Amicus Curiae Brief — Securities and Exchange Commission, Petitioner v. George R. Jarkesy, Jr., et al.

No. 22-859

IN THE

Supreme Court of the United States

_________________________________________________

SECURITIES AND EXCHANGE COMMISSION,

Petitioner,

v.

GEORGE R. JARKESY, JR., ET AL.,

Respondents.

____________________________________________________________________________________________________

On Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

____________________________________________________________________________________________________

BRIEF OF AMICUS CURIAE

AMERICANS FOR PROSPERITY FOUNDATION

IN SUPPORT OF RESPONDENTS

————

Michael Pepson

Counsel of Record

AMERICANS FOR PROSPERITY FOUNDATION

1310 N. Courthouse Road, Ste. 700

Arlington, VA 22201

(571) 329-4529

mpepson@afphq.org

Counsel for Amicus Curiae

October 16, 2023

i

TABLE OF CONTENTS

Table of Authorities................................................... iii

Interest of Amicus Curiae ...........................................1

Summary of Argument................................................ 2

Argument ..................................................................... 5

I.

The SEC’s Administrative Prosecution Violates

Article III and Is Therefore Void Ab Initio ......5

A. The

SEC’s

Administrative

Prosecution

Implicates Private Rights................................. 5

B. The Constitution Exclusively Vests the Judicial

Power To Find Facts and Independently

Interpret the Law in Article III Courts ...........6

C. The SEC Cannot Possess or Exercise Article III

Judicial Power ..................................................8

D. The Commissioners Are Usurpers In An

Unlawful Office Whose Inhouse Enforcement

Actions Are Void Ab Initio ............................. 12

II.

The SEC’s Administrative Prosecution Violates

Due Process ..................................................... 13

A. The SEC’s Administrative Process Is Rigged

Against Respondents ...................................... 14

ii

B. The SEC’s Combination of Investigative,

Prosecutorial, and Judicial Functions Violates

Due Process ..................................................... 15

III.

The Time Has Come to Enforce Article I’s

Vesting Clause ................................................ 16

A. The Forum-Selection Provisions Implicate

Article I ........................................................... 16

B. Article I’s Vesting Clause Protects Liberty ... 18

C. Line-Drawing Questions Should Not Deter

Enforcement of the Separation of Powers ..... 19

D. This Court Should Jettison the “Intelligible

Principle” Remark .......................................... 25

E. Enforcing Article I’s Vesting Clause Will Have

Salutary Effects .............................................. 25

Conclusion ................................................................. 28

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Ala. Ass’n of Realtors v. HHS,

141 S. Ct. 2485 (2021) ....................................... 27

A.L.A. Schechter Poultry Corp. v. United

States,

295 U.S. 495 (1935) ........................................... 23

Allstates Refractory Contractors, LLC v. Su,

79 F.4th 755 (6th Cir. 2023) ................ 21, 23, 24

Am. Lung Ass’n v. EPA,

985 F.3d 914 (D.C. Cir. 2021) ..................... 27, 28

Axon Enter. v. FTC,

143 S. Ct. 890 (2023) ........... 5, 6, 9, 10, 11, 14, 15

B&B Hardware, Inc. v. Hargis Indus.,

575 U.S. 138 (2015) ..................................... 7, 8, 9

Biden v. Nebraska,

143 S. Ct. 2355 (2023) ....................................... 27

Bowsher v. Synar,

478 U.S. 714 (1986) ............................................. 8

Buffington v. McDonough,

143 S. Ct. 14 (2022) ........................................... 18

iv

BST Holdings, L.L.C. v. OSHA,

17 F.4th 604 (5th Cir. 2021) ....................... 23, 24

Calcutt v. FDIC,

37 F.4th 293 (6th Cir. 2022) ............................. 13

CFTC v. Schor,

478 U.S. 833 (1986) ............................................. 7

City of Arlington v. FCC,

569 U.S. 290 (2013) ..................................... 2, 3, 8

Cochran v. SEC,

20 F.4th 194 (5th Cir. 2021) ............................... 3

Collins v. Yellen,

141 S. Ct. 1761 (2021) ....................................... 13

Crowell v. Benson,

285 U.S. 22 (1932) ............................................. 17

Den Ex Dem. Murray v. Hoboken Land &

Improv. Co.,

59 U.S. (18 How.) 272 (1856) .............................. 5

Donziger v. United States,

143 S. Ct. 868 (2023) ......................................... 15

DOT v. Ass’n of Am. R.R.,

575 U.S. 43 (2015) ................................... 7, 20, 23

Ex parte Bakelite Corp.,

279 U.S. 438 (1929) ........................................... 17

v

FTC v. Ruberoid Co.,

343 U.S. 470 (1952) ............................................. 8

Garcia v. Garland,

64 F.4th 62 (2d Cir. 2023) ................................... 8

Gebhart v. SEC,

595 F.3d 1034 (9th Cir. 2010) ........................... 10

Gutierrez-Brizuela v. Lynch834 F.3d 1142

(10th Cir. 2016) ................................................. 18

Gundy v. United States,

139 S. Ct. 2116 (2019) ......... 18, 19, 20, 21, 25, 27

Hildreth’s Heirs v. M’Intire’s Devisee,

24 Ky. 206 (Ky. 1829)........................................ 13

Impax Labs., Inc. v. FTC,

994 F.3d 484 (5th Cir. 2021) ............................. 10

In re Renewable Energy Dev. Corp.,

792 F.3d 1274 (10th Cir. 2015) ................... 5, 7, 8

Jones v. Hendrix,

143 S. Ct. 1857 (2023) ................................. 26, 27

J.W. Hampton, Jr., & Co. v. United States,

276 U.S. 394 (1928) ........................................... 25

La. Pub. Serv. Com v. Fed. Commc’ns

Comm’n,

476 U.S. 355 (1986) ........................................... 18

vi

Little Sisters of the Poor Saints Peter &

Paul Home v. Pennsylvania,

140 S. Ct. 2367 (2020) ................................. 16, 17

Lorenzo v. SEC,

872 F.3d 578 (D.C. Cir. 2017) ..................... 10, 11

Lucia v. SEC,

138 S. Ct. 2044 (2018) ......................................... 9

Meadows v. SEC,

119 F.3d 1219 (5th Cir. 1997) ........................... 10

Mistretta v. United States,

488 U.S. 361 (1989) ..................................... 19, 20

Murray’s Lessee v. Hoboken Land &

Improvement Co.,

59 U.S. (18 How.) 272 (1856) .............................. 7

Nat’l Fed’n of Indep. Bus. v. OSHA,

142 S. Ct. 661 (2022) ......................................... 27

Norton v. Shelby Cnty.,

118 U.S. 425 (1886) ........................................... 13

Oceanic Steam Navigation Co. v.

Stranahan,

214 U.S. 320 (1909) ........................................... 17

Oil States Energy Servs., LLC v. Greene’s

Energy Grp., LLC,

138 S. Ct. 1365 (2018) ............................... 5, 7, 12

vii

Patchak v. Zinke,

138 S. Ct. 897 (2018) ........................................... 2

Sackett v. EPA,

143 S. Ct. 1322 (2023) ................................. 23, 24

Seila Law LLC v. Consumer Fin. Prot.

