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 AMICI CURIAE ADVANCING AMERICAN

FREEDOM; MANHATTAN INSTITUTE; AMERICANS FOR

LIMITED GOVERNMENT RESEARCH FOUNDATION;

CENTER FOR POLITICAL RENEWAL; CITIZENS UNITED;

CITIZENS UNITED FOUNDATION; COMMITTEE FOR

JUSTICE; FAITH AND FREEDOM COALITION; FRONTLINE

POLICY COUNCIL; INTERNATIONAL CONFERENCE OF

EVANGELICAL CHAPLAIN ENDORSERS; TIM JONES,

MISSOURI CENTER-RIGHT COALITION; NATIONAL

CENTER FOR PUBLIC POLICY RESEARCH; NEVADA

POLICY RESEARCH INSTITUTE; NEW JERSEY FAMILY

FOUNDATION; NORTH CAROLINA INSTITUTE FOR

CONSTITUTIONAL LAW; RIO GRANDE FOUNDATION;

SETTING THINGS RIGHT; AND TEA PARTY PATRIOTS

ACTION, INC. IN SUPPORT OF RESPONDENTS

October 18, 2023

J. Marc Wheat

Counsel of Record

Advancing American Freedom, Inc.

801 Pennsylvania Avenue, N.W.

Suite 930

Washington, D.C. 20004

(202) 780-4848

MWheat@advancingamericanfreedom.com

i

QUESTIONS PRESENTED

1. Whether statutory provisions that empower the

Securities and Exchange Commission (SEC) to initiate

and

adjudicate

administrative

enforcement

proceedings seeking civil penalties violate the Seventh

Amendment.

2. Whether statutory provisions that authorize the

SEC to choose to enforce the securities laws through

an agency adjudication instead of filing a district court

action violate the nondelegation doctrine.

3. Whether Congress violated Article II by granting

for-cause removal protection to administrative law

judges in agencies whose heads enjoy for-cause

removal protection.

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED......................................... i

TABLE OF AUTHORITIES ........................................ v

STATEMENT OF INTEREST OF

AMICI CURIAE ........................................................... 1

INTRODUCTION AND SUMMARY OF THE

ARGUMENT ................................................................ 2

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

I.

The Securities and Exchange Act’s

Delegation of Adjudicatory Power to the

Executive Branch is Inconsistent with

Article I and III of the Constitution and

with the Constitutional Separation of

Powers ............................................................... 4

A. Delegation of judicial power to ALJs is

inconsistent with Article III and is thus

outside the power of Congress .................... 4

B. The executive branch cannot exercise

judicial power............................................... 7

C. Article III appellate review is insufficient

to provide the process due under the

Constitution ............................................... 10

II.

Governments Must be Subject to the Rule of

Law if they Are to Fulfill Their Reason for

Being: The Protection of Individual Rights ... 11

A. Individuals have rights that preexist

government ................................................ 11

iii

B. The rights of individuals are at all times

threatened by human nature, whether

in the hypothetical state of nature or

under any government .............................. 13

C. Government exists to protect rights but

is also a potential source of their

violation. This conundrum necessitates

“a government of laws and not of men.” ... 14

III.

The

Constitution

Establishes

the

Separation of Powers as a Means of

Ensuring the Rule of Law............................... 15

A. Belief in separation of powers was

widespread at the founding and had

significant philosophical precedent .......... 15

B. The Framers infused the Constitution

with their shared understanding of

separation of powers.................................. 18

IV.

