‘Power Grab!’ Justice Sotomayor Rages Against ‘Judicial Hubris’ of Conservative Majority in Scorching Opinion Read from the Bench

AP Photo/J. Scott Applewhite

Supreme Court Justice Sonia Sotomayor issued a scathing dissent in an opinion released on Thursday, taking the time to read it from the bench to emphasize her objections to what she characterized as the conservative majority’s “judicial hubris.”

The case in question, Securities and Exchange Commission vs. Jarkesy, dealt with the antifraud provisions of federal securities laws that can be enforced by the Securities and Exchange Commission (SEC) in one of two ways, either by 1) filing suit in federal court, which would involve a trial by jury and the use of the Federal Rules of Evidence, or 2) by adjudicating the matter itself with the SEC or a designated Administrative Law Judge serving as the fact finder and deciding discovery disputes, based on the SEC’s Rules of Practice.

Previously, the SEC could only pursue civil penalties in actions that were brought through federal court actions. But the Dodd-Frank Act passed by Congress in 2010 expanded the SEC’s power to pursue civil penalties in cases brought through its in-house process as well.

An investment adviser named George Jarkesy, Jr. and his firm Patriot28, LLC faced an enforcement action for civil penalties brought this way, by the SEC’s in-house enforcement proceedings. The final order imposed a civil penalty of $300,000 after finding that Jarkesy and his firm had committed securities violations. The defendants petitioned for judicial review and the Fifth Circuit vacated the order by finding that their Seventh Amendment right to a jury trial was violated.

In the Jarkesy Supreme Court opinion released Thursday, the 6-3 majority agreed with the Fifth Circuit and held that “[w]hen the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment entitles the defendant to a jury trial.”

Chief Justice John Roberts wrote the majority opinion, calling the question about whether these proceedings invoked the Seventh Amendment right to a jury trial “straightforward.” Roberts was joined in the majority by the rest of the Republican appointees to the Court, with Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett joining his opinion, and Gorsuch filing a separate concurring opinion joined by Thomas.

Sotomayor’s dissent was joined by her other two colleagues who were appointed by Democratic presidents, Justices Elena Kagan and Ketanji Brown Jackson.

In her dissent, Sotomayor began by pointing out that Congress had authorized agencies to adjudicate violations of federal statutes and impose civil penalties without requiring a trial by jury throughout U.S. history, and the Supreme Court “has blessed that practice repeatedly.”

Congress has relied on this “settled judicial construction,” Sotomayor continued, and “has enacted more than 200 statutes authorizing dozens of agencies to impose civil penalties for violations of statutory obligations.” The majority’s holding, she wrote, was “plainly wrong” to say “for the very first time” that Congress cannot authorize an agency to impose civil penalties without a jury trial.

“The majority pulls a rug out from under Congress without even acknowledging that its decision upends over two centuries of settled Government practice,” Sotomayor wrote. This decision was a “threat” to the “separation of powers,” and “upends longstanding precedent,” she argued, and her dissent spent several pages detailing previous cases on this issue. The majority’s “approach to precedent significantly undermines this Court’s commitment to stare decisis and the rule of law,” she wrote.

Sotomayor blasted both the “earthshattering nature” of the majority opinion and how it shrugged off a rule that the agencies “thought long settled, and which remained unchallenged for half a century.” Because of this “mistaken” ruling, she wrote, “the constitutionality of hundreds of statutes may now be in peril, and dozens of agencies could be stripped of their power to enforce laws enacted by Congress.”

“Make no mistake: Today’s decision is a power grab,” wrote Sotomayor, arguing that the majority decision “offends the Framers’ constitutional design so critical to the preservation of individual liberty: the division of our Government into three coordinate branches to avoid the concentration of power in the same hands.”

She concluded by calling the majority’s assertion that it was “protecting liberty” to be “deeply misguided,” and quoted George Washington (citations omitted):

By giving respondents a jury trial, even one that the Constitution does not require, the majority may think that it is protecting liberty. That belief, too, is deeply misguided. The American People should not mistake judicial hubris with the protection of individual rights. Our first President understood this well. In his parting words to the Nation, he reminded us that a branch of Government arrogating for itself the power of another based on perceptions of what, “in one instance, may be the instrument of good . . . is the customary weapon by which free governments are destroyed.” The majority today ignores that wisdom.