The Future of Administrative Enforcement

In Securities and Exchange Commission v. Jarkesy, the U.S. Supreme Court held in 2024 that when the U.S. Securities and Exchange Commission (SEC) seeks civil penalties for securities fraud, the Seventh Amendment entitles the defendant to a jury trial. The Court concluded that the “public rights” exception—which permits Congress to assign certain matters to agencies for adjudication—did not apply. Under Jarkesy, the SEC therefore cannot impose those penalties through its in-house adjudication process.

The Supreme Court’s decision prompted questions about administrative enforcement beyond securities regulation. In her dissent, Justice Sonia Sotomayor noted that more than two dozen federal agencies can impose civil penalties through administrative proceedings. Lower courts have since confronted arguments seeking to extend Jarkesy to other regulatory schemes. In 2025, the U.S. Court of Appeals for the Third Circuit upheld an administrative penalty imposed by the Federal Aviation Administration, but held two weeks later that a Labor Department enforcement action had to be decided in federal court.

The Supreme Court revisited the scope of Jarkesy in 2026 in Federal Communications Commission v. AT&T. The Court held that the Federal Communications Commission could issue forfeiture orders without providing a jury because the orders did not definitively resolve the carriers’ legal obligations, and the agency’s findings were not conclusive. The government would have to prove its case in a new federal-court proceeding before collecting an unpaid penalty. The Court distinguished Jarkesy because the SEC’s penalties fixed the parties’ legal obligations and the agency’s findings controlled the underlying legal violation.

Recent scholarship examines how far Jarkesy may extend. Some scholars argue that regulatory regimes governing environmental enforcement and federal tax penalties have important differences from the securities-fraud proceeding in Jarkesy and may remain within administrative adjudication. Others contend that the decision may encourage litigants to challenge a broader range of agency sanctions or constrain agencies’ authority to resolve disputes outside federal court. Scholars have also examined reforms aimed at preserving agency adjudication while addressing constitutional concerns about adjudicator independence.

As courts continue to define Jarkesy’s reach, a central regulatory question remains: which enforcement disputes may federal agencies resolve in administrative proceedings, and which must proceed before a federal court and jury?

In this week’s Saturday Seminar, scholars examine how Jarkesy and its aftermath may reshape administrative enforcement and the constitutional boundaries of agency adjudication.

• In a recent article, Robert L. Glicksman of the George Washington University Law School critiques the U.S. Supreme Court’s decision in Jarkesy. Glicksman argues that the Court oversimplifies the Seventh Amendment inquiry by treating the SEC’s civil penalties as the dominant factor and minimizing contrary precedent. He contends that Jarkesy should not invalidate the U.S. Environmental Protection Agency’s authority to impose civil penalties through administrative proceedings under the Clean Air Act and Clean Water Act. Glicksman explains that those statutes create regulatory standards that differ substantially from common law public nuisance. He concludes that the Seventh Amendment may not cover environmental civil penalty claims. Even if it does, he argues, the claims may qualify for the public rights exception.
• In a recent article, James Fallows Tierney of Chicago-Kent College of Law examines the U.S. Supreme Court’s decision in Jarkesy and its consequences for the SEC. Using a new dataset, Tierney finds that after Lucia v. Securities and Exchange Commission, the SEC brought few contested civil penalty proceedings before administrative law judges. He argues that Jarkesy creates limited immediate consequences but greater long-term risks as litigants seek to extend it to other enforcement actions. Tierney warns that extending Jarkesy to punitive or deterrent sanctions could move more actions into federal court and reduce SEC enforcement because costlier jury trials limit how many cases the SEC can bring. He contends that greater litigation risk may raise enforcement costs and strengthen respondents’ bargaining positions in settlements.
• In a recent article in the University of Miami Law Review, Steve Johnson of Florida State University College of Law examines the potential effect of Jarkesy on federal tax penalties. Johnson explains that jury trials are rarely available to plaintiffs in federal tax disputes. He argues that Jarkesy should not be interpreted to expand jury access in civil tax penalty cases. Johnson contends that because the conflict in Jarkesy originated from a government action against a private party, the ruling does not apply to disputes initiated by taxpayers. Johnson concludes that despite taxpayers’ arguments, Jarkesy does not make nonjury judicial review of tax penalties unconstitutional.
• In an article in the Texas Law Review, Aaron Nielson of the University of Texas at Austin School of Law, Christopher Walker of the University of Michigan Law School, and Melissa Wasserman of the University of Texas at Austin School of Law analyze proposals designed to reform agency adjudication proceedings in the wake of Jarkesy and recent criticism. The authors caution against creating a centralized executive adjudication agency because such a move would impose restructuring costs and increase partisan influence. The authors warn that new Article I courts could create accountability problems. The authors argue that internal regulations adopted by executive branch agencies can best preserve adjudicative independence because they discourage interference without raising constitutional concerns.
• In an article in the Louisiana Law Review, John Golden of the University of Texas at Austin School of Law examines the scope of the Supreme Court’s decision in Jarkesy. In Jarkesy, the Court ruled that the SEC cannot impose civil penalties through its in-house proceedings because doing so violates the Seventh Amendment. But Golden notes that the SEC had also ordered Jarkesy to stop violating the law, return profits, and stay out of the securities industry—remedies outside the scope of the Seventh Amendment. Golden argues that the Court’s reasoning may reach beyond civil penalties by holding that the SEC cannot use in-house proceedings to handle fraud cases at all.
• In an article in the Georgetown Journal of Law & Public Policy, Louis Capozzi III of the Missouri Attorney General’s Office argues that the major questions doctrine—a rule requiring agencies to have clear authorization from Congress before making major policy decisions—should apply to enforcement actions, not just regulations. Capozzi explains that agencies sometimes change the law by bringing enforcement actions against individuals or companies rather than issuing rules. This approach can avoid public participation in rulemaking and impose unexpected penalties. He points to the SEC’s enforcement campaign against cryptocurrency companies, which penalized firms under a new reading of old laws, as an example. Capozzi contends that if the major questions doctrine only applies to regulations, agencies may shift to enforcement proceedings to avoid its limits.