Those Who Created the Administrative

State Knew that What They Were

Proposing was Unconstitutional and

Inconsistent with the Fundamental

Purpose of the Constitution............................ 20

A. These

early

architects

of

the

administrative state believed that the

Framers had gotten the purpose of

government wrong ..................................... 21

B. These founders of the administrative

state believed that the structure of good

government demands the separation of

administration and politics ....................... 23

iv

C. These fathers of the administrative

state were widely successful at

undermining the basic structure of

American federal government................... 25

D. The ideas of these so-called progressives

were, in fact, regressive and were

inconsistent with the Constitution ........... 27

CONCLUSION .......................................................... 29

v

TABLE OF AUTHORITIES

Cases

Axon Enter. v. FTC,

143 S. Ct. 890 (2023) .................................. 2, 8, 9, 10

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

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

Department of Transportation v. Association of

American Railroads,

575 U.S. 43, 61 (2015) .............................................. 5

Garcia v. San Antonio Metro. Transit Auth.,

469 U.S. 528 (1985) .................................................. 6

Gibbons v. Ogden,

22 U.S. 1 (1824) ........................................................ 4

Gonzales v. Raich,

545 U.S. 1 (2005) ...................................................... 6

Gundy v. United States,

139 S. Ct. 2116 (2019) ............................................ 26

INS v. Chadha,

462 U.S. 919 (1983) ................................................ 13

In re Murchison,

349 U.S. 133 (1955) .................................................. 9

McCulloch v. Maryland,

17 U.S. 17 U.S. 316 (1819) ................................... 6, 7

McDonald v. Chicago,

561 U.S. 742 (2010) ................................................ 15

Mistretta v. United States,

488 U.S. 361 (1989) ................................................ 25

vi

Murry’s Lessee v. Hoboken Land & Improvement Co.,

59 U.S. 272 (1855) .................................................... 9

Nat’l Fed’n of Indep. Bus. v. Sebelius,

567 U.S. 519 (2012) .............................................. 4, 6

Obergefell v. Hodges,

576 U.S. 644 (2015) .......................................... 11, 12

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

Grp., LLC, 138 S. Ct. 1365 (2018) ........................... 7

Perez v. Mortg. Bankers Ass’n,

575 U.S. 92 (2015) .................................................. 24

PHH Corp. v. Consumer Fin. Prot. Bureau,

881 F.3d 75 (C.A.D.C. 2018) ............................ 18, 26

Seila Law LLC v. Consumer Fin. Prot. Bureau,

140 S. Ct. 2183 (2020) ................................ 18, 24, 26

Stern v. Marshall,

564 U.S. 462 (2011) .................................................. 7

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

575 U.S. 665 (2015) .................................................. 8

West Virginia v. EPA,

142 S. Ct. 2587 (2022) .............................................. 5

Williams v. Pennsylvania,

579 U.S. 1 (2016) ...................................................... 9

Yick Wo v. Hopkins,

118 U.S. 356 (1886) ................................................ 15

Constitutions and Statutes

15 U.S.C. § 78u-2(a)............................................. 10, 11

vii

U.S. Const. art. I ................................ 4, 5, 6, 18, 19, 26

U.S. Const. art. II ................................................ 15, 18

U.S. Const. art. III ......................... 4, 7, 8, 9, 10, 11, 18

U.S. Const. art. VI ..................................................... 15

U.S. Const. amend. IX ............................................... 12

U.S. Const. amend. X ................................................ 19

Mass. Const. pt. 1 art. XXX ................................. 15, 16

Other Authorities

1 W. Blackstone, Commentaries on the Laws of

England (1765) ................................................... 8, 12

3 EDMUND BURKE, Reflections on the Revolution in

France, in THE WORKS OF EDMUND BURKE 19

(1839) ...................................................................... 29

John Adams Excerpt from Thoughts on Government,

https://www.senate.gov/artandhistory/history/com

mon/generic/exerpt-thoughts-on-governmentadams-1776.htm..................................................... 17

Aristotle, Politics, Book III, 1287a (Benjamin Jowett,

trans. 1885) (350 BC) ............................................. 14

Randy E. Barnett, Our Republican Constitution

(1st ed. 2016) .......................................................... 15

Calvin Coolidge, President of the United States,

Speech on the 150th Anniversary of the

Declaration of Independence (July 5, 1926)

https://millercenter.org/thepresidency/presidential-speeches/july-5-1926-

viii

declaration-independence-anniversarycommemoration ................................................ 27, 28

Richard A. Epstein, The Proper Scope of the

Commerce Power, 73 Va. L. Rev. 1387 (1987) ......... 6

Edward H. Fleischman, Commissioner, SEC, Address

to the Women in Housing and Finance, The Fourth

Branch at Work, (November 29, 1990)

https://www.sec.gov/news/speech/1990/112990

fleischman.pdf ...................................................... 2, 3

Frank J. Goodnow, The American Conception of

Liberty (1916),

https://archive.org/details/americanconcepti00good

rich/page/n5/mode/2up ........................................... 21

Philip Hamburger, Is Administrative Law Unlawful

(1st ed. 2014) .......................................................... 10

Thomas Jefferson, Notes on the State of Virginia,

Query XIII (1853) ......................................... 5, 13, 17

James M. Landis, The Administrative Process

(1st ed. 1938) .......................................................... 24

Gary S. Lawson, The Rise and Rise of the

Administrative State, 107 Harv. L. Rev. 1231

(1994) .............................................................. 7, 9, 10

John Locke, Second Treatise on Government ....... 5, 12

Montesquieu, Spirit of the Laws (Thomas Nugent

trans. 1752) (1748) ........................................... 13, 16

ix

Ronald J. Pestritto, The Progressive Origins of the

Administrative State: Wilson, Goodnow, and

Landis, Social Philosophy and Policy, January

2007 ...................................................... 20, 22, 23, 24

Franklin Delano Roosevelt, President of the United

States, Address to the Commonwealth Club

(September 23, 1932)

https://teachingamericanhistory.org/document/com

monwealth-club-address/ ....................................... 22

The Declaration of Independence (U.S. 1776) ...... 1, 11

The Federalist No. 23 (Alexander Hamilton) (Jacob

E. Cooke ed., 1961) ................................................. 28

The Federalist No. 45 (James Madison) (Jacob E.

Cooke ed., 1961) ..................................................... 19

The Federalist No. 47 (James Madison) (Jacob E.

Cooke ed. 1961) .......................................... 16, 17, 18

The Federalist No. 51 (James Madison) (Jacob E.

Cooke ed., 1961) ................................... 13, 14, 19, 25

The Federalist No. 71 (Alexander Hamilton) (Jacob

E. Cooke ed., 1961) ................................................. 17

Woodrow Wilson, Constitutional Government in the

United States (1914)

https://www.loc.gov/resource/gdcmassbookdig.

constitutionalgo00wils_0/?sp=28&r=-0.831,0.033,2.661,1.184,0 ................................................ 21

1

STATEMENT OF INTEREST OF

AMICI CURIAE

Advancing American Freedom (AAF) is a

nonprofit organization that promotes and defends

policies that elevate traditional American values,

including the uniquely American idea that all men are

created equal and endowed by their Creator with

unalienable rights to life, liberty, and the pursuit of

happiness. AAF believes, as did America’s Founders,

that the separation of government powers is essential

to ensuring the promises of the Declaration of

Independence to all Americans. 1

Amici Manhattan Institute; Americans for

Limited Government Research Foundation; Center for

Political Renewal; Citizens United; Citizens United

Foundation; Committee for Justice; Faith and

Freedom Coalition; Frontline Policy Council;

International Conference of Evangelical Chaplain

Endorsers; Tim Jones, Missouri Center-Right

Coalition; National Center for Public Policy Research;

Nevada Policy Research Institute; New Jersey Family

Foundation;

North

Carolina

Institute

for

Constitutional Law; Rio Grande Foundation; Setting

Things Right; and Tea Party Patriots Action, Inc.

believe, as did America’s Founders, that the

maintenance of the separation of government powers

into three co-equal branches is essential to ordered

liberty.

1 No counsel for a party authored this brief in whole or in part.

No person other than Amici Curiae and its counsel made any

monetary contribution intended to fund the preparation or

submission of this brief.

2

INTRODUCTION AND SUMMARY OF THE

ARGUMENT

This case concerns the authority of the

Securities and Exchange Commission (SEC) to

adjudicate, in house, alleged violations of law or SEC

regulations. The most relevant constitutional

requirement at issue in this case is the principle of

separation of powers that undergirds the

governmental structure created by the Constitution.

