On Wednesday, the Supreme Court will hear oral argument in SEC v. Jarkesy, a major constitutional challenge to the future of agency adjudication and enforcement. In an essay forthcoming in the Ohio State Law Journal, David Zaring and I set forth a way for the SEC, Congress, or maybe even the Supreme Court could save agency adjudication. In particular, we argue that, in certain circumstances, the regulated party should have a right to remove an enforcement action from an in-house agency adjudication to an Article III federal court

We’ve posted a draft of the essay, entitled The Right to Remove in Agency Adjudication, to SSRN here. Here’s the abstract:

In SEC v. Jarkesy, the Supreme Court will decide the constitutional future of agency adjudication, especially in the context of agency enforcement actions and the imposition of civil penalties. If the Court agrees with the Fifth Circuit on any of its three independent reasons for unconstitutionality, agency enforcement and adjudication schemes across the federal regulatory state will be severely disrupted, in ways that are detrimental to both the regulator and the regulated. In this Essay, we propose a path forward: In certain circumstances, the regulated party should have a right to remove an enforcement action from an in-house agency adjudication to an Article III federal court. This right to remove would avoid the constitutional issues Jarkesy presents while also advancing the goals of agency enforcement and adjudication better than the alternative of only bringing enforcement actions in federal court. Moreover, the SEC could adopt this right to remove now, before the Court decides Jarkesy, through internal administrative law. Congress, of course, could also enact it through ordinary legislation. It is also possible that the Court itself could adopt this remedy in Jarkesy, based on its recent decisions in United States v. Arthrex and Axon Enterprise v. FTC.

Comments are definitely welcome!

[11/27/2023 Update: Today I did a quick post on how the Supreme Court might be able to craft a right-to-remove remedy in Jarkesy itself.]