Chief Justice’s Opinion in S.E.C. v. Jarkesy
Chief Justice Robert delivered a comprehensive and compelling majority opinion in S.E.C. v. Jarkesy, 603 U.S. __ (2024), ruling that the Securities and Exchange Commission cannot conduct civil fraud trials before its own Administrative Law Judges. Instead, these cases must be tried in federal District Court, where the Seventh Amendment’s right to a civil jury trial must be upheld for all cases categorized as “[suits] at common law,” as opposed to suits in equity or admiralty.
Similar to the landmark decision in District of Columbia v. Heller, 554 U.S. 570 (2008) regarding the Second Amendment, the Supreme Court’s ruling in Jarkesy underscores the importance of upholding the Seventh Amendment against governmental overreach. This decision ensures that Congress and the President cannot disregard the Seventh Amendment’s provisions, much like they previously did with the Second Amendment prior to the Heller case.
Joining Chief Justice Roberts in the majority opinion were Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett. Chief Justice Roberts’ opinion meticulously examined originalist, textualist, and doctrinal legal sources. He argued convincingly that S.E.C. fraud cases fall under the category of “[s]uits at common law” as stated in the Seventh Amendment, thereby necessitating a trial by jury rather than in equity or admiralty courts where jury trials are historically not available.
The Chief Justice’s opinion is well-supported by established Supreme Court precedents. While the ruling does not overturn any previous decisions, it does distinguish Atlas Roofing, Inc. v. Occupational Safety & Health Review Commission, 430 U.S. 442 (1977), a precedent that has faced criticism over the years. Notably, the opinion refrains from addressing Justice White’s assertion that Atlas Roofing was overruled by a Supreme Court case in the 1980s.
Justice Gorsuch penned a compelling concurrence, joined by Justice Thomas, emphasizing the implications of Article III’s guarantee of a life-tenured judge for common law suits and highlighting the Fifth Amendment’s Due Process Clause. He raised concerns about the S.E.C.’s consolidation of legislative, executive, and judicial powers within a single administrative agency, potentially violating the separation of powers doctrine.
On the dissenting side, Justice Sotomayor, along with Justices Kagan and Jackson, presented a vigorous dissenting opinion. She argued that precedent, including Atlas Roofing, supported her position that the S.E.C.’s actions in the Jarkesy case were justified as enforcement of statutory violations falls under the realm of “public rights” that Congress can regulate outside of Article III jurisdiction.
In conclusion, S.E.C. v. Jarkesy represents a significant ruling by a six-justice majority, affirming that the S.E.C. must respect the Seventh Amendment’s provisions by conducting civil fraud trials before Article III judges and providing defendants with the right to a civil jury trial. This decision upholds the rule of law and common sense in the realm of civil fraud litigation.