The Constitution carefully separates the legislative,

executive, and judicial functions into different

branches of government. Apart from the specific

instances of overlap designed to allow the branches to

protect their own power, they are separate and

distinct as are the categories of power they wield.

Today, the agencies that comprise the

administrative state, on the other hand, act with

significant unchecked power. Contrary to the

constitutionally required separation of powers,

“[a]gencies like the SEC and FTC combine the

functions of investigator, prosecutor, and judge under

one roof.” Axon Enter. v. FTC, 143 S. Ct. 890, 917

(2023) (Gorsuch, J., concurring in the judgment).

According to then-SEC Commissioner Edward

Fleischman, “the true life force of a fourth branch

agency is expressed in a commandment that failed,

presumably only through secretarial haste, to survive

the cut for the original decalogue: Thou shalt expand

thy jurisdiction with all thy heart, with all thy soul

and with all thy might.” 2

2

Edward H. Fleischman, Commissioner, SEC, Address to the

3

The constitutional separation of powers was not

an accident. It was designed by the Framers of the

Constitution to ensure that the federal government,

which exists to protect individual rights, would not

become a source of those rights’ violation. The

Constitution’s structures are not suggestions or

guidelines. They are rules those who govern must

follow. The SEC’s adjudication of cases before its own

administrative law judges (“ALJ”) undermines that

structure by violating the distribution of powers

among the three branches and thus is illegal.

Here, the SEC brought an action against

respondents George Jarkesy and Patriot28 for fraud

“under the Securities Act, the Securities and

Exchange Act and the Advisers Act” through the

agency’s in-house adjudicatory process. Jarkesy v.

SEC, 34 F.4th 446, 450 (5th Cir. 2022). The

respondents’ constitutional challenges to, and

requests to enjoin, that adjudication were denied. Id.

After it was found that respondents had committed

securities fraud, and that finding was affirmed by the

Commission, Jarkesy was ordered to “pay a civil

penalty of $300,000” and was “barred [] from various

securities industry activities.” Id. Thus, should the

Court deny respondents’ claims here, they will suffer

deprivations of both liberty and property while having

had their case brought and reviewed by an agency

operating outside of the constitutionally required

separation of powers.

Women in Housing and Finance, The Fourth Branch at Work,

(November 29, 1990)

https://www.sec.gov/news/speech/1990/112990fleischman.pdf.

4

ARGUMENT

I.

The Securities and Exchange Act’s

Delegation of Adjudicatory Power to the

Executive Branch is Inconsistent with

Article I and III of the Constitution and

with the Constitutional Separation of

Powers.

Officials of the federal government have no

authority or right to change the Constitution apart

from the amendment process. Yet for at least one

hundred years, an effort has been made to undermine

the constitutional separation of powers without going

through that process. The Framers understood that

governmental structure was a necessary protection for

individual liberty. When government officials violate

that structure, they undermine those protections,

endangering the liberty of the people that it is their

job to safeguard.

A. Delegation of judicial power to ALJs is

inconsistent with Article III and is thus

outside the power of Congress.

Congress may only exercise the powers vested

in it by the Constitution. The Constitution, “rather

than granting general authority to perform all the

conceivable functions of government,” “lists, or

enumerates, the Federal Government’s powers.” Nat’l

Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 534

(2012). An “enumeration of powers is also a limitation

of powers, because ‘[t]he enumeration presupposes

something not enumerated.’” Id. at 534 (quoting

Gibbons v. Ogden, 22 U.S. 1, 9 (1824)) (alteration in

original). Thus, Congress may only delegate power if

5

the power to do so is either enumerated or is fairly

contained within the Necessary and Proper Clause.

Because the power to delegate is not enumerated and

is not fairly contained within the Necessary and

Proper Clause, Congress may not exercise that power.

First, it is indisputable that there is no

enumerated power to delegate. Article I of the

Constitution lists all the powers of Congress, and

delegation is not among them. Nor is a lack of such

power surprising. “Permitting Congress to divest its

legislative power to the Executive Branch would ‘dash

[the] whole scheme,’” of constitutional lawmaking.

West Virginia v. EPA, 142 S. Ct. 2587, 2618 (2022)

(Gorsuch, J., concurring) (quoting Department of

Transportation v. Association of American Railroads,

575 U.S. 43, 61 (2015) (Alito, J., concurring)). Further,

as John Locke understood, “[t]he legislative cannot

transfer the power of making laws to any other hands:

for it being but a delegated power from the people,

they who have it cannot pass it over to others.” 3 The

same is true of the judicial power. It is delegated by

the people to the judicial branch and cannot be

removed therefrom apart from a constitutional

amendment.

Second, delegation of legislative power is not

“necessary and proper for carrying into execution”

Congress’s enumerated powers. U.S. Const. art. I, § 8,

John Locke, Second Treatise on Government, § 141 at 74-75

(C.B. Macpherson ed., 1980) (emphasis in original). See also,

Thomas Jefferson, Notes on the State of Virginia, Query XIII, 136

(1853) (“Our ancient laws expressly declare that those who are

but delegates themselves shall not delegate to others powers

which require judgment and integrity in their exercise.”).

3

6

cl. 18. The Necessary and Proper Clause “does not

license the exercise of any ‘great substantive and

independent power[s]’ beyond those specifically

enumerated.” Sebelius, 567 U.S. at 559 (quoting

McCulloch, 17 U.S. at 411). “Congress must exercise

its authority under the Necessary and Proper Clause

in a manner consistent with the basic constitutional

principles.” Gonzales v. Raich, 545 U.S. 1, 52 (2005)

(O’Connor, J. dissenting) (citing Garcia v. San Antonio

Metro. Transit Auth., 469 U.S. 528, 585 (1985)

(O’Connor, J., dissenting)). That clause is not “a

pretext . . . for the accomplishment of objects not

entrusted to the government.” Raich, 545 U.S. at 66

(Thomas, J., dissenting) (quoting McCulloch, 17 U.S.

at 423) (internal quotation marks omitted).

