S.Ct. Gives Trial Advocacy a Boost With SEC Decision

The Supreme Court's 6-3 opinion today in S.E.C. v. Jarkesy  moves power from an administrative agency to the courts. The question as seen by the six person majority is: "This case poses a straightforward question: whether the Seventh Amendment entitles a defendant to a jury trial when the SEC seeks civil penalties against him for securities fraud." Likewise, Justice Roberts in authoring the majority opinion, sees the answer as simple, "The SEC’s antifraud provisions replicate common law fraud, and it is well established that common law claims must be heard by a jury."  The Court rejects an application of the public rights exception.  Justice Gorsuch has a concurring opinion, signed onto by Justice Thomas. 

The dissenting three - Justice Sotomayor, joined by Justices Kagan and Jackson conclude their opinion with: "By giving respondents a jury trial, even one that the Constitution does not require, the majority may think that it is protecting liberty. That belief, too, is deeply misguided. The American People should not mistake judicial hubris with the protection of individual rights." 

So is this case a big deal?  Will requiring more jury trials with SEC fraud cases mean anything? I think yes.

Jury trials take more time, more expense, and are not as judicially economical. It could mean more people are going to be receiving notices to appear for jury duty.  It could mean that other civil suits may be slower to get to court because more has been added to the docket.  It could mean that the SEC can take fewer cases as jury trials take longer (you need to pick a jury, and you need to wait for verdicts).  It could also mean that the SEC has less incentive to proceed civilly as opposed to sending the case to DOJ for criminal action.

Whether any of this will happen, remains to be seen.  But what is clear is that a part of an administrative agency's power has moved to a different branch of our government.   

There is also the next question that needs to be asked.  Will this decision set in motion a wave to include jury trials with other administrative agencies and will there be limits? Will it require a common law fraud component?

(esp)