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Judge should dismiss ICE, Black Knight’s constitutionality claims, FTC argues

ICE, Black Knight's claims to dismiss constitutionality and separation of power claims are impertinent: FTC

The Federal Trade Commission (FTC) asked a judge to dismiss Intercontinental Exchange (ICE) and Black Knight‘s claims over the agency’s constitutionality and separation of power as “impertinent” and “immaterial.”

The FTC, which is trying to prevent a merger between the two mortgage tech firms, said the two companies made “bare statements of legal conclusions that fail to meet the required pleading standards,” according to a filing made this week. 

“First, [ICE and Black Knight] concede that the constitutional issues they have raised as counterclaims are not required to decide the FTC’s request for a preliminary injunction,” the FTC said, arguing that ICE and Black Knight’s claims meet the standards for impertinence and immateriality. 

In addition, FTC argued that putting aside ICE and Black Knight’s counterclaims and concession, the constitutional defenses are impertinent and immaterial to the issues the Ninth Circuit held that a court needs to resolve in deciding “whether to grant an FTC claim to preliminary enjoin a merger,” the agency said.

ICE and Black Knight didn’t respond to requests for comment. 

In April, ICE and Black Knight requested that Federal District Court for the Northern District of California Judge Araceli Martinez-Olguin declare the FTC’s structure unconstitutional in separate filings. 

The filings were in response to the agency petitioning a federal court to issue a temporary restraining order (TRO) and preliminary injunction (PI) that prevents ICE from going forward with the deal to buy Black Knight.

“It should enjoin the FTC from subjecting Black Knight to its unfair and unconstitutional internal forum,” Black Knight said in April.

Amid antitrust concerns of the ICE and Black Knight merger, the FTC sued ICE to block the proposed acquisition of Black Knight in March. The agency alleged the merger would reduce competition in key areas of the mortgage process and ultimately raise costs for lenders and homebuyers. 

Prior to the the agency’s lawsuit against ICE, Black Knight agreed to sell its loan origination system, Empower, to a subsidiary of Canada’s Constellation Software Inc. in March and said it would address any concerns raised from the FTC.

“Rather than engage with and consider the divestiture, the FTC rushed to file an administrative complaint in the FTC’s administrative court in March 2023 that failed to account for the divestiture’s effect,” Black Knight said in its filing in April. 

The FTC’s administrative hearing on the deal is scheduled for July 12.

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