Bureau,

140 S. Ct. 2183 (2020) ......................... 2, 8, 12, 24

Severino v. Biden,

71 F.4th 1038 (D.C. Cir. 2023) ........................... 7

Shankland v. Washington,

30 U.S. 390 (1831) ............................................. 19

Stern v. Marshall,

564 U. S. 462 (2011) .................................... 7, 8, 9

Tiger Lily, LLC v. HUD,

5 F.4th 666 (6th Cir. 2021) ............. 19, 25, 26, 28

Tilton v. SEC,

824 F.3d 276 (2d Cir. 2016) .................. 14, 16, 17

Tull v. United States,

481 U.S. 412 (1987) ....................................... 6, 11

United States v. Arthrex, Inc.,

141 S. Ct. 1970 (2021) ....................................... 15

United States v. Ferreira,

54 U.S. 40 (1851) ............................................... 13

viii

United States v. Nichols,

784 F.3d 666 (10th Cir. 2015) ..................... 20, 21

United States v. Pheasant,

No. 21-cr-00024, 2023 U.S. Dist. LEXIS

72572 (D. Nev. Apr. 26, 2023) .......................... 21

VanCook v. SEC,

653 F.3d 130 (2d Cir. 2011) ................................ 9

Wayman v. Southard,

23 U.S. (10 Wheat.) 1 (1825)..... ..2, 19, 20, 25, 28

Wellness Int’l Network, Ltd. v. Sharif,

575 U.S. 665 (2015) ............................................. 6

West Virginia v. EPA,

142 S. Ct. 2587 (2022) ........................... 19, 22, 26

Whitman v. Am. Trucking Ass’ns,

531 U.S. 457 (2001) ............................... 17, 24, 25

Williams v. Pennsylvania,

579 U.S. 1 (2016) ............................................... 15

Constitution

U.S. Const., Art. I, § 1 .................................. 4, 17, 19

U.S. Const., Art. I, § 8 ............................................ 17

U.S. Const. Art. II, § 1, cl. 1 ..................................... 8

U.S. Const. Art. III, § 1 .................................. 7, 9, 17

ix

U.S. Const. Art. III, § 2 .......................................... 17

U.S. Const. Art. III, § 2, cl. 1.................................... 7

U.S. Const. Art. III, § 2, cl. 2.................................... 9

Statutes

15 U.S.C. § 78w(a)(1).............................................. 17

15 U.S.C. § 78y(a)(4)............................................... 10

15 U.S.C. § 80b-13 .................................................. 10

Rules

Sup. Ct. R. 37.3 ......................................................... 1

Other Authorities

Adam Katz,

Eventual Judicial Review,

118 Colum. L. Rev. 1139 (2018)........................ 14

Andrew N. Vollmer,

Accusers as Adjudicators in Agency

Enforcement Proceedings,

52 U. Mich. J.L. Reform 103 (2018) ................. 15

Antonin Scalia, A Note on the Benzene Case,

Reg., July/Aug. 1980 ......................................... 26

x

Brett M. Kavanaugh,

Our Anchor for 225 Years and Counting:

The Enduring Significance of the Precise

Text of the Constitution,

89 Notre Dame L. Rev. 1907 (2014) ................. 18

Caleb Nelson,

Adjudication in the Political Branches,

107 Colum. L. Rev. 559 (2007)........................ 7, 8

Evan D. Bernick,

Is Judicial Deference to Agency FactFinding Unlawful?,

16 Geo. J.L. & Pub. Pol’y 27 (2018). ......... 6, 7, 11

Federalist No. 47 (Madison)..................................... 2

Federalist No. 75 (Hamilton) ................................. 20

Gary Lawson, A Private-Law Framework

for the Subdelegation, in The

Administrative State Before the

Supreme Court: Perspectives on the

Nondelegation Doctrine (Peter J.

Wallison & John Yoo eds. 2022) ....................... 23

Gary Lawson,

The Rise and Rise of the Administrative

State,

107 Harv. L. Rev. 1231 (1994) .......................... 12

Gideon Mark,

Response: SEC Enforcement Discretion,

94 Tex. L. Rev. Online 261 (2016) .................... 14

xi

Gideon Mark,

SEC and CFTC Administrative

Proceedings,

19 U. Pa. J. Const. L. 45 (2016) ........................ 14

Jed S. Rakoff, U.S. Dist. Judge for the S.

Dist. of N.Y., PLI Securities Regulation

Institute Keynote Address: Is the S.E.C.

Becoming a Law Unto Itself? (Nov. 5,

2014),https://securitiesdiary.files.wordpr

ess.com/2014/11/rakoff-pli-speech.pdf .............. 14

Jennifer Mascott,

Constitutionally Conforming Agency

Adjudication,

2 Loyola U. Chi. J. Reg. Comp. 22 (2017) .. 11, 12

Jennifer Mascott,

Early Customs Laws and Delegation,

87 Geo. Wash. L. Rev. 1388 (2019) ................... 23

Mila Sohoni,

The Major Questions Quartet,

136 Harv. L. Rev. 262 (2022) ............................ 28

Naomi Rao,

Administrative Collusion: How

Delegation Diminishes the Collective

Congress,

90 N.Y. U. L. Rev. 1463 (2015) ................... 21, 26

Paul Larkin,

Revitalizing the Nondelegation Doctrine,

23 Federalist Soc’y Rev. 238 (2022).................. 22

xii

Philip Hamburger,

Is Administrative Law Unlawful? (2014)......... 10

Ronald A. Cass, Separating Powers in the

Administrative State: Understanding

Delegation, Discretion, and Deference, C.

Boyden Gray Center for the Study of the

Administrative State Research Paper

No. 23-22 (Sept. 20, 2023),

https://administrativestate.gmu.edu/wpcontent/uploads/2023/08/23-22_Cass1.pdf ............................................................. 20, 22

Steven G. Calabresi & Gary Lawson,

The Depravity of the 1930s and the

Modern Administrative State,

94 Notre Dame L. Rev. 821 (2019) ................. 2, 4

The Administrative State Before the

Supreme Court: Perspectives on the

Nondelegation Doctrine (Peter J.

Wallison & John Yoo eds. 2022) ....................... 22

Thomas J. Philbrick,

A Purple Garment for Their Nakedness:

Wilson, Hegel, and the Non-Delegation

Doctrine,

14 Alb. Gov’t L. Rev. 30 (2021) ......................... 26

1

BRIEF OF AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

Under Supreme Court Rule 37.3, Americans for

Prosperity Foundation (“AFPF”) respectfully submits

this amicus curiae brief in support of Respondents.1

INTEREST OF AMICUS CURIAE

Amicus curiae AFPF is a 501(c)(3) nonprofit

organization committed to educating and training

Americans to be courageous advocates for the ideas,

principles, and policies of a free and open society.

Some of those key ideas include the separation of

powers and constitutionally limited government. As

part of this mission, it appears as amicus curiae before

federal and state courts.

AFPF has a particular interest in this case because

it believes the Securities and Exchange Commission’s

(“SEC”) structure offends the Constitution on many

levels. For-cause removal protections of SEC ALJs

violate Article II, unconstitutionally shielding these

officials from accountability to the President and thus

to the American people. Worse, the SEC’s

administrative process—in which the SEC acts as

investigator, prosecutor, and judge of its own cause—

offends due process, Article III, and the Seventh

Amendment. On top of this, the SEC has unfettered

power to alter the jurisdiction of Article III courts.

