Amicus Curiae Brief — Securities and Exchange Commission, et al., Petitioners v. Michelle Cochran

Supreme Court briefJul 6, 2022

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No. 21-1239

In The

Supreme Court of the United States

____________________

SECURITIES AND EXCHANGE COMMISSION, ET AL.,

Petitioners,

MICHELLE COCHRAN,

____________________

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

____________________

BRIEF AMICUS CURIAE OF

PACIFIC LEGAL FOUNDATION IN

SUPPORT OF MICHELLE COCHRAN

____________________

JOHN F. KERKHOFF

Counsel of Record

ADITYA DYNAR

Pacific Legal Foundation

3100 Clarendon Blvd., Suite 610

Arlington, VA 22201

Phone: (202) 888-6881

jkerhoff@pacificlegal.org

adynar@pacificlegal.org

Counsel for Amicus Curiae Pacific Legal Foundation

QUESTION PRESENTED

Did Congress, through the Securities Exchange

Act, strip district courts of jurisdiction over

constitutional challenges to the Securities and

Exchange Commission’s structure, procedures, and

existence?

TABLE OF CONTENTS

TABLE OF AUTHORITIES ...................................... iv

IDENTITY AND INTEREST OF AMICI CURIAE ... 1

INTRODUCTION AND

SUMMARY OF ARGUMENT .................................... 2

ARGUMENT ............................................................... 4

I. Application of Thunder Basin Has Failed To

Account for the Constitution’s Separation of

Powers and Due Process Guarantees ................... 4

a. What the Constitution Says: Due Process

of Law and Separation of Powers ............... 6

b. What Congress Has Said:

Sections 1331 and 2201, and the

Securities Exchange Act ............................. 8

c. What This Court Has Said: Thunder

Basin, Elgin, and Free Enterprise ............ 11

d. What Lower Courts Say: No Review ........ 14

II. Thunder Basin Should be Refined or Clarified

To Satisfy Constitutional Commands............... 16

a. Thunder Basin’s proper scope and

application must include consideration

of constitutional issue ............................... 17

i. Question 1: Does a statute explicitly

grant jurisdiction over these claims? ....... 19

ii. Question 2: Does a subsequent statute

explicitly strip courts of jurisdiction

over these claims? ..................................... 19

iii

iii. Question 3: Did Congress implicitly

strip courts of jurisdiction over these

claims? ....................................................... 20

1. This Court should apply a strong

presumption of no jurisdiction stripping

given Section 1331, Section 2201, and

Article III .................................................. 20

2. Congress must clearly strip

jurisdiction ................................................ 22

3. The Thunder Basin factors are helpful

guides in determining whether Congress

spoke clearly.............................................. 24

iv. Question 4: Did Congress strip jurisdiction

consistent with the Constitution’s

separation of powers

and due process? ....................................... 28

CONCLUSION.......................................................... 31

TABLE OF AUTHORITIES

Page(s)

Cases

Abbott Labs. v. Gardner,

387 U.S. 136 (1967) ............................................. 21

Alabama Ass’n of Relators v. Dep’t of

Health and Human Servs.,

141 S. Ct. 2485 (2021) ......................................... 22

Axon Enterprises Inc. v. FTC,

986 F.3d 1173 (9th Cir. 2021) ........... 14−15, 24, 27

Axon Enterprises Inc.v. Federal Trade

Commission,

No. 21-86 (2022)..................................................... 1

Bank Markazi v. Peterson,

578 U.S. 212 (2016) ............................................. 16

Bebo v. SEC,

799 F.3d 765 (7th Cir. 2015) ........................ passim

Bell v. Hood,

327 U.S. 678 (1946) ............................................... 9

Bennett v. SEC,

844 F.3d 174 (4th Cir. 2016) ............. 14−15, 26−27

Bowles v. Russell,

551 U.S. 205 (2007) ............................. 3, 16, 18, 28

Bowsher v. Synar,

478 U.S. 714 (1986) ............................................. 21

Calcutt v. FDIC,

__ F.4th __, No. 20-4303,

2022 WL 2081430 (6th Cir. 2022) ....................... 29

Carr v. Saul,

141 S. Ct. 1352 (2021) ......................................... 27

Chrysafis v. Marks,

141 S. Ct. 2482 (2021) ......................................... 25

Cohens v. Virginia,

19 U.S. (6 Wheat.) 264 (1821) ............................. 17

Collins v. Yellen,

141 S. Ct. 1761 (2021) ........................................... 4

Dep’t of Transp. v. Ass’n of Am. R.R.,

575 U.S. 43 (2015) ............................................... 18

Elgin v. Dep’t of Treasury,

567 U.S. 1 (2012) .......................................... passim

Free Enterprise Fund v. v. Public Co.

Acct. Oversight Bd.,

561 U.S. 477 (2010) ...................................... passim

Garland v. Aleman Gonzalez,

142 S. Ct. 2057, No. 20-322, 2022

WL 2111346 (June 13, 2022)................................. 9

Gibson v. SEC,

795 F. App’x 753 (11th Cir. 2019) ....................... 14

Grable & Sons Metal Prods., Inc. v.

Darue Eng’g & Mfg.,

545 U.S. 308 (2005) ............................................... 9

Gregory v. Ashcroft,

501 U.S. 452 (1991) ............................................. 23

Hayburn's Case,

2 U.S. (2 Dall.) 408 (1792) ................................. 5−6

Hill v. SEC,

825 F.3d 1236 (11th Cir. 2016) ........................... 14

I.N.S. v. St. Cyr,

533 U.S. 289 (2001) ......................................... 9, 23

Jarkesy v. SEC,

34 F.4th 446 (5th Cir. 2022) .......................... 25, 29

Jarkesy v. SEC,

803 F.3d 9 (D.C. Cir. 2015) ........................... 14−15

Lucia v. SEC,

138 S. Ct. 2044 (2018) ........................................... 1

Mach Mining, LLC v. EEOC,

575 U.S. 480 (2015) ............................................. 21

Marbury v. Madison,

5 U.S. (1 Cranch) 137 (1803) ................................. 2

Marshall v. Jerrico, Inc.,

446 U.S. 238 (1980) ............................................... 7

Martin v. Hunter’s Lessee,

14 U.S. (1 Wheat.) 304 (1814) ................... 4, 18, 28

Metro. Wash. Airports Auth. v. Citizens

for the Abatement of Aircraft Noise,

Inc., 501 U.S. 252 (1991) ....................................... 6

vii

New Orleans Pub. Serv., Inc. v. Council

of the City of New Orleans,

491 U.S. 350 (1989) ............................................... 9

NFIB v. Dep’t of Labor,

142 S. Ct. 661 (2022) ........................................... 22

Perez v. Mortgage Bankers Ass’n,

575 U.S. 92 (2015) .......................................... 6, 17

Rapanos v. United States,

547 U.S. 715 (2006) ............................................... 1

Sackett v. EPA,

566 U.S. 120 (2012) ............................................... 1

Salinas v. U.S. R.R. Ret. Bd.,

141 S. Ct. 691 (2021) ........................................... 21

Seila Law LLC v. Consumer Fin.

