Court Opinion

ID: 4108071
Source: CourtListenerOpinion
Date Created: 2016-12-16 20:01:08.346323+00
Date Added: 2024-06-11T07:46:08.731089
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 15-2584

DAWN J. BENNETT; BENNETT GROUP FINANCIAL SERVICES, LLC,

                Plaintiffs – Appellants,

           v.

U.S. SECURITIES AND EXCHANGE COMMISSION,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Paul W. Grimm, District Judge. (8:15-
cv-03325-PWG)

Argued:   October 28, 2016                Decided:   December 16, 2016

Before MOTZ, KING, and DUNCAN, Circuit Judges.

Affirmed by published opinion. Judge Duncan wrote the opinion,
in which Judge Motz and Judge King joined.

ARGUED: Andrew Joseph Morris, MORVILLO LLP, Washington, D.C.,
for Appellants.   Melissa N. Patterson, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellee.    ON BRIEF: Gregory
Morvillo, Eugene Ingoglia, Ellen M. Murphy, MORVILLO LLP, New
York, New York, for Appellants.     Benjamin C. Mizer, Principal
Deputy Assistant Attorney General, Beth S. Brinkmann, Deputy
Assistant Attorney General, Mark B. Stern, Mark R. Freeman,
Megan Barbero, Daniel Aguilar, Tyce R. Walters, Civil Division,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Rod J.
Rosenstein, United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Baltimore, Maryland, for Appellee.
DUNCAN, Circuit Judge:

     Dawn     Bennett       and     her    firm,     Bennett          Group       Financial

Services,     LLC,    (collectively,        “Bennett”)         appeal       the    district

court’s     dismissal       on     jurisdictional        grounds           of     her     suit

challenging        the      constitutionality           of     the         administrative

enforcement        proceeding       that    the     Securities             and     Exchange

Commission (“SEC” or “Commission”) brought against her.                                For the

following reasons, we join the Second, Seventh, Eleventh, and

D.C. Circuits that have addressed the issue, and affirm.

                                           I.

                                           A.

     Congress has authorized the Commission to address potential

violations     of     the    federal       securities         laws,        including       the

Securities    Exchange       Act   of     1934   (“Exchange          Act”),       15    U.S.C.

§ 78a et seq., either by filing an enforcement action in federal

district court or by instituting an administrative proceeding.

See, e.g., 15 U.S.C. §§ 78u(d), 78u-1(a)(1), 78u-3.                                Congress

further     authorized       the     SEC    to     delegate          its     adjudicative

functions     to     an     administrative        law        judge     (“ALJ”),          while

“retain[ing] a discretionary right to review the action of any

such”   ALJ   on     “its   own    initiative”      or   at     a    party’s       request.

Id. § 78d-1(a)-(b).          The SEC implemented this framework through

its Rules of Practice.              See 17 C.F.R. § 201.110.                       When the

                                            2
Commission initially assigns enforcement proceedings to an ALJ,

the ALJ holds a hearing and makes an initial decision, which the

respondent may appeal by petitioning for review before the full

Commission.         Id. §§ 201.360(a)(1), 201.410(a).                                The Commission

reviews      the      ALJ’s      initial      decision             de    novo        and     may       take

additional evidence.              See id. §§ 201.410, 201.411(a), 201.452;

see   also      Jarkesy     v.    SEC,     803         F.3d    9,       13    (D.C.     Cir.       2015).

Whether or not a party seeks further administrative review, the

Commission alone--not the ALJ--has the authority to issue the

agency’s            final             decision                in             the           proceeding.

17 C.F.R. § 201.360(d)(2).

      In the Exchange Act, Congress has provided that judicial

review     of      administrative           enforcement              proceedings             shall      be

available       directly         in     the        appropriate               court      of      appeals.

15 U.S.C. § 78y(a)(1).                  When        an       aggrieved             person       files    a

petition,       the    jurisdiction           of       the    court          of    appeals        becomes

exclusive.            Id. 78y(a)(3).               For        judicial            review     of    final

Commission orders, the Exchange Act specifies what constitutes

the   agency       record,    id.      §   78y(a)(2),              the   standard          of     review,

id. §    78y(a)(4),       and     the      process           for    seeking         a   stay      of    the

Commission order either before the Commission or in the court of

appeals, id. § 78y(c)(2).                  Against this background, we turn to

the present dispute.

                                                   3
                                            B.

       Dawn Bennett founded Bennett Group Financial Services, LLC

as an independent investment firm around 2006.                           Around January

2012, the Commission began investigating Bennett and her firm.

       On     September      9,   2015,      the     Commission          instituted      an

administrative proceeding against Bennett to determine whether,

as   the     SEC’s    Division      of    Enforcement       alleged,        Bennett    had

violated the antifraud provisions of the federal securities laws

by   materially       misstating      the    amount       of     assets     managed    for

investors,         materially     misstating        investor        performance,       and

failing to adopt and implement adequate written policies for

calculating        and    advertising       assets        managed     and     investment

returns.       In re Bennett Grp. Fin. Servs., LLC, Exchange Act

Release      No.    75864,   2015    WL     5243888       (Sept.    9,    2015)     (order

instituting proceedings).                The proceedings sought to determine

whether Bennett’s conduct warranted disgorgement, civil monetary

penalties, a cease-and-desist order, and a securities industry

bar.      Id. at *9–10.       The Commission assigned the initial stages

of the proceeding to an ALJ.                Id. at *10.          The ALJ scheduled a

hearing on the merits of Bennett’s case for January 25, 2016.

