Kudos to Commissioner Noah Phillips and Commissioner Christine Wilson for creating and/or popularizing the catchiest Federal Trade Commission (FTC or Commission) phrase of 2021 – zombie votes. But what are these zombie votes that are the latest FTC bone of contention, and do they relate to the traditional lumbering George Romero zombies or to the more modern, fast-moving creatures of “28 Days Later”? (And yes, I agree that those aren’t really zombies. Glad to discuss further.)
So let’s get away from the name for a bit and dissect the issue. Former FTC Commissioner Rohit Chopra’s last day as commissioner was Oct. 8, 2021, and a few weeks later (but not quite 28 days later), a 3-2 vote issued from the Commission announcing a Policy Statement on the use of prior approval provisions in merger orders. Phillips and Wilson dissented on policy and procedural grounds, stating, “Today, two sitting commissioners join forces with a zombie vote cast weeks ago by the sitting Director of the Consumer Financial Protection Bureau (CFPB) to launch yet another broadside at the market for corporate control in the United States.” The “zombie” term stuck, and Politico and other news outlets reported that Chopra voted on as many as 20 different matters on his last day at the agency. These votes had the potential to be highly significant, given the fact that upon his departure, the Commission would be evenly split with two Democrats and two Republicans. And given the increased acrimony at the agency, it is not a leap to presume that these votes were made in order to allow the Democrats to retain a majority on certain pending matters.
So lots of articles were written about this seemingly unprecedented number of last-day votes. And questions were raised regarding under what circumstances, if any, a departing commissioner’s vote should count. The agency released a few documents in response to Freedom of Information Act (FOIA) requests, which indicated that the policy at issue has existed since 1984. The 1984 document describes the policy and states that “the votes of a departing Commissioner always count, except in instances where they are displaced by the votes of his or her successor.” So the policy has been at the FTC for more than 35 years. But notably missing from the document establishing the policy is any explanation as to why it is in fact good policy for the institution or for the country. (And for those keeping track of the Commission, a few days ago the U.S. Senate Commerce Committee voted 14-14 on party lines regarding the nomination of Alvaro Bedoya to be the fifth commissioner, meaning that his nomination can advance for a full Senate vote.)
Now, back to voting. Keep in mind that the commissioners do not have to vote on the same day. A 1994 document that was also released in response to the FOIA indicates that if a majority does not form “within one calendar month after the most recent vote cast,” the motion will be recorded as having failed. So voting at the FTC is complicated, can stretch out for 60 days or so, and depending on how the voting is timed, there could still be matters at the Commission that are pending, which could in this case include Chopra’s vote. And, of course, there may also be matters that have been voted out that include Chopra’s votes but that have not yet been announced. (It is not uncommon for there to be some time lag between votes happening and matters being announced.) As an aside, the Commission issued the revised Safeguards Rule with a 3-2 vote (with Chopra in the majority) 19 days after he left the agency. The dissenting statement from Phillips and Wilson did not raise zombie vote concerns, so I think we can certainly speculate that the vote for the Safeguards Rule was complete before Chopra’s departure and there was a time lag before announcement.
So the policy has been around for quite a while, but this appears to be the first time in recent memory that it was invoked in such a voluminous manner.
Needless to say, some are not particularly pleased with the notion of a departing commissioner’s vote counting months after his departure. Enter Congress, with the FTC Integrity Act, legislation that would retroactively stop the votes of commissioners from being counted after their departure. (I am more than a little disappointed that the draft was not named The Daryl Dixon Act, but no one checked with me first.) Others have also expressed concerns, including most notably the U.S. Chamber of Commerce, which asserted that the actions contradict recent U.S. Supreme Court case law as well as institutional norms.
So that is the brains behind the zombie vote issue. If the legislation starts to have legs, we will keep you up to date.