Adjudicating in the Shadows

Abstract

This work in progress addresses the disparity between the breadth of subject-matter jurisdiction of agency enforcement proceedings and expansive agency remedial authority and the level of procedural protections agency tribunals provide for regulated parties. As the Supreme Court is revisiting the constitutional question whether the Seventh Amendment jury trial right requires certain common-law-like claims such as fraud charges before the Securities and Exchange Commission to be brought in Article III courts, this piece examines the statutory history of congressional authorization of increasing subject matter jurisdiction and remedial authority for agency adjudicators. As that jurisdictional and remedial authority has ramped up in the twenty-first century, Congress has not imposed much if any new mandatory procedural protection for agency consideration of these matters. Agencies also have not on their own taken significant steps to apply the same, uniform, level of minimal procedural protection to private parties as those provided in standard Article III courts under the Federal Rules of Civil Procedure.

In addition, despite a number of agencies’ increasing common-law-like authority to impose significant punitive penalties, these agencies have not established transparent, clear standards about when they will bring charges in-house rather than before an Article III court. Rules governing recusal for agency adjudicators and the initiation and conduct of settlement proceedings also are not subject to in-depth regulation or enforcement by Congress. This piece argues that one reason the congressional expansion of agency adjudicator subject-matter jurisdiction and remedial authority is proving problematic is that it has not been accompanied by a reconsideration of whether current agency procedural protections are commensurate with adjudicators’ expanded subject-matter and remedial authority. If agencies are going to exercise a combination of traditionally equitable remedies as well as common-law legal remedies such as significant monetary penalties, it bears consideration whether agencies also should be required to provide the procedural protections available in contemporary Article III courts rather than the more efficient and streamlined procedural protections that may have been more appropriate when agencies were providing more equitable relief such as enjoining lawful practice or providing restitution.