U.S. Supreme Court takes up Taser maker's battle with FTC

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Jan 24 (Reuters) - The U.S. Supreme Court on Monday agreed to hear Axon Enterprise Inc's (AXON.O) bid to revive its challenge to the constitutionality of the Federal Trade Commission's structure aimed at countering an antitrust action by the agency against the Taser manufacturer.

The justices took up an appeal by the company, which sells stun guns, body cameras and other equipment used by police, after a lower court threw out the case, finding that Axon cannot contest the constitutionality of the FTC's structure in a federal court before first enduring the agency's enforcement action in an in-house administrative proceeding.

The FTC, an independent federal agency that targets anticompetitive and fraudulent business practices, can enforce its authority either in federal court or through its own administrative hearings.

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Scottsdale, Arizona-based Axon contends that the agency is biased against the companies or individuals it targets and the results of its "sham" internal enforcement actions are preordained.

Axon claimed that the agency acts as "prosecutor, judge and jury" in violation of the U.S. Constitution's Fifth Amendment guarantees of due process and equal protection under the law. Axon also challenged the authority of any FTC administrative law judges, asserting that their job protections unlawfully place them outside the president's power to control executive branch officers under the Constitution's Article II.

The FTC last year issued an administrative complaint against Axon challenging its 2018 acquisition of Vievu, a rival body-camera provider, for $13 million, saying the deal allowed the company to impose substantial price increases. Axon said the transaction was lawful and sued in federal court to halt the FTC proceeding.

A federal judge said the company cannot bypass the FTC's administrative proceeding and tossed Axon's case. The judge ruled that the Federal Trade Commission Act, which established the FTC in 1914, requires the company to raise its objections at the agency and appeal any adverse result to a federal court of appeals.

The San Francisco-based 9th U.S. Circuit Court of Appeals upheld that decision last year, prompting Axon to appeal to the Supreme Court.

Backed by business groups including the U.S. Chamber of Commerce, Axon urged the justices to reopen the courthouse doors to its lawsuit challenging the legality of the FTC judges "and of the FTC itself."

President Joe Biden's administration, defending the FTC, urged the justices to reject the appeal.

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Reporting by Andrew Chung in New York; Editing by Will Dunham

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