Protection Bureau,

140 S. Ct. 2183 (2020) ........................................... 9

Stern v. Marshall,

564 U.S. 462 (2011) ..................................... 4−5, 29

Thunder Basin Coal Co. v. Reich,

510 U.S. 200 (1994) ...................................... passim

Tilton v. SEC,

824 F.3d 276 (2d Cir. 2016) ..................... 14, 27, 30

U.S. Army Corps of Eng’rs

v. Hawkes Co., Inc.,

578 U.S. 590 (2016) ............................................... 1

viii

United States Forest Servs. v.

Cowpasture River Preservation Ass’n,

140 S. Ct. 1837 (2020) ......................................... 22

United States v. Fisher,

6 U.S. (2 Cranch) 358 (1805) .............................. 23

United States v. Home Concrete &

Supply, LLC,

566 U.S. 478 (2012) ............................................. 24

United States v. Nordic Village, Inc.,

503 U.S. 30 (1992) ............................................... 23

Utility Air Regulatory Grp. v. EPA,

573 U.S. 302 (2014) ............................................. 22

Webster v. Doe,

486 U.S. 592 (1988) ......................................... 9, 21

West Virginia v. EPA,

__ U.S. __, Nos. 20-1530, 20-1531,

20-1778, 20-1780, 2022 WL 2347278

(June 30, 2022) .................................................... 23

Weyerhaeuser Co. v. U.S. Fish and

Wildlife Serv.,

139 S. Ct. 361 (2018) ........................................... 21

Whitman v. Dep’t of Transp.,

547 U.S. 512 (2006) ................................ 11, 19, 21

Youngstown Sheet & Tube Co.

v. Sawyer,

343 U.S. 579 (1952) ....................................... 21−22

Zivotofsky ex rel. Zivotofsky v. Clinton,

566 U.S. 189 (2012) ......................................... 6, 17

Statutes and Regulations

15 U.S.C. § 78-d-1(a) ................................................. 25

15 U.S.C. § 78-d-1(b) ................................................. 25

15 U.S.C. § 78y .............................................. 10, 25−26

28 U.S.C. § 1331 ................................................. passim

28 U.S.C. § 2201 ................................................. passim

17 C.F.R. § 201.100 .................................................. 25

17 C.F.R. § 201.110 ................................................... 25

Constitutions

U.S. Const. art. I, § 1 .................................................. 6

U.S. Const. art. I, § 7, cl. 2.......................................... 6

U.S. Const. art. II, § 1 ................................................. 6

U.S. Const. art. III ............................................. passim

U.S. Const. art. III, § 2 ............................................. 20

U.S. Const. art. III, § 3 ............................................... 6

Other Authorities

Amar, Akhil Reed, America’s

Constitution: A Biography (2006) ....................... 19

Baude, William, Adjudication Outside

Article III, 133 Harv. L. Rev. 1511

(2020) ......................................................... 4, 18, 29

Bernick, Evan, Is Judicial Deference to

Agency Fact-Finding Unlawful,

16 Geo. J. L. & Pub. Pol'y 30 (2018) ............... 7, 26

Calabresi, Steven G., & Lawson, Gary S.,

The Unitary Executive, Jurisdiction

Stripping, and the Hamdan Opinions:

A Textualist Response to Justice

Scalia, 107 Colum. L. Rev. 1002 (2007).............. 19

Chapman, Nathan S. & McConnell,

Michael W. Due Process as

Separation of Powers,

121 Yale L.J. 1672 (2012) ................................ 7, 29

Dr. Bonham's Case,

77 Eng. Rep. 646 (C.P. 1610) .............................. 25

The Federalist No. 10 (James Madison)

(Cooke ed. 1961)................................................... 25

The Federalist No. 80 (Alexander Hamilton)

(Cooke ed. 1961)................................................... 25

The Federalist No. 82 (Alexander Hamilton)

(Cooke ed. 1961)..................................................... 5

Lawson, Gary, Take the Fifth . . .

Please!: The Original Insignificance

of the Fifth Amendment's Due

Process of Law Clause, 2017 B.Y.U.

L. Rev. 611 ............................................................. 7

Lawson, Gary, The Rise and Rise of the

Administrative State, 107 Harv. L.

Rev. 1231 (1994) .................................................. 26

McRee, Griffith J., II, Life and

Correspondence of James Iredell

(1857) ................................................................... 17

Nelson, Caleb, Adjudication in the

Political Branches,

107 Colum. L. Rev. 559 (2007) ...................... 15, 30

Redish, Martin H., Legislative Courts,

Administrative Agencies, and the

Northern Pipeline Decision,

1983 Duke L.J. 197 (1983) .................................. 26

Sohoni, Mila, Agency Adjudication and

Judicial Nondelegation: An Article

III Canon, 107 Nw. U. L. Rev. 1569

(2013) ................................................................... 27

Whitehouse, Sheldon, Restoring the

Civil Jury’s Role in the Structure of

Our Government,

55 Wm. & Mary L. Rev. 1241 (2014) .................... 6

xii

Wilson, James, Lectures on Law, ch. XI

(1791), reprinted in 1 Collected

Works of James Wilson (Kermit L.

Hall & Mark David Hall, eds.,

Liberty Fund 2011).............................................. 25

IDENTITY AND INTEREST

OF AMICI CURIAE 1

Founded in 1973, Pacific Legal Foundation is a

nonprofit,

tax-exempt,

California

corporation

established for the purpose of litigating matters

affecting the public interest. PLF provides a voice in

the courts for Americans who believe in limited

constitutional government, private property rights,

and individual freedom.

PLF is the most experienced public-interest legal

organization defending the constitutional principle of

separation of powers in the arena of administrative

law. PLF’s attorneys have participated as lead counsel

in several cases involving the role of the Judicial

Branch as an independent check on the Executive and

Legislative branches under the Constitution’s

Separation of Powers. See, e.g., U.S. Army Corps of

Eng’rs v. Hawkes Co., Inc., 578 U.S. 590 (2016)

(judicial review of agency interpretation of Clean

Water Act); Sackett v. EPA, 566 U.S. 120 (2012)

(same); Rapanos v. United States, 547 U.S. 715 (2006)

(agency regulations defining “waters of the United

States”). It also regularly participates in this Court as

amicus curiae. See, e.g., Axon Enterprises Inc. v.

Federal Trade Commission, No. 21-86 (2022); Lucia v.

SEC, 138 S. Ct. 2044 (2018) (SEC administrative law

judge is “officer of the United States” under the

Appointments Clause).

1 No party’s counsel authored any part of this brief. No person or

entity, other than Amicus Curiae and its counsel, paid for the

brief’s preparation or submission. All parties consented.

This case addresses the federal courts’ jurisdiction

to hear constitutional challenges to an administrative

agency’s structure. The decision under review held

that the Securities Exchange Act did not strip federal

courts of jurisdiction to entertain structural

constitutional challenges to the Securities and

Exchange Commission’s in-house adjudicative process

and its officers’ removal protections. PLF explains

how the result below upholds the judicial duty vested

by the sovereign people in the judicial branch and

protects the separation of powers and core

constitutional and individual liberties.

INTRODUCTION AND SUMMARY OF ARGUMENT

Federal courts—and only federal courts—may

exercise the “judicial Power of the United States.”

Since the Founding, that power has included the duty

to “say what the law is.” Marbury v. Madison, 5 U.S.

