A new case coming before the Supreme Court Wednesday has fans of the federal administrative state in their own state of panic. In the case Securities and Exchange Commission v. Jarkesy there is a real chance that the very backbone of the rampant powers of the Swamp could be ripped out.
The case involving conservative radio talk show host and fund manager George R. Jarkesy Jr., is challenging the enforcement capability of the SEC through its system of in-house administrative law judges instead of federal courts to judge cases as reported by Reason.
David McGarry, a policy analyst at the Taxpayers Protection Alliance explained for the outlet,
“In Securities and Exchange Commission’s (SEC) v. Jarkesy, the justices will determine the constitutionality of the agency’s system of in-house administrative law judges (ALJs), bureaucrats who often act as judge and jury in the agency’s enforcement actions. Since many federal agencies—including the Federal Trade Commission (FTC), the Environmental Protection Agency, and the Postal Service—utilize ALJs, the case’s outcome will reverberate across the administrative state.”
Jarsky who was accused by the SEC of securities fraud has argued that the use of ALJs violates the Seventh Amendment guarantee of a trial by jury, a claim upheld by the 5th Circuit U.S. Court of Appeals in 2022.
Writing for The Atlantic, Noah Rosenblum opined in alarmed fashion, that Jarsky’s case threatens “the “administrative state”—the agencies and institutions that set standards for safety in the workplace, limit environmental hazards and damage, and impose rules on financial markets to ensure their stability and basic fairness, among many other important things,” in a piece entitled “The Case That Could Destroy the Government.”
Some would say that this isn’t a bug in Jarsky’s case, it’s a feature.
Former New Jersey Superior Court judge Andrew Napolitano predicted that the Supreme Court is likely to “throw out” the federal administrative state in an interview with Newsmax’s “Carl Higbie FRONTLINE” on Monday. He added that this case’s outcome could rewrite how the government works.
“Administrative agencies like the EPA [environment], the SEC [securities], the FDA [drugs] – they write their own laws, they enforce their own laws, they adjudicate violation of their own laws, and they punish those they find guilty.”
“They are legislative, executive, and judicial on their own,” he added referring to the administrative state. “That’s what this challenge is. And I think Mr. Jarkesy’s going to win the challenge, and I think the Supreme Court is going to throw out the administrative state.”