In   re     Bennett   Grp.   Fin.    Servs.,       LLC,    SEC     Release    No.     3269,

2015 WL 12766768 (Oct. 29, 2015) (ALJ scheduling order).

       On October 30, 2015, Bennett filed this action in federal

district court, seeking to enjoin the administrative proceeding

                                            4
and a declaration that it is unconstitutional.                           The Complaint

alleged    that    the    SEC’s        administrative      enforcement     proceedings

violate    Article       II    of    the   United    States    Constitution,        which

provides    that     “[t]he         executive      Power    shall   be    vested    in   a

President    of    the        United    States,”     U.S.    Const.      art. II,   § 1,

cl. 1, and that “the Congress may by Law vest the Appointment of

such inferior Officers, as they think proper . . . in the Heads

of Departments,” id. § 2, cl. 2.                   Specifically, Bennett alleged

that (1) ALJs count as “inferior Officers” and that the SEC’s

Commissioners--collectively, a “Head” of a “Department”--failed

to appoint them, and (2) those ALJs enjoy at least two levels of

protection        against           removal,       which     impedes      presidential

supervision over their exercise of “executive Power” and thereby

contravenes the separation of powers.                      Cf. Free Enterprise Fund

v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 492 (2010).

     The district court determined it lacked jurisdiction over

Bennett’s case and dismissed the action on December 10, 2015.

Bennett timely appealed, seeking an injunction pending appeal

and expedited review.               Dkt. No. 9 (Dec. 28, 2015).             This court

denied both requests.            Dkt. No. 19 (Jan. 22, 2016). 1

     1 Subsequently, in its initial decision, the ALJ found that
Bennett willfully violated numerous provisions of the securities
laws, barred her from the industry, and imposed disgorgement and
civil penalties collectively exceeding $4 million. Bennett Grp.
Fin.   Servs.,  LLC,   Exchange  Act  Release  No.   1033,  2016
(Continued)
                                               5
                                                    II.

                                                    A.

     We    review        de    novo           a    district    court’s       dismissal      of    a

complaint     for    lack           of     subject-matter            jurisdiction.          Nat’l

Taxpayers Union v. U.S. Soc. Sec. Admin., 376 F.3d 239, 241 (4th

Cir. 2004).

                                                    B.

     Federal        district               courts           generally       have      “original

jurisdiction        of        all         civil          actions      arising      under         the

Constitution,       laws,           or        treaties        of     the    United     States.”

28 U.S.C. § 1331; see also id. § 2201.                               However, Congress may

expressly     divest          the        district         courts     of    jurisdiction       over

certain claims.          See, e.g., Shalala v. Ill. Council on Long Term

Care, Inc., 529 U.S. 1, 5 (2000).                            Congress can also impliedly

preclude     jurisdiction                by       creating     a     statutory       scheme      of

administrative      adjudication                  and     delayed    judicial    review     in     a

particular court.             See, e.g., Thunder Basin Coal Co. v. Reich,

510 U.S. 200, 207 (1994).

     Three     Supreme          Court             decisions        principally     inform        our

analysis of the inquiry presented: Thunder Basin Coal Company v.

WL 4035560, at *47–49 (ALJ July 11, 2016) (default decision).
The Commission granted Bennett’s petition for review, and
briefing was to be completed by November 4, 2016. Bennett Grp.
Fin. Servs., LLC, Exchange Act Release No. 4491, 2016 WL 4426912
(Aug. 22, 2016).

                                                     6
Reich,    Free      Enterprise      Fund    v.     Public    Accounting       Oversight

Board, and Elgin v. Department of the Treasury. 2                       We discuss each

in turn.

                                            C.

                                            1.

     In        Thunder     Basin,     the        Supreme     Court       considered     a

petitioner’s        pre-enforcement         challenge       to    the    Federal   Mine

Safety and Health Amendments Act of 1977, 30 U.S.C. § 801 et

seq. (“Mine Act”).              510 U.S. at 202.            Thunder Basin, a coal

company, objected to a Mine Act regulation that required it to

post the names of certain union representatives authorized under

the statute to accompany the Secretary of Labor during physical

inspections         of     mines.           See     id.      at      203–04     (citing

30 C.F.R. § 40.4).          Rather than seek review of the regulation

through       the   Mine   Act’s    judicial-review         scheme,      Thunder   Basin

filed     a    lawsuit     in    federal        district    court       alleging   that

requiring it to challenge the regulation through the statute’s

judicial-review scheme violated due process.                      Id. at 205.

     The Supreme Court rejected Thunder Basin’s argument.                             The

Court described the Mine Act’s “detailed structure for reviewing

violations of ‘any mandatory health or safety standard, rule,

order, or regulation promulgated’ under the Act.”                           Id. at 207

     2 Thunder Basin, 510 U.S. 200 (1994); Free Enterprise, 561
U.S. 477 (2010); Elgin, 132 S. Ct. 2126 (2012).

                                            7
(quoting    30   U.S.C.   § 814(a)).             Under   the    Mine    Act,     a    mine

operator can challenge an adverse agency order before an ALJ,

subject to discretionary review by the Federal Mine Safety and

Health Review Commission (“MSHRC”).                  Id. at 207–08; 30 U.S.C.

§ 823(d)(1).       A mine operator can petition the MSHRC to review

the ALJ’s decision, or the MSHRC can direct a review at its own

initiative.      See 30 U.S.C. § 823(d)(1), (2)(A)(i).                   If the mine

operator remains dissatisfied with the MSHRC’s decision, it can

challenge    that    decision    in   the        appropriate     federal       court    of

appeals,    which    exercises     “exclusive”           jurisdiction         over    such

cases.     30 U.S.C. § 816(a)(1); see also Thunder Basin, 510 U.S.

at 208.

