As expected, former commissioners of the Federal Trade Commission (FTC) Alvaro Bedoya and Rebecca Kelly Slaughter are suing the Trump administration over their abrupt dismissal from the agency earlier this month.
They are asking a federal judge to enjoin any action preventing them from completing their duties as commissioners and serving out the rest of their terms.
The commissioners said the firings are a “direct violation of a century of federal law and Supreme Court precedent” and deemed Trump’s actions legally “indefensible,” in a lawsuit (PDF) filed March 27. They pointed to a landmark decision in Humphrey’s Executor v. United States as the legal precedent giving statutory tenure protections to commissioners under most circumstances.
On the day of the firings, an email message from Trent Morse, deputy director of presidential personnel, did not give any indication the firings were based on “inefficiency, neglect of duty, or malfeasance in office,” as required under the FTC Act. Instead, the email said Trump has the authority to exercise “substantial executive power.”
This legal interpretation, which applied to the Consumer Financial Protection Bureau in a case against Seila Law, does not apply to the FTC, the commissioners stated.
Bedoya’s term expires in 2026 and Slaughter’s is up in 2029. Bedoya was nominated to the FTC under President Joe Biden, while Slaughter was first nominated by President Donald Trump.
The FTC is active within the healthcare industry, often challenging merger deals and increasingly taking a stricter approach to antitrust under former Chair Lina Khan’s term in the Biden administration.
But with Khan and the two fired commissioners gone, there are just two Republican members left on what is traditionally a five-member commission. Mark Meador is expected to be confirmed as the commission’s third member, and it is in Trump’s authority to not name more members.
If Meador is confirmed, there is potentially just one FTC member able to help rule on a case involving pharmacy benefit managers allegedly using rebate practices to artificially inflate the list price of insulin drugs, as reported by Fierce Healthcare. A quorum of one at the FTC is unprecedented and not legally tested, so firing Bedoya and Slaughter could have a sweeping impact on this industry.
In the lawsuit, the plaintiffs pointed to Chair Andrew Ferguson’s confirmation hearing in 2023, where he said only the Supreme Court has the authority to overturn the Humphrey’s precedent.
They also highlighted their perceived accomplishments at the commission, including dissuading a merger between Illumina and Grail and issuing two interim staff reports on alleged anticompetitive actions by PBMs.
The Trump administration has made no secret over its desire to challenge legal precedent. The president's allies support unitary executive theory, which gives a president broad control over the executive branch, and executive actions within the past couple of months have asserted stronger central authority under the argument that the president alone is "vested with ‘the executive Power’ and responsibility to ‘take Care that the Laws be faithfully executed.’” This lawsuit is one of many cases on the issue that could be challenged up to the Supreme Court.