The battle lines in the war over the administrative state have been years in the making, and several Supreme Court decisions in 2024 made clear that the battle has been joined. One of them was the Court’s decision in Securities and Exchange Commission v. Jarkesy, in which it held that an SEC administrative proceeding in which the SEC sought civil penalties violated the Seventh Amendment because respondents in such proceedings are not entitled to trial by jury.

While the six-justice Jarkesy majority purported to base its decision on the Seventh Amendment, it ranged afield in getting there. Much of Chief Justice Roberts’ opinion is not about the Seventh Amendment, but about Article III, with the Court’s precedent in both areas playing feature roles. The Court’s conflation of these two lines of cases (not for the first time) raises questions about the true scope of Jarkesy. Many have seen the decision as a body blow to the entire administrative state, while others have argued that its impact may be more limited. Most have conceded that we simply don’t know. While the Supreme Court has not further elaborated on the implications of Jarkesy, the Fifth Circuit has provided an early indicator of what it means in the eyes of lower courts. And the news is not good for agency enforcement functions.

The Seventh Amendment guarantees the right to a jury trial in “[s]uits at common law.” Article III vests in federal courts the “judicial power,” which extends to (among other things) “all Cases, in Law and Equity,” arising under federal law. It is unsurprising that these provisions occasionally collide. Juries are generally unavailable in non-Article III federal tribunals, such as administrative fora, so the question of whether a jury trial is required often arises simultaneously with whether a case must be adjudicated in an Article III court. The Supreme Court, however, has developed different analytical frameworks for the two issues. For purposes of the Seventh Amendment, whether the right to a jury trial attaches to a particular suit depends on whether the relevant claim is, in substance if not name, a “[s]uit at common law.” But for Article III purposes, that test is not sufficient. After all, the Article III judicial power is not limited to suits at common law. It extends to cases arising under equitable, admiralty, and maritime jurisdiction, among other kinds of cases. Article III thus gives federal courts jurisdiction over many matters to which the Seventh Amendment clearly does not apply. One standard that emerged, beginning in the mid-nineteenth century, is whether a matter involves “private rights,” in which case adjudication by an Article III court is required, or “public rights,” in which case Congress can assign a non-Article III forum to adjudicate the claims.

While distinct tests developed under the Court’s Article III and Seventh Amendment jurisprudence, the Court has walked a muddy path between them. Two cases that figure prominently in Jarkesy chart this uncertain path: Atlas Roofing Co. v. Occupational Safety and Health Review Commission (1977) and Granfinanciera, S.A. v. Nordberg (1989).

In Atlas Roofing, the Court considered a Seventh Amendment challenge to OSHA’s administrative enforcement scheme, which included the imposition of monetary penalties. Rather than simply analyze whether the matter was a “suit at common law” within the meaning of the Seventh Amendment, the Court asked whether Congress had appropriately assigned responsibility for these claims to an administrative tribunal “with which the jury would be incompatible.” The Court concluded that assignment to the agency was appropriate because the relevant statutory scheme involved public, rather than private, rights. Since these matters had been appropriately assigned to a forum where no jury was available, there was no Seventh Amendment right to a jury trial. The Atlas Roofing decision thus appears to be about the Seventh Amendment, but it does not get there without passing through Article III. The Court’s logic was that (1) Article III did not require adjudication by a court and (2) Congress appropriately placed the matter in a forum where the Seventh Amendment is inapplicable.

Granfinanciera, the principal precedent on which the Jarkesy majority relied, similarly collapsed the Seventh Amendment and Article III analyses. In that case, the Court held that the Seventh Amendment entitles parties subject to fraudulent conveyance claims in federal bankruptcy court—a non-Article III forum—to a jury trial. The holding in Granfinanciera suggests that the Seventh Amendment operates independently from Article III, since the decision found a jury trial right in a non-Article III forum. But, foreshadowing Jarkesy, the Court’s reasoning combined the inquiries into a single test. In the Granfinanciera Court’s view, “[t]he Seventh Amendment protects a litigant’s right to a jury trial only if a cause of action is legal in nature and it involves a matter of ‘private right’” (emphasis added). Thus, the Court said that in addition to its Seventh Amendment case law, it would also “rely on our decisions exploring the restrictions Article III places on Congress’ choice of adjudicative bodies.”