Rather, “the Necessary and Proper Clause is

exceeded . . . when [congressional action] violates the

background principle of enumerated (and hence

limited) federal power.” Sebelius, 567 U.S. at 653

(Scalia, J., dissenting). The Necessary and Proper

Clause merely “ensure[s] that the Congress shall have

all means at its disposal to reach the heads of power

that admittedly fall within its grasp . . . Congress shall

not fail because it lacks the means of

implementation.” 4 But necessary and proper means

necessary and proper. The scope of the powers vested

by the clause is limited by “the word ‘proper’ [which]

in this context requires executory laws to be

distinctively and peculiarly within the jurisdictional

competence of the national government -- that is,

4 Richard A. Epstein, The Proper Scope of the Commerce Power,

73 Va. L. Rev. 1387, 1397-1398 (1987).

7

consistent with background principles of separation of

powers, federalism, and individual rights.” 5

Even Justice Marshall, in his famous

explication of the clause, generally taken to be an

expansive reading, demanded that the “means . . .

consist with the letter and spirit of the Constitution.”

McCulloch v. Maryland, 17 U.S. 17 U.S. 316, 421

(1819). Both the letter and the spirit of the

Constitution require congressional exercises of power

under the clause to be consistent with the separation

of powers. Thus, any attempt to restructure the

powers of the federal government inconsistent with

the separation of powers established by the

Constitution is beyond the power of Congress. See Oil

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

LLC, 138 S. Ct. 1365, 1372-73 (2018) (quoting Stern,

564 U.S. at 484) (“Congress cannot ‘confer the

Government’s judicial Power on entities outside

Article III.’”).

B. The executive branch cannot exercise judicial

power.

Adjudication by the executive is sometimes

unconstitutional, including in this case. See B&B

Hardware, Inc. v. Hargis Indus., 575 U.S. 138, 171

(2015) (Thomas, J., dissenting) (citing Stern v.

Marshall, 564 U.S. 462, 482-83 (2011)). (“Under our

Constitution, the ‘judicial power’ belongs to Article III

courts and cannot be shared with the Legislature or

5 Gary S. Lawson, The Rise and Rise of the Administrative State,

107 Harv. L. Rev. 1231, 1234-1235 (1994) (emphasis added).

8

the Executive.”). The question is whether the power

being exercised is judicial in nature.

The distinction between adjudication that can

properly be exercised by the executive on the one

hand, and core judicial power reserved to Article III

courts on the other, hinges on the distinction between

public and private rights. Wellness Int’l Network, Ltd.

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

dissenting). See B&B Hardware, Inc. v. Hargis Indus.,

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

(“Because federal administrative agencies are part of

the Executive Branch, it is not clear that they have

power to adjudicate claims involving core private

rights.”). The adjudication of “core private rights” is “a

judicial rather than executive power.” See Axon Enter.,

143 S. Ct. at 909 (Thomas, J., concurring). Thus,

“[w]hen private rights are at stake, full Article III

adjudication is likely required.” Id. at 907.

Private rights, in turn, “encompass ‘the three

absolute rights,’ life, liberty, and property, ‘so called

because they ‘appertain and belong to particular men

merely as individuals, not . . . depending upon the will

of the government.’” Axon Enter., 143 S. Ct. at 907

(Thomas, J., concurring) (quoting Wellness Int’l

Network, 575 U.S., at 713–714 (dissenting opinion)

(quoting 1 W. Blackstone, Commentaries on the Laws

of England 119 (1765)).

Relatedly, “it may violate due process by

empowering entities that are not courts of competent

jurisdiction to deprive citizens of core private rights.”

Id. at 910 (citing B&B Hardware, 575 U.S. at 164

(Thomas, J. dissenting)). As Professor Lawson

9

suggests “the Article III inquiry merges with

questions of due process: if the government is

depriving a citizen of ‘life, liberty, or property,’ it

generally must do so by judicial process.” 6 While the

line is difficult to draw, “the imposition of a civil

penalty or fine is very hard to distinguish from the

imposition of a criminal sentence (especially when the

criminal sentence is itself a fine). If the latter is

judicial, it is difficult to see why the former is not as

well.” 7

Here, the penalty is a deprivation of private

rights in the form of a fine and a restriction on future

engagement in securities activity. See Jarkesy, 34

F.4th at 450. Such invasions of liberty and property

demand due process of law. In agency adjudications,

“[a]gencies like the SEC and FTC combine the

functions of investigator, prosecutor, and judge under

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

concurring in the judgment). Because “the Court has

determined that an unconstitutional potential for bias

exists when the same person serves as both accuser

and adjudicator,” in the same case,” Williams v.

Pennsylvania, 579 U.S. 1, 8 (2016) (citing In re

Murchison, 349 U.S. 133, 136-37 (1955)), due process

of law requires Article III review.

6 Lawson, supra note 5, at 1247 (citing Murry’s Lessee v. Hoboken

Land & Improvement Co., 59 U.S. 272 (1855)).

7 Id.

10

C. Article III appellate review is insufficient to

provide the process due under the

Constitution.

Mere Article III appellate review of an agency’s

adjudicatory decision is insufficient. “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 Enter., 143 S.

Ct. at 910 (Thomas, J., concurring). Both factfinding

and deciding questions of law are “at the core of the

judicial power.” Id. Further, “[i]t is obvious that

Article III ‘would not be satisfied if Congress provided

for judicial review but ordered the courts to affirm the

agency no matter what.’” Id. (quoting Lawson, supra

note 5, at 1247). Nor can Congress “simply order[]

courts to put a thumb (or perhaps two forearms) on the

agency’s side of the scale.” Id. (quoting Lawson, supra

note 5, at 1247-48) (internal quotation marks

omitted). “Such a regime ‘allows a mere party to

supplant a jury as the court’s factfinder.’” Id. (quoting

Philip Hamburger, Is Administrative Law Unlawful,

319 (1st ed. 2014)). Finally, even if Article III courts’

review of agency adjudication of private rights were

entirely de novo, such an arrangement is still

inconsistent with the Constitution’s arrangement of

powers and is thus unconstitutional.

