The Fiduciary Constitution, the Separation of Powers, and the Legal Landscape After SEC v. Jarkesy
For decades, the American people’s right to a jury trial under the Seventh Amendment was severely curtailed by Congress, the executive branch, and the judiciary. To implement “functional government,” Congress passed several statutes allowing executive branch agencies to proceed through juryless in-house tribunals, which the Supreme Court blessed through a series of decisions enlarging the so called “public rights doctrine”—with the high-water mark coming in Atlas Roofing v. OSHC. Yet the civil jury right is once again ascendant. The Supreme Court held in SEC v. Jarkesy that administrative agencies cannot seek civil penalties against the American people through juryless in-house proceedings. And the Court made clear that the public rights doctrine is a narrow “exception” to the general constitutional rule that Americans’ right to a jury trial in a civil proceeding must be preserved when they face deprivations of life, liberty, or property.
That ruling perhaps threatens to upend the very structure of agency adjudication that has permeated administrative law for near a century. But in Jarkesy’s wake, many have nonetheless proposed new ways to limit the decision’s reach and save this feature of the modern administrative state. For example, some have proposed a defendant sued by an executive agency may well simply agree to have his case heard by that executive agency. Or, others say, most causes of action and remedies pursued in agency proceedings fall outside the Seventh Amendment’s scope, so Jarkesy is just a blip. These proposals may well be constitutional under the Supreme Court’s modern precedent. But they raise more fundamental issues about our Constitution’s structure, which the Roberts Court, if slowly, continues to restore by revitalizing the Constitution’s separation of powers.
This article steps back to assess several antecedent questions after Jarkesy and suggests that litigants and scholars consider this broader context when exploring how the civil jury right, and other individual rights, should be protected going forward. We advocate for a return to a view of the Constitution that fulfills its original purpose: to protect liberty. Jury rights, like all constitutional issues, fit within a broader framework, and agency adjudication must comply with that framework.
Start at the beginning: Footnote #1 content: This paper takes certain positions and its authors hold varying conclusions about protecting the civil jury right. But the more important goal here is for the reader to consider the questions in a broader context before thinking about how we move forward. Constitutional adjudication spans hundreds of years and legal opinions over it run into the millions of pages. And the nature of constitutional adjudication narrows the litigation focus to specific issues in individual cases and controversies. We do not make any claim that many of our views are something courts, other than the Supreme Court, can implement in many instances because of doctrines like stare decisis. what is the nature of the Constitution? The Constitution is fundamentally a fiduciary-like document that establishes a principal-agent relationship between “We the People” and the federal government. Footnote #2 content: See generally GARY LAWSON & GUY I. SEIDMAN, A GREAT POWER OF ATTORNEY: UNDERSTANDING THE FIDUCIARY CONSTITUTION (2017). Through the Constitution, the American people delegate certain enumerated and limited powers to specific federal actors who serve as the people’s agents in carrying out defined duties and responsibilities. Footnote #3 content: See id; see also, e.g., Robert G. Natelson, The Government as Fiduciary: A Practical Demonstration from the Reign of Trajan, 35 U. RICH. L. REV. 191, 193 (2001); Robert G. Natelson, The Constitution and the Public Trust, 52 BUFF. L. REV. 1077 (2004) [hereinafter Natelson, The Constitution and the Public Trust]; GARY LAWSON ET AL., THE ORIGINS OF THE NECESSARY AND PROPER CLAUSE 68–70 (2010); Gary Lawson et al., The Fiduciary Foundations of Federal Equal Protection, 94 B.U. L. REV. 415 (2014); Gary Lawson & Guy I. Seidman, By Any Other Name: Rational Basis Inquiry and the Federal Government’s Fiduciary Duty of Care, 69 FLA. L. REV. 1385 (2018). The federal government (more specifically certain actors within the federal government) may only wield those powers specifically delegated to it by the people, expressly or implicitly. Footnote #4 content: LAWSON & SEIDMAN, supra note 2, at 51–54.
