Victory! U.S. Supreme Court Holds that Federal District

In an historic ruling, the U.S. Supreme Court this morning held that Texas Accountant Michelle Cochran has the right to challenge the constitutionality of her Administrative Law Judge’s (ALJ) removal protections in federal court before undergoing an administrative adjudication. Writing unanimously for the Court, Justice Kagan’s opinion stated, “The statutory review schemes set out in the Securities Exchange Act and Federal Trade Commission Act do not displace a district court’s federal-question jurisdiction over claims challenging as uncon­stitutional the structure or existence of the SEC or FTC.” “The ordinary statutory review scheme,” she wrote, “does not preclude a district court from entertaining these extraordinary claims.”

The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, which represents Ms. Cochran in Securities and Exchange Commission, et al. v. Michelle Cochran, commends the court for a decision that will allow our client to plead her case before a real Article III federal court rather than be subjected to an endless series of unlawful agency hearings. Michelle Cochran’s path to the U.S. Supreme Court began when she filed suit in federal district court to enjoin the SEC’s second round of administrative enforcement proceedings against her. Though SEC fixed the appointment problem Lucia v. SEC addressed, Ms. Cochran’s ALJ remained unconstitutional because SEC ALJs still enjoy multiple layers of “for cause” removal protection, a problem Lucia declined to reach and that SEC could not fix on its own—because the insulations from removal are statutory. NCLA also asserted that SEC violated Ms. Cochran’s due process rights by failing to adhere to its own rules and procedures.

Source: Victory! U.S. Supreme Court Holds that Federal District