Amicus Brief of Professors John M. Golden and Thomas H. Lee on Non-Article III Adjudication in SEC v. Jarkesy

42 Pages Posted: 30 Sep 2023

See all articles by John M. Golden

John M. Golden

University of Texas at Austin - School of Law

Thomas H. Lee

Fordham University School of Law

Date Written: September 5, 2023

Abstract

Responding to the first question presented in Securities and Exchange Commission v. Jarkesy, 143 S. Ct. 2688 (2023), this brief contends that, consistent with the U.S. Supreme Court’s longstanding public-rights doctrine, the Court should recognize that Congress has constitutional authority to empower federal officials who are not Article III judges to decide whether an individual has violated federal securities antifraud laws and should be assessed civil penalties. Under Supreme Court precedents associated with the public-rights doctrine, there is no Seventh Amendment right to a jury in administrative proceedings before such officials. In the language of the Court’s public- rights doctrine, an SEC enforcement action seeking a civil penalty for violations of federal securities laws is not a matter of private right involving a claim “of the liability of one individual to another under the law as defined,” Crowell v. Benson, 285 U.S. 22, 51 (1932). Rather, such an enforcement action is a matter of public right suitable for adjudication by non-Article III federal officials, such as members of the Commission and ALJs. Outside the Seventh Amendment, there may be alternative Bill of Rights grounds for challenging the process or result of administrative adjudication in Jarkesy. Further, the SEC’s order for creation of a Fair Fund to compensate harmed investors may raise questions under Article III that the ordering of a civil penalty does not raise by itself. But such potential grounds for constitutional challenge do not appear to be properly before the Court in Jarkesy.

Keywords: public rights, private rights, public-rights doctrine, Article III, non-Article III adjudication, Seventh Amendment, Blackstone, Murray's Lessee, Crowell, Atlas Roofing, Union Carbide, Tull, Granfinanciera, Oil States,

JEL Classification: K23, K41

Suggested Citation

Golden, John M. and Lee, Thomas H., Amicus Brief of Professors John M. Golden and Thomas H. Lee on Non-Article III Adjudication in SEC v. Jarkesy (September 5, 2023). Available at SSRN: https://ssrn.com/abstract=4564116 or http://dx.doi.org/10.2139/ssrn.4564116

John M. Golden (Contact Author)

University of Texas at Austin - School of Law ( email )

School of Law
727 East Dean Keeton Street
Austin, TX 78705
United States
(512) 232-1469 (Phone)

Thomas H. Lee

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
212.636.6728 (Phone)

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