Civics: litigation and the (non elected) administrative state

Keith Whittington:

In Jarkesy v. Securities and Exchange Commission, a divided three-judge panel of the Fifth Circuit put a shot across the bow of the administrative state. In an opinion written by Judge Jennifer Walker Elrod, the court ruled against the SEC in a securities fraud enforcement case on several constitutional claims. The full opinion can be found here.

Petitioners raise several constitutional challenges tothe SEC enforcement proceedings. We agree withPetitioners that the proceedings suffered from threeindependent constitutional defects: (1) Petitioners were deprived of their constitutional right to a jurytrial; (2) Congress unconstitutionally delegated legislative power to the SEC by failing to provide itwith an intelligible principle by which to exercise the delegated power; and (3) statutory removal restrictions on SEC ALJs violate Article II.

A nondelegation ruling against the SEC is a big deal, but the actual argument is somewhat more modest. The claim is that Congress did not articulate an intelligible principle to guide the SEC on whether to bring enforcement actions in Article III courts or through administrative decision-making. Significant, but pretty fixable.