       In reviewing the statutory scheme, the Court further noted

that    Congress    demonstrated      its    ability      to    preserve       district-

court     jurisdiction    in    limited        circumstances:          the     Mine    Act

expressly authorizes district-court jurisdiction over actions by

the Secretary of Labor to enjoin habitual violations and coerce

payment of civil penalties; by contrast, “[m]ine operators enjoy

no corresponding right but are to complain to the Commission and

then to the court of appeals.”               Thunder Basin, 510 U.S. at 209

(footnote     omitted).         Based       on     the    “comprehensive          review

process,” the Court found that congressional intent to preclude

district-court      jurisdiction        over      pre-enforcement            claims    was

“fairly discernible.”          Id. at 208, 216.                Moreover, the Court

                                         8
concluded    that       “petitioner’s           statutory     and     constitutional

claims”--even      a     constitutional          claim      that    challenged      the

legitimacy    of       the     administrative       process        itself--could    be

“meaningfully addressed in the Court of Appeals.”                     Id. at 215.

                                           2.

     Several years later, in Free Enterprise, the Supreme Court

considered whether a district court could exercise jurisdiction

over another pre-enforcement challenge--an Article II challenge

to the Public Company Accounting Oversight Board (“PCAOB” or

“Board”)--despite the Exchange Act’s judicial-review provision

found at 15 U.S.C. § 78y.                561 U.S. at 489.           The Board is a

government-created            private,         nonprofit       corporation         that

supervises accounting firms under the SEC’s oversight.                           Under

the Sarbanes-Oxley Act of 2002, Pub. L. No. 107–204, 116 Stat.

745 (codified as amended in scattered sections of 15 U.S.C.),

the SEC would appoint the PCAOB’s five members, and only some of

the Board’s actions required SEC approval.                   Free Enterprise, 561

U.S. at 489–90.         The statute’s judicial-review scheme provided

for review of the Commission’s final rules and orders, such as

sanctions    imposed         following    administrative       adjudication,        but

offered no path to judicial review for Board actions that did

not require SEC approval.          See id.

     In Free Enterprise, the Board “inspected [an accounting]

firm, released a report critical of its auditing procedures, and

                                           9
began a formal investigation” of its practices.                                Id. at 487.

Under the statute, none of those regulatory actions would result

in a Commission rule or order, and so could not trigger a path

to judicial review under § 78y.                     See id. at 489–90.         Petitioners

sued    in     federal        district     court,           arguing    that       the    Board

contravened       the      separation     of    powers,        because      Board       members

enjoyed        two    layers      of      for-cause           removal       that        impeded

presidential         supervision          of        executive         power,       and      the

Appointments Clause, because Board members were officers that

required presidential appointment and Senate advice and consent.

Id. at 487–88.          Petitioners sought an injunction preventing the

Board from exercising its powers, and a declaration that it was

unconstitutional.           Id. at 487.

       The Free Enterprise Court held that § 78y did not preclude

the district court from exercising jurisdiction on the facts

presented.       Id. at 491.           Because the Board had not undertaken

regulatory action that would yield a reviewable Commission order

or rule, the petitioners would have had to “challenge a Board

rule at random” or “bet the farm” by voluntarily incurring a

sanction        in      order     to      trigger           § 78y’s        mechanism        for

administrative          and    judicial    review.             Id.    at    490    (citation

omitted).       The Court concluded that this was not a “‘meaningful’

avenue of relief.” Id. at 491 (quoting Thunder Basin, 510 U.S.

at     212).         The      Court    also         noted     that    the      petitioner’s

                                               10
constitutional            challenge     was    “‘collateral’        to   any    Commission

orders or rules from which review might be sought,” and “outside

the Commission’s competence and expertise” because it did not

involve technical considerations or fact-bound inquiries.                                 Id.

at 490, 491.          Therefore, the Court held that § 78y did not strip

the district court of jurisdiction over petitioners’ claims.

                                               3.

        In     Elgin,      the   last    decision      in     our     trilogy,       federal

employees’ failure to comply with a federal statute prompted

their discharge from government agencies.                           Elgin v. Dep’t of

Treas.,       132    S.    Ct.   2126,    2131      (2012).     Elgin,         one   of   the

employees,          appealed      his     dismissal      to     the      Merit       Systems

Protection Board (“MSPB”) pursuant to a “comprehensive system”

for   resolving         personnel     decisions      involving       federal     employees

established by Congress in the Civil Service Reform Act of 1978

(“CSRA”).           Id.     at   2130    (quoting      United       States     v.    Fausto,

484 U.S. 439, 455 (1988)).                    That process requires adjudication

first before the MSPB, subject to review in the Federal Circuit,

which        has    exclusive     jurisdiction        over    such       appeals.         Id.

at 2130–31.          Before the administrative process had concluded,

however, Elgin joined a suit in federal district court in which

petitioners argued that the statutes providing the basis for

their discharge were unconstitutional.                   Id. at 2131.

                                               11
       The Elgin Court held that the CSRA precluded district-court

jurisdiction        over    petitioners’         claims.       Id.    at   2130.      After

reviewing the “painstaking detail” of the CSRA’s provisions for

federal       employees      to     obtain        judicial       review       of     adverse

employment actions, the Court concluded that Congress evinced a

“fairly     discernible”          intent     to     deny     covered       employees     an

additional avenue of review in district court.                               Id. at 2134.

Significantly, the Court rejected the argument that it should

carve out constitutional claims from the judicial-review scheme

and allow them to proceed in district court, noting that “a

jurisdictional        rule        based     on     the     nature       of     a[]    . . .

constitutional claim . . . is hazy at best and incoherent at

worst.”    Id. at 2135.