(1 Cranch) 137, 177 (1803). And nearly 150 years ago,

Congress confirmed that district courts have

jurisdiction to decide all cases that implicate

constitutional claims and provide redress. 28 U.S.C.

§ 1331.

So when parties allege a constitutional violation,

federal courts generally have jurisdiction. That much

is not in doubt here. Instead, this case turns on a

different question: Did Congress, through the

Securities Exchange Act, strip federal district courts

of jurisdiction to hear claims regarding the

constitutionality of a federal agency?

No.

Nothing in the Act explicitly strips courts of

jurisdiction. And no one suggests otherwise. Nor does

the Act implicitly deprive courts of jurisdiction.

This latter point deserves closer attention. Nearly

two decades ago, this Court created a test designed to

help identify when Congress has silently taken

jurisdiction away from federal courts. Thunder Basin

Coal Co. v. Reich, 510 U.S. 200 (1994). And while the

so-called Thunder Basin factors sought to faithfully

find Congress’s intent, they skip critical constitutional

questions that must be addressed. Congress, after all,

can strip federal courts of already granted jurisdiction

only “[w]ithin constitutional bounds.” Bowles v.

Russell, 551 U.S. 205, 212 (2007). The Court now

should account for core constitutional deficits

inherent in elevating congressional silence above

statutory words.

A refined test is badly needed. Given the broad

grant of jurisdiction to federal courts under Section

1331, courts must start with a presumption that they

can hear structural constitutional claims. And if

Congress wants to overcome the century-and-a-halfold statute, it should speak clearly in doing so. Even

then, courts must guarantee that Congress does not

limit jurisdiction in a way that clashes with the

Constitution’s guarantees.

Indeed, the years since Thunder Basin have only

revealed its shortcomings. The test has morphed into

a virtual rubber-stamp for the government. Until this

case, in fact, lower courts hardly ever allowed a

litigant access to federal court before succumbing to a

federal agency’s proceedings.

Thunder Basin was never meant to foreclose such

a broad swath of cases. It merely reflected judicial

understanding that sometimes Congress strips courts

of jurisdiction. That’s true as far as it goes. But

experience has revealed that Thunder Basin must be

clarified to ensure that courts and agencies comport

with the Constitution’s separation of powers and the

due process of law.

This case presents the opportunity to do so.

Congress explicitly granted jurisdiction under Section

1331 and a mechanism to obtain redress under

Section 2201. Such congressional commands should

not be lightly cast aside. Instead, courts ought to

return to first principles in applying Thunder Basin

by closely examining whether Congress sought to

preclude judicial review, and, if so, whether Congress

did so consistent with Article III, Due Process, and the

Separation of Powers. That approach would return

the proper balance between Congress, the Courts, and

the Executive Branch.

ARGUMENT

I. Application of Thunder Basin Has Failed

To Account for the Constitution’s

Separation of Powers and Due Process

Guarantees

Our Constitution divides power to protect and

secure liberty. Collins v. Yellen, 141 S. Ct. 1761, 1780

(2021). The “judicial Power of the United States”—

delegated by the sovereign people—rests with federal

judges under Article III. U.S. Const. art. III. It

includes “the power to bind parties and to authorize

the deprivation of private rights.” William Baude,

Adjudication Outside Article III, 133 Harv. L. Rev.

1511, 1513−14 (2020). And under Article III,

constitutional cases must be decided in some federal

court. Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.)

304, 328−30 (1814) (holding the “whole judicial power”

“shall be vested” in federal courts (emphasis deleted));

see also Stern v. Marshall, 564 U.S. 462, 484 (2011)

(The “Constitution assigns th[e] job—resolution of the

mundane as well as the glamorous, matters of

common law and statute as well as constitutional law,

issues of fact as well as issues of law—to the

Judiciary.”) (simplified).

But because Congress has the power to create or

eliminate lower federal courts, it may confer

jurisdiction on such courts or take it away—so long as

some federal court retains the “judicial Power of the

United States” to entertain a constitutional claim. The

Federalist No. 82, at 556 (Hamilton) (Cooke ed. 1961)

(“[A]ll causes of the specific classes” named in Article

III “shall for weighty public reasons receive their

original or final determination in the courts of the

Union.”). In doing so, though, Congress must respect

the separation of powers and due process of law.

Congress cannot, for example, vest the “judicial

Power” in the Executive Branch. See, e.g., Hayburn’s

Case, 2 U.S. (2 Dall.) 408 (1792). Nor can Congress

gerrymander jurisdiction such that it tramples on a

party’s due process rights. Cf. Stern, 564 U.S. at

482−84. (“article III could neither serve its purpose in

the system of checks and balances nor preserve the

integrity of judicial decisionmaking if the other

branches of the Federal Government could confer the

Government’s ‘judicial Power’ on entitles outside

Article III.”).

So whenever a party brings a constitutional claim,

jurisdiction lies in some federal court. But in which

court? And when does that court have jurisdiction?

The answers to those questions turn on (1) what the

Constitution says, (2) what Congress has said, and (3)

what this Court has said.

a. What the Constitution Says: Due

Process of Law and Separation of

Powers

The Constitution “vests” powers in different

branches, U.S. Const. art. I, § 1; art. II, § 1; art. III,

§ 3, with some overlap, see, e.g., id. art. I, § 7, cl. 2

(presidential veto). See Hayburn’s Case, 2 U.S. at 410

n.* (“[T]he legislative, executive and judicial

departments are each formed in a separate and

independent manner; and . . . the ultimate basis of

each is the constitution only, within which the limits

of which each department can alone justify any act of

authority.”). This structure:

•

protects against arbitrary rule, Metro. Wash.

Airports Auth. v. Citizens for the Abatement of

Aircraft Noise, Inc., 501 U.S. 252, 272 (1991);

see also Sheldon Whitehouse, Restoring the

Civil Jury’s Role in the Structure of Our

Government, 55 Wm. & Mary L. Rev. 1241,

1270 (2014) (“The American system of

government is built on Montesquieu’s and

Locke’s premise that divided government and

separated powers are most protective of

individual liberty.”); and

•

requires that independent federal judges decide

constitutional questions, Zivotofsky ex rel.

Zivotofsky v. Clinton, 566 U.S. 189, 194−95

(2012) (“[T]he Judiciary has a responsibility to

decide cases properly before it.”); Perez v.

Mortgage Bankers Ass’n, 575 U.S. 92, 119

(2015) (Thomas, J., concurring) (“When a party

properly brings a case or controversy to an

Article III court, that court is called upon to

exercise the ‘judicial Power of the United

States.’”); Marshall v. Jerrico, Inc., 446 U.S.

238, 242 (1980) (holding judges must be neutral

in adjudicative proceedings).

Similarly, the Constitution’s guarantee of “due

process of law” “refer[s] to the guarantee of legal

judgment in a case by an authorized court in

accordance with settled law.” Nathan S. Chapman &

Michael W. McConnell, Due Process as Separation of

Powers, 121 Yale L.J. 1672, 1679 (2012). “Due Process

of Law” dates back to the Magna Carta, and its

meaning “evolved over a several-hundred-year period,

driven . . . by the increasing institutional separation

of lawmaking from law enforcing and law

interpretating.” Id. Due process, then, reflected

similar concerns as those inherent in the

Constitution’s structure: It “meant that the executive

could not deprive anyone of a right except as

authorized by law, and that to be legitimate, a

deprivation of rights had to be preceded by certain

procedural protections characteristic of judicial

process: generally, presentment, indictment, and trial

by jury.” Id.

