The FTC's Independence, a cornerstone of federal regulatory authority since its establishment in 1914, is now under unprecedented constitutional scrutiny as the Department of Justice (DOJ) recently declared the statutory tenure protections for FTC commissioners unconstitutional. This challenge raises significant questions about the agency’s future and its ability to operate as an independent regulatory body.
The DOJ’s position was communicated by Acting Solicitor General Sarah Harris in a February 12, 2025 letter to Senator Dick Durbin (D-IL), ranking member of the Judiciary Committee that oversees the FTC, and it signals a potential overturning of Humphrey’s Executor v. United States (1935), a 90-year-old precedent safeguarding the independence of regulatory agencies.
The DOJ’s stance reflects a broader judicial and political trend challenging the administrative state, underscored by recent Supreme Court decisions such as Loper Bright Enterprises v. Raimondo (2024), which have collectively eroded agencies’ enforcement powers and procedural autonomy.
Historical Foundations of the FTC’s Independence
The FTC’s unique structure, designed to insulate it from partisan political pressures, originated with the Federal Trade Commission Act of 1914 (the “FTC Act”), which mandates a bipartisan commission of five members, with no more than three from the same political party, appointed by the president and confirmed by the Senate. Under the FTC Act, commissioners may only be removed by the president “for inefficiency, neglect of duty, or malfeasance in office,” a provision intended to ensure continuity and expertise in regulatory decision-making.
In 1935, the FTC Act’s limitation on presidential removal authority was put to the test in Humphrey’s Executor v. United States, which resulted from President Franklin Roosevelt's effort to dismiss Commissioner William Humphrey, who FDR felt was out of sync with his views on FTC policy and administration.
The Supreme Court sided with Humphrey, thereby validating Congress’s power to create independent agencies whose leaders are shielded from at-will dismissal. Not only did the Humphrey’s Executor decision cement the FTC’s status as an independent regulatory commission, it also set an important precedent that led to the establishment of similar agencies during the New Deal and postwar eras.
For decades, Humphrey’s Executor underpinned the legitimacy of the administrative state, allowing agencies like the FTC to operate with a degree of autonomy deemed essential for impartial regulation. However, the reasoning in Humphrey’s Executor has faced mounting criticism from originalists and proponents of a unitary executive theory, who argue that the Constitution grants the president plenary removal authority over all executive officers.
Overturning Chevron and Curtailing Agency Discretion
The Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo marked a watershed moment in administrative law. In Loper Bright, the Court overturned Chevron v. Natural Resources Defense Council, which required courts to defer to federal agencies’ reasonable interpretations of ambiguous statutes.
By discarding the doctrine of judicial deference, the Court transferred the exclusive right to interpret federal statutes to the courts, thereby constraining regulators’ ability to adapt to evolving economic and technological challenges.
Among other consequences, the Loper Bright ruling created new avenues for litigants to contest longstanding regulations. As far as the FTC is concerned, Loper Bright and similar Supreme Court decisions complicate the agency’s efforts to enforce antitrust and consumer protection laws, as courts may now second-guess the Commission’s statutory interpretations and policy judgments.
FTC's Independence Challenged in In re H&R Block Case
The FTC's Independence faced significant scrutiny in a 2024 consumer protection case, In re H&R Block, Inc., where the agency accused the tax preparation company of deceptive marketing practices in a proceeding before an Administrative Law Judge (ALJ). H&R Block challenged the FTC’s use of administrative proceedings, arguing that ALJ tenure protections unconstitutionally shielded them from presidential oversight.
Although the FTC rejected the motion, then-Commissioner Andrew Ferguson issued a concurring statement criticizing the administrative state as “gargantuan and increasingly removed from the American people” and contending that ALJ removal protections violated the Constitution. Ferguson’s critique underscored his alignment with opponents of bureaucratic independence, a stance that likely contributed to his rise to FTC Chairman—placing the agency’s leadership in the hands of someone who fundamentally questions the FTC's Independence and its constitutional foundation.
Legal and Political Rationale for Overturning Humphrey’s Executor
Against this backdrop, we can now examine the implications of the DOJ’s position, which is that the FTC’s combination of investigative, prosecutorial, and adjudicative functions renders it an executive entity subject to full presidential control, which includes the ability for the President to remove any commissioner who disagrees with his views.
Essentially, the DOJ is arguing that Humphrey’s Executor is incompatible with modern separation of powers jurisprudence. By advocating for unfettered removal power, the DOJ seeks to align the FTC with the unitary executive theory, which posits that all federal regulatory authority must flow through the president.
Potential Outcomes of a Post-Humphrey’s FTC
If the Supreme Court heeds the DOJ’s call to overturn its Humphrey’s Executor decision, the immediate consequence would be the severability of the “for cause” removal provision from the FTC Act, which would enable presidents to dismiss FTC commissioners at will, transforming the agency into a more overtly political body.
This could lead to rapid ideological shifts in FTC priorities with each change of administration, resulting in a regulatory see-saw shifting between extensive deregulation and aggressive enforcement. It also risks destabilizing long-term regulatory planning and undermining the FTC’s reputation for impartiality. Furthermore, the erosion of tenure protections might deter qualified candidates from serving as commissioners, as their terms could be abruptly terminated for political reasons.
The DOJ’s position on FTC tenure protections and the potential overturning of Humphrey’s Executor further threatens to catalyze challenges against other independent agencies with similar structural safeguards, such as the Federal Communications Commission (FCC) and the National Labor Relations Board (NLRB).
If Humphrey’s Executor falls, these agencies could face relentless litigation over the constitutionality of their operations, creating regulatory uncertainty across multiple sectors. Moreover, the blending of functions within many independent agencies—combining rulemaking, enforcement, and adjudication—may face renewed scrutiny under separation of powers doctrines.
The FTC at a Constitutional Crossroads
The FTC’s evolving constitutional status reflects a broad renegotiation of the balance between executive authority and bureaucratic independence. As the Supreme Court prepares to reconsider Humphrey’s Executor, the agency faces existential questions about its ability to fulfill its statutory mandate without the protections that have defined its operations for nearly a century.
While the elimination of tenure safeguards might resolve immediate separation of powers concerns, it risks trading long-term regulatory stability for short-term political control. Stakeholders across industries must prepare for a future where FTC enforcement priorities shift dramatically with each administration, complicating compliance efforts and strategic planning.
Ultimately, the resolution of these constitutional challenges will shape not only the FTC’s trajectory but also the viability of the independent regulatory commission as a model for governance in the 21st century.
