Jarkesy’s Potential Implications for EPA Administrative Proceedings
On June 27, 2024, the U.S. Supreme Court decided SEC v. Jarkesy,[1] holding that when the Securities and Exchange Commission (SEC) alleges a defendant has violated securities antifraud provisions and seeks civil penalties, the defendant is entitled to a jury trial in federal court under the Seventh Amendment. The ruling restricts the SEC’s use of its own in-house administrative tribunal with its own administrative law judges (ALJs), which the SEC has historically used to pursue antifraud claims. While the Court’s ruling focuses on the SEC, the principles underlying the decision may be applied more broadly to restrict the ability of other federal agencies, including the Environmental Protection Agency (EPA), to pursue civil penalties via their own administrative proceedings.
Upcoming Decision From U.S. Supreme Court Could Further Restrain Authority of Administrative Law Judges
Two cases recently argued before the U.S. Supreme Court address the question of whether federal agencies have authority to mandate proceedings before administrative law judges (ALJs). The plaintiffs in these cases have challenged the constitutionality of ALJ proceedings and, depending on how broadly the resulting opinion is written, the Court’s decision could limit the authority of ALJs across the federal government including within the Environmental Protection Agency (EPA).
