dep’t of Treasury,
567 U.S. 1 (2012). Because we apply the so-called Thunder
Basin factors here, a closer look at each case will assist our
analysis.

       A. Thunder Basin

   In Thunder Basin, the Supreme Court considered
whether the Federal Mine Safety and Health Amendments
8                AXON ENTERPRISE V. FTC

Act of 1977, 30 U.S.C. § 801 et seq., prevented a district
court from exercising jurisdiction over a pre-enforcement
challenge to the statute. 510 U.S. at 202. Thunder Basin
Coal Company objected to an order by the Mine Safety and
Health Administration (MSHA) requiring the company to
post two members of a miner’s union, who were not
employees of the company, as representatives during a
healthy and safety inspection. See id. at 205. Thunder Basin
made two arguments: (1) the designation of nonemployee
representatives violated collective bargaining principles
under the National Labor Relations Act, and (2) forcing the
company to challenge MSHA’s regulatory interpretations
through the administrative review process would violate due
process because it would force the company to choose
between possible penalties for violating the act or irreparable
harm from complying with the agency’s order. See id.
at 205–06.

    The Supreme Court concluded that the Mine Act
precluded district court jurisdiction. Under the first step of
the analysis, the Court held that it could discern Congress’
intent to preclude district court jurisdiction based on the
Mine Act’s “detailed structure for reviewing violations,”
subject to review by the federal court of appeals. Id. at 207–
08. Then under the second step, the Court determined that
the claims were of the type Congress intended to be reviewed
within this scheme. First, it concluded that the company’s
claims fell within the agency’s expertise because they
essentially required an interpretation of the parties’ rights
and duties under the relevant statute and regulation. Id.
at 214–15. Second, though the agency lacked the authority
to decide constitutional issues, the court of appeals could
address them after the parties concluded the administrative
proceeding. Id. at 215. Third, the Court rejected the
argument that due process required pre-enforcement action
                 AXON ENTERPRISE V. FTC                     9

because it found that Thunder Basin would not face any
serious prehearing deprivation that could not be remedied on
appeal. Id. at 216–18.

    The big takeaway from Thunder Basin is that an
administrative review scheme can preclude district court
jurisdiction, despite the possibility that the administrative
process cannot address or remedy the alleged constitutional
harm until a federal court of appeals reviews the case.

   B. Free Enterprise

     The second Supreme Court case, Free Enterprise,
considered whether the structure of the Public Company
Accounting Oversight Board violated Article II’s vesting of
executive power in the presidency. 561 U.S. at 483–84. An
accounting firm sued after the Board released a report
critical of the firm’s auditing procedures and began a formal
investigation. Id. at 487. The firm sought a declaratory
judgment that the Board’s structure violated the
Appointment Clause and an injunction preventing the Board
from exercising its powers. Id. Notably, the firm did not
challenge the agency’s final order or rule, but rather the
Board’s critical report.

    The Supreme Court determined that the statutory scheme
did not preclude jurisdiction. Id. at 489. For the second step
of the analysis—whether the claims are of the type meant to
be reviewed within the statutory scheme—the Court
identified three factors from Thunder Basin to consider:
(1) whether a party can obtain “meaningful judicial review”
within the statutory scheme, (2) whether the suit is “wholly
collateral to a statute’s review provisions,” and (3) whether
10                AXON ENTERPRISE V. FTC

the claims are “outside the agency’s expertise.” Id. (internal
quotation marks omitted). 2

    In ruling that statutory scheme did not strip jurisdiction,
the Court held that the firm could not obtain meaningful
review of its claim under the statutory scheme because it did
not challenge a final agency order or rule. Though the Board
acted under SEC oversight, the SEC can review only Board
rules and sanctions. Id. at 489. This meant that “not every
Board action is encapsulated in a final Commission order or
rule.” Id. at 490. The accounting firm was challenging the
Board’s critical report, which cannot be reviewed by the
agency or the appellate court. So the only way the firm could
raise its constitutional claim under the statutory scheme was
to either challenge a “random” Board rule or willingly incur
a Board sanction by violating a discovery order. See id. The
Court thus held that the statutory scheme did not provide a
meaningful judicial review. Id. The Court also concluded
that the constitutional claims were outside the SEC’s
competence and expertise because they were “standard
questions of administrative law” rather than “technical
considerations of agency policy.” Id. at 491 (alteration
omitted).

    Free Enterprise makes clear that if a party cannot seek
judicial review for its grievances under the normal
procedures of the statutory scheme, it does not have
meaningful judicial review.

     2
       Because the Court viewed these factors as originating from
Thunder Basin, courts have sometimes called them the Thunder Basin
factors.
                 AXON ENTERPRISE V. FTC                     11

       C. Elgin

    Finally, the third Supreme Court case, Elgin, addressed
whether the Civil Service Reform Act of 1978 (CSRA)
“provides the exclusive avenue to judicial review when a
qualifying employee challenges an adverse employment
action by arguing that a federal statute is unconstitutional.”
567 U.S. at 5. The petitioners argued that the federal
government’s Selective Service registration requirement for
males violated the Equal Protection Clause. Id. at 6–7.

    The Supreme Court found that Congress precluded
district court jurisdiction over such claims. The majority
opinion first concluded that there was a fairly discernible
congressional intent to preclude jurisdiction because of the
CSRA’s detailed structure. See id. at 10–13.

    The Court also found that the claims were of the type
Congress intended to preclude. For the first Thunder Basin
factor, the Court found that there was meaningful review
even though the agency lacked the authority to address the
constitutional issues because the statute ultimately “provides
review in the Federal Circuit, an Article III court fully
competent to adjudicate petitioners’ claims . . . .” Id. at 17.
For the second factor, the Court held that the claims were not
wholly collateral to the CSRA scheme because the claims
were “the vehicle by which they seek to reverse” the agency
actions taken against them. Id. at 21–22. Finally, for the
third factor, the Court explained that the agency could bring
its expertise to bear on “threshold” questions within the
agency’s expertise; for example, one petitioner’s claim
rested on an allegation of constructive discharge, which the
agency could resolve in a manner that could avoid the need
to reach the constitutional claim. Id. at 22–23.
12               AXON ENTERPRISE V. FTC

    Elgin thus clarified that a claim is not “wholly collateral”
to a statutory review scheme if it is the “vehicle by which” a
party seeks to prevail at the agency. Elgin also shows that
sometimes an agency’s expertise can affect constitutional
claims if there are preliminary questions apart from the
merits questions at issue.

   With these three cases in mind, we now turn to the
implied preclusion analysis.

II. Step one: The FTC Act evinces a fairly discernible
    intent to preclude district court jurisdiction.

    Axon appears to concede that the FTC Act impliedly
precludes jurisdiction for at least some claims. The FTC Act
includes a detailed overview of how the FTC can issue
complaints and carry out administrative proceedings.
15 U.S.C. § 45. This provision is almost identical to the
statutory review provision in the SEC Act, which other
circuits have held shows a fairly discernible intent to strip
district court jurisdiction. See, e.g., Hill v. SEC, 825 F.3d
1236, 1241 (11th Cir. 2016); Tilton v. SEC, 824 F.3d 276,
281 (2d Cir. 2016). We thus hold that the FTC Act reflects
a fairly discernible intent to preclude district court
jurisdiction.

III.   Step two: The Thunder Basin factors suggest that
       the claims are of the type to be reviewed within
       the statutory scheme.

   We now turn to whether Axon’s claims are of the type
meant to be reviewed within the FTC Act’s statutory
scheme. Axon argues that it has three claims for the district
court to decide: (1) the clearance process used to determine
whether the FTC or DOJ will review a merger violates due
process, (2) the fact that the FTC combines investigatory,
                    AXON ENTERPRISE V. FTC                           13

prosecutorial, adjudicative, and appellate functions within a
single agency violates due process, and (3) the dual-layer of
protection given to FTC ALJs violates the Appointments
Clause of Article II of the Constitution.3

    Under the Thunder Basin factors, we must consider:
(1) whether the plaintiff can obtain meaningful judicial
review in the statutory scheme, (2) whether the claim is
“wholly collateral” to the statutory scheme, and (3) whether
the claim is outside the agency’s expertise. See Elgin,
567 U.S. at 15 (citing Thunder Basin, 510 U.S. at 215). The
D.C. Circuit has explained that these three factors do not
“form three distinct inputs into a strict mathematical
formula,” but are rather “general guideposts useful for
channeling the inquiry into whether the particular claims at
issue fall outside an overarching congressional design.”
Jarkesy, 803 F.3d at 17. Several courts have also concluded
that “the first factor—meaningful judicial review—is ‘the
most critical thread in the case law.’” See, e.g., Hill,
825 F.3d at 1245 (quoting Bebo v. SEC, 799 F.3d 765, 774
(7th Cir. 2015)).