In at least two ways, then, the Constitution

requires that when the government seeks to take a

person’s life, liberty, or property, it must proceed

through judicial process in Article III courts. See Gary

Lawson, Take the Fifth . . . Please!: The Original

Insignificance of the Fifth Amendment’s Due Process

of Law Clause, 2017 B.Y.U. L. Rev. 611, 631–32

(noting that the “judicial Power” requires independent

judges to provide due process of law); cf. Evan Bernick,

Is Judicial Deference to Agency Fact-Finding

Unlawful, 16 Geo. J. L. & Pub. Pol’y 27, 30 (2018)

(Deferring to agency factfinding in core private rights

cases “constitutes an abdication of the duty of

independent judgment that Article III imposes upon

federal judges; and denies litigants due process of

law.”).

The upshot is that the Constitution places outer

limits on Congress’s ability to strip courts of

jurisdiction. The legislature cannot, for example, pull

core private rights cases turning on constitutional

questions completely from federal courts and place

them in the Executive Branch. Nor can Congress take

away the “judicial Power” from federal courts and vest

it in the executive. Statutes governing jurisdiction,

then, must be read with these constitutional baselines

in mind. Doing so preserves the Constitution’s

structure to protect liberty—just as the Founders

intended.

b. What Congress Has Said: Sections 1331

and 2201, and the Securities Exchange

Act

Shortly after the Civil War, Congress vested

federal district courts with jurisdiction to hear all

claims “arising under the Constitution, laws, or

treaties of the United States.” 28 U.S.C. § 1331. And

shortly after the Second World War, Congress vested

federal district courts with the authority, “[i]n a case

of actual controversy,” to “declare the rights and other

legal relations of any interested party seeking such

declaration, whether or not further relief is or could be

sought.” 28 U.S.C. § 2201. This language mirrors

language in Article III and complies with the

Constitution’s guarantee that the “judicial Power” will

be vested in federal courts.

Section 1331 applies broadly. It is “invoked by and

large by plaintiffs pleading a cause of action created

by federal law.” Grable & Sons Metal Prods., Inc. v.

Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005). And

this Court’s “precedents have long permitted private

parties aggrieved by an official’s exercise of executive

power to challenge the official’s authority to wield that

power.” Seila Law LLC v. Consumer Fin. Protection

Bureau, 140 S. Ct. 2183, 2196 (2020); see Bell v. Hood,

327 U.S. 678, 684 (1946) (“[I]t is established practice

for this Court to sustain the jurisdiction of federal

courts to issue injunctions to protect right

safeguarded by the Constitution.”).

Of course, despite Section 1331’s broad grant of

jurisdiction, Congress can pull away that jurisdiction

in specific contexts. For example, this Court recently

explained that clear text in the immigration statutes

revoked some jurisdiction from federal courts. See

Garland v. Aleman Gonzalez, 142 S. Ct. 2057, No. 20322, 2022 WL 2111346, at *4 (June 13, 2022). But

courts require a “heightened showing” from statutes

that could “preclude judicial review of constitutional

claims.” Webster v. Doe, 486 U.S. 592, 603 (1988)

(emphasis added); see New Orleans Pub. Serv., Inc. v.

Council of the City of New Orleans, 491 U.S. 350, 359

(1989) (Congress can strip jurisdiction only “within

the constitutionally permissible bounds.”). Indeed, in

many constitutional contexts—such as habeas

corpus—there is a “longstanding rule requiring a clear

statement of congressional intent” to defeat

jurisdiction. I.N.S. v. St. Cyr, 533 U.S. 289, 298 (2001).

In all events, “[i]n light of § 1331, the question is not

whether Congress has specifically conferred

jurisdiction,”—because we already know that it has—

“but whether it has taken it away.” Elgin v. Dep’t of

Treasury, 567 U.S. 1, 25 (2012) (Alito, J., dissenting).

So what did Congress say here? It passed the

Securities Exchange Act of 1934, which includes

15 U.S.C. § 78y. That statute permits judicial review

of “a final order of the Commission” or “a rule of the

Commission” in a “United States Court of Appeals.”

The word “only” appears nowhere in Section 78y. It

does not mention Section 1331 or Section 2201. Nor

does it say courts lack jurisdiction over any particular

claim.

Section 78y does not say, for example, that federal

courts review only “a final order of the Commission.”

If it did, this might be a different case. Put otherwise,

by giving federal courts jurisdiction to review final

orders of the Commission, the statute does not thereby

deprive federal courts of jurisdiction to hear all claims

“arising under the Constitution, laws, or treaties of

the United States,” or to “declare the rights and other

legal relations” causing the controversy. 28 U.S.C.

§§ 1331, 2201.

And so the question arises: does the statute at

issue preclude jurisdiction under this Court’s

precedents? Answering that question requires

investigating if “the ‘statutory scheme’ displays a

‘fairly discernible’ intent to limit jurisdiction, and the

claims at issue ‘are of the type Congress intended to

be reviewed within th[e] statutory structure.’” Free

Enterprise Fund v. Public Co. Acct. Oversight Bd., 561

U.S. 477, 489 (2010) (quoting Thunder Basin, 510 U.S.

at 207, 212). It does not.

c. What This Court Has Said: Thunder

Basin, Elgin, and Free Enterprise

Section 1331 is “a very familiar” statute. Whitman

v. Dep’t of Transp., 547 U.S. 512, 513−14 (2006) (per

curiam). So “[t]he question . . . is not whether [the

statute at issue] confers jurisdiction, but whether [it]

removes the jurisdiction given to the federal courts.”

Id. at 514 (emphasis added). Through a series of cases,

this Court has developed a test to determine when

statutes strip jurisdiction.

Thunder Basin came first. There, this Court held

that the statutory-review scheme in the Federal Mine

Safety and Health Act barred “district court[s] from

exercising subject-matter jurisdiction over a preenforcement challenge to the Act.” 510 U.S. at 202.

The case involved a statutory interpretation issue, but

the petitioner did not challenge the constitutional

structure of the agency itself.

The Court engaged in a two-prong test, asking (1)

whether there is a congressional intent “fairly

discernible in the statutory scheme,” and (2) whether

a litigant’s “claims are of the type that Congress

intended to be reviewed within [a] statutory

structure.” Id. at 207, 212. At the second prong, courts

consider: (i) whether the claim will eventually receive

meaningful judicial review, (ii) whether agency

expertise can be brought to bear on the litigant’s

claims, and (iii) whether those claims are wholly

collateral to the “statute’s review provisions.” Id. at

212−15.

The facts help explain. The federal Mine Safety

and Health Administration (MSHA) sought to force a

coal company to post the designations of mine

workers’ union representatives—even though the

representatives were not employees of the company at

that time. Id. at 204. The company (Thunder Basin)

argued that “designation of nonemployee [union]

‘representatives’ violated the principles of collectivebargaining representation” under federal law.” Id. at

205. It also argued that being forced to defend itself in

front of the Federal Mine Safety and Health Review

Commission before getting to federal court would

violate the Fifth Amendment because “the company

would be forced to choose between violating the Act

and incurring possible escalating daily penalties.” Id.