The inability of defendants to opt out of the ALJ

system furthers the injustice of that system. Under

the Dodd-Frank Act, “Congress gave the SEC the

power to bring securities fraud actions for monetary

penalties within the agency instead of in an Article III

court whenever the SEC in its unfettered discretion

decides to do so.” Jarkesy, 34 F.4th at 461 (citing 15

11

U.S.C. § 78u-2(a)) (emphasis in original). Thus,

defendants often have no right to demand that their

case be heard by an independent Article III court.

II.

Governments Must be Subject to the Rule

of Law if they Are to Fulfill Their Reason

for Being: The Protection of Individual

Rights.

The founding generation understood the

purpose of government to be the protection of

individual rights. Because government can violate

individual rights, the Framers understood that

government itself had to be restrained. The

constitutional separation of powers was implemented

as just such a protection.

A.

Individuals

government.

have

rights

that

preexist

The rights of individuals preexist government

and come from man’s Creator. The Declaration of

Independence, which imbues meaning into the

Constitution, expresses the fundamental philosophy

of American government: “Governments are instituted

among Men,” to secure “certain unalienable rights,”

which come from man’s Creator and among which “are

Life, Liberty, and the pursuit of Happiness.” The

Declaration of Independence para. 2 (U.S. 1776).

These provisions of the Declaration of Independence

“refer[] to a vision of mankind in which all humans are

created in the image of God and therefore of inherent

worth.” Obergefell v. Hodges, 576 U.S. 644, 735 (2015)

(Thomas, J., dissenting).

12

The Declaration, though perhaps revolutionary

in its clarity and universality, was not espousing

entirely new ideas. Rather, it echoes the reasoning of

William Blackstone and John Locke, among many

others. According to Blackstone, absolute rights are

those “which are such as appertain and belong to

particular men, merely as individuals or single

persons.” 8 The Declaration shows its indebtedness to

the ideas of Locke, who wrote, “no one ought to harm

another in his life, health, liberty, or possessions: for

men being all the workmanship of one omnipotent,

and infinitely wise maker; all the servants of one

sovereign master, sent into the world by his order, and

about his business” are “made to last during his, not

one another’s pleasure.” 9

The Constitution, “like the Declaration of

Independence before it—was predicated on a simple

truth: One’s liberty, not to mention one’s dignity, was

something to be shielded from—not provided by—the

State.” Obergefell, 576 U.S. at 736 (Thomas, J.,

dissenting). The Ninth Amendment reinforces the idea

that “[t]he enumeration in the Constitution, of certain

rights, shall not be construed to deny or disparage

others retained by the people.” U.S. Const. amend. IX.

In other words, the people were to retain their preexisting rights, both enumerated and unenumerated,

under the new government.

8 1 W. Blackstone, Commentaries on the Laws of England 119

(1765).

9 Locke, supra note 3, § 6 at 9.

13

B. The rights of individuals are at all times

threatened by human nature, whether in the

hypothetical state of nature or under any

government.

The Founder’s view of government “was rooted

in a general skepticism regarding the fallibility of

human nature.” See INS v. Chadha, 462 U.S. 919, 949

(1983). In a state of anarchy, the rights of individuals

are real, but are subject to violation by the strong.

Under a government, the rights of individuals are real

but are subject to the whims of those exercising

governmental power. According to Montesquieu,

“constant experience shows us that every man

invested with power is apt to abuse it, and to carry his

authority as far as it will go.” 10 In thousands of years

of recorded human history, that nature has not

changed. 11

The Founders were familiar with the abuse of

government power. The “government [is] the greatest

of all reflections on human nature[.]” 12 As Madison

explained:

If men were angels, no government

would be necessary. If angels were to

10 Montesquieu, Spirit of the Laws, § 11.4 (Thomas Nugent trans.

1752) (1748).

11 See Jefferson, supra note 3, at 130 (“Human nature is the same

on every side of the Atlantic, and will be alike influenced by the

same causes. The time to guard against corruption and tyranny

is before they shall have gotten hold on us. It is better to keep the

wolf out of the fold, than to trust to drawing his teeth and talons

after he shall have entered.”).

12 The Federalist No. 51 at 349 (James Madison) (Jacob E. Cooke

ed., 1961).

14

govern men, neither external nor

internal controls on government would

be necessary. In framing a government

which is to be administered by men over

men, the great difficulty lies in this: you

must first enable the government to

control the governed; and in the next

place oblige it to control itself. 13

Yet someone must govern. Virtually no one

would suggest that American government should be

ruled by the one or the few. But the Framers also

feared the tyranny of the majority. As Madison put it,

while “[a] dependence on the people is, no doubt, the

primary controul on the government,” “experience has

taught mankind the necessity of auxiliary

precautions.” 14 Id.

C. Government exists to protect rights but is

also a potential source of their violation. This

conundrum necessitates “a government of

laws and not of men.”

Quis custodiet ipsos custodes? John Adams

suggested the answer in the Massachusetts

Constitution. Proper government does not impose the

rule of one man, nor of the few or the many. Under

proper government, the law must rule. See Mass.

13 Id.

14 See also, Aristotle, Politics, Book III, 1287a (Benjamin Jowett,

trans. 1885) (350 BC) (“[H]e who bids the law rule may be

deemed to bid God and Reason alone rule, but he who bids man

rule adds an element of the beast; for desire is a wild beast,

and passion perverts the minds of rulers, even when they are

the best of men. The law is reason unaffected by desire.”).

15

Const. pt. 1 art. XXX. Citing this provision of the

Massachusetts Constitution, the Court in Yick Wo v.

Hopkins, 118 U.S. 356, 370 (1886), wrote that the idea

of a person’s rights held “at the mere will of another,

seems to be intolerable in any country where freedom

prevails, as being the essence of slavery itself.”

The law that must rule is the Constitution. The

Declaration describes the higher law upon which

government is based, and the truths explicated in

Declaration, including the reality of “inalienable

rights” are “embedded in our constitutional structure.”

McDonald v. Chicago, 561 U.S. 742, 807 (2010)

(Thomas, J., concurring in part and concurring in the

judgment). The Constitution, in turn, is “the supreme

Law of the Land.” U.S. Const. art. VI, cl. 2. It is also

“the law that governs those who govern [the people],”

and “is put in writing so that it can be enforced against

the servants of the people.” 15 Those who administer

American government swear an oath to uphold and

defend it. 16

III.

