William & Mary Environmental Law and Policy Review
Abstract
In the summer of 2024, the Supreme Court published its opinion in SEC v. Jarkesy. In Jarkesy, the Court held that certain administrative cases must be adjudicated through Article III courts with juries instead of administrative law tribunals. The case involved fraud charges against George Jarkesy, Jr., an investment manager. After a Securities and Exchange Commission (SEC) investigation, the agency alleged that Jarkesy had violated the Securities Exchange Act of 1934. Subsequently, SEC Administrative Law Judges (ALJs) levied civil penalties against Jarkesy for securities fraud. On appeal, the Court held that securities fraud under the Securities Exchange Act is a common law cause of action to be adjudicated through Article III courts with juries, not ALJs. Although the Supreme Court’s opinion in SEC v. Jarkesy analyzed statutes enforced by the SEC, the holding could also be applicable to some statutes administered by Environmental Protection Agency’s (EPA) ALJs, specifically the Clean Air Act (CAA), Clean Water Act (CWA), and Resource Conservation and Recovery Act (RCRA).
This Note consists of six parts. Part I will explain the background of the ALJ system and discuss the statutes that the Note will be analyzing. Part II will give the background of the Jarkesy decision. Part III will explain how the civil penalties levied by EPA’s ALJs are legal in nature, rather than equitable in nature. Part IV will explain that, although most of the statutes do not include direct language that closely resembles a common law cause of action, the legal nature of the penalties supersedes the need for this language in the statutes. Part V will discuss how the “public rights” exception does not apply to these statutes. Part VI will argue that certain civil penalties levied by EPA’s ALJs are unconstitutional because they violate the Seventh Amendment. Rather, those subject to these penalties have a right to a jury trial in an Article III court.