       Petitioners raised “three additional factors” to argue that

their claims were not the type that Congress intended to exclude

from    the     statute’s      judicial-review             scheme,     but     the    Court

disagreed      on    each    point.        Id.    at     2136.       First,    the    Court

emphasized that petitioners could receive meaningful review “in

the Federal Circuit, an Article III court fully competent to

adjudicate”      their      claims.        Id.    at   2137.         Second,    the   Court

reasoned      that    petitioners’         constitutional            claims    were    “the

vehicle by which” petitioners sought to reverse the discharge

orders, and thus were not “wholly collateral” to the statutory

scheme.       Id. at 2139–40.         Third, even though the MSPB could not

                                            12
rule on the constitutionality of the statute, the Court noted

that its expertise could “otherwise be ‘brought to bear’” on

“many threshold questions that may accompany a constitutional

claim.”     Id. at 2140 (quoting Thunder Basin, 510 U.S. at 214–

15).     Thus, petitioners could not proceed outside the statutory

scheme and had to wait for judicial review in due course.

                                           D.

       Under Thunder Basin and its progeny, determining whether

Congress has impliedly divested district-court jurisdiction over

agency    action    involves     a    two-step         inquiry.        First,     we   ask

whether      Congress’s        intent           to         preclude    district-court

jurisdiction is “fairly discernible in the statutory scheme.”

Thunder    Basin,   510   U.S.       at   207;       see    also   Elgin,   132   S. Ct.

at 2132;    Free    Enterprise,       561       U.S.       at   489.   This     involves

examining the statute’s text, structure, and purpose.                             Elgin,

132 S. Ct. at 2133.        Second, we ask whether plaintiffs’ “claims

are of the type Congress intended to be reviewed within this

statutory structure.”          Thunder Basin, 510 U.S. at 212; accord

Elgin, 132 S. Ct. at 2136–40.              At this second stage, we consider

three factors.       We focus on (1) whether the statutory scheme

“foreclose[s] all meaningful judicial review.”                         Thunder Basin,

510 U.S. at 212–13; see also Elgin, 132 S. Ct. at 2132; Free

Enterprise, 561 U.S. at 490–91.                 We also consider (2) the extent

to which the plaintiff’s claims are “wholly collateral” to the

                                           13
statute’s review provisions, and (3) whether “agency expertise

could    be   brought       to   bear   on    the . . .      questions     presented.”

Thunder Basin, 510 U.S. at 212, 215; see also Elgin, 132 S. Ct.

at 2139–40; Free Enterprise, 561 U.S. at 490–91.                         Against this

background, we apply the Thunder Basin framework to the facts

before us. 3

                                             III.

                                             A.

                                             1.

     At the first step of our analysis, we readily discern from

the text and structure of the Exchange Act Congress’s intent to

channel claims first into an administrative forum and then on

appeal to a U.S. Court of Appeals.                  Like the Mine Act in Thunder

Basin, the Exchange Act includes a comprehensive scheme that

provides      for    judicial      review      in    the     appropriate        court   of

appeals,      with    substantially          the    same     authority     to     affirm,

modify, enforce, or set aside final agency orders in whole or in

part, as well as authority to consider new arguments, reject

findings      of    fact,    remand     to    adduce   new    evidence,     and     issue

stays.         Compare       15 U.S.C. § 78y,          with     30 U.S.C. § 816(a).

     3 Bennett concedes that the Thunder Basin framework governs
whether the district court had jurisdiction to entertain her
suit. Appellants’ Br. at 8. Because we rule on jurisdictional
grounds, we do not reach the merits of Bennett’s claim.

                                              14
Moreover,         Congress       demonstrated       it    knew      how     to     preserve

district-court jurisdiction, but declined to do so: “like the

Mine       Act,    the    statute     here   specifically         authorizes       district

courts to exercise jurisdiction over certain actions brought by

the agency but not by private parties.”                       Nat’l Taxpayers Union,

376    F.3d       at   243;     see   also   Thunder     Basin,    510     U.S.    at   209.

Compare 15 U.S.C. § 78u(d)(1), with 30 U.S.C. § 818.                             Our sister

circuits have concluded that the provisions in the Exchange Act

are    “nearly         identical,”       Jarkesy,      803    F.3d    at     16–17,      and

“materially indistinguishable,” Hill v. SEC, 825 F.3d 1236, 1242

(11th Cir. 2016), from the provisions in the Mine Act that the

Thunder           Basin       Court        found    eliminated            district-court

jurisdiction.              We     agree.       Congressional         intent       to    deny

collateral         district-court        challenges      is    “fairly      discernible”

from the text and structure of the Exchange Act.

                                              2.

       Bennett advances two main arguments at Thunder Basin step

one, both of which we find unpersuasive. 4

       4
       Bennett also claims that the “painstaking detail” in the
Exchange Act’s judicial-review provision “tells us nothing about
the scope of the SEC’s jurisdiction to issue . . . orders.”
Appellants’ Br. at 24.     That argument leaps ahead: we decide
here whether the district court had jurisdiction, which depends
on the scope of the review scheme; we do not decide the scope of
the SEC’s jurisdiction or the constitutional legitimacy of ALJ
appointments, questions that go to the merits.

                                              15
       She first relies on language in Free Enterprise taken out

of context: “The Government reads § 78y as an exclusive route to

review.       But the text does not expressly limit the jurisdiction

that       other   statutes    confer       on     district      courts.         See,      e.g.,

28 U.S.C. §§ 1331,        2201.             Nor    does    it     do    so      implicitly.”

561 U.S. at 489.              Bennett        argues       that      this        language      is

dispositive of the issue before us because she, too, asserts an

Article II challenge to the agency’s authority.

       Bennett reads too much into the Free Enterprise Court’s

conclusion, which is distinguishable on the facts. 5                              Looking at

the statutory text, the Court noted that § 78y “provides only

for judicial review of Commission action, and not every Board

action is encapsulated in a final Commission order or rule.”

