May 17, 2022

Headed to the Supremes: The Court to Consider the SEC’s ALJs (Again)

Yesterday, the U.S. Supreme Court agreed to review whether the SEC’s Administrative Law Judges are unconstitutionally protected from removal. The case is Securities and Exchange Commission v. Michelle Cochran. The question in the case is:

whether a federal district court has jurisdiction to hear a suit in which the respondent in an ongoing [SEC] administrative proceeding seeks to enjoin that proceeding, based on an alleged constitutional defect in the statutory provisions that govern the removal of the administrative law judge who will conduct the proceeding.

The Supreme Court is expected to hear arguments in these this case and a related FTC case in the Fall. You may recall that, in its June 21, 2018 opinion in Lucia v. Securities and Exchange Commission, the Supreme Court held that SEC ALJs are “Officers of the United States” under the Appointments Clause of the U.S. Constitution, and are not mere employees. I have been very interested in these SEC ALJ cases because I started out my career at the SEC as a clerk in the Office of Administrative Law Judges.

– Dave Lynn