Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Commissioner Rosch Discusses Administrative Proceedings at Agency, (Nov 9, 2012)

By Jeffrey May, J.D.

FTC Commissioner J. Thomas Rosch told attendees of the American Bar Association Section of Antitrust Law's Fall Forum on November 8, 2012, that the agency's structure “is not only constitutionally sound, but optimal.” In remarks prepared for delivery, entitled “Three Questions About Part Three: Administrative Proceedings at the FTC,” Rosch discussed administrative proceedings at the agency.

Rosch focused his remarks on three issues: (1) the standard that the Commission applies when, acting as a prosecutor, it votes out a complaint; (2) the standards that the Commission applies when, sitting as an appellate tribunal, it reviews decisions from Administrative Law Judges (ALJs); and (3) the extent to which there may be something untoward about the Commission occupying both of these prosecutorial and adjudicative roles.

Noting that he was underwhelmed by the agency's litigation efforts when he came there in 2006, Rosch was pleased to report that the Commission is now litigating as an active prosecutor should. The agency has seven competition matters in litigation at the moment, including one case before the Supreme Court, according to Rosch. As a result, the Commission is “grappling” with the “reason to believe” and public interest standards used when it acts as a prosecutor and decides to vote out a complaint.

Although amorphous, the “reason to believe” standard is not troubling to Rosch. “[W]hile there may be some logical critiques of the FTC’s practice and procedures, I don’t think the ‘reason to believe’ standard or the deliberative process (which typically follows at least six months of investigation) the FTC engages in to make that determination is one.”

Rosch also considered the Commission’s role as an adjudicative tribunal, particularly the standard of review that the Commission applies when it considers appeals from decisions rendered by administrative law judges (ALJs). He warned that the Commission should be very cautious when—if ever—it rejects the ALJ’s factual findings and, more particularly, its assessment of witness credibility. Rosch also discussed the importance of the FTC operating at full strength, with five commissioners, when it sits as an appellate tribunal.

Lastly, Rosch discussed whether there was anything problematic about combining the prosecutorial and adjudicative functions. “Congress apparently didn’t think so,” he observed. “When it established the FTC in 1914, it intended for the FTC to serve the dual roles of prosecutor and judge—a view that it codified in Section 5 of the FTC Act.”

The Commissioner noted that the FTC retains several layers of supervision by all three branches of the government. Congress controls appropriations and can augment or strip us of the agency's statutory authority at any time. The Executive Branch nominates the commissioners and determines the FTC’s budget request. With respect to the Judicial Branch, “any decision that the Commission renders when it sits as an adjudicative body can be appealed by the respondent to the regional federal appellate court of its choice.”

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