This Court held the Mine Act precluded

jurisdiction. For starters, the Act set up a detailed

review scheme. And second, the type of claim that the

petitioner alleged fell within the scheme. That’s

because the company’s arguments hinged on the

interpretation of the Act. Id. at 214−15. Yes, the

company also made a due process argument, but not

one about the structure or existence of MSHA.

Instead, the company argued only that it should not

be forced into a comply-or-face-fines scenario.

Ultimately, though, the petitioner could receive

meaningful judicial review by asking for nonenforcement of the Act. See Elgin, 567 U.S. at 32

(Alito, J., dissenting) (explaining that in Thunder

Basin “[t]he only constitutional issue was a matter of

timing.”)

Next came Free Enterprise. There, as here, the

Court considered the Securities Exchange Act, though

in a different context. See 561 U.S. at 487 The

petitioner in Free Enterprise challenged the structure

of the Public Company Accounting Oversight Board.

Id. The Court was explicit about the Act: “the text does

not expressly limit the jurisdiction that other statutes

confer on district courts. See, e.g., 28 U.S.C. §§ 1331,

2201. Nor does it do so implicitly.” Id. at 489.

The Court reached that conclusion, in part,

because the petitioner might never have received

meaningful judicial review. After all, the firm was not

challenging a final order of the SEC, which is what the

Securities Exchange Act contemplates. Id. at 490. And

the petitioner’s constitutional claims were “outside

the Commission’s competence and expertise.” Id. at

491.

Last came Elgin. There, former federal employees

who had been fired for failing to register for the

military draft argued that the statute was

unconstitutional. But the Civil Service Reform Act

“provide[d] the exclusive avenue to judicial review

when a qualifying employee challenges an adverse

employment action.” 567 U.S. at 5. So the employees

were required to proceed through the Merit System

Protection Board (MSPB), even though they had filed

an action in federal court challenging the requirement

to register for the draft.

Elgin again applied the Thunder Basin factors and

held that the Civil Service Reform Act provided the

exclusive avenue for judicial review. But the key

point: the employees did not argue that the MSPB

itself or its process violated the Constitution. All that

the employees challenged was a separate statute that

required them to register for the draft. And that

argument fits well within the “type” that can (and

will) be reviewed later in court.

In short, Thunder Basin and Elgin depart from

Free Enterprise in at least one crucial respect: In

Thunder Basin and Elgin, the petitioners merely

argued for non-enforcement of a particular statute.

But Free Enterprise involved a constitutional

challenge to the structure of the entity at issue.

Lower courts have struggled to apply the Thunder

Basin factors, as this case and its companion, Axon

Enterprises Inc. v. FTC, demonstrate. And this Court,

while it has applied the factors in Elgin and Free

Enterprise, has had no occasion to evaluate the

continued workability of Thunder Basin.

d. What Lower Courts Say: No Review

Struggling to make sense of the “of the type”

language from Thunder Basin, courts below have

tugged in favor of precluding judicial review for

structural claims. See, e.g., Axon Enterprises Inc. v.

FTC, 986 F.3d 1173, 1180−82 (9th Cir. 2021); Gibson

v. SEC, 795 F. App’x 753 (11th Cir. 2019); Jarkesy v.

SEC, 803 F.3d 9, 17 (D.C. Cir. 2015); Bennett v. SEC,

844 F.3d 174, 183 (4th Cir. 2016); Hill v. SEC, 825

F.3d 1236 (11th Cir. 2016); Tilton v. SEC, 824 F.3d

276 (2d Cir. 2016); Bebo v. SEC, 799 F.3d 765 (7th Cir.

2015). These cases bar a party from bringing any

structural constitutional claim. In fact, the current

application of Thunder Basin means that all claims

may be kept out of court because they all will be “of

the type that Congress intended to be reviewed within

the statutory structure.” 510 U.S. at 212.

“Meaningful review,” according to lower courts, is

possible if a party can eventually receive review

(which occurs, of course, only if the private party loses

in the agency proceeding). See Bennett, 844 F.3d at

183 (holding that Free Enterprise applies only when

no reviewable SEC action was possible); Hill, 825 F.3d

at 1243 (Commission action will eventually

“necessarily . . . result in a final Commission order.”);

Jarkesy, 803 F.3d at 28. Indeed, lower courts find

jurisdiction stripped even when they conclude that

constitutional claims lie outside of the agency’s

expertise and that the claims may be wholly collateral

to the underlying action—two of the Thunder Basin

factors. E.g., Axon, 986 F.3d at 1187 (noting that “[t]he

Thunder Basin factors point in different directions,”

but “[w]e agree with other circuits . . . that . . . the

presence of meaningful judicial review is enough to

find that Congress precluded district court

jurisdiction over the type of claims that Axon brings.”

(citing Bennett, 844 F.3d at 183 n.7; Bebo, 799 F.3d at

774)). In other words, Thunder Basin has collapsed

into a single factor: Whether, at some time in the far

distant future, the party might get to federal court for

review.

That is not what Thunder Basin intended. The

separation of powers and due process of law do not

contemplate some eventual review—they require

more. See Caleb Nelson, Adjudication in the Political

Branches, 107 Colum. L. Rev. 559, 590 (2007) (“[N]ot

just any sort of ‘judicial’ involvement [will] do”

because courts must “be able to exercise their own

judgment” about the particular case.). Perhaps

because the Court in Thunder Basin failed to fully

explain what claims were “of the type” that Congress

can strip from courts, lower courts have failed to

account for key constitutional principles that must

guide them in evaluating whether a party will receive

meaningful review. To ensure that lower courts do not

read implications into Thunder Basin (which itself

implies Congress intended to strip jurisdiction), this

Court can reinvigorate a proper Thunder Basin test.

Cf. Bebo, 799 F.3d at 769−72 (improperly concluding

that Elgin narrowed Free Enterprise’s holding).

In short, Thunder Basin has evolved into a test

that simply asks whether a court may see the claim

sometime down the road. That must change.

II.

Thunder Basin Should be Refined or

Clarified To Satisfy Constitutional

Commands

Because lower courts have failed to account for

constitutional principles in applying Thunder Basin,

the test should be clarified or refined. To see why,

start with what we know for sure:

•

One: The Constitution permits jurisdiction

stripping only if consistent with the

separation of powers, Article III, and due

process of law. See Bowles, 551 U.S. at 212

(“Within constitutional bounds, Congress

decides what cases the federal courts have

jurisdiction to consider.” (emphasis added));

see also Bank Markazi v. Peterson, 578 U.S.

212, 227−28 (2016) (explaining that

Congress may not regulate jurisdiction in an

unconstitutional manner).

•

Two: Congress, through Section 1331, gave

district courts jurisdiction over all federal

constitutional claims.

•

Three: Cochran here brings claims “arising

under” the Constitution, clearly falling

within Section 1331 (no one argues to the

contrary).

•

Four: The Exchange Act does not “expressly

limit the jurisdiction” that Section 1331

grants, “[n]or does it do so implicitly.” Free

Enterprise Fund, 561 U.S. at 489.

One wonders, then, how this has become a

Supreme Court case. The Government relies heavily

on the fact that Cochran could eventually at some

point get into federal court. But that is not enough.

