Democrats put due process on the chopping block

As Congress debates immigration changes, tax giveaways for the blue-state wealthy, massive welfare expansions, and energy concerns in the Democrats’ social spending bill, one little-noticed provision threatens to upend the due process protections that undergird our society and economy.

Americans have long enjoyed protection from being “deprived of life, liberty or property without due process of law.”  A key part of due process is that before the government can charge you for a crime, it must first define what the offense is. In a just society, no one should be fined for breaking a law that the government has failed to make clear.

Neatly tucked away in Subtitle N of the Democrats’ bill is a provision that endangers this protection. It would give the Federal Trade Commission a first-of-its-kind, blanket authority to impose civil penalties for whatever acts or practices it deems to be “unfair or deceptive acts.”  Unconscionably, the FTC would suddenly have the power to levy fines in the absence of any clear agency rules defining the punishable conduct in advance.  

As a practical matter, this means a small business trying to survive the pandemic could find itself on the wrong side of a federal lawsuit for conducting “unfair” business practices without any clue as to why those practices were deemed unfair.  No “cease and desist” letter to warn them in advance. No formal rulemaking process that would have provided clarity. Just a surprise penalty — to the tune of over $43,000 per violation.

When the FTC was created in 1914, it was tasked with protecting consumers against unfair or deceptive acts relating to commerce. This mandate still holds today, and it is one that enjoys bipartisan support.  

But Congress did not give the FTC general authority to fine companies for first-time offenses. Only in limited instances, when the offense is clearly defined in law for all to see, has Congress granted the FTC the power to punish a first offense.

This is an essential limiting feature of the law that protects citizens and businesses from regulatory overreach, as well as partisan abuse from federal bureaucrats.

Earlier this year, the Supreme Court ruled 9-0 against the FTC for extracting money from businesses without the authority to do so. Justice Stephen Breyer lamented that if the Court were to find in favor of the FTC, businesses would be in a position where “before you know the thing is wrong, they hit you with bad damages.”

This is far from a trifling matter. The elimination of fair notice would undermine and potentially cripple the U.S. economy. It would raise barriers to market entry, hurt competition, hinder innovation, and dramatically raise the cost of doing business for large and small companies alike. 

In the coming days, the U.S. Senate Parliamentarian will rule whether this unprecedented provision will be allowed to remain in the Democrats’ partisan reconciliation bill. On procedural grounds alone it should be thrown out. But for the sake of our economy, a fair government, and a just society, we should all hope this provision is scrapped.

Wicker is ranking member of the Senate Commerce Committee.