In Jarkesy, the Supreme Court rendered already-murky waters opaque. The case involved an appeal from an SEC administrative proceeding in which the SEC imposed a $300,000 civil penalty against George Jarkesy and his firm for violations of the antifraud provisions of the securities laws. The Fifth Circuit vacated the SEC’s order on three grounds: (1) that adjudication in the administrative forum violated Jarkesy’s Seventh Amendment right to a jury trial; (2) that Congress violated the nondelegation doctrine by authorizing the SEC to choose whether to litigate in an Article III court or to adjudicate the matter itself; and (3) that the insulation of the SEC administrative law judges from executive supervision through two layers of for-cause removal protection violated the separation of powers.

Relying heavily on Granfinanciera, the Supreme Court agreed that Jarkesy’s Seventh Amendment rights had been violated and did not reach the Fifth Circuit’s other holdings. In affirming the Fifth Circuit, the Court said the case “poses a straightforward question: whether the Seventh Amendment entitles a defendant to a jury trial when the SEC seeks civil penalties against him for securities fraud.” The Seventh Amendment would apply, the Court reasoned, if the relevant claim is “legal in nature,” which turns on “the cause of action and the remedy it provides.” The Court found that “[i]n this case, the remedy is all but dispositive” because “money damages are the prototypical common law remedy.”

So far, so good. Putting aside whether the Court was correct in determining that the SEC proceeding was sufficiently analogous to common law actions, it at least was applying a well-established Seventh Amendment framework. And under that framework, the most important consideration was the remedy sought. However, the majority opinion then veers into Article III territory. Both the government and the dissent, relying on Atlas Roofing, argued that the matter could appropriately be adjudicated by the administrative tribunal because it involved “public rights.” The second part of the majority opinion responds to that argument. The majority said, “[W]e have repeatedly explained that matters concerning private rights may not be removed from Article III courts.” Distinguishing prior public rights cases, the Court said the antifraud provisions of the securities laws target the same kind of conduct as common law fraud and the matter was therefore a matter of private right. Justice Gorsuch, in a concurrence joined by Justice Thomas, expressly found that the SEC’s enforcement proceeding was unconstitutional not only under the Seventh Amendment, but also under Article III.

The holding in Jarkesy could be seen as one merely about the SEC’s efforts to obtain money penalties in the jury-free administrative forum. But, as illuminated in Justice Gorsuch’s concurrence, something much broader lurks in the second part of the decision. Taken individually, both parts of the majority opinion can be seen as consistent. In both, the Court determined that the nature of the claims (and, with respect to the Seventh Amendment, the remedy) put the case within the boundaries of the Seventh Amendment and Article III, respectively. However, that begs questions the majority did not answer. If the decision was “just” a Seventh Amendment decision, then could the SEC cure the defect in future proceedings by seeking only equitable remedies, such as cease-and-desist orders, industry bars, disgorgement, and undertakings? Or, in theory, could it be cured by authorizing the administrative forum to conduct a jury trial? If Jarkesy is really an Article III decision, then those cures would be ineffectual. Under the Article III rationale, an administrative forum is simply the wrong place for a dispute involving private rights, regardless of what remedies are sought or whether assembling a jury in that tribunal is possible. 

The task of solving the Jarkesy puzzle—a challenging one—has so far been left to the lower courts, and the Fifth Circuit recently took one of the first stabs at a solution. On April 17, 2025, the Fifth Circuit issued a decision in AT&T v. Federal Communications Commission. The case involved a $57 million “forfeiture penalty” imposed on AT&T by the FCC arising from AT&T’s violations of Section 222 of the Telecommunications Act (requiring that certain customer information be treated confidentially). AT&T appealed the FCC’s order to the Fifth Circuit and argued, among other things, that “the Commission’s enforcement regime is unconstitutional under Article III [and] the Seventh Amendment.”