    In applying these Thunder Basin factors, we conclude
that Axon’s claims are of the type meant to be reviewed
within the statutory scheme.

    A. Axon will have meaningful judicial review of its
       claims.

   Axon’s argument on the first Thunder Basin factor boils
down to a simple premise: eventual review by the federal
    3
      These three claims do not line up with the three claims that Axon
brought in its complaint. Rather, Axon agreed that the FTC should
decide the merits of the antitrust dispute and that the clearance process
claim falls within its due process claim.
14                  AXON ENTERPRISE V. FTC

appellate court is not meaningful judicial review. But
Supreme Court precedent, as well as rulings from our sister
circuits, rejects that premise.

    First, Axon argues that the FTC Act does not provide
meaningful judicial review because the administrative
process itself “creates ongoing constitutional harm that
simply cannot be remedied in an after-the-fact appeal.” But
the Supreme Court in Thunder Basin held that the
“petitioner’s statutory and constitutional claims here can be
meaningfully addressed in the Court of Appeals,” even
though the petitioner there similarly argued that the agency
process itself would violate its constitutional rights. See
Thunder Basin, 510 U.S. at 215; see also FTC v. Standard
Oil Co. of Cal., 449 U.S. 232, 244 (1980) (rejecting
petitioner’s argument that “the expense and disruption of
defending itself in protracted adjudicatory proceedings”
warrants an exception to the agency review process). 4

    Other circuits have rejected this argument as well. As
the Eleventh Circuit explained in Hill v. SEC, “[w]hether an
injury has constitutional dimensions is not the linchpin in
determining its capacity for meaningful judicial review.”

     4
      Axon seeks to distinguish Standard Oil on the basis that it did not
deal with an allegedly unconstitutional proceeding. Other circuits have
rejected this distinction, however. See Jarkesy, 803 F.3d at 26 (“If the
injury inflicted on the party seeking review is the burden of going
through an agency proceeding . . . then [Standard Oil] teaches that the
party must patiently await the denouement of proceedings within the
Article II Branch.” (internal quotation marks omitted)); Bennett,
844 F.3d at 185 (rejecting the argument that “Standard Oil is inapposite
because it did not involve a constitutional claim” because it “makes no
material difference for assessing the meaningfulness of judicial review
here, because Thunder Basin and Elgin establish that petitioners can
obtain meaningful review of constitutional claims through a statutory
scheme similar to the one here”).
                    AXON ENTERPRISE V. FTC                            15

825 F.3d at 1246; see also Bennett v. U.S. Sec. and Exch.
Comm’n, 844 F.3d 174, 184 n.10 (4th Cir. 2016) (“[F]ederal
courts require litigants who unsuccessfully challenge the
constitutionality of the initial tribunal—including the
authority of the presiding decision maker—to endure the
proceeding and await possible vindication on appeal.”);
Tilton, 824 F.3d at 285 (explaining that “post-proceeding
relief, although imperfect, suffices to vindicate the litigant’s
constitutional claim” dealing with the legitimacy of the
tribunal).

    In other words, Axon has no right to avoid the
administrative proceeding itself. If the proceeding might
harm Axon, that harm can still be ultimately remedied by a
federal court of appeals, even if it is not Axon’s preferred
remedy of avoiding the agency process altogether. See
Bennett, 844 F.3d at 185 n.12 (rejecting the argument that a
court could not provide “complete relief” to the
Appointments Clause claim and explaining that the
petitioner is not necessarily “entitled to her preferred
remedy” given that “Congress may substitute remedies for
illegal action”). Axon’s argument also proves too much
because then “[e]very person hoping to enjoin an ongoing
administrative proceeding could make this argument,”
which would undermine the notion that it is “only in the
exceptional cases . . . where courts allow plaintiffs to avoid
the statutory review schemes prescribed by Congress.”
Bebo, 799 F.3d at 775. 5

    5
      It is telling that Axon appears disappointed that “the best Axon can
hope for is a remand for a complete do-over.” A “do-over,” however, is
exactly the type of relief the Supreme Court has ordered when it has
found a constitutional violation of an agency process. See Lucia v. SEC,
138 S. Ct. 2044, 2055 (2018) (after finding an Appointments Clause
16                   AXON ENTERPRISE V. FTC

     Axon also complains that it can obtain judicial review
only if FTC prevails in the administrative proceeding and
issues a cease and desist order. 15 U.S.C. § 45(c). But that
is true for any statutory review scheme that allows only for
review of final agency orders. For example, the SEC review
scheme allows judicial review only for “[a] person aggrieved
by a final order of the Commission,” 15 U.S.C. § 78y(a)(1),
yet every other circuit to have addressed the SEC statutory
scheme found that a party can obtain meaningful judicial
review. See Bennett, 844 F.3d at 186; Hill, 825 F.3d at 1246;
Tilton, 824 F.3d at 286–87; Jarkesy, 803 F.3d at 20; Bebo,
799 F.3d at 774. If we accepted Axon’s argument, it would
create a gaping loophole to the statutory scheme that
Congress could not have intended. As the Fifth Circuit
explained, “Congress provides meaningful judicial review
by authorizing review of challenges to a final agency order
by a federal circuit court.” Bank of La. v. FDIC, 919 F.3d
916, 925 (5th Cir. 2019).

    To be sure, sometimes the burden of an agency process
may justify pre-enforcement relief.      But that is for
exceptional circumstances not relating to typical agency
review. We agree with the Second Circuit’s view in Tilton:
“[T]he Supreme Court has concluded that post-proceeding
judicial review would not be meaningful because the
proceeding itself posed a risk of some additional and
irremediable harm beyond the burdens associated with the

violation, concluding that “the ‘appropriate’ remedy for an adjudication
tainted with an appointments violation is a new ‘hearing before a
properly appointed’ official”); see also Free Enterprise, 561 U.S. at 508–
513 (rejecting the argument that the Appointments Clause violation
rendered all of the Board’s actions and authority in violation of the
Constitution and instead severing the unconstitutional tenure provisions
from the statute and concluding that “petitioners are not entitled to broad
injunctive relief against the Board’s continued operations”).
                 AXON ENTERPRISE V. FTC                    17

dispute resolution process.” 824 F.3d at 286 (emphasis
added); see also McNary v. Haitian Refugee Ctr., Inc.,
498 U.S. 479, 496 (1991) (finding that petitioners’ claims
were not precluded by a statutory review provision because
petitioners would have had to “voluntarily surrender
themselves for deportation” to obtain review); Mathews v.
Eldridge, 424 U.S. 319, 331 (1976) (explaining that
exhaustion was not required because petitioner faced harm
arising from “his physical condition and dependency upon
the disability benefits,” not the alleged deprivation of due
process that was the basis for his claim).

    Axon does not face such a dire risk requiring pre-
enforcement relief. See Tilton, 824 F.3d at 286 (concluding
that “appellants have identified no such additional,
irremediable harm here” because “[t]he only prospective
injury that they describe is being subjected to an
unconstitutional    adjudicative procedure”)       (internal
quotation marks omitted)); Jarkesy, 803 F.3d at 21 (finding
that the petitioner’s claim was not like McNary). Thus,
Axon’s alleged constitutional harm does not prevent the FTC
Act’s statutory review scheme from providing meaningful
judicial review.