1 Amicus curiae states that no counsel for any party authored

this brief in whole or in part, and no entity or person, aside from

amicus curiae or its counsel, made any monetary contribution

intended to fund the preparation or submission of this brief.

2

AFPF believes this unconstitutional arrangement

cannot stand and the SEC’s extralegal administrative

prosecution is void.

SUMMARY OF ARGUMENT

The Constitution “sets out three branches [of

government] and vests a different form of power in

each—legislative, executive, and judicial.” Seila Law

LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183,

2216 (2020) (Thomas, J., concurring in part,

dissenting in part) (citations omitted). “[T]he

legislature makes, the executive executes, and the

judiciary construes the law[.]” Wayman v. Southard,

23 U.S. (10 Wheat.) 1, 46 (1825) (Marshall, C.J.). “By

vesting each branch with an exclusive form of power,

the Framers kept those powers separate.” Patchak v.

Zinke, 138 S. Ct. 897, 904 (2018) (plurality). Or so they

thought. Framers, meet the administrative state.

“The administrative state makes hash out of this

basic allocation of constitutional powers.” Steven G.

Calabresi & Gary Lawson, The Depravity of the 1930s

and the Modern Administrative State, 94 Notre Dame

L. Rev. 821, 852 (2019). “[A]s a practical matter”

modern administrative bodies “exercise legislative

power,” “executive power,” “and judicial power[.]” City

of Arlington v. FCC, 569 U.S. 290, 312–13 (2013)

(Roberts, C.J., dissenting). Cf. Federalist No. 47

(Madison). Indeed, this “is a central feature of modern

American government.” City of Arlington, 569 U.S. at

313 (Roberts, C.J., dissenting). But “[t]he Framers

could hardly have envisioned today’s vast and varied

federal bureaucracy and the authority administrative

agencies now hold over our economic, social, and

political activities.” Id. (Roberts, C.J., dissenting)

3

(cleaned up). “It would be a bit much to describe” this

state of affairs as “‘the very definition of tyranny,’ but

the danger posed by the growing power of the

administrative state cannot be dismissed.” Id. at 315

(Roberts, C.J., dissenting). It is past time to confront

the problem.

This case is an ideal opportunity to do so. The SEC

is an exemplar of the administrative state’s

unconstitutionality. See generally Cochran v. SEC, 20

F.4th 194, 214–25 (5th Cir. 2021) (en banc) (Oldham,

J., concurring) (exploring SEC’s origin story). This

administrative body wields vast legislative, executive,

and judicial power, posing a grave threat to core

private rights and individual liberty. As relevant here,

it brings inhouse prosecutions where it acts as

investigator, prosecutor, and judge of its own cause.

The SEC also gets to make the rules for this slanted

administrative process, further rigging the game in its

own favor. Unsurprisingly, the Commission

consistently finds in favor of itself. The SEC’s ALJs

are

also

unconstitutionally

insulated

from

accountability to the political branches and, by

extension, to the American People. This arrangement

offends due process and makes a mockery of the

Constitution’s structural protections of individual

liberty. It should not be allowed to stand.

Respondents are entitled to a meaningful remedy

for the government’s separation-of-powers violations

that will afford them complete redress. By purporting

to wield Article III judicial power to deprive

Respondents

of

their

private

rights,

the

Commissioners here were mere usurpers in an

unlawful office. This enforcement action against

4

Respondents, therefore, is necessarily void ab initio,

and the Order must be vacated without remand.

More broadly, this case also provides the Court

with an opportunity to address “[t]he most blatant

way in which the administrative state violates the

constitutional separation of powers”; to wit, “the vast

subdelegation of legislative authority that permeates

modern government.” Calabresi & Lawson, 94 Notre

Dame L. Rev. at 853. The Constitution flatly prohibits

Congress from delegating any of its legislative power

to other entities. U.S. Const. Art. I, § 1. Yet, Congress

has increasingly sought to insulate itself from

accountability by purporting to delegate its legislative

power to various administrative bodies. And as

Congress has in this way shirked its own

constitutional responsibilities, those politically

unaccountable administrative bodies have filled the

resulting vacuum and taken up the policymaking role

Congress has abandoned. To remedy this state of

affairs, the Court should make clear the Constitution

exclusively tasks the People’s elected representatives

with making important policy choices through the

deliberately difficult legislative process, subject to

constitutional limits on federal power.

For the foregoing reasons, the decision below

should be affirmed.

5

ARGUMENT

I.

The SEC’s Administrative Prosecution

Violates Article III and Is Therefore Void

Ab Initio.

A. The SEC’s Administrative Prosecution

Implicates Private Rights.

In analyzing whether the SEC’s inhouse

administrative prosecution complies with the

Constitution, a threshold inquiry is whether it

implicates Respondents’ private (as opposed to public)

rights. See Oil States Energy Servs., LLC v. Greene’s

Energy Grp., LLC, 138 S. Ct. 1365, 1373 (2018). It

does. Private rights include “life, liberty, and

property[.]”2 Axon Enter. v. FTC, 143 S. Ct. 890, 907

(2023) (Thomas, J., concurring). Cf. Den Ex Dem.

Murray v. Hoboken Land & Improv. Co., 59 U.S. (18

How.) 272, 284 (1856). Here, the SEC sought to

deprive Respondents of vested property rights and

infringe their economic liberty. See Pet. App. 3a–4a;

see also Pet. App. 1a (SEC’s “decisions have broad

consequences for personal liberty and property”).

“The original idea appears to have been that certain rights

belong to individuals inalienably—things like the rights to life,

liberty, and property—and they may not be deprived except by

an Article III judge. Meanwhile, additional legal interests may

be generated by positive law and belong to the people as a civic

community and disputes about their scope and application may

be resolved through other means, including legislation or

executive decision.” In re Renewable Energy Dev. Corp., 792 F.3d

1274, 1278 (10th Cir. 2015) (Gorsuch, J.).

2

6

Among other things, the SEC imposed $985,000 in

civil penalties and disgorgement and barred Mr.

Jarkesy from pursuing his chosen occupation. See Pet.

App. 3a–4a. That well describes core private rights.

See Axon, 143 S. Ct. at 910–11 (Thomas, J.,

concurring). Cf. Tull v. United States, 481 U.S. 412,

422 (1987) (“A civil penalty was a type of remedy . . .

that could only be enforced in courts of law.”).

Respondents are entitled to the constitutional process

required when private rights are infringed.

B. The Constitution Exclusively Vests the

Judicial Power To Find Facts and

Independently Interpret the Law in

Article III Courts.

“[A]n exercise of the judicial power is required

when the government wants to act authoritatively

upon core private rights that had vested in a

particular individual.” Wellness Int’l Network, Ltd. v.

Sharif, 575 U.S. 665, 713 (2015) (Thomas, J.,

dissenting) (cleaned up); see Axon, 143 S. Ct. at 907

(Thomas, J., concurring) (“[W]hen private rights are

at stake, full Article III adjudication is likely

required.”). “Article III of the Constitution begins with

a clause that vests [this] particular kind of power in a

specialized branch of the federal government.” Evan

D. Bernick, Is Judicial Deference to Agency FactFinding Unlawful?, 16 Geo. J.L. & Pub. Pol’y 27, 43

(2018). The Judicial Vesting Clause exclusively vests

the “judicial Power of the United States” in Article III

7

courts,3 U.S. Const. Art. III, § 1; see Oil States, 138 S.