Free        Enterprise,       561 U.S. at 490.                The      Free       Enterprise

petitioners        challenged      the       constitutionality             of     the      Board

members’ appointments before enforcement; no Board rule directly

implicated petitioners’ challenge, nor had the Board issued a

sanction against the petitioners.                      There was thus no reviewable

“Commission        action,”     nor    even        a   guarantee       that     the     Board’s

investigation         would      eventually             culminate        in       reviewable

“Commission        action.”           The     Court       reasoned      that,         in   such

       5
       We also note that most of the Supreme Court’s reasoning in
Free Enterprise centered not on the text of the statute, but on
the three Thunder Basin step-two factors, which we discuss
below.

                                              16
circumstances, Congress would not have intended petitioners to

challenge a Board rule at random or incur a sanction in order to

trigger    judicial      review     under        § 78y.      The    Court     therefore

allowed petitioners’ claims against the Board to proceed outside

the statutory scheme.

     Here,        by    contrast,       Bennett           necessarily        challenges

“Commission    action.”         Id.     The       Commission      has    instituted       an

administrative disciplinary proceeding against Bennett, and she

challenges     the     legitimacy      of     the     ALJ    presiding       over    that

proceeding.            Unlike     an   inspection           or     investigation,          a

disciplinary      proceeding       results       in   a   final    Commission       order.

See 17 C.F.R. §§ 201.411(a), 201.360(d)(2).                        Thus, unlike the

petitioners’ claims in Free Enterprise, Bennett’s constitutional

claims    “fall    within    the    fairly       discernible       scope    of   § 78y’s

review    procedures”       because    the       proceedings      will     result    in    a

reviewable Commission order.           Hill, 825 F.3d at 1243.

     Bennett’s second textual argument fares no better.                          Bennett

argues the Exchange Act’s saving clause, which provides that

“the rights and remedies provided by this chapter shall be in

addition to any and all other rights and remedies that may exist

at law or in equity,” 15 U.S.C. § 78bb(a)(2), shows Congress did

not intend to make the statutory remedies exclusive, and thus

indicates that congressional intent to preclude district-court

                                            17
review of constitutional claims of the type she raises here is

not “fairly discernible” from the text.

      Bennett      cites    Abbott     Laboratories      v.    Garner,    a   case   in

which the Supreme Court found a similar saving clause “strongly

buttressed” its conclusion that the statute had not eliminated

district-court jurisdiction over a challenge to a regulation.

387 U.S. 136, 144 (1967), abrogated on other grounds by Califano

v.   Sanders,      430    U.S.   99   (1977).        There,    however,   the   Court

emphasized that the judicial-review provision in the statute did

not cover the particular claim at issue: The statute provided

“special-review          procedures”     to     deal    with    technical     factual

determinations, id. at 144, for “certain enumerated kinds of

regulations, not encompassing those of the kind involved” in the

case, id. at 141 (footnote omitted).                     Here, by contrast, the

judicial-review provision in § 78y encompasses all objections to

final     agency    action,      including     the     constitutional     objections

Bennett raises.          See Hill, 825 F.3d at 1244. 6

      6That a statute both grants exclusive jurisdiction to a
U.S. Court of Appeals to review final agency action and includes
a saving clause preserving rights and remedies is not internally
inconsistent. For instance, Congress may have wanted to channel
all claims to a particular forum (with the judicial-review
scheme) while simultaneously preserving the Commission’s ability
to enforce state securities laws (via the saving clause).
Further, the Supreme Court has recently construed the Exchange
Act’s saving clause narrowly when it found that the clause did
not preserve antitrust claims. See Credit Suisse Sec. (USA) LLC
v. Billing, 551 U.S. 264, 275 (2007).
(Continued)
                                          18
        We conclude that Congress’s intent to preclude district-

court jurisdiction is “fairly discernible” from the statutory

scheme here.

                                            B.

     At    the   second    stage       of    inquiry,    in   determining   whether

Bennett’s    claims    “are       of   the    type   Congress    intended    to   be

reviewed    within    th[e]   statutory           structure,”    we   consider    the

three      Thunder        Basin        factors:         (1) meaningful      review,

(2) collateral         claims,              and         (3) agency       expertise.

510 U.S. at 212.      We address each factor in turn. 7

     7 We agree with our sister circuits to have addressed the
matter that meaningful judicial review is the most important
factor in the Thunder Basin analysis.        See Hill, 825 F.3d
at 1245 (stating that meaningful judicial review is “the most
critical thread in the case law”) (quoting Bebo v. SEC, 799 F.3d
765, 774 (7th Cir. 2015)); Tilton v. SEC, 824 F.3d 276, 282
(2d Cir. 2016) (same); see also Nat’l Taxpayers Union, 376 F.3d
at 243 (concluding that the Thunder Basin Court “rested its
conclusion” on the availability of meaningful judicial review).
But see Jarkesy, 803 F.3d at 22 (concluding that the Thunder
Basin factors are “guideposts for a holistic analysis”).     This
interpretation is most consistent with the Supreme Court’s
treatment.   In Thunder Basin, the Court noted that it would
uphold district-court jurisdiction “particularly where a finding
of preclusion could foreclose all meaningful judicial review.”
510 U.S. at 212–13 (emphasis added); see also Elgin, 132 S. Ct.
at 2132 (emphasizing the availability of some judicial review at
beginning   of   Thunder   Basin’s   two-step   analysis);   Free
Enterprise, 561 U.S. at 490–91 (focusing on petitioners’
inability to meaningfully pursue their constitutional claims
under the administrative scheme and discussing meaningful relief
when assessing whether the claims were “wholly collateral”).

                                            19
                                              1.

       With respect to meaningful review, Bennett contends that

post-proceeding            consideration      of     her    constitutional       challenge

will       be    meaningless        under    § 78y        because     the   violation     is

exposure        to   the    unconstitutional         proceeding,       rather    than     any

adverse decision on the merits. 8                  Characterizing her claim as a

“structural, prophylactic” challenge to the constitutionality of

the forum itself, she contends that the only appropriate relief

is     an       injunction     to     halt     the        allegedly     unconstitutional

administrative         proceeding       before       it    occurs.      Appellants’      Br.

at 26.

