Last month, the U.S. Supreme Court decided Securities & Exchange Commission v. Jarkesy, No. 22-859 (U.S. June 27, 2024), holding that the SEC cannot assess civil penalties for securities fraud through an administrative tribunal. As the court well-understood, the decision has implications for many areas of federal regulatory enforcement, including environmental law. So what does it mean for the environmental practice?

George Jarkesy committed securities fraud. The SEC had the option to sue for penalties in district court but elected to pursue assessment of penalties in an administrative tribunal established by the Dodd-Frank Act. The administrative law judge awarded the penalties and the commission affirmed. Jarkesy petitioned for review of that decision in the court of appeals, arguing that the award of penalties violated his Seventh Amendment right to a jury trial. The court of appeals reversed the commission, agreeing with the Seventh Amendment argument. The Supreme Court affirmed in an opinion by the chief justice joined by the court’s six conservatives. In addition, Justice Neil Gorsuch with Justice Clarence Thomas concurred with an additional opinion; Justice Sonia Sotomayor and the other two liberals dissented.