Ct. at 1372, “in independent judges,” 4 id. at 1381

(Gorsuch, J., dissenting); see CFTC v. Schor, 478 U.S.

833, 867 (1986) (Brennan, J., dissenting).

“Congress cannot ‘confer the Government’s

‘“judicial Power”’ on entities outside Article III.” Oil

States, 138

S. Ct.

at 1372–73 (quoting

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

Bernick, 16 Geo. J.L. & Pub. Pol’y at 43–46. Cf.

Severino v. Biden, 71 F.4th 1038, 1050 (D.C. Cir. 2023)

(Walker, J., concurring) (noting this Court “has

doubted Congress’s ability to vest any judicial power

(whether ‘quasi’ or not) in an executive agency” (citing

Oil States, 138 S. Ct. at 1372–73)). “The allocation of

powers in the Constitution is absolute[.]” DOT v. Ass’n

of Am. R.R., 575 U.S. 43, 69 (2015) (Thomas, J.,

concurring in judgment). And “[u]nder our

Constitution, the ‘judicial power’ belongs to Article III

courts and cannot be shared with the Legislature or

the Executive.” B&B Hardware, Inc. v. Hargis Indus.,

575 U.S. 138, 171 (2015) (Thomas, J., dissenting)

(citing Stern, 564 U.S. at 482–83); see Caleb Nelson,

3 “As originally understood, the judicial power extended to ‘suit[s]

at the common law, or in equity, or admiralty.’” Oil States, 138

S. Ct. at 1381 (Gorsuch, J., dissenting) (quoting Murray’s Lessee

v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 284

(1856)); see also U.S. Const. Art. III, § 2, cl. 1 (“The judicial Power

shall extend to all Cases, in Law and Equity, arising under this

Constitution, [and] the Laws of the United States[.]”).

4 “This constitutional design is all about ensuring ‘clear heads . . .

and honest hearts,’ the essential ingredients of ‘good judges.’” In

re Renewable Energy Dev. Corp., 792 F.3d at 1277 (citation

omitted).

8

Adjudication in the Political Branches, 107 Colum. L.

Rev. 559, 569–70 (2007). It “can no more be shared

with another branch than the Chief Executive, for

example, can share with the Judiciary the veto power,

or the Congress share with the Judiciary the power to

override a Presidential veto.” Stern, 564 U.S. at 483

(cleaned up). After all, Article III “promis[es] . . .

the federal government will never be allowed to take

the people’s lives, liberties, or property without a

decisionmaker insulated from the pressures other

branches may try to bring to bear.” In re Renewable

Energy Dev. Corp., 792 F.3d at 1278.

C. The SEC Cannot Possess or Exercise

Article III Judicial Power.

“Administrative agencies” like the SEC “have been

called quasi-legislative, quasi-executive or quasijudicial . . . in order to validate their functions within

the separation-of-powers scheme of the Constitution.”

FTC v. Ruberoid Co., 343 U.S. 470, 487 (1952)

(Jackson, J., dissenting). But merely labeling their

function as “adjudicative” cannot change that all

“federal administrative agencies are part of the

Executive Branch[.]” B&B Hardware, 575 U.S. at 171

(Thomas, J., dissenting). And “[e]ven when an

executive agency acts like a legislative or judicial

actor, it still exercises executive power.” Garcia v.

Garland, 64 F.4th 62, 70 n.7 (2d Cir. 2023). Indeed,

“under our constitutional structure,” all of the SEC’s

activities, including bringing inhouse administrative

prosecutions, “must be exercises of” Article II

executive power. City of Arlington, 569 U.S. at 304 n.4

(citing U.S. Const. Art. II, § 1, cl. 1); see Seila Law, 140

S. Ct. at 2198 n.2; Bowsher v. Synar, 478 U.S. 714, 761

n.3 (1986) (White, J., dissenting).

9

The SEC Commissioners and ALJs are executive

officials housed within an Article II agency, who

therefore cannot possess or exercise Article III judicial

power. U.S. Const. Art. III, § 1; see Stern, 564 U.S. at

482–84; see also B&B Hardware, 575 U.S. at 171

(Thomas, J., dissenting). “[F]actfinding” and “deciding

questions of law” “are at the core of judicial power, as

Article III itself acknowledges.” Axon, 143 S. Ct. at

910 (Thomas, J., concurring) (citing U.S. Const. Art.

III, § 2, cl. 2). Accordingly, the Constitution bars the

SEC from making factual findings and deciding

questions of law in disputes implicating core private

rights. But that is exactly what the SEC’s

administrative prosecution scheme allows it to do.

The SEC “houses . . . both prosecutorial and

adjudicative activities,” Axon, 143 S. Ct. at 902,

“combin[ing] the functions of investigator, prosecutor,

and judge under one roof,” id. at 917 (Gorsuch, J.,

concurring in judgment). “The agency effectively fills

in for the district court, with the court of appeals

providing judicial review.” Id. at 900 (majority

opinion); see Lucia v. SEC, 138 S. Ct. 2044, 2049

(2018) (“an SEC ALJ exercises authority comparable

to that of a federal district judge conducting a bench

trial” (cleaned up)). But with a twist: federal appellate

courts review district courts’ legal conclusions de

novo; by contrast, federal appellate courts have

granted “Chevron deference” to the SEC’s legal

conclusions announced in inhouse administrative

prosecutions, even ruling that the SEC’s inhouse

decisions can “trump” Article III precedent. See

VanCook v. SEC, 653 F.3d 130, 140 n.8 (2d Cir. 2011).

Further still, the Commission’s factual findings are

subject to great deference: “The findings of the

10

Commission as to the facts, if supported by

substantial evidence, are conclusive.”5 15 U.S.C.

§ 78y(a)(4); accord id. § 80b-13; see Lorenzo v. SEC,

872 F.3d 578, 583 (D.C. Cir. 2017) (describing

substantial evidence “standard as a ‘very deferential’

one” (citation omitted)).

The substantial evidence standard essentially

reverses the burden of proof on petitions for review,

given that substantial evidence is a lower standard of

proof than the preponderance standard. 6 See

Meadows v. SEC, 119 F.3d 1219, 1224 (5th Cir. 1997)

(“‘Substantial evidence . . . is more than a mere

scintilla and less than a preponderance.’” (citation

omitted)); Gebhart v. SEC, 595 F.3d 1034, 1043 (9th

Cir. 2010) (“[A] reviewing court must uphold the

agency’s [factual] findings ‘unless the evidence

presented would compel a reasonable finder of fact to

reach a contrary result.’” (citation omitted)). Indeed,

some courts have described “[t]his deferential review”

as “no more searching than if [an appellate court]

were evaluating a jury’s verdict.” Impax Labs., Inc. v.

FTC, 994 F.3d 484, 492 (5th Cir. 2021).

This arrangement violates the separation of

powers. See Philip Hamburger, Is Administrative Law

Unlawful?, 319 (2014). As Justice Thomas recently

5 “The reviewing court also cannot take its own evidence—it can

only remand the case to the agency for further proceedings.”

Axon, 143 S. Ct. at 907 (Thomas, J., concurring).

