Senator Ted Cruz (R-TX) said on Thursday that the Federal Trade Commission may be violating Americans’ due process rights by using a “fringe, left-wing” legal theory to sue companies for alleged racial discrimination, according to a letter exclusively shared with The Daily Wire.
In the letter, Cruz asks FTC Chair Lina Khan to provide information on whether the commission was filing multimillion-dollar lawsuits against corporations based on the theory that disparities must equal discrimination. Cruz, the ranking member of the Senate Commerce Committee, said that the FTC’s reliance on “disparate impact theory” and a controversial statistical model that uses a person’s name to guess their race may be unconstitutional.
“I am concerned that instead of relying on sound evidence and acting within the law, the FTC is suing — and threatening to sue — companies for racial discrimination under the fringe, left-wing disparate impact legal theory,” Cruz wrote. “Perhaps even more troublingly, the FTC is basing such discrimination claims on a discredited and congressionally rejected model that guesses a person’s race based on their name.”
Cruz said that the FTC was “searching for statistical disparities to justify enforcement actions” and that Congress had never granted the commission the authority to bring lawsuits based on that data. He noted that in 2018 Congress blocked the Consumer Financial Protection Bureau from utilizing disparate impact theory.
The letter comes days after FTC Commissioner Melissa Holyoak released a statement saying that the commission should consider the “propriety” of bringing discrimination claims “based on a disparate impact theory, as well as use of such theory against an individual defendant.”
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In his letter, Cruz said that the FTC was using the Bayesian Improved Surname Geocoding (BISG) model to bring lawsuits, a technique the senator said was “flawed” and riddled with “known faults.”
“Stereotyping a person’s race by their name is not just unseemly, but prone to significant inaccuracy,” he wrote. “Moreover, the FTC’s use of race-guessing to bring lawsuits may be unconstitutional.”
Cruz said that the FTC had not disclosed to companies it had sued that it had based some of its analysis on using the BISG model.
“It is understandable why the FTC has not disclosed this practice to companies subjected to enforcement actions: BISG has been rightly criticized for its high error rates for racial minorities,” Cruz wrote.
Cruz said Khan should provide details on each statistical proxy model the FTC has used to generate information to bring enforcement actions over the past five years. He also asked her to provide information on the commission’s use of disparate impact theory.