The

Constitution

Establishes

the

Separation of Powers as a Means of

Ensuring the Rule of Law.

A. Belief in separation of powers was

widespread at the founding and had

significant philosophical precedent.

John Adams explained the purpose of a

government of separated powers in the Massachusetts

15 Randy E. Barnett, Our Republican Constitution 23 (1st ed.

2016).

16 U.S. Const. art. II, § 1, cl. 7; U.S. Const. art. VI, cl. 3.

16

Constitution. Under the state constitution, the

executive, judicial, and legislative organs of the state

government may not exercise the powers of one

another so that, “it may be a government of laws and

not of men.” Mass. Const. pt. 1 art. XXX. In other

words, the separation of powers is one of the

fundamental solutions to the dilemma discussed

above: the conflict between the need for government to

protect rights because of human nature and the

tendency of governments in which men rule to destroy

the rights the institution exists to protect. For the

Founders, the most important proponent of the

separation of powers was Montesquieu. 17

As Montesquieu wrote, “When the legislative

and executive powers are united in the same person,

or in the same body of magistrates, there can be no

liberty; because apprehensions may arise, lest the

same monarch or senate should enact tyrannical laws,

to execute them in a tyrannical manner.” 18 Further,

“there is no liberty, if the judiciary power be not

separated from the legislative and executive. Were it

joined with the legislative, the life and liberty of the

subject would be exposed to arbitrary control,” and if

it were, “joined to the executive power the judge might

behave with violence and oppression.” 19 For all three

17 The Federalist No. 47 at 324 (James Madison) (Jacob E. Cooke

ed. 1961) (“The oracle who is always consulted and cited on this

subject is the celebrated Montesquieu. If he be not the author of

this invaluable precept in the science of politics, he has the merit

at least of displaying and recommending it most effectually to the

attention of mankind.”).

18 Montesquieu, supra note 10, at § 11.6.

19 Id.

17

powers to be exercised by the same person or body

“would be an end of everything.” 20

The

Founders

shared

Montesquieu’s

understanding.

As

Jefferson

wrote,

“The

concentrating [of powers] in the same hands is

precisely the definition of despotic government. It will

be no alleviation that these powers will be exercised

by a plurality of hands, and not by a single one. . . An

elective despotism was not the government we fought

for.” 21 The founding generation’s view of separation of

powers as essential to liberty was so strong that a

major antifederalist critique of the proposed

20 Id.

Jefferson, supra note 3, at 128-29. See also, John Adams

Excerpt

from

Thoughts

on

Government,

https://www.senate.gov/artandhistory/history/common/generic/e

xerpt-thoughts-on-government-adams-1776.htm (last visited

Oct. 17, 2023) (“A single Assembly is liable to all the vices, follies

and frailties of an individual. Subject to fits of humour, starts of

passion, flights of enthusiasm, partialities of prejudice, and

consequently productive of hasty results and absurd judgments:

And all these errors ought to be corrected and defects supplied by

some controuling power.”); The Federalist No. 47 (James

Madison) (Jacob E. Cooke ed., 1961) (“The accumulation of all

powers, legislative, executive, and judiciary, in the same hands,

whether of one, a few, or many, and whether hereditary, selfappointed, or elective, may justly be pronounced the very

definition of tyranny.”); The Federalist No. 71 at 483 (Alexander

Hamilton) (Jacob E. Cooke ed., 1961) (“The same rule, which

teaches the propriety of a partition between the various branches

of power, teaches us likewise that this partition ought to be so

contrived as to render the one independent of the other.”).

21

18

Constitution was that it did not separate powers

enough. 22

B. The Framers infused the Constitution with

their shared understanding of separation of

powers.

The design of the Constitution directly reflects

an understanding of government that sees it as both

the protector of, and a threat to, individual liberty. See

PHH Corp. v. Consumer Fin. Prot. Bureau, 881 F.3d

75, 164 (C.A.D.C. 2018) (Kavanaugh, J., dissenting)

(“To prevent tyranny and protect individual liberty,

the Framers of the Constitution separated the

legislative, executive, and judicial powers of the new

national government.”).

Article I establishes the legislative branch and

vests “All legislative Powers” of the federal

government in “a Congress of the United States which

shall consist of a Senate and House of

Representatives.” U.S. Const. art. I, § 1 (emphasis

added). Article II vests “the ‘executive Power’ –all of

it,” Seila Law LLC v. Consumer Fin. Prot. Bureau, 140

S. Ct. 2183, 2191 (2020), in “a President of the United

States.” U.S. Const. art. II, § 1. Finally, Article III

vests “the judicial Power of the United States . . . in

one supreme Court, and in such inferior Courts as the

Congress may from time to time ordain and establish.”

U.S. Const. art. III, § 1. The judges of these courts

22 The Federalist No. 47 at 323 (James Madison) (Jacob E. Cooke

ed., 1961) (“One of the principal objections inculcated by the more

respectable adversaries to the Constitution is its supposed

violation of the political maxim that the legislative, executive,

and judiciary departments ought to be separate and distinct.”).

19

“shall hold their Offices during good Behaviour,” and

may not have their compensation reduced while in

office. Id. The Constitution only departs from this

strict separation in specific ways to create a system of

checks and balances.

Those checks and balances were meant to work

along with the separation of powers to ensure that

each branch could protect its own power. According to

Madison, “the great security against a gradual

concentration of the several powers in the same

department, consists in giving to those who

administer

each

department

the

necessary

constitutional means and personal motives to resist

encroachments of the others.” 23 He continued,

“Ambition must be made to counteract ambition. The

interest of the man must be connected with the

constitutional rights of the place.” Id.

The Constitution enumerates specific powers

that Congress may exercise and vests it with the

power, “[t]o make all Laws which shall be necessary

and proper for carrying into Execution,” its

enumerated powers. U.S. Const. art. I, § 8, cl. 18.

