Supreme Court Curtails Administrative State In SEC Decision

June 27, 2024

Committee for Justice president Curt Levey issued the following statement on the Supreme Court’s decision today in Securities and Exchange Commission v. Jarkesy. CFJ, along with a number of other groups, filed a Supreme Court amicus brief in the case:

In an important 6-3 decision curtailing the excesses of the administrative state, the Supreme Court held that when the SEC seeks civil penalties for securities fraud, the Seventh Amendment entitles the defendant to a jury trial in an independent Article III court. The defendant cannot be forced to face in-house enforcement proceedings, as was authorized by the 2010 Dodd-Frank Act.

Today’s decision sets an important precedent for similar in-house enforcement proceedings across the federal bureaucracy, when agencies act as prosecutor, judge, and jury in seeking civil penalties. 

This practice is an affront not only to the Seventh Amendment but also the Constitution’s separation of powers. Today’s decision reminds us that the separation of powers is vital to the protection of fundamental liberties, as the Framers emphasized. As Chief Justice Roberts wrote for the majority, “the dissent would permit Congress to concentrate the roles of prosecutor, judge and jury in the hands of the Executive Branch. That is the very opposite of the separation of powers that the Constitution demands."

The Supreme Court has taken a bite out of the administrative state in several major decisions since last spring (and the Court may do so again in the coming days by limiting or overruling the Chevron doctrine). Today’s Jarkesy decision is another important bite. 

The Committee for Justice got involved in this case because pushing back against the growth of the administrative state, while fighting to protect individual liberty and the separation of powers, is central to CFJ’s mission. 

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