6 “Deferential review of the SEC’s . . . decisions is particularly

concerning given their tendency to overwhelmingly agree with

their respective agency’s decisions.” Axon, 143 S. Ct. at 907 n.3

(Thomas, J., concurring).

11

suggested, SEC’s administrative process “may violate

the separation of powers by placing adjudicatory

authority over core private rights—a judicial rather

than executive power—within the authority of Article

II agencies” and “violate Article III by compelling the

Judiciary to defer to administrative agencies

regarding matters within the core of the Judicial

Vesting Clause.” Axon, 143 S. Ct. at 909–10 (Thomas,

J., concurring). Cf. Lorenzo, 872 F.3d at 602

(Kavanaugh, J., dissenting) (“[A]gency-centric process

is in some tension with Article III of the

Constitution[.]”). Exactly so.

“Requiring judges in core-private-rights cases to

defer to facts found by administrative agencies

effectively divests the courts of a key component of

judicial power—and therefore violates Article III.”7

Bernick, 16 Geo. J.L. & Pub. Pol’y at 46. “It is no

answer that an Article III court may eventually

review the agency order and its factual findings under

a deferential standard of review.” Axon, 143 S. Ct. at

910 (Thomas, J., concurring). “[W]hen agency

adjudicators stray outside the proper limits of

executive adjudication, such as by depriving

individuals of vested property rights, they must not

serve even as fact-finders subject to judicial deference.

All cases and controversies subject to the federal

judicial power—or parts of those cases and

controversies—must be evaluated and determined by

Article

III

judges[.]”

Jennifer

Mascott,

7 This practice also violates the Seventh Amendment jury-trial

right. See Axon, 143 S. Ct. at 910 (Thomas, J., concurring) (citing

Tull, 481 U.S. at 417); Resp. Br. 12–24; Pet. App. 17a.

12

Constitutionally Conforming Agency Adjudication, 2

Loyola U. Chi. J. Reg. Compliance 22, 25 (2017)

(footnotes omitted). At minimum, “Article III requires

de novo review, of both fact and law, of all agency

adjudication that is properly classified as ‘judicial’

activity.” Gary Lawson, The Rise and Rise of the

Administrative State, 107 Harv. L. Rev. 1231, 1248

(1994).

In sum, here Congress has unconstitutionally

delegated to the SEC—an Article II executive body—

core judicial power Article III’s Vesting Clause

exclusively vests in Article III courts. See Oil States,

138 S. Ct. at 1372–73. The statutory provisions

granting the SEC unfettered discretion to choose to

bring inhouse administrative prosecutions are part

and parcel of this unconstitutional arrangement.

D. The Commissioners Are Usurpers In An

Unlawful

Office

Whose

Inhouse

Enforcement Actions Are Void Ab Initio.

Congress lacks power to transfer Article III

judicial power to an Article II administrative body. 8

Because Congress has assigned the SEC “judicial

Power”—a sovereign function it cannot possess—the

SEC’s administrative tribunal cannot constitutionally

exist, and its Commissioners are mere usurpers,

whose inhouse enforcement actions are void ab initio.9

More broadly, Congress cannot constitutionally “create

agencies that straddle multiple branches of government.” Seila

Law, 140 S. Ct. at 2216 (Thomas, J., concurring).

8

9 The “intelligible principle” regime does not apply to violations

of Article III’s Vesting Clause.

13

Cf. Hildreth’s Heirs v. M’Intire’s Devisee, 24 Ky. 206,

208 (Ky. 1829) (“The offices attempted to be created,

never had a constitutional existence; and those who

claimed to hold them, had no rightful or legal power.”).

See generally Calcutt v. FDIC, 37 F.4th 293, 344–45

(6th Cir. 2022) (Murphy, J., dissenting) (surveying

case law), rev’d, 143 S. Ct. 1317 (2023) (per curiam).

As this Court explained long ago: “Where no office

legally exists, the pretended officer is merely a

usurper, to whose acts no validity can be attached[.]” 10

Norton v. Shelby Cnty., 118 U.S. 425, 449 (1886). And

this “Court’s modern cases also treat an officer’s

actions as void if the generic office could ‘not lawfully

possess’ the power to take them.” Calcutt, 37 F.4th at

344 (Murphy, J., dissenting) (citing Collins v. Yellen,

141 S. Ct. 1761, 1788 (2021)).

Here, the Commission cannot lawfully possess the

“judicial Power” the Commissioners purported to

exercise. Therefore, those actions are void ab initio.

II.

The SEC’s Administrative Prosecution

Violates Due Process.

The SEC’s Order cannot stand for a second reason:

The SEC’s administrative prosecution violated

Respondents’ due-process rights.

“This rule extended to constitutional defects. The Supreme

Court may have followed it as early as United States v. Yale

Todd (U.S. 1794).” Calcutt, 37 F.4th at 344 (Murphy, J.,

dissenting) (citing United States v. Ferreira, 54 U.S. 40, 52–53

(1851) (note by Taney, C.J.)).

10

14

A. The SEC’s Administrative Process

Rigged Against Respondents.

Is

It is important to understand the degree to which

the SEC’s administrative process stacks the deck

against respondents. After all, the SEC “combines the

functions of investigator, prosecutor, and judge under

one roof.” Axon, 143 S. Ct. at 917 (Gorsuch, J.,

concurring in judgment). It “employ[s] relaxed rules of

procedure and evidence—rules they make for

themselves.” Id. (Gorsuch, J., concurring in

judgment). See generally Gideon Mark, SEC and

CFTC Administrative Proceedings, 19 U. Pa. J. Const.

L. 45, 65–70 (2016) (describing SEC’s inhouse rules).

Worse, since 2010, the SEC has been able to impose

civil penalties through its inhouse administrative

process. See Tilton v. SEC, 824 F.3d 276, 279 (2d Cir.

2016). “[T]he S.E.C. can today obtain through internal

administrative proceedings nearly everything it

might obtain by going to court.” Jed S. Rakoff, U.S.

Dist. Judge for the S. Dist. of N.Y., PLI Securities

Regulation Institute Keynote Address: Is the S.E.C.

Becoming a Law Unto Itself?, 5 (Nov. 5, 2014).11

Unsurprisingly, the agency “win[s] the

vast

majority of these in-house prosecutions[.]” Adam

Katz, Eventual Judicial Review, 118 Colum. L. Rev.

1139, 1153–54 (2018). In contested cases, SEC ALJs

overwhelmingly rule against respondents. See Gideon

Mark, Response: SEC Enforcement Discretion, 94 Tex.

L. Rev. Online 261, 262 (2016). In short, SEC

https://securitiesdiary.files.wordpress.com/2014/11/rakoff-plispeech.pdf.

11

15

administrative prosecutions are severely slanted

against respondents from start to finish.

B. The SEC’s Combination of Investigative,

Prosecutorial, and Judicial Functions

Violates Due Process.

This arrangement is unconstitutional. Due process

demands that SEC may not act as investigator,

prosecutor, and judge of its own cause. See Williams

v. Pennsylvania, 579 U.S. 1, 8 (2016) (“[A]n

unconstitutional potential for bias exists when the

same person serves as both accuser and adjudicator in

a case.”). See generally Andrew N. Vollmer, Accusers

as Adjudicators in Agency Enforcement Proceedings,

52 U. Mich. J.L. Reform 103 (2018). “In this country,

judges have no more power to initiate a prosecution of

those who come before them than prosecutors have to

sit in judgment of those they charge.” Donziger v.