Those “powers not delegated to the United States by

the Constitution, nor prohibited by it to the states, are

reserved to the states respectively, or to the people.”

U.S. Const. amend. X. Those powers that are

delegated are not a blank check. 24 In contravention of

these constitutional principles, there has been a

23 The Federalist No. 51 at 349 (James Madison) (Jacob E. Cooke

ed., 1961).

24 The Federalist No. 45 at 313 (James Madison) (Jacob E. Cooke

ed., 1961) (“The powers delegated by the proposed constitution to

the federal government, are few and defined.”).

20

concerted effort over the past century to comingle the

powers of government in the executive branch.

IV.

Those Who Created the Administrative

State Knew that What They Were

Proposing was Unconstitutional and

Inconsistent with the Fundamental

Purpose of the Constitution.

The administrative state became a major player

in the federal government during the administration

of Franklin Delano Roosevelt (“FDR”), largely as a

result of his New Deal policies. 25 However, the ideas

did not start with him. According to FDR himself,

many of the principles for the New Deal came from

President Woodrow Wilson. 26 Wilson, in turn, was

influenced by Frank Goodnow, a professor at

Columbia and later Johns Hopkins. 27 Finally, one of

the most important early architects of the

administrative state was James Landis. 28 “Through

Landis’ work on securities legislation, and his

subsequent service on the FTC and SEC,” he “became

the animating force behind the growth of modern

administration as we know it today.” 29

25 See Ronald J. Pestritto, The Progressive Origins of the

Administrative State: Wilson, Goodnow, and Landis, Social

Philosophy and Policy, January 2007, at 16, 16 n.1.

26 Id. at 28.

27 See id. at 25, 43.

28 Id. at 25.

29 Id. at 16.

21

A. These early architects of the administrative

state believed that the Framers had gotten

the purpose of government wrong.

In the minds of these men, the government

cannot merely protect the rights of individuals

because the complexity of the modern world demands

government intervention. To Wilson:

The object of constitutional government

is to bring the active, planning will of

each part of the government into accord

with the prevailing popular thought and

need . . .whatever institutions, whatever

practices serve these ends, are necessary

to such a system: those which do not, or

which serve it imperfectly should be

dispensed with or bettered. 30

Goodnow also believed that America had moved

past the Founders’ vision of government. He wrote,

“[W]hile insistence on individual rights may have been

of great advantage at a time when the social

organization was not highly developed, it may become

a menace when social rather than individual efficiency

is the necessary prerequisite of progress.” 31

Apparently, then, it was a good thing that “the sphere

of governmental action is continually widening and

Woodrow Wilson, Constitutional Government in the United

States 14 (1914)

https://www.loc.gov/resource/gdcmassbookdig.constitutionalgo00

wils_0/?sp=28&r=-0.831,-0.033,2.661,1.184,0.

31 Frank J. Goodnow, The American Conception of Liberty 21

(1916)

https://archive.org/details/americanconcepti00goodrich/page/n5/

mode/2up.

30

22

the actual content of individual private rights is being

increasingly narrowed.” 32

Landis wrote similarly, “[t]he complexities of

our modern society are increasing rather than

decreasing,” which “call[s] for greater surveillance by

government.” 33 Nonetheless, “modern government

had to move beyond the separation of powers, since the

end of government had changed from rights protection

to what Landis called the ‘promotion of the welfare of

the governed’ or, more generally, ‘well-being.’” 34

Somewhat more subtly, though no less

dangerously, FDR said, “[t]he task of statesmanship

has always been the re-definition of [the] rights

[people enter into the social contract to protect] in

terms of a changing and growing social order. New

conditions

impose

new

requirements

upon

Government and those who conduct Government.” 35

Thus, contrary to the understanding that informed the

drafting of the Constitution, these innovators of

administration saw government’s purpose not as

rights protection but as the restructuring of society for

social and economic efficiency with less and less

regard paid to individual rights.

32 Id.

33 Pestritto, supra note 27, at 35.

34 Id. at 27.

35 Franklin Delano Roosevelt, President of the United States,

Address to the Commonwealth Club (September 23, 1932)

https://teachingamericanhistory.org/document/commonwealthclub-address/.

23

B. These innovators of the administrative state

believed that the structure of good

government demands the separation of

administration and politics.

Because those who created the administrative

state believed the purpose of government was

different from that which animated the creation of the

Constitution, they also thought the structures created

by that Constitution had to go.

For Goodnow, “the sphere of administration,”

was “outside the sphere of constitutional law.”36

Further, in place of separation of powers, Goodnow

and Wilson advocated for the separation of politics and

administration. 37 According to Wilson the government

is a living organism, not a machine, as the Founders

thought. As he asserted, “No living thing can have its

organs offset against each other, as checks, and live.” 38

Landis, “fully conceded” that “[t]he growth of modern

administration . . . does not fit within the form of

American

constitutionalism,”

specifically

the

39

separation of powers.

As one particularly relevant example of this

philosophy in practice, the SEC was designed based on

the belief that complexity demands not only

government intervention but government free of

normal constraints, with sufficient flexibility to

address the apparently ever-arising issues. 40 Landis

36 Pestritto, supra note 27, at 47.

37 See id. at 25, 46-47.

38 Id. at 39.

39 Id. at 27.

40 See id.

24

“pointed to the Securities and Exchange Act of 1934,

which he had helped to draft, as an example of how to

create an agency with powers flexible enough to meet

unforeseen exigencies.” 41 Landis thought “[t]he

discretionary language with which the act empowered

the SEC was a vast improvement” over the earlier

Securities Act which gave the agency more limited

powers. 42

Landis complained that “[a] legalistic approach

that reads a governing statute with the hope of finding

limitations upon authority rather than grants of

power with which to act decisively” was common

because doing otherwise was a political gamble. 43 On

the other hand, Landis held up as an example,

One of the ablest administrators that it

was my good fortune to know . . . [who]

never read, at least more than casually,

the statutes that he translated into

reality. He assumed that they gave him

power to deal with the broad problems of

an

industry

and,

upon

that

understanding, he sought his own

solutions. 44

This Court has at times imbibed the progressive

view of government. Seila Law, 140 S. Ct. at 2212

(Thomas, J., concurring) (quoting Perez v. Mortg.

