June 26, 2022

Volume XII, Number 177

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June 24, 2022

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June 23, 2022

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The Fifth Circuit Sides With Justinian and Blackstone

As has been widely reported, the Fifth Circuit Court of Appeals this week addressed the legal status of the administrative courts of the Securities and Exchange Commission.  In short, the Court held:

  • The SEC's in-house adjudication of Petitioners' case violated their Seventh Amendment right to a jury trial;

  • Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I's vesting of "all" legislative power in Congress; and

  • statutory removal restrictions on SEC ALJs violate the Take Care Clause of Article II.

Jarkesy v. SEC, 2022 U.S. App. LEXIS 13460, *1

The independence of administrative law judges has been a cause for concern since the days of the Roman empire.  The Code of Justinian famously intones: "Ne quis in sua causa iudicet vel sibi ius dicat." CJ 3.5.0.  Generally this is translated as "no one should judge his own case".  My own closer translation is "lest anyone should judge his own case or sit as judge for himself".

Perhaps Sir William Blackstone was correct when he warned:

Every new tribunal, erected for the decision of facts, without the intervention of a jury, (whether composed of justices of the peace, commissioners of the revenue, judges of a court of conscience, or any other standing magistrates) is a step towards establishing aristocracy, the most oppressive of absolute governments.

Commentaries on the Laws of England, Book III, ch. 23.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 140
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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