LITIGATION TRENDS 2025 | 23 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C Robert B. Niles-Weed Co-Head New York robert.niles-weed@weil.com Mark A. Perry Co-Head Washington, D.C. mark.perry@weil.com Greg Silbert Co-Head New York gregory.silbert@weil.com Zack Tripp Co-Head Washington, D.C., New York zack.tripp@weil.com Major Action on Administrative Agencies from the Supreme Court The Supreme Court’s 2023-2024 Term was a blockbuster for administrative law. While prior Litigation Trends Reports have covered various aspects of the Supreme Court’s decisions in this area, the Court’s decisions last year are among its most significant in generations. These cases are likely to affect the government, individuals, corporations, and other entities for generations to come. First, in SEC v. Jarkesy, No. 22-859, the Supreme Court held that the Securities and Exchange Commission cannot pursue civil penalties for securities fraud claims in in-house tribunals, and instead must pursue such claims in court. Writing for a 6-3 majority, Chief Justice Roberts reasoned that the Seventh Amendment’s jury trial right was implicated by these statutory securities fraud claims – meaning that defendants have a right to defend such claims in court rather than in front of the agency’s own adjudicators – because of the close relationship between those claims and common law fraud. The Court held that Appeals and Strategic Counseling these claims do not fall within the “public rights” exception that allows Congress to delegate adjudication of certain claims to a non-Article III administrative tribunal. Jarkesy’s impacts are significant, both for the SEC and for other agencies. Most immediately, Jarkesy will force the SEC to bring suits for civil penalties in federal court, where defendants have greater procedural protections and a jury trial right. This change of forum may reduce the government’s success rate in such cases, or, perhaps, chill the SEC from bringing certain cases at all. As Justice Gorsuch noted in his concurrence, the “SEC won about 90% of its contested in-house proceedings compared to 69% of its cases in court.” Jarkesy’s effects, however, are likely to be felt far beyond the SEC. As Justice Sotomayor noted in dissent, “more than 200 statutes authoriz[e] dozens of agencies to impose civil penalties for violations of statutory obligations.” And some of those agencies – including the Occupational Safety and Health Review Commission, the Federal Energy Regulatory Commission, the Department of Agriculture, and others – can seek civil penalties only in agency proceedings, meaning that Jarkesy may leave those agencies with no avenue to seek such penalties going forward. Second, in Loper Bright Enterprises v. Raimondo, No. 22-451, the Supreme Court overturned its 1984 decision in Chevron v. Natural Resources Defense Council, and held that an agency’s interpretation of a statute it is charged with administering is not entitled to any deference in a judicial proceeding. In another 6-3 decision, also written by Chief Justice Roberts, the Court held that deferring to an agency’s interpretation is inconsistent with the Administrative Procedure Act, which requires a court to decide all relevant questions of law. The Court emphasized that Chevron’s alternative approach allowing deference to an agency’s interpretation was “unworkable” and “fundamentally misguided.” Loper Bright is likely to impact a variety of diverse areas of administrative law – and its impact is already being felt. To be sure, Loper Bright does not CROSS-PRACTICE FOCUS 22 | Weil, Gotshal & Manges LLP
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