       The Supreme Court has rejected analogous arguments.                               With

respect         to   the    nature    of     the   constitutional           challenge,    in

Thunder Basin the Court recognized that “[a]djudication of the

       8
       In her reply brief, however, Bennett suggests that her
true concern is a sanction.     Reply Br. at 11.      If so, then
Bennett’s claim has even less merit for two reasons.        First,
contrary to her assertion, her claim does “seek to affect the
merits of the SEC proceeding,” Appellants’ Br. at 40, and so is
not “wholly collateral.”   Second, the statute’s judicial-review
scheme ensures “meaningful review” because a court of appeals
can remedy any sanctions order.       If the Commission imposes
sanctions in its final order, Bennett can request a stay pending
judicial review before the Commission, 17 C.F.R. § 201.401, and
before   the  court   of  appeals   once   it  obtains   exclusive
jurisdiction, 15 U.S.C. § 78y(c)(2).     Even if Bennett fails to
obtain a stay, the court of appeals can vacate a Commission
order in whole.    Id. § 78y(a)(3).    Bennett cannot demonstrate
she is likely to suffer irreparable injury while awaiting
judicial review. See Thunder Basin, 510 U.S. at 218; Hill, 825
F.3d at 1247.

                                              20
constitutionality of congressional enactments has generally been

thought   beyond       the    jurisdiction          of   administrative        agencies,”

510 U.S. at 215 (quoting Johnson v. Robison, 415 U.S. 361, 368

(1974)), but that “[t]his rule is not mandatory.”                              Id.    The

Thunder Basin Court--evaluating a similar judicial-review scheme

under    the    Mine    Act--found          that    petitioner’s      “constitutional

claims . . . [could] be meaningfully addressed in the Court of

Appeals,”      even     when        the     petitioner       there    challenged      the

constitutionality            of     the      administrative          process     itself.

510 U.S. at 215. 9            Moreover, the Supreme Court has similarly

rejected the drawing of jurisdictional lines between agencies

and federal courts based on the nature of constitutional claims.

See Elgin, 132 S. Ct. at 2135–26 (noting that the line between

facial,     as-applied,           and     other    constitutional      challenges      to

statutes is “hazy at best and incoherent at worst”).                             Bennett

fails to explain why an Appointments Clause challenge to the ALJ

presiding      over    her        proceeding       differs   appreciably       from   the

contention in Thunder Basin that compelling a firm to challenge

     9 The Elgin Court similarly held that Congress can require
plaintiffs to bring challenges to the constitutionality of
statutes exclusively through the administrative scheme, even
when the initial agency cannot rule on the constitutional
question and the reviewing court lacks the power to conduct a
hearing   to  find   facts  relevant  to   that   determination.
132 S. Ct. at 2136–39.

                                              21
a   regulation    through    the   Mine     Act’s    judicial-review           scheme

violates due process.       Both attack the legitimacy of the forum. 10

     Relatedly,        Bennett     argues     that       an    unconstitutional

proceeding is, itself, the harm that she should be allowed to

avoid.     The    burden    of     defending    oneself        in     an     unlawful

administrative      proceeding,      however,        does      not     amount        to

irreparable injury.        FTC v. Standard Oil Co. of Cal., 449 U.S.

232, 244 (1980).        In Standard Oil, a company sued in district

court to enjoin an ongoing administrative proceeding, arguing

that the entire proceeding was unlawful because the agency had

initiated it without the evidentiary basis required by statute.

Id. at 235.      The Court concluded that Standard Oil had to first

complete the administrative process before reaching a federal

court, and that this scheme provided meaningful judicial review.

See id. at 238.         The Court emphasized that “the expense and

annoyance of litigation is ‘part of the social burden of living

under government.’”        Id. at 244 (quoting Petroleum Expl., Inc.

v. Pub. Serv. Comm’n, 304 U.S. 209, 222 (1938)).                    Bennett argues

Standard   Oil    is    inapposite    because       it   did    not        involve   a

     10 Moreover, in analogous cases, federal courts require
litigants who unsuccessfully challenge the constitutionality of
the initial tribunal--including the authority of the presiding
decision maker--to endure the proceeding and await possible
vindication on appeal. See Tilton, 824 F.3d at 285 (discussing
cases).

                                      22
constitutional claim. 11   But that distinction makes no material

difference for assessing the meaningfulness of judicial review

here, because Thunder Basin and Elgin establish that petitioners

can obtain meaningful review of constitutional claims through a

statutory   scheme   similar   to   the   one   here.   Thunder   Basin,

510 U.S. at 215–16; Elgin, 132 S. Ct. at 2136–39; see also Hill,

825 F.3d at 1246–47. 12

     11 Bennett also argues that the injury is not just the
expense and emotional toll of litigation, but also the
“institutional integrity” of the government structure and her
individual liberty interest.     The cases she cites undermine
these arguments.   See CFTC v. Schor, 478 U.S. 833, 852 (1986)
(upholding scheme that “hew[ed] closely to the agency model
approved” previously by the Court “in Crowell v. Benson, 285
U.S. 22 (1932)”); Bond v. United States, 564 U.S. 211, 223
(2011) (stating that only when individuals “suffer otherwise
justiciable injury” and participate “in a proper case” may they
argue a structural constitutional objection, including that the
structure protecting individual liberty is compromised).