United States, 143 S. Ct. 868, 870 (2023) (Gorsuch, J.,

dissenting from denial of certiorari).

This constitutional workaround should not be

allowed to stand. If SEC wants to prosecute

Respondents, Article III and due process require SEC

to do so in federal court. See Axon, 143 S. Ct. at 910

(Thomas, J., concurring) (SEC review scheme “may

violate due process by empowering entities that are

not courts of competent jurisdiction to deprive citizens

of core private rights.”); United States v. Arthrex, Inc.,

141 S. Ct. 1970, 1993 (2021) (Gorsuch, J., concurring

in part, dissenting in part).

16

III.

The Time Has Come to Enforce Article I’s

Vesting Clause.

Congress lacks power under Article I to transfer

Article III power to an Article II entity. Even if the

SEC’s inhouse enforcement process would otherwise

pass constitutional muster, the forum-selection

provisions would constitute an unconstitutional

delegation for an additional reason: Article I bars

Congress from transferring its exclusive legislative

power to other entities.

A. The

Forum-Selection

Implicate Article I.

Provisions

As Petitioner tells it, the forum-selection

provisions do not confer legislative power but instead

merely grant prosecutorial discretion. See Pet. Br. 37–

44. Not so. To be sure, the decisions whether and, if

so, what to charge and whether to seek civil or

criminal penalties are exercises of prosecutorial

discretion Article II generally entrusts the Executive

with making. But here, by contrast, the forumselection provisions grant the SEC a blank check to

make the jurisdictional decision which branch of

government, Executive or Judicial, is empowered to

find facts and adjudicate liability, by what process,

and under what standards, and theoretically to do so

for categories of cases.12 See Tilton, 824 F.3d at 278

Whether the SEC has exercised this power is irrelevant.

“[A]bsent [statutory] provision[s] cannot be supplied by the

courts.” Little Sisters of the Poor Saints Peter & Paul Home v.

12

17

(choice of forum “belongs to the SEC without express

statutory constraint”); see also 15 U.S.C. § 78w(a)(1)

(granting broad rulemaking authority). That is

legislative power. After all, subject to other

constitutional limits, the Constitution tasks Congress

with determining what matters that could otherwise

be adjudicated within the Executive are instead

within the purview of lower federal courts. See U.S.

Const. Art. I, §§ 1, 8; U.S. Const. Art. III, §§ 1, 2.

“‘[T]he mode of determining matters of this class is

completely within congressional control.’”13 Crowell v.

Benson, 285 U.S. 22, 50 (1932) (quoting Ex parte

Bakelite Corp., 279 U.S. 438, 451 (1929)); see Oceanic

Steam Navigation Co. v. Stranahan, 214 U.S. 320, 339

(1909). The forum-selection provisions transfer

Congress’s power “[t]o constitute Tribunals inferior to

the supreme Court,” U.S. Const. Art. I, § 8, “with such

Exceptions, and under such Regulations as the

Congress shall make,” U.S. Const. Art. III, § 2, to an

Article II body, giving it carte blanche to, in essence,

regulate the jurisdiction of Article III courts for a wide

range of matters. Indeed, the agency could

presumably choose to only bring inhouse

administrative prosecutions or, conversely, only

litigate in Article III courts. In sum, the decision

Pennsylvania, 140 S. Ct. 2367, 2381 (2020) (cleaned up). And this

Court “ha[s] never suggested that an agency can cure an

unlawful delegation of legislative power by adopting in its

discretion a limiting construction of the statute.” Whitman v. Am.

Trucking Ass’ns, 531 U.S. 457, 475 (2001).

Because SEC’s prosecution of Respondents implicates their

private rights, it cannot be assigned to an administrative

tribunal and may only be adjudicated in an Article III court.

13

18

below correctly concluded the SEC’s forum-selection

provisions implicate Article I. See Pet. App. 21a–24a.

B. Article I’s

Liberty.

Vesting

Clause

Protects

“In its design and structure, the Constitution is

tilted in the direction of liberty.” Brett M. Kavanaugh,

Our Anchor for 225 Years and Counting: The

Enduring Significance of the Precise Text of the

Constitution, 89 Notre Dame L. Rev. 1907, 1911

(2014).14 As relevant here, the baseline Article I sets

is that the Executive has no authority to act unless

and until Congress confers power on it via duly

enacted legislation.15 See La. Pub. Serv. Com v. Fed.

Commc’ns Comm’n, 476 U.S. 355, 374 (1986). And the

Constitution deliberately makes it difficult to alter

this liberty-tilted baseline.

To protect liberty, “the framers went to great

lengths to make lawmaking difficult,” requiring “that

any proposed law must win the approval of two

Houses of Congress . . . and either secure the

President’s approval or obtain enough support to

override his veto.” Gundy v. United States, 139 S. Ct.

2116, 2134 (2019) (Gorsuch, J., dissenting). And the

“[T]he liberty protected by the separation of powers in the

Constitution is primarily freedom from government

oppression[.]” Id. at 1909.

14

Chevron maximalism wrongly reverses this baseline, see

Buffington v. McDonough, 143 S. Ct. 14, 19–20 (2022) (Gorsuch,

J., dissenting from denial of certiorari), also implicating

nondelegation concerns, see Gutierrez-Brizuela v. Lynch, 834

F.3d 1142, 1154–55 (10th Cir. 2016) (Gorsuch, J., concurring).

15

19

Constitution flatly prohibits Congress from delegating

any of its legislative power to other entities. U.S.

Const. Art. I, § 1; see Shankland v. Washington, 30

U.S. 390, 395 (1831) (Story, J.) (“[T]he general rule of

law is, that a delegated authority cannot be

delegated.”). As Chief Justice Marshall wrote: “It will

not be contended that Congress can delegate . . .

powers which are strictly and exclusively legislative.”

Wayman, 23 U.S. (10 Wheat.) at 42.

For good reason. “If Congress could pass off its

legislative power to the executive branch, the

‘[v]esting [c]lauses, and indeed the entire structure of

the Constitution,’ would ‘make no sense.’” Gundy, 139

S. Ct. at 2134–35 (Gorsuch, J., dissenting) (citation

omitted). “[I]t would frustrate ‘the system of

government ordained by the Constitution’ if Congress

could merely announce vague aspirations and then

assign others the responsibility of adopting legislation

to realize its goals.” Id. at 2133 (Gorsuch, J.,

dissenting)

(citation

omitted).

“By

shifting

responsibility to a less accountable branch, Congress

protects itself from political censure—and deprives

the people of the say the framers intended them to

have.” Tiger Lily, LLC v. HUD, 5 F.4th 666, 674 (6th

Cir. 2021) (Thapar, J., concurring). “Legislation would

risk becoming nothing more than the will of the

current President, or . . . of unelected officials barely

responsive to him.” West Virginia v. EPA, 142 S. Ct.

2587, 2618 (2022) (Gorsuch, J., concurring).

C. Line-Drawing Questions Should Not Deter

Enforcement of the Separation of Powers.

