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NCLA Asks D.C. Circuit to Affirm that Courts Can Hear Constitutional Cases on FTC Enforcement

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Media Matters for America v. United States Federal Trade Commission, et al. Media Matters for Americ...

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AI Summary

The New Civil Liberties Alliance's filing supports judicial jurisdiction over FTC's demands, highlighting abuse of power. A preliminary injunction halting FTC's investigation emphasizes ongoing judicial challenges. This legal fight could have significant implications for agency regulations and constitutional rights.

Sentiment Rationale

Although the article discusses significant legal issues, direct impacts on AFRM's stock price remain unclear.

Trading Thesis

AFRM may experience volatility due to regulatory uncertainties impacting buy now pay later sectors.

Market-Moving

  • Court decisions on FTC jurisdiction may influence fintech operational frameworks.
  • Regulatory rulings could sway investor sentiment on buy now pay later companies.
  • Growing scrutiny of FTC's powers may create market disruptions in financial tech.

Key Facts

  • NCLA filed a brief supporting jurisdiction in FTC investigation case.
  • Preliminary injunction halted FTC's demand for Media Matters' information.
  • NCLA's argument cites Supreme Court victories against agency overreach.
  • FTC's internal adjudication system challenged by NCLA's legal stance.
  • This case may set precedent for agency jurisdiction over investigations.

Companies Mentioned

  • Media Matters for America (N/A): Involved in a pivotal case against FTC.
  • FTC (N/A): The ongoing investigation impacts regulatory perceptions in fintech.
  • Axon Enterprise, Inc. (AXON): Key precedent in judicial jurisdiction against agency adjudication.

Legal

This analysis falls under 'Legal' due to implications regarding regulatory oversight in the financial sector and challenges to agency power, relevant for AFRM's operational landscape in the buy now pay later market.

NCLA Files Brief Urging D.C. Circuit to Uphold Jurisdiction in FTC Case

On January 12, 2026, the New Civil Liberties Alliance (NCLA) submitted an amicus curiae brief to the U.S. Court of Appeals for the D.C. Circuit. The brief supports neither party in the case of Media Matters for America v. Federal Trade Commission (FTC), urging the court to affirm that the U.S. District Court for the District of Columbia maintains jurisdiction over the matter. This case raises significant constitutional questions, as NCLA asserts that the FTC's demands for internal information potentially violate the First and Fourth Amendments.

Preliminary Injunction Halts FTC Investigation

The U.S. District Court issued a preliminary injunction halting the FTC's investigation into Media Matters. NCLA's brief addresses the FTC's insistence on managing this dispute through its internal adjudication system, which effectively places the agency in control of determining its own authority. This, NCLA argues, unfairly bars access to judicial review for individuals affected by such decisions.

Historical Context: Supreme Court Precedents

NCLA's position is strengthened by prior Supreme Court decisions, notably in Michelle Cochran v. SEC (also known as Axon Enterprise, Inc. v. FTC). In April 2023, the Supreme Court ruled that individuals have the right to bring constitutional challenges against government agencies in federal court without first being subjected to potentially unconstitutional administrative proceedings. This landmark decision overruled six circuit courts that had previously restricted access to judicial protections against arbitrary agency actions.

  • Important Rulings:
    • Free Enterprise Fund v. Public Company Accounting Oversight Board (2010) – Recognized district courts’ jurisdiction over such claims.
    • SEC v. Jarkesy – Affirmed the need for a neutral adjudicator for agency prosecutions.

These foundational cases underscore that Media Matters deserves to have its constitutional lawsuit against the FTC heard in district court, rather than being relegated to FTC’s internal processes that could lead to undue delays in justice.

FTC’s Defense Challenged

The FTC contends that the agency lacks jurisdiction over the case, citing the Federal Trade Commission Act of 1914, which purportedly grants them authority to enforce Civil Investigative Demands (CIDs) in legal cases. However, NCLA emphasizes that Media Matters initiated this lawsuit, not the FTC, and that the agency may not ever proceed with court enforcement. The FTC's CID review process, established by regulation, does not eliminate the long-standing jurisdiction held by district courts as conferred by Congress.

Statements from NCLA Leadership

Prominent figures at NCLA expressed strong opinions regarding the case:

  • “Executive branch administrative agencies cannot pass regulations that purport to displace the judicial power from courts to the agency—especially not when the question is whether the agency itself has violated the Constitution!” — Peggy Little, Senior Litigation Counsel, NCLA
  • “Plaintiffs alleging violations of their constitutional rights deserve to be heard in a court of law—not by a commission acting as both the prosecutor and the judge.” — L. Margaret Harker, Senior Litigation Counsel, NCLA
  • “It is surprising to see this administration stand for the Administrative State by resisting federal district court jurisdiction.” — Mark Chenoweth, President, NCLA

About the New Civil Liberties Alliance

The NCLA is a nonpartisan, nonprofit civil rights organization established by legal scholar Philip Hamburger. The organization is dedicated to protecting constitutional freedoms from government overreach, particularly by state and federal agencies. NCLA advocates for civil liberties through public-interest litigation and pro bono efforts, aiming to restore fundamental rights for all Americans.

For further details, please visit the amicus page.

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