The 5th Circuit’s Ambush Against the SEC Is Unprecedented and Shocking
SlateOn Wednesday, a panel of the 5th U.S. If the Supreme Court adopted it in full, the decision would significantly decrease Congress’ authority to regulate the economy and combat private corruption, magnify the powers of the courts to thwart administrative agencies, and potentially increase political control over agency adjudicators and the civil service. Consider first Elrod’s holding that the SEC’s power to choose between judicial and administrative enforcement violates the “non-delegation doctrine.” This judicial doctrine provides that Congress may not give an agency the power to make binding rules unless it provides an “intelligible principle” to guide its discretion. The 5th Circuit’s novel nondelegation ruling, if adopted by the Supreme Court, would thus place significant government functions in constitutional peril. But recent Supreme Court opinions have invited Elrod’s conclusion that the system of “good cause” protections for administrative law judges at the SEC violates the Constitution.