The Eleventh Circuit Friday joined three others in concluding that Congress intended Respondents must wait until appeal from the Commission to have a Court consider their challenges to the Constitutionality of the SEC’s administrative forum.
Following the Thunder Basin line of cases, the Eleventh Circuit held that federal courts do not have jurisdiction to short-circuit the SEC’s administrative process to hear claims that the process is not constitutional. Instead, Respondents must raise their arguments twice before the very tribunals they claim aren’t Constitutional (first before the agency’s ALJs, then again on appeal to the Commission), before having them heard by a federal court.
The Eleventh Circuit vacated the injunctions issued by Atlanta District Judge May, and remanded, with instructions to dismiss for lack of jurisdiction. Like the Second Circuit (Tilton), Seventh Circuit (Bebo) and DC Circuit (Jarkesy), the Court held that Congress intended such claims to proceed through conclusion in the SEC’s administrative forum before proceeding to judicial review on appeal to a Circuit Court of Appeals as set out in the Exchange Act.
Another similar case remains pending at Fourth Circuit, Bennett v. SEC, No. 15-2584 (4th Cir., appeal docketed Dec. 28, 2015). The merits of the Appointments Clause and other Constitutional arguments have yet to be determined, but are pending on appeal to the DC Circuit in Timbervest.
The Eleventh Circuit’s opinion, Hill v. SEC, No. 15-12831 (11th Cir. June 17, 2016) c/w Gray Financial Group, Inc. v. SEC, No. 15-13738 (11th Cir. June 17, 2016) is here: http://media.ca11.uscourts.gov/opinions/pub/files/201512831.pdf
I discussed the Second Circuit’s recent Tilton decision, here: http://www.burrsecuritieslitigation.com/930#.V2Rg5lUrLik