Precedents of the Burger Court Facing Reassessment

In a significant ruling, the Supreme Court has clarified the jurisdictional boundaries for the Securities and Exchange Commission (SEC) regarding civil penalty suits. Chief Justice John Roberts, writing for the majority, emphasized that the SEC must pursue civil penalties in federal court, where defendants are entitled to a jury trial under the Seventh Amendment. This decision marks a departure from previous practices established by the Dodd-Frank Act, which allowed the SEC to adjudicate cases internally through administrative law judges (ALJs). The Court's opinion distinguishes the current case from the precedent set in Atlas Roofing, asserting that it does not apply to SEC civil penalty suits. Justice Sonia Sotomayor, however, dissented, arguing that the distinction made by the majority is unfounded. Roberts, typically critical of academic legal opinions, referenced a selection of legal scholars to support his view that Atlas Roofing is an outlier in legal precedent. Justice Neil Gorsuch, in his concurrence, expanded on the implications of the ruling, suggesting that if the Jarkesy case extends beyond the SEC, it could necessitate that numerous agency adjudications be conducted in federal court. He noted that some agencies lack the authority to seek civil penalties in this venue, indicating a potential need for Congressional action to address these limitations. The ruling raises questions about the applicability of the public-rights doctrine in various agency contexts, as highlighted by ongoing cases like SpaceX's challenge against the National Labor Relations Board (NLRB). The dissenting opinion acknowledged the uncertainty surrounding how existing labor laws would align with the majority's interpretation.