I received an email from the Washington legal Foundation re an important upcoming case:
“If the SEC’s constitutional violations have no consequence because the agency may simply ratify all acts taken by its improperly appointed agents, then there will be very little incentive to comply with the Appointments Clause in the future.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—The U.S. Supreme Court will hear oral arguments this coming Monday, April 23, at 10 a.m., in Lucia v. SEC, a case that will decide whether the Securities and Exchange Commission violated the U.S. Constitution’s Appointments Clause by the manner in which it appointed Administrative Law Judges (ALJs) to conduct trials of SEC enforcement actions. WLF Chief Counsel Richard Samp, who co-authored WLF’s
brief in the case and will attend the arguments, will be available Monday afternoon to discuss what the oral arguments may have revealed about likely outcomes.
The Appointments Clause specifies procedures for appointing “Officers” of the United States. The SEC did not comply with those procedures in appointing ALJs, claiming that ALJs are not “Officers.” If the Supreme Court rules that ALJs are, in fact, “Officers,” the validity of many of the trials recently conducted by the SEC’s ALJ (i.e., all cases in which appeals from SEC enforcement orders are still pending) will be called into question.
WLF’s brief urged the Court to rule both that the SEC appointed its ALJs in an unconstitutional manner and that defendants (including Petitioner Raymond Lucia) whose enforcement proceedings were tried before an improperly appointed ALJ are entitled to a new trial. The United States argues that even if the Court rules that the ALJ appointments were unconstitutional, the SEC should be permitted to retroactively “ratify” all the proceedings conducted by those ALJs.