Nor will it always be true (for example if a party

“wins” in the agency proceeding). Michelle Cochran’s

claims must be heard in court now.

a. Thunder Basin’s proper scope and

application must include

consideration of constitutional issues

Without refinement of Thunder Basin, lower

courts will continue to push away core constitutional

questions. But that approach clashes with the

Constitution’s Vesting Clauses. Judges—who have

received a portion of the sovereign people’s power—

may not “opt out of exercising” the judicial power,

which includes “an obligation to guard against

deviations from [constitutional] principles.” Perez, 575

U.S. at 118−19 (Thomas, J., concurring). “[T]he

Judiciary has a responsibility to decide cases properly

before it, even those it ‘would gladly avoid.’’’

Zivotofsky, 566 U.S. at 194−95 (2012) (quoting Cohens

v. Virginia, 19 U.S. (6 Wheat.) 264, 404 (1821)). As the

Founders well understood, federal courts “cannot

wilfully blind themselves” from the “exercise of the

[judicial] power.” Letter from James Iredell to Richard

Spaight (Aug. 26, 1787), in Griffith J. McRee, II, Life

and Correspondence of James Iredell 173, 174 (1857).

And so when courts consider whether Congress has

stripped Section 1331 jurisdiction, they must ask, too,

whether Congress did so “[w]ithin constitutional

bounds.” Bowles, 551 U.S. at 212. Our legislative

branch cannot divest from our judicial branch the

power that the sovereign people have vested in judges.

Hunter’s Lessee, 14 U.S. at 330−31 (Congress “cannot

vest any portion of the judicial power of the United

States, except in courts [it] ordained and

established.”). Said another way: If, in taking away

district court jurisdiction, Congress also placed the

“judicial Power” in an Article II forum, a

constitutional problem would arise. Lawson, 2017

B.Y.U. L. Rev. at 631 (explaining that executive

adjudications “cannot legitimate a deprivation that is

not otherwise legitimate” regardless of the procedures

used); see Baude, 133 Harv. L. Rev. at 1541 (The

Executive Branch “cannot deprive people of life,

liberty or property without judicial process.”); But

“[t]he Constitution does not vest the Federal

Government with an undifferentiated ‘governmental

power’” Dep’t of Transp. v. Ass’n of Am. R.R., 575 U.S.

43, 67 (2015) (Thomas, J., dissenting). It vests

particular powers in distinct branches.

In other words, using administrative agencies as

“judicial” fora to deprive parties of their private rights

creates a problem—one of constitutional magnitude.

Lower courts applying Thunder Basin have not

grappled with these fundamental issues. Instead, they

try to reconstruct what Congress might have

wanted—what, they say, is “fairly discernible.” But

Congress does not intend to do what it cannot do

under the Constitution. Thus, this Court should

clarify that in every case raising jurisdiction

stripping, Thunder Basin must be read alongside key

constitutional protections to fully guard against

potential infringement of separation of powers and

due process.

So just how should courts proceed? Along with the

Thunder Basin factors—meaningful judicial review,

agency expertise, and whether claims are wholly

collateral to the statutory review provision—courts

ought to consider the following questions.

i. Question 1: Does a statute

explicitly grant jurisdiction over

these claims?

Yes.

Section 1331 applies, and no one here disputes the

point. Whitman, 547 U.S. at 513−14. Thus, as with all

structural constitutional claims, courts should start

with the presumption that district courts have

jurisdiction.

ii. Question 2: Does a subsequent

statute explicitly strip courts of

jurisdiction over these claims?

No.

The Exchange Act “does not expressly limit the

jurisdiction” that Section 1331 confers, and no one

disputes this point, either. Free Enterprise Fund, 561

U.S. at 489. Of course, Congress can explicitly strip

jurisdiction from district courts in some cases. But

even so, it cannot wrest all constitutional claims from

all federal courts—such claims must be vested

somewhere in the federal judiciary. Steven G.

Calabresi & Gary S. Lawson, The Unitary Executive,

Jurisdiction Stripping, and the Hamdan Opinions: A

Textualist Response to Justice Scalia, 107 Colum. L.

Rev. 1002, 1005 (2007); Akhil Reed Amar, America’s

Constitution: A Biography 226–29 (2006) (Congress

could not “transfer the final word in federal-law cases

from federal courts to state judges” because “‘all’

meant just what it said: Federal courts had to be the

last word in ‘all’” cases involving the Constitution.).

Here, though, because no one argues that Congress

has explicitly stripped jurisdiction, the Court need not

grapple with this question further.

iii.

Question 3: Did Congress

implicitly strip courts of

jurisdiction over these claims?

No again.

As this Court said in Free Enterprise Fund: the

Exchange Act “does not expressly limit the

jurisdiction” conferred by Section 1331, and “[n]or

does it do so implicitly.” 561 U.S. at 489. That ought

to be enough to decide this case, but lower courts have

not followed Free Enterprise. Instead, arguing that

Elgin has displaced Free Enterprise, courts continue

to overlook core constitutional concerns. See Bebo, 799

F.3d at 769−772 (concluding that Elgin had narrowed

the jurisdictional holding of Free Enterprise).

Thus, this Court should clarify that any alleged

jurisdiction-stripping statute must comport with the

separation of powers and due process of law. A proper

three-part framework—set out below—would guide

courts in answering those questions.

1. This Court should apply a

strong presumption of no

jurisdiction stripping given

Section 1331, Section 2201,

and Article III

The Constitution says federal courts possess the

power to hear “all Cases . . . arising under this

Constitution.” U.S. Const. art. III, § 2. And Congress

has done just so in Section 1331, which grants district

courts “jurisdiction of all civil actions arising under

the Constitution.” 28 U.S.C. § 1331. This “very

familiar” statute means that in all constitutional

cases the question is “whether [a statute] removes the

jurisdiction given to the federal courts.” Whitman, 547

U.S. at 513−14; see Elgin, 567 U.S. at 25 (Alito, J.,

dissenting) (“In light of § 1331, the question is not

whether Congress has specifically conferred

jurisdiction but whether it has taken it away.”).

So courts must start with a presumption of

jurisdiction when parties raise constitutional claims.

Doing so fits neatly with the well-worn practice of

judicial review. Courts give a “strong presumption

favoring judicial review of administrative action”

which the government rebuts only by carrying a

“‘heavy burden’ of showing that the statute’s

‘language or structure’ forecloses judicial review.”

Salinas v. U.S. R.R. Ret. Bd., 141 S. Ct. 691, 698

(2021) (quoting Mach Mining, LLC v. EEOC, 575 U.S.

480, 486 (2015)); cf. Weyerhaeuser Co. v. U.S. Fish and

Wildlife Serv., 139 S. Ct. 361, 370 (2018) (noting the

“strong presumption” favoring judicial review); Abbott

Labs. v. Gardner, 387 U.S. 136, 140 (1967) (“[J]udicial

review of a final agency action by an aggrieved person

will not be cut off unless there is persuasive reason to

believe that such was the purpose of Congress.”).

Thus, courts should presume that Section 1331 grants

jurisdiction absent a “heightened showing” that

statutes might “preclude judicial review of

constitutional claims.” Webster, 486 U.S. at 603. And

more importantly, this presumption gives life to the

sovereign people’s desire to protect liberty by

separating powers. Bowsher v. Synar, 478 U.S. 714,

721 (1986) (“The declared purpose of separating and

dividing the powers of government, of course, was to

‘diffus[e] power the better to secure liberty.’” (quoting

Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S.

