I've finally had a chance to finish Jarkesy v. SEC. There is no reason for that opinion to have been nearly 100 pages. The Justices need to grant more cases, reduce the time of oral argument, and spend less time writing encyclopedias. I could read Atlas Shrugged three times, and it would still take less time than reading through all the Court's decisions from this term. Some of the majority opinions are longer than the John Galt speech. Speaking of Rand…
From the 1930s through 2010, the Securities and Exchange Commission (SEC) would seek civil penalties in federal court. But that practice changed with the Dodd Frank Act, which gave the SEC the choice to bring suit in federal court, or through "in-house" adjudications before an ALJ. Unsurprisingly, the SEC prefers Door #2. The government is more likely to win before an administrative law judge. Moreover, the rules favor the government, as the Federal Rules of Civil Procedure and Evidence do not apply to these internal proceedings. And if the defendant appeals the agency's ruling to federal court, the ALJ's findings are nearly dispositive. Justice Gorsuch's concurrence well explains how this process is stacked against the accused.
The crux of Chief Justice Roberts's majority opinion is that the SEC must bring suit for civil penalties in a federal court, where a jury trial is available under the Seventh Amendment. To be frank, I'm not sure that Jarkesy really cares about having a jury. Rather, he would prefer to be in a federal court with a neutral Article III judges, and all of the protections of the Federal Rules of Civil Procedure and Evidence. I question how many SEC suits brought in federal court wind up before a jury trial. The Seventh Amendment is a means to an end.
