TL/DR –
The U.S. Supreme Court will hear the case of Securities Exchange Commission (SEC) v. Jarkesy on November 29, 2023, which could heavily impact the functioning of administrative law judges (ALJs) and the nondelegation doctrine. The case arose from SEC allegations that hedge funds started by George Jarkesy committed securities fraud; however, the U.S. Court of Appeals for the 5th Circuit reversed the SEC’s decision, declaring the actions of SEC ALJs unconstitutional. If the Supreme Court upholds this ruling, it could threaten the functionality of federal agencies that protect Americans, limit Congress’ powers, and potentially overturn 80 years of administrative law.
SEC v. Jarkesy: Supreme Court to Hear Case Which Could Impact Administrative Law Judges
On November 29, 2023, the U.S. Supreme Court will hear SEC v. Jarkesy, a significant case with potential implications on the administrative law judges (ALJs) system and the nondelegation doctrine. There are almost 2,000 ALJs working as independent officials within the executive branch across federal agencies, resolving disputes between agencies and involved parties.
In this case, the Securities Exchange Commission (SEC) found that two hedge funds established by George Jarkesy committed securities fraud, penalizing the involved parties and barring Jarkesy from the securities industry. However, the U.S. Court of Appeals for the 5th Circuit reversed the decision, claiming SEC ALJs and the SEC’s power to adjudicate securities fraud cases as unconstitutional.
Implications of the Case
If the Supreme Court upholds the 5th Circuit’s ruling, it could threaten the functionality of federal agencies protecting American citizens. ALJs play crucial roles in ensuring Americans receive their Social Security benefits, safeguarding their rights to unionize, and regulating U.S. energy sources. A ruling favoring the nondelegation doctrine would limit Congress’s power and prioritize the courts’ policy preferences above elected officials, a precedent that has been discredited for nearly a century.
Details of SEC v. Jarkesy
The SEC found that George Jarkesy violated multiple federal statutes, leading him to challenge the SEC’s adjudication process. If the Supreme Court upholds the 5th Circuit’s ruling, there could be immediate challenges to the constitutionality of ALJs at the National Labor Relations Board and the Occupational Safety and Health Administration, potentially disrupting operations and providing financial benefits to corporations at workers’ expense. This ruling could also overturn 80 years of administrative law.
Additionally, a resurrection of the nondelegation doctrine would curtail Congress’s ability to legislate and concentrate power on the judiciary, as it would overturn the long-standing precedent that Congress has broad powers to delegate authority.
Significance of the Case
The case is part of a long-standing conservative bid to limit governmental assistance to American citizens. Justice Neil Gorsuch of the Supreme Court opened the door to this challenge with a dissent in 2019. The elimination of ALJs would favor right-wing interests supporting this case as part of three Supreme Court cases challenging administrative law, which could limit the government’s ability to cater to American citizens’ needs, solve their problems, and protect their health, safety, and the environment.
Other cases, such as Consumer Financial Protection Bureau v. Community Financial Services Association and Loper Bright Enterprises v. Raimondo, could also potentially eliminate numerous consumer protections and make the Supreme Court the principal decision-maker on the reasonability of a rule enacted at a statute’s direction. A ruling in favor of any or all of these cases would lead to major gains for corporations and significant harm for everyday Americans.
—
Read More US Economic News