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Facebook judge rejects argument for FTC chair's recusal: 'Courts must tread carefully'

Facebook judge rejects argument for FTC chair's recusal: 'Courts must tread carefully'

Deference to the president’s power to pick the heads of federal agencies won out over potential concerns about the appearance of impartiality in a ruling on Tuesday in the U.S. Federal Trade Commission’s antitrust case against Facebook Inc.
U.S. District Judge James Boasberg of Washington, D.C., denied Facebook’s motion to dismiss the FTC’s case. As my Reuters colleagues reported on Tuesday, the judge found the FTC’s amended complaint against Facebook (now known as Meta Platforms Inc) adequately alleged that the company used its power to buy up or crush rivals.

I'm focusing on Boasberg's rejection of Facebook’s alternative argument for dismissing the FTC’s suit. The company’s lawyers at Kellogg, Hansen, Todd, Figel & Frederick contended that FTC Chair Lina Khan showed such animus toward the company in her previous work as a public policy analyst, law professor and congressional investigator that she should not have participated in the FTC’s vote to authorize the filing of an amended complaint. Boasberg ruled that Khan was not required to step aside, despite a plethora of evidence that she regarded Facebook as a monopolist before she was appointed to the FTC.

In October, when I first wrote about Facebook’s assertion that Khan should have recused from the FTC’s consideration of the amended complaint, I said the dispute spotlighted a public policy conundrum: Is the government best served when federal agencies are headed by experts who have developed and expressed strong opinions about companies they oversee? Or are agencies undermined when their leaders are open to accusations of bias?

Boasberg’s answer: Courts must respect the president’s power to pick agency heads and the Senate’s authority to confirm them. President Joe Biden, he said, probably named Khan as chair of the FTC precisely because of her scholarship and advocacy about monopolist practices by big tech companies, including Facebook. “It is natural that the president will select a candidate based on her past experiences and views, including on topics that are likely to come before the Commission during her tenure,” the judge wrote. “Courts must tread carefully when reviewing cases in this area.”

Boasberg relied heavily on the D.C. Circuit’s 1979 decision in Association of National Advertisers v. FTC, which held that an FTC chair’s statements about regulating advertisements directed at children were not grounds to disqualify him from the rulemaking process. That decision, Boasberg said, acknowledged that agency administrators “may hold policy views on questions of law prior to participating in a proceeding.” But those previously held views are not proof of a closed mind, Boasberg said.

He quoted the 1979 D.C. Circuit opinion to explain the implications of judicial meddling with agency recusal determinations: “We would eviscerate the proper evolution of policymaking were we to disqualify every administrator who has opinions on the correct course of his agency's future action.”

Boasberg's key determination was that Khan was acting more like a prosecutor than a judge when she participated in the FTC’s vote to file the amended Facebook complaint. Facebook’s recusal argument rested on appellate precedent calling for FTC commissioners to step aside from administrative proceedings if their impartiality could reasonably be questioned. But Boasberg agreed with the FTC’s argument that Khan was not a fact-finder in the Facebook case, which is (obviously) being litigated in federal court, not in an FTC administrative proceeding.

In that context, Boasberg concluded, Khan need not be held to judicial recusal standards but to the more lenient standard for prosecutors, who don’t have to step aside based on the appearance of partiality. Because Khan had no financial conflict of interest, the judge said, and no “personal animosity against Facebook beyond her own views about antitrust law,” she didn’t trigger recusal requirements under the test for prosecutors.

Prosecutors are also subject to disqualification under federal government ethics rules when they have an “axe to grind” against potential targets. Facebook had argued that Khan’s previous statements about the company were so inflammatory that they demonstrated an axe to grind against Facebook, but Boasberg said courts have not regarded expressions of policy views as disqualifying evidence of personal animosity.

Facebook isn’t the only big tech company to claim Biden administration officials can’t fairly participate in actions against them. As I told you last fall, Amazon.com Inc, has also petitioned for Khan’s recusal in an unspecified FTC matter. And Google’s parent company, Alphabet Inc, has asked the Justice Department to disqualify antitrust division head Jonathan Kanter from DOJ’s case against the company, based on Kanter’s past legal work and public statements.

Facebook referred me to its general statement about the judge’s ruling, which noted Boasberg’s acknowledgment that the FTC still faces a “tall task” to prove Facebook violated antitrust law in acquiring Instagram and WhatsApp. “We’re confident the evidence will reveal the fundamental weakness of the claims,” the Facebook statement said.

I also reached out to Facebook’s expert on the ethics of Khan’s participation in the FTC’s case, Northwestern University Pritzker School of Law professor Daniel Rodriguez, who asserted in his expert declaration that public faith in the regulatory system demands that federal commissioners' decisions be beyond reproach regardless of whether they are functioning as prosecutors or judges. Rodriguez declined to comment on Boasberg’s ruling.

But legal ethics professor Kathleen Clark of Washington University in St. Louis echoed Rodriguez’s concerns about public faith in the system. “I think Boasberg gives short shrift to the value of impartiality,” Clark said. “The decision doesn’t recognize the risk of allowing civil prosecutors to take action even when there are legitimate concerns about their impartiality.”

Clark, who told me last fall that Khan’s pre-appointment statements about Facebook raised legitimate questions about potential bias, said such concerns might have been allayed if the FTC’s internal decision-making on Khan’s ability to act impartially had been fully disclosed. But Boasberg’s decision, she said, “gives the FTC permission to do again what it did here.”

Opinions expressed here are those of the author. Reuters News, under the Trust Principles, is committed to integrity, independence and freedom from bias.

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