Bankers Ass’n, 575 U.S. 92, 115-16 (2015) (Thomas, J.,

41 Id.

42 Id.

43 James M. Landis, The Administrative Process, 75 (1st ed.

1938).

44 Id.

25

concurring) (“Unfortunately, this Court ‘ha[s] not

always been vigilant about protecting the structure of

our Constitution,’ at times endorsing a ‘more

pragmatic, flexible approach’ to our Government’s

design.”) (alteration in original). For example, the

Court wrote in Mistretta v. United States, 488 U.S.

361, 372 (1989), “[I]n our increasingly complex society,

replete with ever changing and more technical

problems, Congress simply cannot do its job absent an

ability to delegate power under broad general

directives.” If that is the case, the Constitution may be

amended. Until it is, however, those who govern the

people are bound by that document as it is, not as they

wish it were. Because the innovators of the

administrative state had little respect for the

Constitution and its limitations on power, it should be

unsurprising that the system they created

circumvents those limitations.

C. These innovators of the administrative state

were widely successful at undermining the

basic structure of American federal

government.

The administrative state is insulated from both

methods of restraint of government foreseen by the

Framers. According to Madison, “a dependence on the

people” is the “primary controul” of government, but

certain “auxiliary precautions” were also necessary. 45

As Justice Thomas has noted, when “independent

agencies wield substantial power with no

accountability to the President or the people they ‘pose

45 The Federalist No. 51 at 349 (James Madison) (Jacob E. Cooke

ed., 1961).

26

a significant threat to individual liberty and to the

constitutional system of separation of powers and

checks and balances.” Seila Law, 140 S. Ct. at 2212

(Thomas, J., concurring) (quoting PHH Corp., 881

F.3d at 165 (Kavanaugh, J., dissenting)).

The design of administrative agencies

intentionally avoids both democratic and structural

constraints. First, many agency officials, despite being

a part of the executive branch and thus exercising the

President’s power, are nonetheless protected from

removal by, and otherwise from the control of, the

President.

Further, the very structures that were designed

to protect the liberty of the people function to insulate

the administrative state from congressional review.

Enacting federal legislation is not easy, nor is it

supposed to be. Gundy v. United States, 139 S. Ct.

2116, 2134 (2019) (Gorsuch, J., dissenting) (explaining

that the rigors of bicameralism and presentment,

“Article I’s detailed and arduous processes for new

legislation,” were, “to the framers . . . bulwarks of

liberty.”). The slow, deliberative process protects

liberty against populist whims in the federal

government. Yet that same process now makes it

practically impossible for the legislature to oversee the

exercise of the legislative and judicial power it has

delegated to agencies. Because neither the President

nor Congress can exercise meaningful oversight of

much of what happens in the administrative state, the

“primary controul” envisioned by Madison and the

Framers is rendered largely ineffectual.

27

Second, the “auxiliary precautions,” established

by the Constitution are undermined. The general

structural protection that comes from a system of

checks and balances operating among branches

exercising distinct powers is absent in the

administrative state which consists of agencies

exercising legislative, executive, and judicial powers,

all directed towards a shared goal. Thus, neither the

primary nor the auxiliary limits on government power

are reliably operable in the administrative state.

D. The ideas of these so-called progressives

were, in fact, regressive and were

inconsistent with the Constitution.

Those who designed and established the

administrative state thought of themselves as

progressive, but they were not. As President Calvin

Coolidge explained on the Declaration’s 150th

anniversary,

It is often asserted that the world has

made a great deal of progress since 1776,

that we have had new thoughts and new

experiences which have given us a great

advance over the people of that day, and

that we may therefore very well discard

their conclusions for something more

modern. But that reasoning can not be

applied to this great charter. If all men

are created equal, that is final. If they are

endowed with inalienable rights, that is

final. If governments derive their just

powers from the consent of the governed,

that is final. No advance, no progress can

28

be made beyond these propositions. If

anyone wishes to deny their truth or

their soundness, the only direction in

which he can proceed historically is not

forward, but backward toward the time

when there was no equality, no rights of

the individual, no rule of the people.

Those who wish to proceed in that

direction can not lay claim to progress.

They are reactionary. Their ideas are not

more modern, but more ancient, than

those of the Revolutionary fathers. 46

Hamilton argued that while the federal

government would need extensive powers in the

realms over which it had authority, “the most vigilant

and careful attention of the people,” was essential “to

see that it be modelled in such a manner, as to admit

of its being safely vested with the requisite powers.” 47

As part of that vigilance, “If any plan which has been,

or may be offered to our consideration, should not,

upon a dispassionate inspection, be found to answer

this description, it ought to be rejected.” 48 The plan of

the administrative state is, by design, inconsistent

with the protections of which Hamilton was speaking.

Because the view expressed by Hamilton was the view

established in law by the adoption of the Constitution

46 Calvin Coolidge, President of the United States, Speech on the

150th Anniversary of the Declaration of Independence (July 5,

1926)

https://millercenter.org/the-presidency/presidentialspeeches/july-5-1926-declaration-independence-anniversarycommemoration.

47 The Federalist No. 23 at 150 (Alexander Hamilton) (Jacob E.

Cooke ed., 1961).

48 Id.

29

and which represented the general understanding of

government and the Constitution at the time of the

founding, the later meddling of “sophisters,

economists,

and

calculators,” 49

and

the

unconstitutional adjudication of judicial cases by the

executive branch must be rejected.

CONCLUSION

For the forgoing reasons, the Court should rule

for the respondents on all three questions presented.

Respectfully submitted,

J. Marc Wheat

Counsel of Record

Advancing American Freedom, Inc.

801 Pennsylvania Avenue, N.W. Suite 930

Washington, D.C. 20004

(202) 780-4848

mwheat@advancingamericanfreedom.com

Counsel for Amici Curiae

49 3 EDMUND BURKE, Reflections on the Revolution in France, in

THE WORKS OF EDMUND BURKE 19, 98 (1839).