It seems that the federal administrative agencies are besieged by constitutional attacks on all sides. That the administrative-state cases — plural — changing America will arise sooner or later has been in little doubt. But the fact that the issues would arise in a single case was not on anyone’s radar. However, this is precisely what has happened.
A serious, concentrated attack on agencies was ossified by the U.S. Court of Appeals for the Fifth Circuit when, on May 18, 2022, it decided Jarkesy v. Sec. & Exch. Comm’n. In a remarkable opinion, a 2-1 panel of the Fifth Circuit held that the Securities and Exchange Commission or actions related to it violated the Constitution in the following ways:
(a) By trying private entities through “in-house” agency proceedings for alleged violations of federal law, in spite of the Seventh Amendment’s Jury Trial Clause;
(b) By devising laws in pursuance of a congressional delegation that lacked an intelligible principle, in violation of the Constitution’s separation of powers and the Legislative Vesting Clause; and
(c) By having Administrative Law Judges who could not be removed by the president, despite the Take Care Clause of Article II, try the petitioners for securities law violations.
In this Taft white paper, partner Sohan Dasgupta details this decision and its ramifications on the federal administrative state.
Download the white paper here.