(IntegrityTimes.com) – Conservative judges at the Supreme Court claimed on June 27 that liberal colleagues are selectively reading cases to support their dissenting opinion, which defends the ability of an executive agency to perform the role of “prosecutor, judge, and jury”. Justice Sonia Sotomayor, who was appointed under former President Barack Obama, joined Justices Ketanji Brown Jackson and Elena Kagan in dissenting from the ruling of the majority in SEC v. Jarkesy.
Sotomayor argued that the ruling “upends” the established and longstanding practice of the tripartite government’s coequal partners. Justice Neil Gorsuch accused Sotomayor of being as “picky” as a child at the dinner table. Gorsuch stated Sotomayor had selected only a few cases while leaving plenty “untouched”. In SEC v Jarkesy, the majority upheld the rights of defendants to a trial by jury when the Securities and Exchange Commission hits them with civil penalties.
The Supreme Court ruled in a 6-3 vote in June 27 that when a defendant is accused of violating the federal securities laws’ antifraud provision, and faces civil penalties, the defendant is entitled to a jury under the Constitution’s Seventh Amendment. It is unclear whether the ruling will be applied more widely by both the SEC and other federal agencies.
Sontomayor argued that the ruling jeopardized the constitutionality of hundreds of statutes, and liberal reporters likened the move to throwing a lit match into several dozen federal agencies. They noted that the charges at the heart of the case against George Jarkesy, a hedge fund manager, matter because they are civil rather than criminal. Civil trials are treated differently from criminal trials by the Constitution.
Jarkesy argued that he had been deprived of his Seventh Amendment right to a jury trial. The hedge fund manager faced in-house proceedings over ten years ago relating to fraud charges linked to his business activities. The dissenters argued that federal agencies could lose their authority to enforce laws passed by Congress.
The focus of the case was the decision by Congress to grant SEC the power to use its administrative law judges to rule on enforcement actions in-house, rather than have them adjudicated in federal courts. The Supreme Court concluded that civil securities fraud cases should be handled by the court due to them being “legal in nature” rather than relating to “public rights”.
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