United States Supreme Court Issues Ruling in Agreement With Amicus Brief Filed by Brown Rudnick Attorneys
PUBLISHED ON: 06/21/2018
The United States Supreme Court ruled today in Lucia v. Securities and Exchange Commission that SEC administrative law judges have not properly been appointed, and that a hearing held before an administrative law judge was invalid as a result. The Court reasoned that SEC ALJs are inferior officers of the United States and therefore subject to the constitutional requirements for appointing inferior officers, requirements the SEC disregarded. The decision reverses a prior ruling by the U.S. Court of Appeals for the District of Columbia. Brown Rudnick attorneys Stephen Best, Alex Lipman, Justin Weddle, and Ashley Baynham filed an amicus brief in support of the position that administrative law judges were inferior officers. Read the full brief here or download it above.
The SEC has brought numerous enforcement actions before administrative law judges since the passage of the Dodd-Frank financial reform act. Dodd-Frank made administrative proceedings more attractive to the agency than lawsuits in federal court, where defendants enjoy more robust due process rights. The Court's ruling today has broad implications for how the SEC attempts to use administrative proceedings moving forward, and invalidates, at the very least, previous hearings and rulings by SEC administrative law judges whose appointment was challenged by litigants.
The Supreme Court's full ruling can be read here.