     12 Bennett tries to distinguish Elgin and other similar
cases denying alternative avenues of appeal by arguing that in
those cases a reviewing court could provide “complete relief” by
reversing the final order issued in the initial forum, whereas
under the judicial-review scheme at issue here a court of
appeals could never issue the injunctive relief she seeks
because the proceedings would already have concluded.       This
argument suggests that a court of appeals’ order ruling on
Bennett’s Appointments Clause claim and vacating any sanction
the Commission imposes would not provide “complete relief.”
That cannot be.    Bennett “has no inherent right to avoid an
administrative proceeding at all.”    Jarkesy, 803 F.3d at 27.
Bennett also assumes she is entitled to her preferred remedy--an
injunction in district court.    That is also incorrect.    As a
general matter, the Supreme Court has long recognized that
Congress may substitute remedies for illegal action.    Cf. Cary
v. Curtis, 44 U.S. (3 How.) 236 (1845) (holding congressional
statute withdrew traditional right of action against customs
(Continued)
                                    23
       Furthermore, cases in which the Supreme Court has concluded

that   post-proceeding   judicial    review   was   not    meaningful   are

distinguishable in critical respects.         Bennett places principal

reliance on Free Enterprise, where the Supreme Court held that

§ 78y was not an exclusive route to judicial review on the facts

of that case.      But unlike the plaintiffs in Free Enterprise,

Bennett is already embroiled in an enforcement proceeding.               To

bring her challenge to the constitutionality of ALJ appointments

before an Article III court, Bennett need not “bet the farm”--in

fact, she need not take any additional risks.             Id. at 490.   She

has already allegedly committed the actions that violate federal

securities laws.

       Bennett misreads Free Enterprise when she asserts that the

case “applies the principle that a litigant who challenges the

collectors for illegally exacted duties and that aggrieved
parties were not unconstitutionally deprived of all access to
the courts because common-law remedies remained); McKesson Corp.
v. Div. of Alcoholic Beverages & Tobacco, Dep’t. of Bus.
Regulation of Fla., 496 U.S. 18, 36–37 (1990) (explaining that
for unlawfully exacted taxes pre- or post-deprivation remedies
satisfy due process). Thunder Basin applies this principle and
says that Congress can require persons subject to administrative
adjudication to pursue their claims exclusively there first
before reaching an Article III court. 510 U.S. at 216. We also
note   that   this    case   “does   not  present   the   ‘serious
constitutional question’ that would arise if an agency statute
were   construed   to    preclude   all  judicial  review   of   a
constitutional claim.”      Thunder Basin, 510 U.S. at 215 n.20
(quoting Bowen v. Mich. Acad. of Family Physicians, 476 U.S.
667, 681 n.12 (1986)).

                                    24
constitutionality of an agency forum is not required to endure

the administrative process and incur a sanctions order before

she has access to a court.”             Reply Br. at 11.            That is too

broad.     What animated the Court in Free Enterprise was not that

a   plaintiff   might     need   to   defend    against    a   sanctions     order

before the agency prior to reaching federal court, but rather

that the choice petitioners in that case faced--incur penalties

for noncompliance or challenge a rule at random--made federal

judicial    review   not    meaningfully       accessible.       See   561   U.S.

at 490; see also Thunder Basin, 510 U.S. at 218.                    That concern

is not present here, because the SEC has instituted disciplinary

proceedings     against    Bennett     and     she   can   pursue    her   claims

through the administrative scheme. 13

      13
       Other cases in which the Supreme Court has concluded that
post-proceeding   judicial  review    was  not   meaningful  are
distinguishable because they involved proceedings that “posed a
risk of some additional and irremediable harm beyond the burdens
associated with the dispute resolution process.”     Tilton, 824
F.3d at 286.    In McNary v. Haitian Refugee Center, Inc., the
Court allowed a class of undocumented aliens to raise a due-
process challenge to immigration proceedings in district court,
rather than pursue eventual review in a court of appeals
pursuant to the statutory scheme, in part because most aliens
could “ensure themselves review in courts of appeals only if
they voluntarily surrender[ed] themselves for deportation,” a
“price . . . tantamount to a complete denial of judicial review
for most undocumented aliens.”      498 U.S. 479, 496–97.     In
Mathews v. Eldridge, the Court allowed a recipient of Social
Security disability benefits to raise a due-process challenge to
administrative exhaustion requirements in district court because
“his physical condition and dependency upon the disability
benefits [meant] an erroneous termination would damage him in a
(Continued)
                                       25
        In    short,   we     conclude     Bennett    can   obtain     meaningful

judicial      review   of    her   constitutional     claims   under        § 78y   by

proceeding in the administrative forum and raising her claims in

a federal court of appeals in due course.

                                          2.

      Turning to the second Thunder Basin factor, the reference

point for determining whether a claim is “wholly collateral” is

not free from ambiguity.           On the one hand, the Supreme Court has

compared the merits of a constitutional claim to the substance

of   the     charges   at     issue.      See   Eldridge,    424     U.S.    at     330

(concluding that due-process claim was “entirely collateral to

[the] substantive claim of entitlement”).                   On the other hand,

the Court has considered whether a claim is “wholly collateral

to   [the]     statute’s      review     provisions.”       Elgin,    132     S. Ct.

at 2136 (quoting Free Enterprise, 561 U.S. at 489).                    Under this

standard, claims are not wholly collateral when they are “the

vehicle by which [petitioners] seek to reverse” agency action.

Id. at 2139.

      Bennett argues for the first reading: Her constitutional

claim    is    “wholly      collateral”    to   the   proceeding     “because       it

challenges the legality of the forum itself and does not seek to

way not recompensable through retroactive payments.”  424 U.S.
319, 331 (1976).    Bennett has not shown that she will suffer
similar irreparable injury.

                                          26
affect the merits of [the] SEC proceeding.”              Appellants’ Br.

at 40.     At one level, this makes conceptual sense: Even if she

is successful in challenging the appointment of the Commission’s

ALJs, the SEC could still bring a civil enforcement action in

district court on the same substantive charges.

