The Future of the Burger Court: Are Key Precedents About to Change?

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 the context of SEC enforcement actions. Justice Neil Gorsuch, in his concurrence, expanded on the implications of the ruling, suggesting that if the precedent from Atlas Roofing is extended, it could necessitate that numerous agency adjudications be conducted in federal court. He pointed out that some agencies lack the authority to seek civil penalties in this venue, indicating a potential need for Congressional action to address these gaps. The ruling raises questions about the applicability of the public-rights doctrine to other agencies, as highlighted by ongoing cases, including one involving SpaceX and the National Labor Relations Board (NLRB). The dissenting opinion acknowledged the uncertainty surrounding how existing labor laws would align with the majority's interpretation.