    Second, Axon argues that the agency review process
cannot provide meaningful review because it cannot address
Axon’s constitutional claims. Axon’s argument makes
sense from a policy perspective: it seems odd to force a party
to raise constitutional challenges before an agency that
cannot decide them. But the Supreme Court has rejected that
argument. In Elgin, the Court held that, even if the agency
cannot decide constitutional claims, a meaningful judicial
review exists as long as the party ultimately can appeal to
“an Article III court fully competent to adjudicate
petitioners’ claims.” 567 U.S. at 17; see also id. (explaining
18                  AXON ENTERPRISE V. FTC

that in Thunder Basin “we held that Congress’ intent to
preclude district court jurisdiction was fairly discernible in
the statutory scheme ‘[e]ven if’ the administrative body
could not decide the constitutionality of a federal law” when
“[t]hat issue . . . could be ‘meaningfully addressed in the
Court of Appeals’ that Congress had authorized to conduct
judicial review”); Bank of Louisiana, 919 F.3d at 926
(“Indeed, there can be meaningful review in the circuit court
even if the agency itself lacks authority to decide the
constitutional question presented.”); Jarkesy, 803 F.3d at 19
(“Because Jarkesy's constitutional claims, including his non-
delegation challenge to Dodd–Frank, can eventually reach
‘an Article III court fully competent to adjudicate’ them, it
is of no dispositive significance whether the Commission has
the authority to rule on them in the first instance during the
agency proceedings.”).         Here, Axon can present its
constitutional claims to this court after the conclusion of the
FTC enforcement proceedings. That is enough under
Supreme Court precedent.

     Third, the Supreme Court in Elgin rejected the premise
of Axon’s argument that there cannot be meaningful review
if the agency process does not create an appropriate record
for the federal court of appeals. It held that the court of
appeals can take judicial notice of relevant facts or remand
to the agency to make factual findings. Elgin, 567 U.S.
at 19. Here, 15 U.S.C. § 45(c) allows the court of appeals to
“order such additional evidence to be taken before the
Commission and to be adduced upon the hearing in such
manner and upon such terms and conditions as to the court
may seem proper.” 6

     6
     Axon’s reliance on Fashion Originators Guild of America v. FTC,
114 F.2d 80 (2nd Cir. 1940) is inapt. That case dealt with a situation in
                     AXON ENTERPRISE V. FTC                            19

      Finally, Axon argues—and the dissent agrees—that its
claims resemble those from Free Enterprise. Under Axon’s
and the dissent’s reading of Free Enterprise, challenges to
an “agency’s structure, procedures, or existence . . . are not
precluded from district court jurisdiction.” Dissent at 37–
38. As the dissent cogently points out, it makes little sense
to force a party to undergo a burdensome administrative
proceeding to raise a constitutional challenge against the
agency’s structure before it can seek review from the court
of appeals. And if we were writing on a clean slate, we
would agree with the dissent. 7 Cf. Ortega v. United States,
861 F.2d 600, 603 & n. 4 (9th Cir.1988) (“This case is
squarely controlled by the Supreme Court's recent decision
. . . . [We] agree[ ] with the dissent that [appellant] deserves
better treatment from our Government. Unfortunately, legal
precedent deprives us of discretion to do equity.”).

    But the Supreme Court in Free Enterprise did not carve
out a broad exception for challenges to an agency’s structure,
procedure, or existence. Rather, the Court justified district
court jurisdiction on the narrow ground that the challenged
action—the Board’s critical report of the auditing firm—did
not amount to a final order that could be appealed to a court

which the petitioner asked the court to review whether it was proper for
FTC to actively exclude evidence that it deemed irrelevant. See id.
at 82–83. That does not affect whether a court can remand for further
factfinding as it pertains to Axon’s constitutional claims.

    7
       The dissent cites Mace v. Skinner, 34 F.3d 954 (9th Cir. 1994), and
Latif v. Holder, 686 F.3d 1122 (9th Cir. 2012), but neither mandates
district court jurisdiction here. Mace did not cite or apply Thunder Basin.
And Latif did not consider the Thunder Basin factors under the second
step of the implied preclusion analysis because the court ruled under the
first step that Congress’ intent to preclude jurisdiction was not “fairly
discernable from the statutory scheme” at issue. 686 F.3d at 1129.
20                  AXON ENTERPRISE V. FTC

under the statutory scheme. Free Enterprise, 561 U.S.
at 490-91 (“We do not see how petitioners could
meaningfully pursue their constitutional claims” because the
statute “provides only for judicial review of Commission
action, and not every Board action is encapsulated in a final
Commission order or rule”).            In other words, “an
uncomplimentary inspection report is not subject to judicial
review” under the statute. Id. at 490. So the auditing firm
had no way to obtain judicial review, other than selecting a
“random” Board Rule to challenge or “incur a sanction (such
as a sizable fine) by ignoring Board requests for documents
and testimony.” Id. The Court held that neither option
offered access to a meaningful judicial review. Id. at 490–
91. In other words, Free Enterprise does not appear to
address a scenario where there is eventual judicial review,
but rather speaks only to a situation of no guaranteed judicial
review.

     In Axon’s case, though, it does not have to intentionally
violate a “random” rule or incur sanctions by violating
discovery orders to obtain judicial review of its claims.
Under the statute, Axon has the right to seek judicial review
from this court once the enforcement proceeding ends. It
may not be an efficient mechanism to seek judicial review,
but this court will eventually hear Axon’s claims as long as
it continues to oppose the FTC’s actions. And any adverse
order issued by the FTC would be stayed until Axon has had
a chance to seek judicial review. See 15 U.S.C. § 45(g)(1)–
(2). 8 Under Supreme Court precedent, that amounts to

    8
      The dissent notes that Axon may not have an opportunity to have
a court review the structure of the FTC if the FTC drops its investigation
or Axon prevails on the merits during the administrative proceeding. But
under either scenario, Axon has prevailed over FTC, and that ends the
dispute. Put another way, Axon is not entitled to a judicial ruling on its
                    AXON ENTERPRISE V. FTC                            21

meaningful judicial review. See Thunder Basin, 510 U.S.
at 215 (“constitutional claims here can be meaningfully
addressed in the Court of Appeals,” despite petitioner’s
argument that the agency process itself would violate its
constitutional rights); Standard Oil Co. of Cal., 449 U.S.
at 244. Perhaps the Supreme Court in the near future will
clarify and extend the holding of Free Enterprise to include
any constitutional challenge to any agency’s structure,
procedure, or existence. But based on our best reading of
Free Enterprise, the Court has not done so yet. Thus, Free
Enterprise does not control here. In sum, because “[t]he
statutory scheme at issue in this case authorizes review of
final [agency] orders in a federal circuit court,” the FTC Act
provides Axon meaningful judicial review under the first
Thunder Basin factor. Bank of Louisiana, 919 F.3d at 926. 9

constitutional claim challenging the administrative proceeding if it has
prevailed on the merits.

    9
      Though Axon repeatedly points to cases involving a court asserting
jurisdiction over pattern and practice claims, those cases are inapt. None
of those cases even mention the possibility that Congress can impliedly
preclude district court jurisdiction, so they are not relevant. See
generally McNary v. Haitian Refugee Ctr., Inc., 498 U.S. 479 (1991);
Gebhardt v. Nielsen, 879 F.3d 980 (9th Cir. 2018); Veterans for Common
Sense v. Shinseki, 678 F.3d 1013 (9th Cir. 2012). Moreover, many of
these cases fit within the implied preclusion framework because they
consider whether the parties could have obtained meaningful review or
whether the claims at issue were collateral to the review scheme. See
McNary, 498 U.S. at 496 (finding jurisdiction in part because, “if not
allowed to pursue their claims in the District Court, respondents would
not as a practical matter be able to obtain meaningful judicial review of
their application denials or of their objections to INS procedures
notwithstanding the review provisions”); VCS, 678 F.3d at 1034–35
(relying on the fact that the claim at issue could not have been raised
under the statutory scheme); City of Rialto v. W. Coast Loading Corp.,
581 F.3d 865, 874 (9th Cir. 2009) (asking “whether the claim . . . is
22                 AXON ENTERPRISE V. FTC

     B. Axon’s constitutional claims are arguably
        “wholly collateral” to the enforcement
        proceeding.

    Courts have offered two competing ways to consider the
second Thunder Basin factor of whether a claim is “wholly
collateral” to the statutory review scheme.

