ARLINGTON, Va. — This morning, the U.S. Supreme Court issued a decision in SEC v. Jarkesy, a landmark case challenging the use of administrative law judges to impose money fines. The Court affirmed that the government must prove its case in an independent court with a real jury before it can impose a fine. The Institute for Justice (IJ), which defends property rights nationwide and fights to stop governments from taking property in “courts” that are not real courts, filed an amicus brief on behalf of clients in New Jersey, Maryland, and Oklahoma.

“Jury trials were the norm for most of the country’s history, but since the 1970s scores of federal agencies have claimed the power to impose fines through in-house administrative courts, where judge and prosecutor are employed by the same agency,” said IJ Senior Attorney Rob Johnson. “Today, the Court made clear that post-1970s adventure is a historical anomaly without any grounding in the Constitution. And while the Court’s decision addressed just one federal agency, the principles that it relied on sweep beyond the SEC. The right to trial by jury is not limited to the SEC, and the Court’s opinion won’t be limited to the SEC either.”

The majority opinion, written by Chief Justice Roberts, stated, “A defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator.” In a concurrence, Justice Gorsuch notes that: “The agency is free to pursue all of its charges against Mr. Jarkesy. And it is free to pursue them exactly as it had always done until 2010: In a court, before a judge, and with a jury.”

“Today’s decision is loud and clear: If the government wants to punish people by taking their money, then it must go to a real court with a real judge and a jury,” said IJ Attorney Bob Belden. “The government had argued that cases by the government to impose money fines fall within a ‘public rights’ exception to the jury right, but the Court rejected that theory. When the government seeks to impose fines, that’s exactly the kind of case that requires a jury.”

IJ is currently challenging fines imposed by in-house administrative judges at several federal agencies, including the Department of Labor. Sun Valley Orchards, a multi-generation family farm in New Jersey, was ordered to pay the government over $500,000, most of that for alleged paperwork violations. C.S. Lawn & Landscape, a landscaping company in Maryland, was ordered to pay almost $55,000. And ProCraft Masonry, a construction firm in Oklahoma, was targeted for fines over $31,000. Each small business is fighting for the right to make its case in a real court with a real judge and jury.

“No doubt, the government will argue that today’s decision applies to only the SEC,” said IJ Attorney Jared McClain. “We will be pressing to make sure this decision applies to every agency that imposes fines.”