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The Federalist: Could SEC v. Jarkesy Be The SCOTUS Case That Brings Down The Administrative State?

This article was written by Auguste Meyrat and published in The Federalist.

Last Friday, the U.S. Supreme Court heard arguments for Securities and Exchange Commission v. Jarkesy, which challenges the authority of the administrative state. The defendant is George Jarkesy, a conservative radio host who was fined over half-a-million dollars by the SEC for allegedly defrauding investors and appealed this sentence by arguing that the SEC does not have the constitutional authority to do this.

His legal team makes three arguments: (1) The SEC is violating the Seventh Amendment, which guarantees a trial by jury; (2) the SEC doesn’t have the authority to adjudicate these matters since it’s an executive agency, not a federal court; and (3) the SEC judges are unfairly protected from serious political and legal accountability. All these arguments add up to condemn the administrative state as a whole, which Jarkesy’s team claims “is effectively rigged against virtually every defendant that goes before an ALJ [administrative law judge].”

Based on Supreme Court justices’ questioning (specifically those appointed by Trump), Jarkesy may be actually successful in winning his case. According to a report from The New York Times, Justice Kavanaugh took issue with the fact that the SEC is basically acting as the judge, jury, and executioner; Justice Gorsuch pointed out the lack of accountability that results from no jury option; and Justice Coney Barrett was bothered by the blurriness between what counts as public and private law.

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