     However, we think the second reading is more faithful to

the more recent Supreme Court precedent, even though it reduces

the factor’s independent significance.        Moreover, we are joined

in that interpretation by several of our sister circuits that

have considered the issue.          See Jarkesy, 803 F.3d at 22–23;

Tilton, 824 F.3d at 287–88.         But see Bebo, 799 F.3d at 773–74

(declining    to   decide   among   interpretations);    Hill,   825   F.3d

at 1251–52 (same).

     Bennett’s claim appears to be the “vehicle by which she

seeks” to vacate the ALJ’s initial findings.            Elgin, 132 S. Ct.

at 2139.     Indeed, the SEC investigated her for three years, but

she did not file suit in district court until after the SEC

instituted proceedings before the ALJ. 14       Free Enterprise--which

focused on whether the claim was procedurally-entwined with the

     14 Bennett argues that if she had brought a pre-enforcement
challenge in district court, the SEC would have moved to dismiss
her claim as premature.    How the SEC would have responded in
this situation, let alone how a court would have ruled, is an
attenuated hypothetical that cannot meaningfully inform our
review.    The fact remains that Bennett did not bring such a
challenge.

                                     27
proceeding--is       instructive.             There,      “[p]etitioners’        general

challenge    to    the   Board      [wa]s     ‘collateral’       to   any   Commission

orders or rules from which review might be sought.”                              See 561

U.S. at 490.       Here, by contrast, Bennett’s claim arises out of

the enforcement proceeding and provides an affirmative defense.

If she succeeds, Bennett will invalidate a Commission order.

Therefore, her claim is not wholly collateral.

                                            3.

       The   third    Thunder        Basin       factor--agency       expertise--also

points toward precluding district-court jurisdiction.                            Bennett

argues that her challenge to the constitutional sufficiency of

ALJ    appointments      lies       outside      the     SEC’s   expertise.         Free

Enterprise held as much, reasoning that an Appointments Clause

challenge    to    the     PCAOB     raised       only    “standard    questions      of

administrative        law,”      rather       than       “fact-bound,”          industry-

specific, or technical inquiries on which the SEC has special

“competence and expertise.”                 561 U.S. at 491.           Subsequently,

however,     in    Elgin      the     Supreme       Court    “adopted       a    broader

conception of agency expertise in the jurisdictional context.”

Tilton, 824 F.3d at 289; see also Hill, 825 F.3d at 1250–51;

Bebo, 799 at 771; Jarkesy, 803 F.3d 28–29.                        There, the Court

held that Congress had precluded jurisdiction, reasoning that

the Merit Systems Protection Board could “apply its expertise”

to    “threshold     questions       that     may   accompany     a   constitutional

                                            28
claim”     against    a    federal    statute,        even      when    the     agency

disclaimed    authority     to     resolve    those    constitutional          claims.

Elgin, 132 S. Ct. at 2140.               The Court noted that the agency

“might fully dispose of the case” or “alleviate constitutional

concerns”    by    resolving     “preliminary        questions”        or    statutory

questions it “routinely considers.”                  Id.     Thus, the agency’s

expertise could “be brought to bear.”            Id.

      The Commission could bring its expertise to bear here by

concluding that the Division of Enforcement’s substantive claims

are   meritless,     thereby     fully    disposing        of    the    case    before

reaching the constitutional question.                Indeed, the Supreme Court

has emphasized that “one of the principal reasons to await the

termination of agency proceedings is ‘to obviate all occasion

for   judicial    review.’”        Standard    Oil,    449      U.S.   at    244   n.11

(quoting McGee       v.   United    States,    402    U.S.      479,   484     (1971)).

Although that may be unlikely to occur here, given that Bennett

has apparently eschewed all other defenses, 15 as a matter of law,

under Elgin the agency-expertise factor points toward precluding

district-court jurisdiction.

      15Neither Bennett nor her counsel appeared at the initial
hearing.   Bennett Grp. Fin. Servs., LLC, Exchange Act Release
No. 1033, 2016 WL 4035560, at *2 (ALJ July 11, 2016) (default
decision). Bennett does not challenge the merits or details of
the specific SEC proceeding. Appellants’ Br. at 2.

                                         29
                                                    IV.

       In § 78y, Congress established a comprehensive process for

exclusive       judicial         review       of    final        Commission       orders     in    the

federal courts of appeals.                     From the text and structure of the

statute,       it    is    fairly     discernible               that    Congress     intended       to

channel    all       objections          to      such      orders--including              challenges

rooted    in    the       Appointments         Clause--through             the     administrative

adjudication         and       judicial       review           process     set     forth    in     the

statute.            The    three      Thunder             Basin        factors     indicate        that

Bennett’s       claims         are    of      the    type        Congress        intended     to    be

reviewed within this framework.                          If the Commission rules against

her,    Bennett          can    obtain      meaningful            judicial       review     of     her

constitutional claims in a competent Article III court in due

course.     The wholly collateral and agency expertise factors also

point toward preclusion.

       Adopting          Bennett’s         argument            would     provide     no     limiting

principle:          Anyone       could        bypass        the        judicial-review        scheme

established         by    Congress         simply         by    alleging     a     constitutional

challenge      and       framing      it    as      “structural,”          “prophylactic,”           or

“preventative.”                That   conflicts           with     Elgin’s       admonition        that

distinguishing            among       types         of         constitutional        claims        for

jurisdictional purposes is a fool’s errand.                                  And it conflicts

with    established            precedent         that      Congress        has     the    power     to

channel statutory and constitutional claims into administrative

                                                    30
adjudication in the first instance, so long as it provides for

judicial review in an Article III court.   Cf. Crowell v. Benson,

285 U.S. 22 (1932).   Bennett cannot short-circuit that process.

     Accordingly, the judgment of the district court is

                                                          AFFIRMED.

                                31