The upcoming Supreme Court case SEC v. Jarkesy has been discussed on this blog as a presidential removal case but there are bigger constitutional issues with originalist implications, as a couple of recent amicus briefs highlight. The issues presented in Jarksey (to be argued in December) are:
(1) Whether statutory provisions that empower the Securities and Exchange Commission to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment; (2) whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine; and (3) whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.
This brief from the New Civil Liberties Alliance focuses on the first two issues. From the summary of the argument:
Congress cannot delegate judicial power to the Executive Branch, as it does not belong to Congress. The Constitution vests judicial power in Article III courts, and its location there is mandatory. Casting this inquiry in terms of “delegation” doctrine misses the constitutional point altogether. Congress lacks judicial power, and it may only lawfully locate such power in inferior Article III courts.
By the same token, the Executive Branch is confined to the exercise of executive power. No executive officer can constitutionally exercise the judicial power of the United States. Furthermore, judicial power cannot be subject to political review; yet SEC’s adjudicatory regime is premised on such review as an integral part of its in-house adjudication. By shifting enforcement into administrative tribunals, agencies transform Americans’ fundamental civil liberties into mere options from which the government can escape by taking the administrative path.
One can guess from my approach in this article that I'm sympathetic to this categorical approach to vesting powers. Also, I agree with the brief that it's not a nondelegation doctrine issue. It's a question whether vesting these adjudicatory powers in the agency is necessary and proper to implement Congress' power to regulate interstate commerce. And that question turns on whether the agency's adjudicatory powers are "judicial Powers" under Article III.
(Via Instapundit.)
Also in support of the respondents is this originalist-oriented brief by Edwin Meese, Steven Calabresi and Gary Lawson, which leads with the Seventh Amendment argument:
The Constitution creates a federal government of limited and enumerated powers subject to the Bill of Rights and seventeen subsequent constitutional amendments. The Article III federal courts have the limited and enumerated power to hear three categories of cases and controversies: (i) Cases in Law; (ii) Cases in Equity; and (iii) Cases in Admiralty. The federal courts also have the limited and enumerated power to hear certain cases or controversies based on the identity of the parties to a lawsuit. Congress has the power to constitute Article I tribunals inferior to the Supreme Court to hear public-rights cases, such as the U.S. Court of Federal Claims or the tribunals of Administrative Law Judges who work for the Social Security Administration. The judges on these tribunals exercise executive power and must therefore be subject to control by the President through direct-decisional, directive, and cancellation powers—that is, the powers of direct control and direction—or through an unlimited removal power, or through all of the above.
The proceeding below was a case in “Law” analogous to the many fraud cases that were prosecuted at common law before the royal courts of justice at Westminster in 1787: (i) the Court of King’s Bench; (ii) the Court of Common Pleas; and (iii) the Court of Exchequer. The proceeding below was not a case in “Equity,” which would have been heard by the Court of Chancery, the only court at Westminster that did not use jury trial for all facts relevant to liability or guilt. (Even the Chancery Court used juries to resolve factual disputes as to which juries were always supposed to have the last word.) It was established in England and Wales in 1787 that respondents would have been entitled to a civil jury trial, and it was established in the United States from 1789 onward that respondents would have been entitled to a trial before a civil jury.
The Securities and Exchange Commission relies on the so-called “public rights” doctrine of Atlas Roofing Co., Inc. v. Occupational Safety and Health Review Commission, 430 U.S. 442 (1977). This Court reasoned in Atlas Roofing that OSHA enforcement actions were not “Suits at common law” to which the Seventh Amendment applies. Similarly, the SEC argues that because of their importance, and because the United States is a party to the suit, securities-fraud enforcement actions do not require a jury trial.
The argument that the Seventh Amendment right to a civil jury trial does not attach to civil cases when the government is a party is Orwellian and terrifying. Civil jury trials are important in common-law cases between two private parties, as our ancestors made clear. But civil jury trials are even more essential in securities fraud cases to which the federal government, with its enormous financial and litigation resources, is a party. Civil and criminal juries are the shield with which the Constitution protects litigants when the all-powerful federal government sues or prosecutes them. The need for the jury-trial guarantee has been recognized in England since Magna Carta, if not before, and in the United States since the adoption of Article III in 1788, the first Judiciary Act in 1789, and the Seventh Amendment in 1791.
If the Court cannot distinguish Atlas Roofing on this case’s facts, it should overrule Atlas Roofing as an obvious
misinterpretation of the Seventh Amendment and the most basic rights of American citizens.
Posted at 6:14 AM