579, 635 (1952) (Jackson, J., concurring))).

Put simply: Article III and Section 1331 say what

they mean. They grant jurisdiction. And if Congress

wants to override those foundational texts, it has

much work to do.

2. Congress must clearly strip

jurisdiction

Given the presumption of jurisdiction, Congress

must be clear to overcome Section 1331 and Section

2201. If, for example, Congress says “no district court

shall have jurisdiction to entertain these claims,” then

it might explicitly take away the power to hear a case.

But congressional drafting rarely comes so neatly

packaged. And so courts should assess whether the

words that Congress used reflect an obvious intent to

strip jurisdiction.

Ensuring that Congress is crystal clear before this

Court says that a statute overrides Article III and

Section 1331 makes good sense. Clear statements,

after all, are well known to the law. See e.g., NFIB v.

Dep’t of Labor, 142 S. Ct. 661, 665 (2022) (applying

clear-statement rule to sprawling agency powers over

economy); Alabama Ass’n of Relators v. Dep’t of Health

and Human Servs., 141 S. Ct. 2485, 2489 (2021) (“We

expect Congress to speak clearly when authorizing an

agency to exercise powers of ‘vast economic and

political significance.’” (quoting Utility Air Regulatory

Grp. v. EPA, 573 U.S. 302, 324 (2014)); United States

Forest Servs. v. Cowpasture River Preservation Ass’n,

140 S. Ct. 1837, 1850 (2020) (“Our precedents require

Congress to enact exceedingly clear language if it

wishes to significantly alter the balance between

federal and state power and the power of the

Government over private property.”); West Virginia v.

EPA, __ U.S. __, Nos. 20-1530, 20-1531, 20-1778, 201780, 2022 WL 2347278, at *17 (June 30, 2022)

(requiring a “clear congressional authorization”); id at

*18 (Gorsuch, J., concurring, with whom Alito, J.,

joins) (“Like many parallel clear-statement rules in

our law, this one operates to protect foundational

constitutional guarantees.”).

And the jurisdictional context is no exception.

Here, too, this Court has told Congress to say what it

means. St. Cyr, 533 U.S. at 298 (noting a

“longstanding rule requiring a clear statement of

congressional intent to repeal habeas jurisdiction”).

“Implications from statutory text . . . are not sufficient

to repeal habeas jurisdiction.” Id. at 299. (emphasis

added); see also United States v. Nordic Village, Inc.,

503 U.S. 30, 33 (1992) (holding that the waiver of

sovereign immunity “must be ‘unequivocally

expressed’” (citation omitted)); Gregory v. Ashcroft,

501 U.S. 452, 460−61 (1991) (applying plainstatement rule in case involving “the usual

constitutional balance of federal and state powers”).

These clear-statement approaches simply reflect

the Founding-era view that “where the general system

of the laws is departed from, the legislative intention

must be expressed with irresistible clearness to induce

a court of justice to suppose a design to effect such

objects.” United States v. Fisher, 6 U.S. (2 Cranch)

358, 390 (1805) (Marshall, C.J.) (emphasis added).

Getting around Article III and Sections 1331 and 2201

certainly “depar[ts] from” the “general system,” and so

Congress must be clear. Id.

Thus, to the extent Thunder Basin’s first prong—

whether the congressional intent to strip jurisdiction

is “fairly discernible in the statutory scheme”—

departs from the first principles of the Constitution,

the Court should clarify that the first prong requires

a clear statement from Congress. Thunder Basin, 510

U.S. at 207. The Court should clarify the first prong to

ask whether it is clearly discernible that Congress

intended to strip jurisdiction.

3. The Thunder Basin factors

are helpful guides in

determining whether

Congress spoke clearly

But when is it “clear” that Congress stripped

jurisdiction? And what claims count? Congress need

not use “magic words” or a special formula. United

States v. Home Concrete & Supply, LLC, 566 U.S. 478,

493 (2012) (Scalia, J., concurring in part and

concurring in the judgment). If it is clear—not merely

“fairly discernable”—that Congress wanted to strip

jurisdiction, then courts may decline to hear the case.

1. Meaningful judicial review. Courts see this

factor as the most important. Axon, 986 F.3d at 1187

(“We agree with other circuits . . . that . . . the presence

of meaningful judicial review is enough to find that

Congress precluded district court jurisdiction over the

type of claims that Axon brings.”). But they hardly

treat it as such. In fact, courts have all but substituted

the word “possible” for “meaningful.”

Start with basics: meaningful means meaningful.

And no such kind of review occurs in the SEC in-house

proceeding, where an SEC-appointed ALJ decides the

case before an appeal to the SEC itself (which issued

the complaint). 15 U.S.C. § 78-d-1(a)–(b); 17 C.F.R.

§ 201.110. This alone runs afoul of the longstanding

rule that “no man can be a judge in his own case

consistent with the Due Process clause.” Chrysafis v.

Marks, 141 S. Ct. 2482, 2482 (2021); see Dr. Bonham’s

Case, 77 Eng. Rep. 646 (C.P. 1610) (“[N]o one ought to

be a judge in his own cause.”); The Federalist No. 10,

at 59 (Madison) (“No man is allowed to be a judge in

his own cause; because his interest would certainly

bias his judgment, and not improbably, corrupt his

integrity.”); id., No. 80, at 538 (Hamilton) (“No man

ought certainly to be a judge in his own cause, or in

any cause in respect to which he has the least interest

or bias.”); James Wilson, Lectures on Law, ch. XI at

739 (1791), reprinted in 1 Collected Works of James

Wilson (Kermit L. Hall & Mark David Hall, eds.,

Liberty Fund 2011) (Any act that will “make a man

judge in his own cause, is void in itself.”)

On top of that, private parties before the SEC do

not get a jury even though the SEC adjudicates

private rights while imposing severe financial

penalties. Jarkesy v. SEC, 34 F.4th 446, 453−57 (5th

Cir. 2022). Nor does the “respondent” receive the

benefit of the Federal Rules of Civil Procedure and

Federal Rules of Evidence. Instead, the SEC plays by

its own rules. 17 C.F.R. § 201.100 et seq.

More still, any “review” by federal judges turns on

the record that the SEC developed, and “the Exchange

Act specifies what constitutes the agency record, 15

U.S.C. § 78y(a)(2), the standard of review, id. §

78y(a)(4), and the process for seeking a stay of the

Commission order either before the Commission or in

the court of appeals, id. § 78y(c)(2).” Bennett, 844 F.3d

at 177. The entire case, then—the evidence and claims

being ultimately reviewed—is shaped by the agency.

It determines the record. It determines whether to

issue an order. It determines whether to drop the case

entirely. The agency pulls all the strings of the

ultimate “review” before an appellate court. What’s

more, judicial deference to fact-finding and legal

determinations means that no “meaningful” review

occurs. The Rise and Rise of the Administrative State,

107 Harv. L. Rev. 1231, 1248–49 (1994) (“[T]he agency

decision, even before the bona fide Article III tribunal,

possesses a very strong presumption of correctness on

matters both of fact and of law.”); Bernick, 16 Geo. J.

