Last week, the Supreme Court issued what should be two relatively uncontroversial opinions. One affirmed that people faced with ruinous penalties are entitled to a trial; the other said that when they get to trial, there should be no thumb on the scale in favor of the prosecution. The fact that these two decisions are among the most controversial of the term raises a question: Who’s afraid of due process, and why?
In Jarkesy v. SEC, the Securities and Exchange Commission sought to try a man for securities fraud in-house rather than in federal court. Naturally, the man objected. He had good reason to doubt the forum’s impartiality, given the close working relationship between the agency’s enforcement staff and its adjudication staff. For example, the same commissioners who decide SEC appeals are the very people who green-light prosecutions in the first place. This means that by the time your case is on appeal, the person deciding it will have already prejudged the evidence when it was presented to them by your prosecutors behind closed doors.
Not surprisingly, the commission seldom rules against itself. From 2010 to 2015, enforcement staff boasted a win rate greater than 90 percent for in-house prosecutions, compared with just 69 percent when it went to federal court. But no longer. This week, the Supreme Court ruled that under the Seventh Amendment, individuals like Jarkesy are entitled to seek a jury trial rather than submit to in-house proceedings. In short, the SEC can no longer act as a prosecutor, judge, jury, and executioner.
The facts of Loper Bright v. Raimondo are similarly sympathetic. There, a group of family-owned, family-operated fishing companies challenged an agency rule that required them to pay for the salaries of the federal monitors. The fishermen acknowledged that the agency could force them to carry a monitor on board to look for violations of federal law, but they argued that the agency lacked the statutory power to force them to pay for it. Usually, a judge would consider both sides’ arguments and decide who is right. However, because of a doctrine called Chevron deference, the court deemed itself obligated to defer to the agency’s interpretation of the statute.
No longer. The Supreme Court ruled that Chevron deference is not required and not warranted. Courts can consider an agency’s opinion and expertise but are not required to rotely defer to it.
These two holdings — individuals are entitled to a jury trial, and, when they get there, they are entitled to a neutral judge — used to be considered bedrock principles of our Constitution. And most people recognize them as such in the context of criminal law. But when it comes to our behemoth administrative state, among some, sympathy for due process has evaporated.
Critics have argued that allowing courts to second-guess bureaucrats would upset the democratic process and institute judges as policy-makers. But that gets judging wrong. Rather than deciding whether an agency’s regulations are a good idea, judges ask whether the agency has the statutory authority to enact those regulations in the first place.
Critics have further insinuated that the defendants in administrative proceedings are undeserving of due process. Some have written George Jarkesy off, for example, as a hedge-fund bro and argued that more due process would make it easier for corporations to break the law — or even bring the administrative state to a halt.
It bears emphasizing that thousands of people find their livelihoods threatened each year by enforcement actions; some of them wind up there innocently, and some of them do not. But due process exists to protect them all, and it’s not something we should throw away just because it’s inexpedient.
Due process is expensive. And sure, the more you regulate, the more due process you’ll have to afford. But consider the costs of scrapping these protections. Many countries provide less due process — but it comes at the expense of confidence in government practices and of just outcomes. So long as agencies continue to pass regulations related to everything from gas stoves to Greek yogurt, and so long as they continue to impose significant penalties for any infractions, they’ll have to afford people their constitutional rights, whatever the cost. This won’t cause the government to grind to a halt, although it may force bureaucrats to more carefully consider which regulations are worth passing and enforcing.
Ultimately, Jarkesy and Loper Bright merely extend uncontroversial due-process rights for the accused to the behemoth administrative state. This is something that champions of a fair and just society should celebrate — just as they do in other contexts.