“Strictly speaking, there is no acceptable

delegation of legislative power.” Mistretta v. United

20

States, 488 U.S. 361, 419–20 (1989) (Scalia, J.,

dissenting) (emphasis in original).16 This raises the

question what is “legislative power” that Congress

may not delegate. To be sure, “[t]he line has not been

exactly drawn” between “important subjects, which

must be entirely regulated by the legislature itself”

and matters of “less interest” that Congress can

delegate to others “to fill up the details.” Wayman, 23

U.S. (10 Wheat.) at 43. And as Professor Ronald Cass

has explained, “the hard question is how to specify

clearly—at least, as clearly as possible—what power

the Congress can and cannot assign to others.” Ronald

A. Cass, Separating Powers in the Administrative

State: Understanding Delegation, Discretion, and

Deference, C. Boyden Gray Center for the Study of the

Administrative State Research Paper No. 23-22, at 36

(September 20, 2023) [hereinafter “Separating

Powers”].17 “But the inherent difficulty of linedrawing is no excuse for not enforcing the

Constitution.” Ass’n of Am. R.R., 575 U.S. at 61 (Alito,

J., concurring); see id. at 86 (Thomas, J., concurring).

And “the difficulty of the inquiry doesn’t mean it isn’t

worth the effort.” United States v. Nichols, 784 F.3d

16 “When it came to the legislative power, the framers understood

it to mean the power to adopt generally applicable rules of

conduct governing future actions by private persons[.]” Gundy,

139 S. Ct. at 2133 (Gorsuch, J., dissenting); see Federalist No. 75

(Hamilton). “[T]he core of the legislative power that the Framers

sought to protect from consolidation with the executive is the

power to make ‘law’ in the Blackstonian sense of generally

applicable rules of private conduct.” Ass’n of Am. R.R., 575 U.S.

at 76 (Thomas, J., concurring in the judgment).

17 https://administrativestate.gmu.edu/wp-

content/uploads/2023/08/23-22_Cass-1.pdf.

21

666, 671 (10th Cir. 2015) (Gorsuch, J., dissenting from

denial of rehearing en banc).

No matter the difficulty of the task, the Judiciary

is dutybound to search for the line and could do so on

a case-by-case basis. Cf. Allstates Refractory

Contractors, LLC v. Su, 79 F.4th 755, 789 (6th Cir.

2023)

(Nalbandian,

J.,

dissenting)

(finding

nondelegation violation), petition for rehearing en

banc filed, No. 22-3772 (6th Cir. Oct. 6, 2023); United

States v. Pheasant, No. 21-cr-00024, 2023 U.S. Dist.

LEXIS 72572, at *19-22 (D. Nev. Apr. 26, 2023)

(same). “To leave this aspect of the constitutional

structure alone undefended would serve only to

accelerate the flight of power from the legislative to

the executive branch, turning the latter into a vortex

of authority that was constitutionally reserved for the

people’s representatives in order to protect their

liberties.” Gundy, 139 S. Ct. at 2142 (Gorsuch, J.,

dissenting). And “[d]evelopments in the modern

administrative state suggest the time has come to

articulate judicially manageable standards for

identifying delegations of legislative power. The

reasons for judicial restraint in this area have largely

collapsed[.]” Naomi Rao, Administrative Collusion:

How Delegation Diminishes the Collective Congress,

90 N.Y. U. L. Rev. 1463, 1508 (2015).

More than sufficient ink has been spilled to allow

this Court to articulate judicially manageable

standards. For example, surveying the jurisprudence

and scholarship, Professor Cass has identified three

22

“essential elements” shaping the nondelegation

doctrine:18

[F]irst, that Congress cannot pass to

others the power to make important

judgments on legally binding rules,

second, especially on matters respecting

the regulation of private rights rather

than of public property, and, third, that

grants of authority must fall within the

constitutionally assigned purview of the

delegate (must pertain to the exercise of

that delegate’s own power).

Cass, Separating Powers, supra, 43. See generally

West Virginia v. EPA, 142 S. Ct. at 2625 n.11

(Gorsuch, J., concurring) (collecting scholarship); The

Administrative State Before the Supreme Court:

Perspectives on the Nondelegation Doctrine (Peter J.

Wallison & John Yoo eds. 2022) [hereinafter

“Nondelegation Perspectives”]. As Professor Cass

suggests, “[t]ogether, these elements should prove

sufficient to allow a judicially manageable—though,

admittedly, far from a bright-line—nondelegation

doctrine.” Cass, Separating Powers, supra, 44.

If the Court “revisit[s] how nondelegation under

Article I operates, it” could also “consider what

18 As Paul Larkin has suggested, there may well be “multiple

nonexclusive” nondelegation principles that, if enforced, would

“force Congress to do its job, to prevent the President from doing

Congress’s work, and to avoid taking on that responsibility

themselves.” Paul Larkin, Revitalizing the Nondelegation

Doctrine, 23 Federalist Soc’y Rev. 238, 263 (2022).

23

Congress historically delegated to federal officials

around the Framing. . . . [T]he statutes [then]

authorized the executive to create rules that were only

‘binding’ on executive officials, not members of the

public.” Allstates, 79 F.4th at 788 n.17 (Nalbandian,

J., dissenting) (citations omitted); see Jennifer

Mascott, Early Customs Laws and Delegation, 87 Geo.

Wash. L. Rev. 1388, 1449 (2019). This approach

suggests “[t]he Government may create generally

applicable rules of private conduct only through the

proper exercise of legislative power.” Ass’n of Am.

R.R., 575 U.S. at 86 (Thomas, J., concurring).

Founding-era agency law principles may also

provide further shape to the doctrine; after all, the

Constitution is a form of fiduciary instrument in

which “We the People” are the principal and Congress

is supposed to be our faithful agent. See generally

Gary Lawson, A Private-Law Framework for the

Subdelegation, in Nondelegation Perspectives.

The Commerce Clause’s original public meaning

may be another relevant background principle

providing additional guideposts.19 See, e.g., A.L.A.

Schechter Poultry Corp. v. United States, 295 U.S.

495, 554 (1935) (Cardozo, J., concurring) (noting

Commerce Clause “objection, far-reaching and

incurable, aside from any defect of unlawful

delegation”). Cf. BST Holdings, L.L.C. v. OSHA, 17

19 “By departing from th[e Commerce Clause’s] limited meaning,

the Court’s cases have licensed federal regulatory schemes that

would have been unthinkable to the Constitution’s Framers and

ratifiers.” Sackett v. EPA, 143 S. Ct. 1322, 1358 (2023) (Thomas,

J., concurring) (cleaned up).

24

F.4th 604, 619 (5th Cir. 2021) (Duncan, J.,

concurring). See generally Sackett, 143 S. Ct. at 1358

(Thomas, J., concurring). For example, where a

statute grants “authority to regulate an area—public

health and safety—traditionally regulated by the

States,” “lack of guidance” bounding an agency’s

discretion should be greeted skeptically. Allstates, 79

F.4th at 788 n.16

(Nalbandian, J., dissenting)

(cleaned up). Novelty may provide yet another

indicator of a serious subdelegation problem. Cf. Seila

Law, 140 S. Ct. at 2201 (“Perhaps the most telling

indication of a severe constitutional problem with an

executive entity is a lack of historical precedent to

support it.”).

This Court has also said “the degree of agency

discretion that is acceptable varies according to the

scope of the power congressionally conferred.”

