Fifth Circuit Curtails FTC's In-House Adjudication on Deceptive Ads

The Fifth Circuit ruled the FTC’s internal process for deceptive advertising claims violates constitutional separation of powers.

The U.S. Court of Appeals for the Fifth Circuit on March 20, 2026, vacated a cease-and-desist order the Federal Trade Commission (FTC) imposed on Intuit Inc., finding the agency’s use of internal administrative law judges to adjudicate deceptive advertising claims violates constitutional separation of powers. Read more.

• The decision follows the Supreme Court’s SEC v. Jarkesy ruling, which said the SEC’s administrative proceedings for fraud claims infringe on the right to a jury trial under the Seventh Amendment. Details here.
• The FTC had alleged that Intuit deceptively marketed its TurboTax “Free Edition” product, which was unavailable to about two-thirds of filers in 2020. Administrative proceedings resulted in a 20-year cease-and-desist order against Intuit. More background.
• "The adjudication of a deceptive advertising claim before an administrative law judge violated the constitutional separation of powers," wrote Judge Edith H. Jones for the panel. Judge James C. Ho highlighted that the “public rights exception” lacks a textual constitutional basis.
• Monetary relief in deceptive ad cases now faces a higher bar in the Fifth Circuit, unless another statute or specific trade regulation rule independently authorizes it according to analysis.

The ruling may compel the FTC to abandon or rework its administrative process and instead pursue enforcement in federal court or coordinate more closely with state regulators. It represents a major development in administrative law, particularly for in-house counsel and firms navigating consumer protection litigation and compliance in the affected jurisdictions.