The Court’s Ruling:
The federal Securities and Exchange Commission’s imposition of a statutory civil penalty against a person whom it had found guilty of a statutory securities fraud violation, violated the Trial By Jury Clause of the Seventh Amendment to the United States Constitution. To obtain a statutory civil penalty from a private individual, a federal administrative agency may only proceed against the individual in a federal court-of-law, where the parties have the right to a jury trial.
My Opinion:
The Seventh Amendment provides that “In Suits at common law. . . the right of trial by jury shall be preserved. . . .” An administrative agency’s proceeding against a private individual for a statutory civil penalty is not a “Suit[…] at common law” subject to the Seventh Amendment. However, an administrative agency’s trial of its own case against a private individual violates the Judicial Power Vesting Clause of Article III, Section 1 of the Constitution. To obtain a statutory civil penalty from a private individual, a federal administrative agency should be required to proceed against the individual in a federal court.
Dan D. Rhea
RECENT RULINGS 