The three-judge panel, in a unanimous ruling (with one of the three concurring without separate opinion), agreed with AT&T and vacated the FCC’s order. The court made clear at the outset that it did not view Jarkesy as purely a Seventh Amendment case. Rather, it said, its task was to “determine whether, following Jarkesy, the Commission’s enforcement regime also violates the Seventh Amendment and Article III.” The court first examined the Seventh Amendment issue, which turned on “the cause of action and the remedy provided.” It found Jarkesy indistinguishable and thus concluded that AT&T’s right to a jury trial was violated. Moving to the Article III analysis, the court considered whether the “public rights” exception authorized the case to be heard administratively. Relying extensively on Jarkesy, the court found that it did not.

In the eyes of the Fifth Circuit, at least, the solution to the Jarkesy puzzle is that it is both a Seventh Amendment and an Article III decision. The court extracted from Jarkesy not only a rule about the Seventh Amendment but also one about Article III, even though the Jarkesy majority purported to base its holding only on the Seventh Amendment. That means Jarkesy extends beyond the application of the Seventh Amendment to claims for monetary penalties or other legal remedies in administrative tribunals. Moreover, the court did not merely hold that the proceeding against AT&T was unconstitutional. It held that the FCC’s entire enforcement regime was unconstitutional, apparently without respect to the remedies sought. (Like the SEC, the FCC has the statutory authority to impose various non-monetary remedies administratively.) This second dimension follows from the first. If Article III prohibits agency adjudication of a claim, then it makes no difference what remedies are sought. Any attempted adjudication of that claim outside an Article III court must fail. The Fifth Circuit thus treated Jarkesy’s discussion of Article III as part of its holding and, effectively, an alternative ground for the decision.

If the Fifth Circuit’s interpretation of Jarkesy as an Article III case finds purchase in other courts, then the enforcement programs of many agencies will be hobbled. The key question that every agency with an administrative adjudication apparatus must answer is whether the claims pursued in that forum concern private or public rights. If the claims relate to private rights, then they simply cannot go forward. Both the Supreme Court in Jarkesy and the Fifth Circuit in AT&T took narrow views of the public rights exception, suggesting that few agencies will be able to establish that the claims they bring fall within it. And the AT&T decision demonstrates that the logical outcome of the Article III rationale is wholesale invalidation of agency enforcement regimes that rely on administrative adjudication. While some agencies (like the SEC) may pivot to bringing enforcement cases in federal court, others (like the FCC) have no statutory authority to do so. For defenders of the administrative state, this would be the worst-case outcome.

The demise of administrative enforcement is not predestined. The hybrid approach of Jarkesy and AT&T does not inevitably lead to the unconstitutionality of every administrative enforcement regime. Whether a particular regime is unconstitutional will depend on, among other things, the court’s application of the public versus private rights test and whether the court believes the claims at issue are so analogous to common law rights of action that the Seventh Amendment is triggered. The answers could differ across agencies and across courts, and perhaps even from case to case within the same administrative regime. The Jarkesy Court emphasized the particular remedy sought in the SEC’s enforcement action (money penalties), which it described as “all but dispositive.” That leaves open the possibility of different outcomes where monetary penalties are not sought, or where the statutory basis of monetary penalties is different.

Other circuits have yet to weigh in on the impact of Jarkesy on the enforcement regimes of other regulators (or, indeed, on whatever remains of the SEC’s administrative enforcement regime), though the Third Circuit has said that while Jarkesy “suggest[s] that the two provisions [Article III and the Seventh Amendment] are connected,” they could be unlinked. However, given the not-so-hidden message of Jarkesy and prior cases collapsing the Article III and Seventh Amendment analyses, it appears likely that the Fifth Circuit’s interpretation of Jarkesy will be adopted elsewhere. To the extent a circuit split develops on the scope of Jarkesy, the Supreme Court may be called upon to resolve it. The messaging in the Jarkesy majority opinion about Article III and the fact that two concurring justices found Article III to be a separate basis for affirming the Fifth Circuit mean that the prognosis for administrative enforcement is not good. Those who had hoped that Jarkesy was only a glancing blow in the war over the administrative state appear headed for disappointment.

Matthew Strada is a Professorial Lecturer in Law at George Washington University Law School.