    Some district courts have held that a claim is wholly
collateral to the statutory enforcement scheme if it is not
substantively intertwined with the merits dispute in the
agency proceeding. See, e.g., Hill v. SEC, 114 F. Supp. 3d
1297 (N.D. Ga. 2015). Because Axon’s constitutional
challenges can be substantively separated from the
underlying antitrust claim before the FTC, Axon argues that
they are wholly collateral to the merits claim.

    In contrast, several of our sister circuits—the D.C.
Circuit, Second Circuit, and the Fourth Circuit—have
applied this factor in the procedural sense: “a claim is not
wholly collateral if it has been raised in response to, and so
is procedurally intertwined with, an administrative
proceeding—regardless of the claim’s substantive
connection to the initial merits dispute in the proceeding.”
Tilton, 824 F.3d at 287; see also Bennett, 844 F.3d at 187;
Jarkesy, 803 F.3d at 22–25. 10 In other words, if the claim is
the procedural vehicle that the party is using to reverse the

collateral to an alien’s substantive eligibility” and “stress[ing] the
importance of meaningful judicial review of agency action.”).
     10
      The Fifth, Seventh, and Eleventh Circuits have not definitively
addressed this issue. See Bank of Louisiana, 919 F.3d at 928; Hill,
825 F.3d at 1251–52; Bebo, 799 F.3d at 773–74.
                 AXON ENTERPRISE V. FTC                     23

agency action, it is not “wholly collateral” to the review
scheme.

    We agree that “the second reading is more faithful to the
more recent Supreme Court precedent . . . .” Bennett,
844 F.3d at 187. Elgin found that a petitioner’s constitutional
claims were not wholly collateral when those claims were
“the vehicle by which they seek to reverse the removal
decisions” and to obtain relief. 567 U.S. at 22. Neither
Thunder Basin nor Free Enterprise shed any light on
whether “wholly collateral” should be construed
procedurally or substantively. See Free Enterprise, 561 U.S.
at 490–91 (not addressing the nature of “wholly collateral”);
Thunder Basin, 510 U.S. at 212–13 (same).

    While it is a close call, we find that the second Thunder
Basin factor also supports preclusion of jurisdiction. Axon’s
complaint seeks to avoid the FTC process and the agency’s
settlement demands. Indeed, Axon’s requested relief
includes an injunction to prevent the FTC from pursuing its
administrative enforcement action. The claims are therefore
the “vehicle by which” Axon seeks to prevail at the agency
level and are not wholly collateral to the review scheme.

   C. The FTC lacks agency expertise to resolve the
      constitutional claims.

    The third Thunder Basin factor—whether the claims are
outside the agency’s expertise—weighs against jurisdiction-
stripping.

    Like the second factor, this third factor is cloaked in
ambiguity. The Supreme Court in Free Enterprise took a
straightforward approach: when an issue does not involve
“technical considerations of [agency] policy” and instead
involves “standard questions of administrative law, 561 U.S.
24               AXON ENTERPRISE V. FTC

at 491 (internal quotation marks omitted), the issue lies
outside the agency’s expertise. On the other hand, the Court
several years later in Elgin arguably appeared to take a more
expansive view of agency expertise, stating that there may
be “threshold questions that may accompany a constitutional
claim and to which the [agency] can apply its expertise” or
“preliminary questions unique to the employment context
[that] may obviate the need to address the constitutional
challenge.” 567 U.S. at 22–23. Some circuits have read
Elgin as suggesting that if an agency can moot the
constitutional claims by resolving the merits issues before
the agency, then the agency can bring its expertise to bear.
See, e.g., Bank of Louisiana, 919 F.3d at 929 (citing Jarkesy,
803 F.3d at 29).

    We, however, disagree with the expansive reading of
Elgin. Such an approach is hard to reconcile with Free
Enterprise unless we assume that Elgin somehow overruled
Free Enterprise sub silentio. See Shalala v. Ill. Council on
Long Term Care, Inc., 529 U.S. 1, 18, 120 S. Ct. 1084, 1096,
146 L. Ed. 2d 1 (2000) (“This Court does not normally
overturn, or so dramatically limit, earlier authority sub
silentio.”); see also United States v. Obaid, 971 F.3d 1095,
1102 (9th Cir. 2020) (citing Shalala, 529 U.S. at 18) (“We
should not assume that the Supreme Court has implicitly
overruled its precedent.”). Indeed, such an interpretation
renders this third factor virtually meaningless because any
challenge to an administrative process can be mooted if a
party prevails on the substantive merits.

    A narrower reading of Elgin reconciles it with Free
Enterprise. The constitutional challenges in Elgin required
the determination of certain “threshold” questions that were
directly within the agency’s expertise. For example, one
petitioner’s claim relied on the preliminary issue of whether
                  AXON ENTERPRISE V. FTC                      25

he was subject to a constructive discharge. See Elgin,
567 U.S at 23. In other words, Elgin stands for the
unremarkable proposition that an agency’s expertise can
sometimes help decide an issue and thus obviate the need to
resolve a constitutional claim. It does not establish a broad
rule that an agency can always moot a claim by simply ruling
for the party.

    Here, there are no threshold questions that need to be
addressed before reviewing Axon’s constitutional claims.
The due process and Appointments Clause claims do not
turn on the antitrust merits of the case, so there is little room
for the FTC to bring its expertise to bear. Rather, Axon’s
claims are more like the “standard questions of
administrative law” that the Free Enterprise Court
addressed.

    Thus, the third factor weighs against preclusion.

                             *   *    *

    The Thunder Basin factors point in different directions
here. Axon will have meaningful judicial review of its
claims from within the statutory review scheme, which
points to jurisdiction preclusion. The “wholly collateral”
factor also likely favors preclusion, though that is far from
clear. On the other hand, the agency expertise factor weighs
against preclusion.

    We agree with the other circuits, however, that under
Supreme Court precedent the presence of meaningful
judicial review is enough to find that Congress precluded
district court jurisdiction over the type of claims that Axon
brings. See Bennett, 844 F.3d at 183 n.7; Bebo, 799 F.3d
at 774.
26               AXON ENTERPRISE V. FTC

    This is not to minimize Axon’s serious concerns about
how the FTC operates. For one, Axon raises substantial
questions about whether the FTC’s dual-layered for-cause
protection for ALJs violates the President’s removal powers
under Article II. See, e.g., Free Enterprise, 561 U.S. at 484
(ruling that dual for-cause limitations of Board members
violates separation-of-powers); Lucia v. SEC, 138 S. Ct.
2044 (2018) (holding that SEC ALJs are “Officers” subject
to the Appointments Clause); Seila Law LLC v. CFPB,
140 S. Ct. 2183, 2192 (2020) (finding that the removal
restrictions on the director of the CFPB violated Article II of
the Constitution).

     This case implicates one of the inherent tensions in the
modern administrative state: Congress wanted to insulate
ALJs from political interference, but ALJs wield tremendous
power and still remain a part of the executive branch—even
if Congress bestowed them with the title “judge”—and they
should thus theoretically remain accountable to the President
and the people. As the Supreme Court cautioned in Free
Enterprise, the “growth of the Executive Branch, which now
wields vast power and touches almost every aspect of daily
life, heightens the concern that it may slip from the
Executive’s control, and thus from that of the people.”
561 U.S. at 499. See also, e.g., Linda D. Jellum, “You’re
Fired!” Why the Alj Multi-Track Dual Removal Provisions
Violate the Constitution and Possible Fixes, 26 Geo. Mason
L. Rev. 705, 743 (2019) (arguing that, in light of Free
Enterprise, ALJs’ dual-layers of protection violate the
Constitution).

    Further, Axon raises legitimate questions about whether
the FTC has stacked the deck in its favor in its administrative
proceedings. Axon claims—and FTC does not appear to
dispute—that FTC has not lost a single case in the past
                  AXON ENTERPRISE V. FTC                      27

quarter-century. Even the 1972 Miami Dolphins would envy
that type of record. Indeed, a former FTC commissioner
acknowledged that the FTC adjudication process might
unfairly favor the FTC given the agency’s stunning win rate.
Axon essentially argues that the FTC administrative
proceeding amounts to a legal version of the Thunderdome
in which the FTC has rigged the rules to emerge as the victor
every time. But we cannot move beyond the Thunder Basin
factors, which mandate our conclusion that Axon cannot
bring a claim in district court. Axon can have its day in
court—but only after it first completes the FTC
administrative proceeding.

