The Supreme Court Continues Its War on Regulatory Agencies

Jarkesy, for his part, argued that the entire public rights doctrine is unconstitutional. Enshrining that line of thinking would upend how the federal government functions at a basic level. Roberts, writing for the court, declined to go anywhere near that far. He instead ruled that because fraud lawsuits were part of English common law in 1791, the public rights doctrine simply did not apply to them.

“The object of this SEC action is to regulate transactions between private individuals interacting in a pre-existing market,” he wrote for the court. “To do so, the government has created claims whose causes of action are modeled on common law fraud and that provide a type of remedy available only in law courts. This is a common law suit in all but name. And such suits typically must be adjudicated in Article III courts.”

Sotomayor, writing in dissent, sharply disagreed. She described Roberts’s majority opinion as breaking with the court’s precedents. “This Court has [previously] held, without exception, that Congress has broad latitude to create statutory obligations that entitle the Government to civil penalties, and then to assign their enforcement outside the regular courts of law where there are no juries,” she wrote.