Overview
By the time the US Supreme Court's term ends this summer, the Court will have issued three decisions that could have significant ramifications for those in the energy industry. One goes to the very core of how agencies—agencies like the Federal Energy Regulatory Commission (FERC), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Nuclear Regulatory Commission (NRC), and the Surface Transportation Board (STB)—are created and structured, while the other two could upend traditional regulatory enforcement practices. Below we discuss the cases and their potential impact.
Trump v. Slaughter: Agency Independence and Structure
Top of mind for the energy industry is the pending outcome in Trump v. Slaughter. Argued last December, Slaughter presents the critical question of whether Congress can limit the president's authority to remove members of the executive branch, an important question for independent agencies whose commissioners are insulated from at-will removal.
As we explained earlier, a 90-year-old case, Humphrey's Executor, found that Congress can lawfully restrain the president's power to remove members of independent agencies. But Humphrey's Executor has been limited in recent decisions, and Slaughter outright asks whether it should be overturned. Slaughter arose out of President Trump's firing of former Federal Trade Commission (FTC) Commissioner Rebecca Slaughter, who enjoyed statutory protection from at-will firing. The Court heard oral argument in the case on December 8, 2025, and a decision will be issued no later than late June or early July 2026.
Why it Matters: Members of numerous federal agencies enjoy the same protections from firing that members of the FTC do. If the Court overrules Humphrey's Executor, these statutory protections would be at risk, and there could be significant uncertainty regarding the ability of the agency to perform its duties. Because a holding in Slaughter will implicate agencies like the FERC, the NRC, the STB, and the CFTC and SEC—agencies that provide regulatory certainty to business and oversight to the industries that are literally and figuratively powering the US economy—the focus on Slaughter's outcome will be intense. But, like always, the devil will be in the details. Once a decision is reached, there will likely be even more litigation for other agencies concerning the application of a Court decision in Slaughter to the particular facts and circumstances of those agencies.
FCC v. AT&T and Sripetch v. SEC: Reviewing Regulatory Enforcement Practices
Two upcoming cases have the potential to unsettle traditional regulatory enforcement processes and powers at agencies.
- In Federal Communications Commission v. AT&T, Inc., the Court will consider whether the FCC's civil-enforcement structure violates the Constitution. Under its enforcement regime, the FCC must issue a notice of apparent liability, give the regulated party an opportunity to respond in writing, and then issue a final decision. If the carrier refuses to pay this penalty, the FCC can refer the matter to the Department of Justice to seek to recover the penalty in an action in federal district court. Alternatively, the carrier can pay the penalty and seek review in the courts of appeals. The US Court of Appeals for the Fifth Circuit held that the FCC’s initial assessment of liability violates the Constitution's right to a jury trial. The Supreme Court granted certiorari and scheduled oral argument for April 21, 2026.
- Sripetch v. Securities and Exchange Commission concerns the remedies that the SEC can seek to enforce federal securities laws. The SEC often obtains relief in its enforcement actions through disgorgement, the act of having wrongdoers return the gains obtained from fraudulent activities. Lower courts have split on whether disgorgement requires the SEC to show that victims suffered pecuniary harm. The Supreme Court granted certiorari to resolve this question. Oral argument is scheduled for April 20, 2026.
Why it Matters: These two cases could transform agencies' traditional enforcement regimes, including those at FERC, the CFTC, Pipeline and Hazardous Materials Safety Administration (PHSMA), and others.
Many agencies have, like the FCC, enforcement procedures whereby the agency makes an initial assessment of a civil penalty, which a regulated entity must decide whether to pay and challenge through the appellate process, or not pay and go to district court. This is the process followed by FERC[1], the CFTC[2], PHSMA[3], and the NRC[4]—to name just a few.
If the Court determines that the FCC's initial penalty assessment violates the Constitution, regardless of the availability of subsequent de novo review in district court, the enforcement regimes of numerous other agencies would be squarely implicated. Similarly, if the Court holds that the SEC must show pecuniary harm to obtain disgorgement, other agencies that seek disgorgement in the context of enforcement matters would likely be held to the same standard.
****
We will be closely monitoring these cases and will make further updates once the Court issues the relevant orders. In the meantime, companies can and should evaluate whether these decisions may have implications for ongoing regulatory matters, and if so how to address them.
[1]https://www.steptoe.com/en/news-publications/district-court-rules-that-ferc-enforcement-proceedings-do-not-violate-the-constitutional-right-to-trial-by-jury.html
[2]https://www.cftc.gov/sites/default/files/2021-05/EnforcementManual.pdf
[3]See 49 CFR 190.235.
[4]https://www.nrc.gov/reading-rm/doc-collections/cfr/part002/part002-0205
