Taxpayers Are Paying for Bad Regulations’ Doomed Courtroom Defenses

Federal district courts delivered two notable preliminary injunctions last week that, at first blush, seem to have little in common. One blocked a Mississippi law requiring social-media platforms to perform age verification; the other, a Federal Trade Commission (FTC) rule banning noncompete agreements.

Both rulings shared one notable commonality. Both the Mississippi Legislature and the FTC ought to have anticipated their respective policies’ failure in court. In each case, the court slapped down a dubious legal theory that government officials – to further their own personal policy agendas – insisted on pursuing despite copious evidence demonstrating them to be constitutionally or statutorily unsound. To make matters worse, taxpayers must finance the (almost certainly doomed) ongoing legal defense of these regulations.

The cost of defending these manifestly illegal or unconstitutional statutes remains unclear. However, the Mississippi and noncompete injunctions instantiate an accelerating trend. States on the age-verification issue, and the FTC on competition issues, have wasted significant sums of money attempting to evade inevitable courtroom losses. While politicians often frame this kind of defiance of law and precedent as boldness and courage – He fights! – voters should interpret it as blitzkriegs against fiscal responsibility.

Age-verification mandates contain several First Amendment violations, and judges – just within the last year – have ruled against them in Arkansas, California, and Ohio. Going back decades, many courts found such mandates to be impermissibly burdensome of adult Americans’ constitutionally protected speech. In offline cases, moreover, the Supreme Court has also recognized a First Amendment right to speech anonymously – a right on which mandatory age verification infringes.

Nonetheless, despite the baked-in constitutional deficiencies that doom age-verification mandates, myriad states have enacted them – either explicitly (i.e., an outright mandate) or implicitly (e.g., an age-appropriate design code).

(Note: An upcoming Supreme Court case will determine whether pornography websites enjoy the standard speech protections outlined above. The ruling may, or may not, alter precedent concerning social-media platforms.)

To ban noncompete agreements, which irk its progressive leadership, the FTC went spelunking and discovered authority to make substantive rules proscribing certain business practices per se as unfair methods of competition. But as legal scholars, generations of FTC officials, and now the U.S. District Court for the Northern District of Texas have argued, the FTC Act (read faithfully) provides no such authority.

These kinds of legal creativity and overreach have become routine at this FTC. Having advanced a head-scratching, never-before-seen theory, the agency lost its case against Meta’s acquisition of AI developer Within, an early and indicative setback. Next, courts swatted away a thoroughly dubious action against the Microsoft–Activision merger. Neither the fact that the FTC brought such shoddy cases nor its consequent courtroom losses should surprise anyone. FTC leadership’s long-held and publicly stated views, and the agency’s recent policy statements, have contravened explicitly decades of bipartisan precedent. To finance its legal adventurism, moreover, the FTC has requested a 35-percent budget increase for Fiscal Year 2025.

Government officials of any type – legislative, executive, or judicial ­– must at the very least respect the legal boundaries of their authority and use public resources efficiently and well. These are the most basic requirements of good governance. The FTC and states advancing age-verification laws have failed on both counts.