In today’s decision in SEC v. Jarkesy, the Court ruled by a vote of 6 to 3 that when the Securities and Exchange Commission seeks civil penalties against a person for alleged securities fraud, it may not compel that person to defend himself before one of its administrative law judges. Rather, the Seventh Amendment entitles the person to a jury trial in federal court.
Chief Justice Roberts wrote the majority opinion for six justices. In addition to joining the Chief’s majority opinion, Justice Gorsuch (joined by Justice Thomas), argued in a concurring opinion that Article III and the Due Process Clause of the Fifth Amendment “reinforce the correctness” of the Court’s ruling. Justice Sotomayor, joined by Justices Kagan and Jackson, dissented.
It might seem odd that a case involving the Seventh Amendment right to a jury trial would divide the Court ideologically. But what is really at stake is the power of the administrative state.
The divide between the majority and the dissent turns on the so-called “public rights” exception to the Seventh Amendment, an exception that, I gather, has been interpreted unevenly over the decades. Sotomayor would expand even its most expansive version in a way that would make it the rule rather than the exception. The Chief instead relies heavily on a 1987 precedent that, as the Chief points out, so sharply limited a ruling from a decade earlier that the author of that earlier ruling (Justice White) objected that it had been overruled.
Even more remarkably, Sotomayor imagines that separation-of-powers principles support what the Chief accurately describes as the “concentrat[ion of] the roles of prosecutor, judge, and jury in the hands of the Executive Branch.” She writes:
Beyond the majority’s legal errors, its ruling reveals a far more fundamental problem: This Court’s repeated failure to appreciate that its decisions can threaten the separation of powers. Here, that threat comes from the Court’s mistaken conclusion that Congress cannot assign a certain public-rights matter for initial adjudication to the Executive because it must come only to the Judiciary.
It’s one thing to argue that combining the roles of prosecutor, judge, and jury in the SEC is allowed by separation-of-powers principles. It’s quite another to contend that such combination promotes, or might even be required by, those principles.
While I’m at it, I’ll object as well to this grandstanding hackery of Sotomayor’s:
Today, for the very first time, this Court holds that Congress violated the Constitution by authorizing a federal agency to adjudicate a statutory right that inheres in the Government in its sovereign capacity, also known as a public right.
But the majority isn’t disputing that Congress can authorize an agency to adjudicate a “public right.” It instead disagrees with her that the right at issue is a public right. I’d expect much better from opposing counsel, much less from a judicial colleague.