IV. Axon’s Clearance Process Claim

    Finally, we address separately Axon’s novel and
superficially appealing argument that it lacks a meaningful
judicial review of the government’s “clearance process”
claim.

    Before deciding whether to move forward with an
enforcement action, the FTC and the U.S. Department of
Justice confer and decide which agency will bring the action,
according to Axon. This alleged “black box” decision
process has a significant impact on Axon and other targets
of investigation: They may avail themselves of the
procedural protections offered at a trial in district court (if
the Department of Justice files a complaint), or they may be
shunted to an administrative proceeding (if the FTC pursues
the matter). Axon argues that it has no meaningful judicial
review of this “clearance process” decision under the FTC
statutory scheme, and thus should be able to raise it in district
court.

   But a closer look at this claim shows that it is really not
about pre-investigation or pre-enforcement decisions, but
28                AXON ENTERPRISE V. FTC

rather about the procedures the FTC will use. Axon takes
issue with the fact that, when the FTC takes the case,
companies are deprived “of the substantive or procedural
protections enjoyed by litigants in federal district court.” In
other words, the clearance process falls within Axon’s due
process claim because it is arguing that it will face an unfair
proceeding before the FTC. Indeed, Axon admitted as much.

     But Axon will eventually have meaningful judicial
review of its due process claim because it can raise it before
a federal court of appeals after the administrative
proceeding. If the court of appeals rules that the FTC
administrative proceeding violates Axon’s due process
rights, it will presumably be then entitled to a trial in district
court. On the other hand, if the FTC proceeding does not run
afoul of due process, then Axon’s complaint is ultimately
that it prefers the Department of Justice over the FTC to lead
the enforcement action. But the executive branch enjoys
latitude in deciding what type of enforcement action to
pursue and which agency will lead it. Cf. Heckler v. Chaney,
470 U.S. 821, 832 (1985) (agency’s decision not to pursue
enforcement is unreviewable under the APA); Standard Oil,
449 U.S. at 242-45 (1980) (agency’s decision to enforce is
unreviewable). Absent any due process concerns, the target
of an enforcement action cannot dictate the choices of the
executive branch.

    And under the Thunder Basin factors, Axon’s clearance
process claim—which is a due process claim—falls within
the statutory review scheme. First, Axon has an opportunity
for judicial review at the end of the process. See supra
pp. 11, 13–21. Even though Axon asserts that the harm from
the clearance process occurred before the enforcement
action began, what matters is that Axon is currently in an
administrative proceeding that ultimately leads to judicial
                    AXON ENTERPRISE V. FTC                          29

review. 11    Second, Axon’s challenge to the FTC’s
adjudicative procedures is not “wholly collateral” to the
statutory scheme because it is the “vehicle by which” it seeks
to succeed at the agency proceeding. Finally, there is a
stronger argument that the agency expertise factor warrants
preclusion of the clearance process claim than for Axon’s
other claims. The FTC might have valuable insight into how
the clearance process works and demonstrate that the process
does in fact comport with due process, which makes such
questions more like the “threshold” issues addressed in Elgin
than allowing the agency to avoid constitutional issues be
deciding the case on the substantive merits.

    Thus, we find that Axon’s clearance process claim, just
like its other claims, is of the type Congress intended to be
reviewed under the FTC Act’s statutory review scheme.

                         CONCLUSION

    We hold that Supreme Court precedent compels the
preclusion of district court jurisdiction over Axon’s claims.
The FTC Act reflects a fairly discernible intent to preclude
district court jurisdiction, and Axon can ultimately obtain
meaningful judicial review of its claims before this court
once the FTC administrative proceeding concludes. We
AFFIRM the district court’s dismissal for lack of subject
matter jurisdiction.

    11
        Had Axon brought its clearance process claim early in the
investigation, before the enforcement proceeding began, though, Axon
might have had a stronger case for district court jurisdiction, but that
issue is not properly before us.
30               AXON ENTERPRISE V. FTC

BUMATAY, Circuit Judge, concurring in the judgment in
part and dissenting in part:

    Axon Enterprise, Inc., a major manufacturer of law-
enforcement equipment, challenges the very existence of the
Federal Trade Commission—an independent agency created
by Congress—as unconstitutional. First, Axon alleges that
the “clearance process” used by the FTC and the Department
of Justice to divide up antitrust investigations violates due
process and equal protection guarantees. Second, the
company claims that the double layer of termination
protection for the FTC’s administrative law judges infringes
on the president’s Article II authority. Finally, it challenges
the constitutionality of the FTC’s administrative structure,
which vests it with investigative, prosecutorial, and
adjudicative powers.

    At first blush, this case appears to be a weighty
constitutional one. Indeed, the advent of independent,
administrative agencies has called on courts to test the
bounds of the Constitution’s defined structural limitations.
But those issues are not the subject of this appeal. The
district court dismissed the case for lack of jurisdiction,
ruling that Axon must first raise its arguments before the
FTC. So the narrow, but equally important, question before
the court is whether the district court has jurisdiction to
consider Axon’s broad constitutional claims in the first
instance.

    Following Supreme Court precedent and according due
respect to separation-of-powers principles, I believe the clear
answer to that question—at least for some of Axon’s
claims—is yes. The majority holds otherwise. Although
thoughtfully considering the question, my friends in the
majority unfortunately rule that Axon is precluded from its
day in court and instead must bring its claims to the FTC—
                 AXON ENTERPRISE V. FTC                      31

the very agency it seeks to have declared unconstitutional.
To get there, the majority misapplies Court precedent and
ignores the injuries Axon is trying to vindicate. What’s
worse, by funneling the challenge to the FTC back to the
FTC, Axon may forever be foreclosed from obtaining
meaningful judicial review of its claims. For these reasons,
I respectfully dissent.

                               I.

    Congress established the FTC over 100 years ago when
President Woodrow Wilson signed the Federal Trade
Commission Act into law. 38 Stat. 717 (1914). The FTC is
tasked with preventing the use of “unfair methods of
competition” and “unfair or deceptive acts or practices” in
commerce. 15 U.S.C. § 45(a)(2). The Act authorizes
administrative proceedings within the agency to determine if
a party is engaged in these prohibited methods, acts, or
practices. Id. § 45(b). It also empowers the FTC to issue a
“cease and desist” order against an antitrust violator. Id.
After such an order, review of the administrative
adjudication is only permitted in the “appropriate court of
appeals of the United States.” Id. § 45(b), (d), (g).

    Although the Act is silent on this question, we must
decide what role district courts play when a party—like
Axon—asserts broad constitutional claims against the FTC
itself. To start, it is a well-settled presumption that Congress
intended subject matter jurisdiction in the district courts for
all claims arising under federal law. See Block v. Cmty.
Nutrition Inst., 467 U.S. 340, 350–51 (1984); 28 U.S.C.
§ 1331. To be sure, there is also a narrow exception to that
presumption: sometimes Congress delegates jurisdiction
exclusively to an administrative agency to consider a claim
in the first instance. See Thunder Basin Coal Co. v. Reich,
510 U.S. 200, 207 (1994). Such action effectively strips
32               AXON ENTERPRISE V. FTC

district courts of original jurisdiction over the claim. While
this jurisdiction stripping is usually explicit, it may also
come implicitly. See id. In all cases, we should favor a
“narrower construction” of jurisdiction stripping over a
“broader one.” ANA Int’l Inc. v. Way, 393 F.3d 886, 891
(9th Cir. 2004).

    The Supreme Court has established a two-step
framework for discerning whether Congress impliedly
precluded district court jurisdiction over a party’s claim. See
Thunder Basin, 510 U.S. 200. Under that precedent, district
courts are impliedly precluded from exercising jurisdiction
when (1) Congress’s intent to make an administrative
process exclusive is “fairly discernible” from the statutory
scheme, and (2) the claims at issue “are of the type Congress
intended to be reviewed within th[at] statutory structure.”
Id. at 207, 212 (simplified). At the second step, we consider
what’s known as the Thunder Basin factors: (1) whether the
claims can be afforded “meaningful judicial review” without
district court jurisdiction; (2) whether the claim is “wholly
collateral” to the agency’s review provisions; and
(3) whether the claims are “outside the agency’s expertise.”
Id. at 212–13.

