Violators of various laws enforced by the Securities and Exchange Commission long have been subjected to in effect a trial on the merits of alleged violations conducted by judges working within the SEC itself. And indeed the whole systems always has had the unfortunate overtone of constituting one agency as both prosecutor and judge. In 2010, the Dodd Frank Act nonetheless expanded the powers of SEC administrative judges, part of the effort to facilitate enforcement following the economic meltdown of 2008.
A few days ago, a panel of judges in the Federal Fifth Circuit (one of many circuits but the senior appeals court level in the Federal system before you end up in the Supreme Court) declared they SEC administrative judge system unconstitutional as violating the right to a jury trial, let alone by judges who cannot be removed from office.
This will be appealed, as it strikes at the core of the SEC matrix of enforcement and is a bell-weather case for many other governmental agencies. The underpinning of the decision is a theory known as “non-delegation”: it is imporoper for Congress to delegate its legislative powers.
These issues already are on the SCOTUS docket for next session, and there is great uncertainty as to expected results given the conservative bent of the Supreme Court. This is the third consecutive post by me this date admonishing readers to “stay tuned” in significant areas of legal practice.
A word of apology for failure to post for a bunch of weeks; the law racket is pretty busy, we had a viral visitor in our house, the college kid returned spreading expected chaos. As Bogie once said: “destiny takes a hand.” I will try to do better….