The FTC Has Made Its Decision; Now Let It Enforce It

Today, the FTC announced a new “click-to-cancel rule,” enacted after receiving 16,000 comments from the public. The rule requires sellers to make it as easy to cancel subscriptions as it is to start them. The vote to adopt the rule was 3-2. along party lines. The statement from dissenting Commissioner Holyoak makes clear that the rule, due to go into effect in 180 days, may never see the light of day. Like the FTC rule on non-competes, which we discussed here and here, this rule is likely to be challenged and enjoined before it can go into effect. The title of this post is a commentary on how much the world has changed since the days of Andrew Jackson. The FTC has made its decision, but the courts likely will enjoin its enforcement. Jacksonian autocracy has been displaced by juristocracy.

The stridency of the dissenting statement provides an augury of litigation strategies perhaps already in the works. Commissioner Holyoak challenges the FTC’s authority to promulgate so broad a rule and characterizes it as encroaching on the legislative function in violation of Article I of the Constitution.  Commissioner Holyoak then impugns the motives of her colleagues:

The likely unlawful character of the rule is compounded by the Majority’s race to cross the finish line. Why the rush? There is a simple explanation. Less than a month from election day, the Chair is hurrying to finish a rule that follows through on a campaign pledge made by the Chair’s favored presidential candidate.

I do not doubt that the rule accords with the policy preferences of the Democratic Party. However, agencies do not rush through rules that accord with campaign pledges. If there were actual coordination, the candidate would want the agency to wait until after inauguration so that the presumably successful candidate could take credit for actually fulfilling a campaign pledge. Rather, the Democratic Party appointees are likely trying to get rules passed while they can, in case their preferred candidate does not secure an election victory.

The dissenting statement gripes that the majority should have taken more time to work out compromises with the dissenters so as to promulgate a more limited rule that could have withstood legal challenges. Commissioner Holyoak indicates that Rules used to take ove 5 1/2 years to promulgate. This one is being rushed through in only three. I’m sorry, but it doesn’t seem unreasonable to me that an administrative agency should be able to promulgate a rule during the course of a President’s four-year term. Legislation, which can be vastly more impactful, happens much more quickly. Moreover, the separate statement of Commissioner Rebecca Kelly Slaughter suggests that at least some compromises were included in the final rule.

There follow about ten pages of tightly argued procedural objections and enumerations of the flaws of the final rule. This will make for very useful material for interested parties who will, I predict, file their challenges to the rule and motions for nationwide injunctions in the Northern District of Texas. Ultimately, I suspect that Commissioner Holyoak will be vindicated and the rule will not go into effect. She insists that she will support a narrower version of the rule, so I hope the Commissioners will continue their conversations in pursuit of that goal while the current rule is in limbo.

But Commissioner Holyoak does not close with a call for bipartisanship:

I am not reflexively opposed to rulemaking where Congress has delegated the Commission relevant authority, and we act consistent with that authority. Unfortunately, that is not what today’s Rule is. Instead, we have an ill-disguised political maneuver from the Majority in the form of a rule, one rushed to publication to advance the prospects of the Chair’s preferred presidential candidate.

Today’s post was written with the assistance of Isabella (above left), one of the Blog’s most reliable readers (or sniffers).