    In Thunder Basin, the Court considered whether a
statutory scheme of administrative review followed by
judicial review in a federal appellate court precluded district
court jurisdiction over a plaintiff’s statutory and
constitutional claims. Id. at 206. The Court noted that the
plaintiff’s claims could be “meaningfully addressed in the
Court of Appeals” and that the case therefore did “not
present the ‘serious constitutional question’ that would arise
if an agency statute were construed to preclude all judicial
review of a constitutional claim.” Id. at 215 n.20. Notably,
the Court explained that an agency’s statutory framework
                 AXON ENTERPRISE V. FTC                      33

will generally not serve as a bar to district court jurisdiction
over a constitutional challenge to the agency’s procedures,
when Congress only allows appellate review of individual
determinations. Id. at 213 (describing McNary v. Haitian
Refugee Center, Inc., 498 U. S. 479 (1991)).

    The Court demonstrated how to apply the Thunder Basin
factors in two subsequent cases: Free Enterprise Fund v.
Public Company Accounting Oversight Board, 561 U.S. 477
(2010), and Elgin v. Department of Treasury, 567 U.S. 1
(2012).

    In Free Enterprise Fund, the Court found concurrent
district court jurisdiction for a claim challenging the
constitutionality of an independent board’s existence.
561 U.S. at 490. In that case, a plaintiff was able to bring its
constitutional claim in district court because the board’s
statutory scheme only guaranteed judicial review of a board
sanction or rule. Id. Such cramped judicial review wasn’t
enough to divest the district court’s jurisdiction in the
Court’s view because “not every Board action is
encapsulated in” an appealable order. Id.

    Two years later, in Elgin, the Court determined another
independent board had exclusive jurisdiction to review
claims dealing with the constitutionality of—not the board
itself—but of federal statutes bearing on its merits
determinations. 567 U.S. at 5–6. The Court concluded the
board’s administrative procedures provided ample review
since any merits determination was reviewed by the Federal
Circuit and, thus, the constitutional issue would ultimately
be adjudicated by an Article III court. Id. at 17.

    Our circuit has also considered the dividing line between
exclusive agency jurisdiction and concurrent district court
jurisdiction. In a case challenging an executive agency’s
34                  AXON ENTERPRISE V. FTC

authority, we have held that “any examination of the
constitutionality of [an agency’s power],” rather than the
merits of an individual action, “should logically take place
in the district courts, as such an examination is neither
peculiarly within the agency’s ‘special expertise’ nor an
integral part of its ‘institutional competence.’” Mace v.
Skinner, 34 F.3d 854, 859 (9th Cir. 1994). We later
concluded that plaintiffs raising “broad constitutional claims
that do not require review of the merits of their individual
[agency] grievances” are not precluded from bringing their
challenge in the district court. Latif v. Holder, 686 F.3d
1122, 1129 (9th Cir. 2012) (applying Elgin to a Department
of Homeland Security challenge); see also Americopters,
LLC v. FAA, 441 F.3d 726, 736 (9th Cir. 2006) (allowing for
district court “residual jurisdiction” when a constitutional
claim for damages is not “inextricably intertwined” with an
agency order). 1

    While jurisdictional questions are often complex, the
lesson of these cases is straightforward: Absent legislative
language to the contrary, challenges to an agency’s
structure, procedures, or existence, rather than to an
agency’s adjudication of the merits on an individual case,
may be heard by a district court. On the other hand,
complaints regarding the agency’s application of substantive
law to the merits of an individual case are exclusively
relegated to the agency’s administrative process.

     1
      The majority wrongly discards these precedents. First, I disagree
that Mace is not controlling in light of Thunder Basin. Maj. Op. at 19
n.7. The majority posits no irreconcilability between the cases and so
Mace remains binding law. See Miller v. Gammie, 335 F.3d 889, 893
(9th Cir. 2003) (holding that precedent of this court remains binding
unless it is “clearly irreconcilable” with intervening Court decisions).
Second, while it is contestable whether Latif was a Thunder Basin step
one or two case, I fail to see why its guidance should be ignored here.
                 AXON ENTERPRISE V. FTC                     35

Accordingly, our duty should be to scrutinize each claim to
determine whether it’s merely an attack on a merits
determination or something more existential to the agency.

    The demarcation of jurisdiction along these lines most
respects the separation of powers. Congress created the
agency adjudicatory process precisely to apply agency
expertise to the merits of individual claims. Having district
court proceedings parallel to an agency’s administrative
proceeding amounts to a collateral attack on agency
decision-making and would undermine its congressionally
mandated role. See Elgin, 567 U.S. at 14. Thus, preserving
exclusive agency jurisdiction over individualized claims
furthers Congress’s intent. But to the extent the claims target
the agency’s existence, structure, or procedures under the
Constitution, rather than its merits decisions, the district
court remains an appropriate forum for such action. After
all, pronouncing the constitutionality of a government
function is precisely the business of Article III courts.

                              II.

    Applying the foregoing principles, Axon was entitled to
bring some of its claims before the district court. The
Thunder Basin factors demonstrate that Axon’s clearance
process and ALJ challenges represent “broad constitutional
claims” not requiring review of the “merits of individual”
agency actions. Latif, 686 F.3d at 1129. The district court
was thus wrong to dismiss them at the outset. In contrast,
Axon’s claim against the FTC’s adjudicatory structure, at
bottom, contests the agency’s antitrust determinations and
must be brought before the FTC.
36                  AXON ENTERPRISE V. FTC

A. Axon’s Due Process and Equal Protection Challenge
   to the Clearance Process

    Axon’s first constitutional challenge targets the
clearance process used by the FTC and the DOJ to divide
their overlapping jurisdictions to review mergers and
enforce antitrust laws. According to Axon, the clearance
process decides if companies must answer to either the DOJ,
with the prospect of a federal lawsuit in district court, or the
FTC, with its administrative proceedings. Which agency has
purview over an industry can mean a world of difference for
the companies involved. For example, unlike federal court
proceedings, the FTC’s administrative hearings do not
trigger the protections of the Federal Rules of Civil
Procedure or Evidence.                Furthermore, the FTC
administrative hearings are presided over by an FTC
Commissioner or ALJ rather than an impartial Article III
judge. Despite the importance of the DOJ–FTC split, the
clearance process is, according to Axon, a “black box” that
isn’t codified in any statute, rule, or regulation. Axon alleges
that the clearance decision appears to be made “by a coin
flip.” Such an arbitrary process, Axon asserts, violates due
process and equal protection under the Fifth Amendment.

    Under the Thunder Basin factors, I would conclude that
the district court has jurisdiction over this claim. 2

     1. Meaningful Review

   Most fundamentally, the FTC Act provides insufficient
meaningful review of Axon’s clearance process claim. Not

     2
      I limit my analysis to the second step of the Thunder Basin inquiry
since Axon acknowledges that the FTC Act provides for exclusive
agency jurisdiction over some claims.
                 AXON ENTERPRISE V. FTC                    37

all actions the FTC takes are subject to Article III scrutiny.
Indeed, the Act only provides for court of appeals review of
an FTC “cease and desist” order. 15 U.S.C. § 45(c).
Accordingly, without a cease-and-desist order, the FTC’s
actions are largely immune from judicial review. Moreover,
the Act limits available relief, allowing courts to grant only
a “decree affirming, modifying, or setting aside [an FTC]
order[.]” Id.

    Under this statutory scheme, Axon’s claim might never
make it to an Article III judge. Axon challenges the very
process by which cases arrive at the FTC’s doorstep rather
than the DOJ’s. In other words, as Axon sees it, the FTC
and DOJ’s joint decision to subject the company to the
FTC’s jurisdiction is the harm in and of itself. Cf. Seila Law
LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183, 2196
(2020) (holding that a person subject to an unconstitutional
agency’s power suffers from a “here-and-now” injury).
Under that theory of injury, Axon may not be able to
meaningfully pursue its constitutional claim.

