Last week, in the consolidated cases of Charles Hill, Jr. v. SEC (No. 15-12831) and Gray Financial Group, Inc. v. SEC (No. 15-13738), the U.S. Court of Appeals for Eleventh Circuit heard oral argument on the question of whether federal district courts have jurisdiction to review constitutional challenges to SEC administrative enforcement proceedings.
The Eleventh Circuit is the most recent court of appeals to examine the issue. Recently, the D.C. Circuit, in Jarkesy v. SEC, and the Seventh Circuit, in Bebo v. SEC, have held that district courts lack subject-matter jurisdiction to entertain challenges to SEC administrative proceedings. Like Jarkesy and Bebo, the consolidated Eleventh Circuit cases involve preemptive constitutional attacks on pending SEC administrative proceedings.
The Eleventh Circuit appeal is being monitored closely in light of several recent district court decisions holding that the statutory scheme for review of SEC administrative proceedings does not preclude court challenges to the constitutionality of the SEC’s procedure for selecting administrative law judges. A split by the Eleventh Circuit could lead the Supreme Court to grant certiorari.