L. & Pub. Pol’y at 30 (Deferring to agency factfinding

in core private rights cases “constitutes an abdication

of the duty of independent judgment that Article III

imposes upon federal judges; and denies litigants due

process of law.”).

In other words, review in an Article III forum

occurs only after a party is (1) subject to a biased

proceeding, (2) with no jury, (3) with an agencycrafted record, (4) to which federal judges will

ultimately defer.

In no meaningful sense is that review meaningful.

And when determining whether Congress sought to

strip courts of jurisdiction, courts must not turn a

blind eye to such burdens imposed on litigants.

Surely, after all, Congress did not so intend.

This is no new insight. Long before Thunder Basin,

scholars questioned “[w]hether there is ‘meaningful’

review” when courts defer to agency factfinding.

Martin H. Redish, Legislative Courts, Administrative

Agencies, and the Northern Pipeline Decision, 1983

Duke L.J. 197, 227 (1983) (emphasis added). Such

deference “skew[s] too far in favor of agencies” in

federal court, so courts should employ “more robust

review to agency adjudication where private rights

are at stake.” Mila Sohoni, Agency Adjudication and

Judicial Nondelegation: An Article III Canon, 107 Nw.

U. L. Rev. 1569, 1597 (2013). But because courts do

not do so, deference doctrines cut against meaningful

review.

2. Agency Expertise. Agencies do not have expertise

in deciding constitutional issues. Free Enterprise, 561

U.S. at 491 (stating that expertise means “technical

considerations of agency policy.”). As this Court

recently explained “agency adjudications are

generally ill

suited to

address

structural

constitutional challenges.” Carr v. Saul, 141 S. Ct.

1352, 1360 (2021). Just so. And thus, when a party

brings a structural constitutional claim, courts ought

to weigh against jurisdiction stripping.

3. Wholly Collateral. This factor has courts

confused. See Tilton, 824 F.3d at 287; Bennett, 844

F.3d at 186 (finding decision is “not free from

ambiguity”); Bebo, 799 F.3d at 774 (noting “this

unsettled issue”); Axon, 986 F.3d at 1185 (concluding

that claims were “arguably” wholly collateral and

noting that courts have “offered two competing ways

to consider” the factor).

This Court should clarify: “Wholly collateral”

means claims that do not rise and fall with the merits

of the administrative complaint. The constitutionality

of the SEC administrative-adjudication scheme, for

example, is wholly collateral to the merits of

Cochran’s case because it has nothing to do with the

allegations in the SEC’s complaint in this case. After

all, “constitutional challenges to the laws that

[agencies] administer” “are . . . wholly collateral to

other types of claims” which agencies are “empowered

to consider.” Elgin, 567 U.S. at 29−30. The lower

courts remain in disarray on this point. But to the

extent it is used to excavate Congress’s intent, the

“wholly collateral” inquiry must apply to

constitutional claims falling well outside the agency’s

complaint.

Only after examining these factors can one

determine whether Congress clearly intended to strip

jurisdiction. But the factors must be applied

rigorously. And even then, there is a final step: Would

congressional jurisdiction stripping violate the

Constitution?

iv.

Question 4: Did Congress strip

jurisdiction consistent with the

Constitution’s separation of

powers and due process?

No once more.

This final question must be addressed in every

case. Because Congress can strip jurisdiction only

“[w]ithin constitutional bounds,” courts must consider

whether Congress, in stripping jurisdiction, acted

constitutionally. Bowles, 551 U.S. at 212. And if not,

jurisdiction stripping cannot be the correct result.

For instance, Congress cannot bar all federal

courts from hearing all constitutional claims. Hunter’s

Lessee, 14 U.S. (1 Wheat.) at 328−30 (holding the

“whole judicial power” “shall be vested” in federal

courts) (emphasis deleted). Or, a statute that stripped

a court of jurisdiction and forced a party to navigate

through an Article II forum that exercises the “judicial

Power” would violate Article III and the separation of

powers. Stern, 564 U.S. at 469 (holding Congress

cannot give Article I court the “judicial power of the

United States by entering final judgment on a

common law tort claim”); see Baude, 133 Harv. L. Rev.

at 1541 (The Executive Branch “cannot deprive people

of life, liberty or property without judicial process.”).

And finally, a statute cannot strip jurisdiction if it

would ensure that the party would lose his private

rights to life, liberty, or property without adequate

due process in a judicial forum. Lawson, 2017 B.Y.U.

L. Rev. at 631 (explaining that executive adjudications

“cannot legitimate a deprivation that is not otherwise

legitimate” regardless of the procedures used);

Chapman & McConnell, 121 Yale L.J. at 1679 (Due

process “consistently referred to the guarantee of legal

judgment in a case by an authorized court in

accordance with settled law.”).

The SEC process violates these latter two

constraints. It adjudicates private rights and issues

binding orders that deprive people of their property

with no judicial process. It exercises the judicial power

by binding parties in cases involving private rights

and imposing fines. See Jarkesy, 34 F.4th at 458 (SEC

“fraud claims and civil penalties are analogous to

traditional fraud claims at common law” and are

“about the redress of private harms.”). And “both

Article III and the Due Process Clause generally

require the government to follow common-law

procedure (including, fundamentally, the use of a

‘court’) when seeking to deprive people of their private

rights to property or liberty.” Calcutt v. FDIC, __ F.4th

__, No. 20-4303, 2022 WL 2081430, at *39 (6th Cir.

2022) (Murphy, J., dissenting). “Generations of

Americans assumed that once core private rights had

vested in a particular individual, the allied

requirements of due process and the separation of

powers protected them against many forms of

interference by the political branches.” Nelson, 107

Colum. L. Rev. at 562.

The SEC’s in-house adjudication here runs

roughshod over these longstanding constitutional

norms. The SEC’s process violates the separation of

powers and due process. It levies huge civil penalties

that affect private rights. Tilton, 824 F.3d at 279

(“SEC’s

authority

impose

penalties

administratively” has been “dramatically expanded”

such that it is “essentially ‘coextensive with [the

SEC’s] authority to seek penalties in Federal court.’”

Id. (citation omitted)). It imposes a binding judgment.

And so courts cannot read the Exchange Act to strip

jurisdiction. Doing so would be outside of

“constitutional bounds.”

Thunder Basin and Elgin sidestep these necessary

predicate questions about whether the Constitution

permits the Executive Branch from exercising the

power that the purported jurisdiction-stripping

statute supplies. That ignores our Constitution’s

design, which the sovereign people established by

delegating limited powers to separate branches.

Eroding these key constitutional constraints

threatens our government’s very structure and in turn

puts individual liberty in grave danger.

CONCLUSION

The separation of powers and due process of law

protect liberty and guard against arbitrary rule. That

structure allows Congress to strip federal courts of

jurisdiction only when done clearly and within

constitutional limits. It has done neither here.

The judgment should be affirmed.

DATED: July 6, 2022.

Respectfully submitted,

JOHN F. KERKHOFF

Counsel of Record

ADITYA DYNAR

Pacific Legal Foundation

3100 Clarendon Blvd.

Suite 610

Arlington, VA 22201

Phone: (202) 888-6881

jkerhoff@pacificlegal.org

adynar@pacificlegal.org

Counsel for Amicus Curiae

Pacific Legal Foundation

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.