    The Supreme Court has already told us that judicial
review is insufficient when a statutory scheme only permits
appeal of limited agency actions because not every agency
action is “encapsulated” in an appealable order. Free
Enterprise Fund, 561 U.S. at 490. Here, the interagency
clearance process is similarly not necessarily “encapsulated”
in a cease-and-desist order. The FTC, for instance, may
decide to drop its investigation of Axon, or Axon may settle
or prevail on the merits in the administrative proceedings. In
such circumstances, Axon will still have been injured by the
clearance process but have no cease-and-desist order to
38                  AXON ENTERPRISE V. FTC

appeal its claim. 3 Thus, exclusive agency jurisdiction here
means that Axon’s constitutional claim may never see the
light of day.

    Without a guaranteed vehicle for court review, Axon’s
only recourse is to intentionally lose before the FTC to
receive any assurance of Article III adjudication of its
clearance process claim. But, as the Court has said,
conditioning judicial review on incursion of a harm is
“tantamount to a complete denial of [judicial] review.”
McNary, 498 U.S. at 496. Indeed, parties shouldn’t have to
risk “severe punishment” “before testing the validity of [a]
law.” Free Enterprise Fund, 561 U.S. at 490 (simplified).
As a result, I see no reason why Axon must “bet the farm”
to get its day in court. Id. 4

     3
       The majority concludes that if Axon prevails on the antitrust
merits, “that ends the dispute.” Maj. Op. 20 n.8. I respectfully disagree.
Winning on the antitrust merits does nothing to remedy Axon’s
independent injury of being subject to an unconstitutional structure or
procedure. In Free Enterprise Fund, the agency’s investigation of the
plaintiff “produced no sanction;” nevertheless, the Court held that the
firm was permitted to bring its constitutional challenge against the
PCAOB in district court. 561 U.S. at 490. That is because “a separation-
of-powers violation may create a ‘here-and-now’ injury” that is
independent on the agency’s merits determinations. Id. at 513; see also
Seila Law, 140 S. Ct. at 2196 (recognizing the longstanding ability of
“private parties aggrieved by an official’s exercise of executive power to
challenge the official’s authority to wield that power”).

     4
      The majority recognizes that Free Enterprise Fund requires a
“guaranteed” right of appeal to receive meaningful review. Maj. Op. 20.
But the majority doesn’t explain how Axon obtains such review if the
FTC chooses not to place Axon in administrative proceedings or issue a
cease-and-desist order as is required for judicial review under the FTC
Act. In such cases, the majority must concede no judicial review is
possible. I believe this violates the holding of Free Enterprise Fund.
                 AXON ENTERPRISE V. FTC                      39

    Furthermore, adequate relief is a hallmark of meaningful
review. See Elgin, 567 U.S. at 22. Here, even if Axon’s
claim reaches a court, the only relief afforded under the FTC
Act is modification or setting aside of an FTC cease-and-
desist order. 15 U.S.C. § 45(c). Such relief would not be
adequate to address the alleged harms of an unconstitutional
clearance process. If Axon raises a valid constitutional
infringement, it is entitled to relief appropriate to remedy the
violation, such as injunctive or declaratory relief. See, e.g.,
Free Enterprise Fund, 561 U.S. at 513 (holding that the firm
was entitled to declaratory relief to ensure that it would be
subject only to “a constitutional agency”). And since
appellate courts “have no jurisdiction to grant . . . remedies”
other than those provided by Congress, Latif, 686 F.3d
at 1128, Axon could not obtain necessary relief under the
Act. The Act’s complete lack of appropriate remedies for
Axon cuts strongly against an implied congressional intent
to displace district court jurisdiction. See Americopters,
441 F.3d at 735 (holding that district courts have “residual
jurisdiction” to hear claims against an agency when the law
does not grant the court of appeals jurisdiction over the
appropriate form of relief).

   2. Wholly Collateral

    Axon’s clearance claim is also “wholly collateral” to the
administrative proceedings. A claim is not wholly collateral
when it is the “vehicle” by which a party “seek[s] to reverse”
an agency’s decision. Elgin, 567 U.S. at 22. Here, Axon
challenges the FTC’s very jurisdiction to investigate any
antitrust claims, not any particular FTC order or sanction.
Indeed, as of the filing of Axon’s complaint, the FTC had
not established any antitrust violation by Axon or issued any
40                   AXON ENTERPRISE V. FTC

cease-and-desist order. 5 But, as alleged by Axon, the
clearance process itself injures its rights independent of any
potential FTC sanctions for antitrust violations. Thus, the
clearance process claim doesn’t serve as a “vehicle” to
reverse an agency decision. Id. As such, Axon’s claim most
resembles Free Enterprise Fund’s challenge to an
independent board’s “existence” and is, therefore,
“collateral” to any FTC merits adjudication. 561 U.S. at 490.

     Moreover, there is no danger that Axon’s claim is a
collateral attack on an individual agency determination in
disguise. Axon may still be prosecuted for its putative
violation of antitrust laws, regardless of any district court
litigation casting doubt on the clearance process. In other
words, whether the clearance process complies with due
process is wholly collateral to whether Axon committed an
antitrust violation.

         3. Agency Expertise

    Like in Free Enterprise Fund, Axon’s challenge to the
interagency clearance process is patently “outside the

     5
       The majority suggests that Axon did not act quick enough. The
majority contends, if Axon filed its claims “early in the investigation,”
then it might have had a stronger case for district court jurisdiction. Maj.
Op. 29 n.11. Such a malleable test for district court jurisdiction is
seemingly unworkable.         See Elgin, 567 U.S. at 15 (rejecting
jurisdictional rules that rely on “amorphous distinctions” and “hazy”
lines). After all, how “early” is early enough? Is the day before the FTC
files its enforcement action enough? Two weeks before? This “early
enough” test ignores Court precedent which focuses not on the timing of
the claim, but on the nature of the claim. See, e.g., Thunder Basin,
510 U.S. at 207 (looking to the three-factor test despite the claim being
“pre-enforcement”). More fundamentally, nothing in the FTC Act
suggests that Congress intended such an “early-in-the-investigation”
test.
                  AXON ENTERPRISE V. FTC                      41

Commission’s competence and expertise.” 561 U.S. at 491.
While the FTC possesses substantial expertise in the antitrust
field and historic experience with particular industries,
Axon’s claim doesn’t implicate such expertise. Instead, it
relies on principles of due process and equal protection,
which are “standard questions” of constitutional law that
“courts have no disadvantage handling.” Id. (simplified).
The FTC’s expertise might illuminate the clearance process,
its origins, and its justifications, but it can’t shed particular
light on whether the process satisfies due process and equal
protection guarantees.

    Axon’s claim is unlike the one in Elgin where agency
expertise could answer “threshold questions” that may
“obviate the need to address the constitutional challenge.”
Elgin, 567 U.S. at 22–23. In Elgin, agency expertise was
only relevant for addressing “preliminary questions” which
may have demonstrated that the plaintiffs suffered no
statutory injury at all and disposed of the need to address the
constitutional question. Id. But here, Axon’s claim is a
“question[] of administrative law,” like that in Free
Enterprise Fund, 561 U.S. at 491, which are left for courts
to decide. Indeed, no FTC finding on an antitrust question
could negate the injury Axon experienced from being subject
to a putatively unconstitutional clearance process. In other
words, the FTC’s expertise on antitrust matters can’t moot
Axon’s claimed injuries and so the constitutional question
must be reached regardless of any agency’s determination.

