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Monday June 10, 2024

10th Circ Declines to Stop Leachco Proceeding on Constitutional Grounds

The 10th Circuit U.S. appeals court June 4 ruled Leachco cannot stop CPSC's administrative proceeding based solely on whether the commission's structure is constitutional. Even if there were a constitutional violation in the removal protections given to commissioners and to administrative law judges (ALJs), that alone would not be enough to cause "irreparable harm." The firm had argued that statutory removal protections created by Congress impinge Article II presidential powers as commissioners and ALJs cannot be fired at will.


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Not ruling on that question, the three-judge panel pointed ( to the 10th Circuit's own precedent of distinguishing between existence of a separation of powers violation and a party being subjected to such a violation in a way that also abridges constitutional rights. Leachco did not show the latter, they said.


They relatedly pointed to 2021 U.S. Supreme Court precedent in Collins v. Yellen, asserting that Leachco did not show that the alleged separation of power violation would affect how CPSC and the ALJ treat it.


They rejected the company's argument that the Supreme Court's 2022 decision in Axon Enterprise, Inc. v. Federal Trade Commission was applicable. That case did not address "irreparable harm," they wrote.


The judges were Scott Matheson, David Ebel, and Joel Carson. Their decision upholds a refusal by the Oklahoma U.S. district court to issue a preliminary injunction to stop CPSC's administrative case, which seeks to force a recall of Podster infant loungers.


Last year, Leachco also lost attempts in the 10th Circuit and U.S. Supreme Court to stay CPSC's activity pending the appeal (PSL, 8/21/23).


The three judges in the new decision also expressed doubt about the likely success of Leachco's Article II argument, noting its failure elsewhere.


That included the 5th Circuit's rejection of the argument in an unrelated decision on CPSC (PSL, 1/22/24) based on standing Supreme Court precedent from the 1935 decision, Humphrey's Executor v. United States, which upheld similar protections for FTC commissioners.