Whitman, 531 U.S. at 475; see also Allstates, 79 F.4th

at 776 (Nalbandian, J., dissenting) (“Laws that vest

more power require more constraints.”). Accordingly,

“when the grant of power is bigger, such that it can

‘affect the entire national economy,’ Congress ‘must

provide substantial guidance.’” Allstates, 79 F.4th at

787 (Nalbandian, J., dissenting) (quoting Whitman,

531 U.S. at 475). Indeed, there may be cases where

“the significance of the delegated decision is simply

too great for the decision to be called anything other

than ‘legislative,’” even where Congress provides

detailed guidance. Whitman, 531 U.S. at 487

(Thomas, J., concurring).

In sum, this Court is well equipped to articulate

judicially manageable standards for enforcing Article

I’s Vesting Clause on a case-by-case basis. And the

time has come to do so.

25

D. This

Court

Should

Jettison

“Intelligible Principle” Remark.

the

In all events, this Court should make clear “th[e]

mutated version of the ‘intelligible principle’ remark”

in J.W. Hampton, Jr., & Co. v. United States, 276 U.S.

394 (1928), that forms the basis of the modern

“intelligible principle” test “has no basis in the

original meaning of the Constitution, in history, or

even in the decision from which it was plucked.”

Gundy, 139 S. Ct. at 2139 (Gorsuch, J., dissenting).

After all, “[a]lthough this Court since 1928 has treated

the ‘intelligible principle’ requirement as the only

constitutional limit on congressional grants of power

to administrative agencies, the Constitution does not

speak of ‘intelligible principles.’ Rather, it speaks in

much simpler terms: ‘All legislative Powers herein

granted shall be vested in a Congress.’” Whitman, 531

U.S. at 487 (Thomas, J., concurring) (citations

omitted). And in all events, this Court should reaffirm

that while Congress may task ministers with “fill[ing]

up the details” on matters “of less interest,” the

Constitution categorically bars Congress from

punting important policy decisions to unelected

bureaucrats housed within a warren of administrative

bodies. Wayman, 23 U.S. (10 Wheat.) at 42–43.

E. Enforcing Article I’s Vesting Clause Will

Have Salutary Effects.

The sky will not fall if this Court enforces Article

I’s Vesting Clause. As Judge Thapar has suggested

elsewhere, common strawman critiques advanced by

proponents of the administrative state—“Congress is

incapable of acting quickly in response to

emergencies” and “modern society is too complex to be

26

run by legislators”—are constitutionally irrelevant

and, in any event, lack merit on their own terms. See

Tiger Lily, 5 F.4th at 674–75 (Thapar, J., concurring).

On the other side of the ledger, the benefits of

putting Congress back in the driver’s seat of setting

public policy—where the Constitution puts it—are

immense. See Antonin Scalia, A Note on the Benzene

Case, Reg., July/Aug. 1980, at 28 (“[T]he

unconstitutional delegation doctrine is worth hewing

from the ice.”). Unconstitutional “[d]elegations have

weakened accountable government in both political

branches, allowing agencies to initiate policy and

congressmen to serve as shadow administrators. This

brings things too far out of alignment with the vesting

of legislative and executive powers in separate

branches.” Rao, 90 N.Y. U. L. Rev. at 1508. This

“drives a wedge between the personal interests of

legislators and the institutional interests of Congress,

undermining the collective legislative process

established to promote the public good.” Id. at 1477.

“[D]elegation also contributes to . . . political

polarization[.]” Thomas J. Philbrick, A Purple

Garment for Their Nakedness: Wilson, Hegel, and the

Non-Delegation Doctrine, 14 Alb. Gov’t L. Rev. 30, 63

(2020). Enforcing Article I’s Vesting Clause would

ameliorate some of these awful effects.

Sketching out the contours of the Constitution’s

bar against subdelegation of legislative power would

also provide much-needed clarity as to the major

questions doctrine’s metes and bounds. As this Court

has explained, the major questions doctrine is

grounded in “both separation of powers principles and

a practical understanding of legislative intent[.]”West

Virginia v. EPA, 142 S. Ct. at 2595. Cf. Jones v.

27

Hendrix, 143 S. Ct. 1857, 1876–77 (2023) (citing Ala.

Ass’n of Realtors v. HHS, 141 S. Ct. 2485 (2021) (per

curiam), as involving a “statute implicat[ing]

historically or constitutionally grounded norms”).

This case provides an ideal opportunity for this Court

to elucidate the relationship between Article I’s

Vesting Clause and the major questions doctrine.20

Guidance as to which assertions of agency power

in this Court’s recent major questions cases would

violate Article I’s Vesting Clause had these power

grabs been clearly authorized would provide muchneeded doctrinal clarity and conceptual certainty. 21

See, e.g., NFIB v. OSHA, 142 S. Ct. at 669 (Gorsuch,

J., concurring) (“[I]f the statutory subsection the

agency cites really did endow OSHA with the power it

asserts, that law would likely constitute an

unconstitutional delegation of legislative authority.”);

Am. Lung Ass’n v. EPA, 985 F.3d 914, 1002 (D.C. Cir.

2021) (Walker, J., concurring in part, dissenting in

part) (“[I]f Congress merely allowed generation

shifting (it didn’t), but did not clearly require it, I

20 The major questions doctrine appears to have emerged in the

wake of the judicially created “intelligible principle” regime as an

alternative to enforcing Article I’s Vesting Clause. See Gundy,

139 S. Ct. at 2141 (Gorsuch, J., dissenting); Nat’l Fed’n of Indep.

Bus. v. OSHA, 142 S. Ct. 661, 669 (2022) (per curiam) (Gorsuch,

J., concurring).

21 Importantly, West Virginia v. EPA did not squarely present a

nondelegation question. See 142 S. Ct. at 2600. This Court’s other

recent major-questions precedent likewise turned on whether the

agency’s claimed powers were statutorily authorized and did not

require this Court to address nondelegation claims. See Biden v.

Nebraska, 143 S. Ct. 2355, 2365 (2023); NFIB v. OSHA, 142 S.

Ct. at 663; Ala. Ass’n of Realtors, 141 S. Ct. at 2486.

28

doubt doing so was constitutional.”), rev’d sub nom.,

West Virginia v. EPA, 142 S. Ct. 2587 (2022); see also

Tiger Lily, 5 F.4th at 672 (“[T]he government’s

interpretation of § 264(a) could raise a nondelegation

problem.”). This would answer a concern expressed by

some that “the Court’s failure to say anything about

nondelegation creates genuine conceptual uncertainty

about what exactly it was doing in these cases, a

conceptual uncertainty that will matter for future

cases.” Mila Sohoni, The Major Questions Quartet, 136

Harv. L. Rev. 262, 297 (2022). It would also provide

Congress with much-needed guidance on the universe

of today’s important subjects that cannot

constitutionally be assigned (clearly or otherwise) to

administrative bodies. See Wayman, 23 U.S. (10

Wheat.) at 43.

CONCLUSION

For these reasons, this Court should affirm the

decision below.

Respectfully submitted,

Michael Pepson

Counsel of Record

AMERICANS FOR PROSPERITY FOUNDATION

1310 N. Courthouse Road, Ste. 700

Arlington, VA 22201

(571) 329-4529

mpepson@afphq.org

Counsel for Amicus Curiae

October 16, 2023