                               * * *

    Given that all three Thunder Basin factors indicate that
jurisdiction stripping would be inappropriate here, I would
42                   AXON ENTERPRISE V. FTC

reverse the district court’s dismissal of the clearance process
claim. 6

B. Axon’s Article II Challenge to FTC’s ALJs

    Axon also alleges that the FTC’s ALJs are
unconstitutionally shielded from removal by the Executive.
The FTC is headed by five Commissioners, nominated by
the President and confirmed by the Senate. 15 U.S.C. § 41.
The President may not remove Commissioners during their
seven-year terms except for “inefficiency, neglect of duty, or
malfeasance in office.” Id. In turn, the Commissioners
appoint ALJs who can only be removed for good cause. See
5 U.S.C. § 7521(a), (b)(1). Axon asserts this is an
impermissible dual layer of protection from Executive
control. See U.S. Const. art. II, § 1, cl. 1, 3. In this way,
Axon’s claim closely mimics the Article II argument made

     6
       The majority contends that it is following “every other circuit that
has addressed a similar issue” in finding no district court jurisdiction
over any of Axon’s claims. Maj. Op. 5. First, if so, those other decisions
conflict with our court’s precedent. See Mace, 34 F.3d at 858–60;
Americopters, 441 F.3d at 735–36; Latif, 686 F.3d at 1128–29. Second,
I am not so sure that every other circuit agrees with the majority. The
Fifth Circuit has recently granted rehearing en banc in a directly
analogous case and, thus, has vacated a panel decision following the
majority’s reasoning. See Cochran v. SEC, 978 F.3d 975 (5th Cir. Oct.
30, 2020). Finally, I find the dissents in several of those cases to be more
persuasive. See Cochran v. SEC, 969 F.3d 507, 519 (5th Cir. 2020)
(Haynes, J., dissenting) (distinguishing Elgin and Thunder Basin
because the parties there challenged “the constitutionality of a
substantive statute that gave rise to an administrative action” rather than
“the constitutional grounding of the agency overseeing the
proceedings.”); Tilton v. SEC, 824 F.3d 276, 298 (2d Cir. 2016) (Droney,
J., dissenting) (“Forcing the appellants to await a final Commission order
before they may assert their constitutional claim in a federal court means
that by the time the day for judicial review comes, they will already have
suffered the injury that they are attempting to prevent.”).
                  AXON ENTERPRISE V. FTC                       43

in Free Enterprise Fund, 561 U.S. at 495–97 (holding that
Article II forbids providing two layers of tenure protections
to officers of the United States).

    On initial consideration, it appears that Axon’s
complaint here is tied to the FTC’s merits determination
since it only sustains an injury upon an ALJ sanction. But
on closer inspection, that’s not the case. According to Axon,
its injury is rooted in the violation of the separation of
powers, apart from any FTC antitrust penalty. I agree that
the Constitution’s structural provisions “protect[] the liberty
of all persons” by ensuring no government entity acts “in
excess of [its] delegated governmental power.” Bond v.
United States, 564 U.S. 211, 222 (2011). Thus, when an
agency violates this principle, “liberty is at stake,” id., and it
“create[s] a ‘here-and-now’ injury,” Free Enterprise Fund,
561 U.S. at 513. See also Seila Law, 140 S. Ct. at 2196
(“[W]hen [a tenure protection] provision violates the
separation of powers it inflicts a ‘here-and-now’ injury on
affected third parties that can be remedied by a court.”). In
other words, a government agency inflicts injury on a person
whenever it subjects that person to unconstitutional
authority—regardless of whether a sanction is levied by the
agency. Free Enterprise Fund, 561 U.S. at 513. Thus, even
without an FTC finding of an antitrust violation, Axon raises
a cognizable injury by being made to appear before a
putative unconstitutional officer.

    With this understanding of Axon’s ALJ challenge, its
Thunder Basin analysis largely tracks that of the clearance
process claim, and, thus, it should not have been precluded
from district court jurisdiction. After all, to guarantee
Article III review of its ALJ challenge, Axon would
similarly have to incur the very harms it seeks to avoid. The
firm would need to be subject to the ALJ, an officer it argues
44               AXON ENTERPRISE V. FTC

is unconstitutionally insulated from Executive control, and
intentionally lose its case on the merits before the FTC. Only
then could a cease-and-desist order issue, allowing Axon to
litigate its constitutional injury before an Article III court.
But if Axon prevails on the antitrust merits before the FTC,
its ALJ claim will never reach a federal judge and will never
be reviewed outside of the very agency it challenges. And
even if Axon does reach a court, the company could not
obtain injunctive or declaratory relief under the limited
remedies of the FTC Act. See 15 U.S.C. § 45(c).

    The constitutionality of the FTC ALJs is also wholly
collateral to the merits of Axon’s alleged antitrust
violation—each with distinct injuries and separate remedies.
For example, an Axon victory on its ALJ claim would not be
dispositive on any allegation that it violated antitrust laws.
Indeed, Axon could still be prosecuted for violating antitrust
laws regardless of whether the ALJs’ tenure protection fails
to comply with the Constitution.

    Finally, as with the clearance process claim, whether the
ALJs’ removal protections violate Article II is a “standard
question[] of administrative law,” which doesn’t turn on
statutory questions within the FTC’s expertise. Free
Enterprise Fund, 561 U.S. at 491. For example, no amount
of antitrust expertise can tell us whether ALJs must be
directly removable by the President. Nor are there threshold
statutory questions “squarely within” the FTC’s expertise
that “may obviate the need to address the constitutional
challenge.” Elgin, 567 U.S. at 22–23.

     I would therefore hold that all three Thunder Basin
factors—meaningful review, wholly collateral, and agency
expertise—favor district court jurisdiction on this claim. I
would reverse the district court’s dismissal of Axon’s Article
II claim against the FTC ALJs.
                 AXON ENTERPRISE V. FTC                    45

C. Axon’s Due          Process Challenge to FTC’s
   Investigatory,     Prosecutorial, and Adjudicative
   Functions

    Axon finally contends that the FTC’s administrative
adjudicatory process violates due process by combining the
role of investigator, prosecutor, and adjudicator within one
agency. Although Axon cloaks this claim as one about an
unconstitutional structure, at bottom, it is a complaint about
the agency’s individualized merits determination. So, I
agree that this claim is precluded from district court review.

    In Axon’s view, the FTC’s structure is “inherently
biased.” Under the FTC Act, the agency investigates
antitrust violations, see 15 U.S.C. § 57b-1; it prosecutes the
enforcement action, see 16 C.F.R. § 3.11; and then it
adjudicates any appeal from an ALJ’s initial decision, id.
§ 3.52. Axon asserts that its structure has granted the FTC
an “undisputed 100% win rate” within the administrative
process for the past 25 years. As a result, Axon believes it
is a “virtual certainty” that it will lose its case before the
Commission, which violates due process protections.

    Although Axon maintains that the FTC is
unconstitutionally structured, what it really fears is the FTC
determining that it violated antitrust laws. Unlike Axon’s
other claims, a biased adjudicatory process only injures
Axon if it results in an unfavorable order. Such a loss will
necessarily be encapsulated in an FTC sanction, which is
directly appealable to the circuit court and can be set aside,
affording Axon meaningful review and full relief. See
15 U.S.C. § 45(c).

   Since this claim falls squarely within the FTC’s province
and expertise and any injury flowing from the alleged
constitutional violation will be guaranteed a court of appeals
46               AXON ENTERPRISE V. FTC

review, I would hold that all three Thunder Basin factors—
meaningful judicial review, wholly collateral, and agency
expertise—favor the FTC’s exclusive jurisdiction here. I
thus concur in affirming the district court’s dismissal of this
claim.

                             III.

    Congress established the FTC’s administrative process
to adjudicate the merits of antitrust enforcement actions. But
Congress did not completely eliminate the district court’s
role in adjudicating constitutional claims against the FTC.
To be sure, for some claims, when the constitutional issue is
directly intertwined with the agency’s individual merits
decision, the agency should resolve the matter in the first
instance. As Court precedent shows, Axon’s claim of
unconstitutional bias is one example of such a claim. But
when “[p]laintiffs raise broad constitutional claims that do
not require review of the merits,” our precedent clearly
permits parties to select their forum. Latif, 686 F.3d at 1129.
Such is the case with Axon’s constitutional claims against
the clearance process and the FTC ALJs.

    By forcing Axon’s claims into the FTC administrative
process, we effectively shut the courtroom doors to a party
seeking relief from alleged constitutional infringements.
Now, Axon’s only recourse is to antagonize the FTC into
prosecuting the enforcement proceeding against it and then
lose in that forum—all the while, further subjecting the
company to the harm it seeks to avoid. The FTC Act does
not mandate this unfortunate result. Both the Constitution
and our precedent counsel against it, too. For that reason, I
respectfully dissent from the dismissal of Axon’s clearance
process and ALJ claims.