News & Analysis as of

Article II Appointments Clause

Supreme Court to Decide Who Can Appoint ALJs

The Supreme Court of the United States, on Friday, January 12, 2018, agreed to decide whether the former practice of the Securities and Exchange Commission (SEC) of having its chief judge appoint administrative law judges...more

SEC Venue Selection: Avoiding Ground-Hog Day

by Dorsey & Whitney LLP on

The Supreme Court agreed to determine whether the SEC’s use of hearing officers is contrary to the Constitution’s Appointments Clause in an order entered in Raymond J. Lucia Companies v. SEC, No. 17-130 on Friday, January 12,...more

DOJ sides with Lucia against the SEC in dispute over whether ALJs are inferior officers

by Ballard Spahr LLP on

The Supreme Court is considering a cert petition requesting that it hear the Lucia case, which we have blogged about extensively due to its potential impact on the outcome of the PHH case. Significantly, the DOJ recently...more

In Reversal, SEC Agrees That Its Administrative Law Judges Are Inferior Officers That Require Commission Appointment, But Still...

by Shearman & Sterling LLP on

On November 29, 2017, the U.S. Solicitor General submitted a brief to the United States Supreme Court in Lucia v. Securities and Exchange Commission, No. 17-130, urging the Court to grant certiorari and resolve a circuit...more

SEC Reverses Course on ALJ Appointments Issue, but Uncertainty Remains

by K&L Gates LLP on

On Thursday, November 30, 2017, the Securities and Exchange Commission (“SEC” or the “Commission”) took action to settle an issue that had been impacting its enforcement efforts for some time: whether its administrative law...more

Supreme Court Likely To Decide Whether To Hear SEC ALJ Issue This Term

As the U.S. Supreme Court commenced a new term last week, one issue of substantial interest to many readers of this blog is whether the Court will address the constitutionality of the Securities & Exchange Commission’s use of...more

SEC ALJs Before the Supreme Court: Will the Court Take The Issue?

by Dorsey & Whitney LLP on

The validity of the SEC ALJs’ under the Constitution’s Appointments Clause is a critical issue the Supreme Court is considering for addition to its docket this term which will begin on the first Monday in October. Petition...more

Circuit Split Cries Out for Supreme Court Review - Have SEC ALJs been operating contrary to the U.S. Constitution?

The District of Columbia Circuit Court of Appeals’ earlier decision in Lucia v. SEC that U.S. Securities and Exchange Commission (SEC) administrative law judges (ALJs) are employees who are not subject to the Appointments...more

D.C. Circuit Considers Reversal of Earlier Decision and May Declare SEC Administrative Law Judges Inferior Officers Subject to...

by K&L Gates LLP on

On Wednesday, May 24, 2017, the U.S. Court of Appeals for the District of Columbia Circuit, sitting en banc, heard arguments in Raymond J. Lucia Cos. v. SEC, a case in which it is tasked with deciding whether the...more

SEC Stays ALJ Cases Subject to 10th Circuit Review

by Burr & Forman on

On Monday, May 22, the SEC stayed all its administrative proceedings assigned to an ALJ in which a Respondent has an option for review by the 10th Circuit. (Securities laws provide appellate review of SEC administrative...more

SEC Enforcement, ALJs and the Appointments Clause – Part II

by Dorsey & Whitney LLP on

This is the second of two articles reviewing the arguments of the parties in SEC v Raymond J. Lucia Companies, Inc., v. Securities and Exchange Commission, No. 15-1345 (D.C. Cir. Argument May 24, 2017). In that case the en...more

SEC Enforcement, ALJs and the Appointments Clause

by Dorsey & Whitney LLP on

The future of the SEC’s administrative enforcement process and, in particular its Administrative Law Judges, will be the focus of the D.C. Circuit this week as the Court, sitting en banc to hear oral argument in SEC v Raymond...more

Circuits Split Over Constitutionality of SEC’s Administrative Law Judges

by Carlton Fields on

The Tenth Circuit Court of Appeals, in Bandimere v. SEC, recently held that the SEC’s administrative law judges (ALJs) are “inferior officers” whose appointments violate the Appointments Clause of the U.S. Constitution...more

Court Grants CFPB's Petition for Rehearing in PHH

The D.C. Circuit has vacated its prior order in PHH Corporation v. Consumer Financial Protection Bureau and ordered the matter be reheard en banc. The parties have been specifically asked to address the following issues in...more

2016 Year In Review: Securities Litigation And Regulation

2016 was an active year in securities litigation. In the first half of 2016 alone, plaintiffs filed 119 new federal class action securities cases. It was also a busy year for SEC enforcement proceedings, with a record 868...more

Tenth Circuit ruling on constitutionality of SEC administrative judges: implications for CFPB

by Ballard Spahr LLP on

Just before year-end, the U.S. Court of Appeals for the Tenth Circuit, in Bandimere v. United States Securities and Exchange Commission, set aside an SEC decision finding the petitioner liable for violating various securities...more

Appellate Court Decision Casts New Doubts Regarding SEC Administrative Actions

by Bryan Cave on

A recent federal appellate decision casts new doubt on the SEC’s practice of using its own administrative law judges (ALJs) to hear actions brought by the SEC Enforcement Division. In a decision late last month, the U.S....more

Circuits Split - Tenth Holds SEC ALJs Unconstitutional

by Burr & Forman on

The Tenth Circuit recently held that the SEC’s in-house judges are “inferior officers” hired in violation of Article II’s Appointment Clauses, creating a split with the D.C. Circuit over the issue. The Tenth Circuit held...more

D.C. Circuit Upholds Constitutionality of SEC Administrative Proceedings

by Shearman & Sterling LLP on

On August 9, 2016, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit issued Lucia v. SEC, a significant decision that holds that the Securities and Exchange Commission’s (“SEC” or...more

D.C. Circuit Upholds Constitutionality of SEC Administrative Law Judges

The Securities and Exchange Commission (“SEC”) scored a significant victory yesterday in its quest to defend the increased use of its in-house judges when a three-judge panel of the D.C. Circuit ruled that the appointment of...more

ALJs are A-OK: D.C. Circuit Upholds Constitutionality of SEC In-House Courts

In several recent decisions we have covered, Federal Circuit Courts have unanimously ruled that respondents in an SEC enforcement action cannot bypass the Exchange Act’s review scheme by filing a collateral lawsuit in federal...more

D.C Circuit rejects constitutional challenge to SEC’s use of administrative law judges

by Ballard Spahr LLP on

A challenge to the constitutionality of the SEC’s use of administrative law judges (ALJ) was rejected by the U.S. Court of Appeals for the D.C. Circuit. In Raymond J. Lucia Companies, Inc. et al. v. Securities and Exchange...more

DC Circuit Upholds SEC ALJs in First Merits Opinion

by Burr & Forman on

The D.C. Circuit has affirmed that SEC ALJs are not constitutional Officers subject to the Appointments Clause, rejecting perhaps the strongest of the constitutional challenges to the Commission’s administrative forum. The...more

The SEC Retains its House Advantage During Administrative Proceedings

Amendments to the Rules of Practice Do Little to Address Criticism that the Deck is Stacked - Facing pressure from industry practitioners and in the wake of constitutional challenges in multiple jurisdictions, the...more

Supreme Court Declines to Review Constitutionality of SEC In-House Court

by Carlton Fields on

The SEC’s increased use of its own "home court" for enforcement proceedings has triggered constitutional challenges to SEC administrative proceedings (APs). See "Defendants Challenge SEC’s Increased Use of Administrative...more

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