Document ID: ./input/supremecourt_opinions/opinions/23pdf/22-859new_kjfm.pdf
Page Number: 10.0

Cite as:  603 U. S. ____ (2024) 

5 

Opinion of the Court 

so that Jarkesy and Patriot28 could collect larger manage-
ment fees.  App. to Pet. for Cert. 80a–86a, 95a–105a.  The 
SEC initiated an enforcement action, contending that these
actions  violated  the  antifraud  provisions  of  the  Securities 
Act, the Securities Exchange Act, and the Investment Ad-
visers Act, and sought civil penalties and other remedies.

Relying  on  the  new  authority  conferred  by  the  Dodd-
Frank  Act,  the  SEC  opted  to  adjudicate  the  matter  itself
rather  than  in  federal  court.  In  2014,  the  presiding  ALJ 
issued an initial decision.  Id., at 155a–225a.  The SEC re-
viewed  the  decision  and  then  released  its  final  order  in 
2020.  Id., at 71a–154a.  The final order levied a civil pen-
alty  of  $300,000  against  Jarkesy  and  Patriot28,  directed 
them to cease and desist committing or causing violations
of  the  antifraud  provisions,  ordered  Patriot28  to  disgorge
earnings, and prohibited Jarkesy from participating in the 
securities industry and in offerings of penny stocks.  Id., at 
152a–154a. 

Jarkesy and Patriot28 petitioned for judicial review.  34 
F. 4th  446,  450  (CA5  2022).  A  divided  panel  of  the  Fifth
Circuit granted their petition and vacated the final order. 
Id., at 449–450.  Applying a two-part test from Granfinan-
ciera, S. A. v. Nordberg, 492 U. S. 33 (1989), the panel held
that the agency’s decision to adjudicate the matter in-house
violated  Jarkesy’s  and  Patriot28’s  Seventh  Amendment 
right to a jury trial.  34 F. 4th, at 451.  First, the panel de-
termined  that  because  these  SEC  antifraud  claims  were 
“akin to [a] traditional action[ ] in debt,” a jury trial would 
be required if this case were brought in an Article III court. 
Id., at 454; see id., at 453–455.  It then considered whether 
the “public rights” exception applied.  That exception per-
mits  Congress,  under  certain  circumstances,  to  assign  an
action to an agency tribunal without a jury, consistent with
the Seventh Amendment.  See id., at 455–459.  The panel 
concluded that the exception did not apply, and that there-
fore  the  case  should  have  been  brought  in  federal  court,