This view of the Constitution is supported by the document’s text, which specifically enumerates and then vests different powers in different actors: “the executive power” and “the judicial power” are vested, respectively, in the executive and judicial departments, and “all legislative powers herein granted” are vested in Congress. Footnote #5 content: Id. at 52. It is those powers that those specific actors may wield. Any time the federal government acts, it must be doing so under these delegated powers.
That sounds basic. And it is. But this framework too often is ignored. Overlooked, too, are the next steps in any proper constitutional analysis: what power is being wielded and whether that power is specifically enumerated (or delegated from the people) within the Constitution. If so, one should then ask a second question: who has the power? The Constitution’s enumeration of certain powers to certain actors provides the answer. The Constitution gives separate powers to specific actors—the separation of powers—which proscribes any further subdelegation to other actors. Thus, the Constitution does not authorize agents to give their power away to anyone else. Once these questions are answered, many issues that arise in constitutional litigation, including those that arise in Seventh Amendment cases, can likely be resolved on structural constitutional grounds.
Other constitutional text, of course, plays a role, too. After all, the Seventh Amendment and the Bill of Rights protect individual rights. And “there is nothing in the Constitution that specifically states …that Congress may not authorize other actors to exercise legislative power.” Footnote #6 content: Gary S. Lawson, Delegation and Original Meaning, 88 VA. L. REV. 327, 335 (2002). So, one might say, only those affirmative limits on the government found in the Bill of Rights preserve the People’s rights. But this gets the order of operations backward, and as Professor Lawson explains, “reflects a fundamental misunderstanding of the American Constitution.” Footnote #7 content: Id. The Bill of Rights provides greater protection—like wearing a belt and suspenders—when these structural safeguards against an overreaching federal government fail, and at the same time can serve, in some cases, as a structural check on many of the actors assigned to carryout duties under the Constitution. Footnote #8 content: See generally Akhil Reed Amar, The Bill of Rights as a Constitution, 100 Yale L.J. 1131 (1991). This is not to disparage the Constitution’s individual rights provisions—both enumerated and unenumerated. As history and the modern legal landscape show, the Framers were prescient in placing an exclamation point on the limits of federal power with the Bill of Rights. Footnote #9 content: Gary Lawson, The Bill of Rights as an Exclamation Point, 33 U. RICH. L. REV. 511, 513–15 (1999) (arguing that, under the original Constitution, an “extensive Bill of Rights was unnecessary and inappropriate because the national government’s enumerated powers did not include the power to regulate” the rights later included and thus became “exclamation points” for what the federal government may not do); Natelson, The Constitution and the Public Trust, supra note 3, at 1142 (noting the “first ten amendments were added to define the rules of” the enumerated powers limitations.). Even so, protecting rights under a Bill of Rights framework can lead to doctrinal confusion susceptible to muddled jurisprudence filled with constitutional “exceptions” and pragmatic approaches at odds with the Constitution’s text and structure. Footnote #10 content: See e.g., Evan D. Bernick, Is Judicial Deference to Agency Fact-Finding Unlawful?, 16 GEO. J.L. & PUB. POL’Y 27 (2018). We also note that the Bill of Rights plays a very different role under the Fourteenth Amendment, which makes many of the Bill of Rights provisions the primary protection for liberty with respect to the states.
Once one grapples with the Constitution’s structural elements, the Seventh Amendment rarely provides an independent protection; the very nature of the Constitution guards against encroachments on the jury right. The questions of what power and who may wield the power the Constitution assigns may often be dispositive in protecting people’s right to a civil jury trial.
One specific provision is especially apt when it comes to the civil jury right. We the People delegate, under Article III, “the judicial Power of the United States”—to judicial branch actors who are exclusively vested with that power. There is no enumerated power allowing Congress (or anyone) to give away, arrogate, or allow the executive branch to exercise the judicial power—including, but not limited to, federal agencies. In turn, nothing in the Constitution authorizes the executive branch to wield that power. So whether an agency may hear and ultimately decide a matter turns on whether the Constitution has affirmatively allowed them to wield that power.
If true, many of the proposed functional limits on the Supreme Court’s Jarkesy decision are nonstarters. Indeed, it does not matter whether a party “consents” to have the executive branch wield power against them, or “waives” the right to have his or her case heard in an Article III court—where the jury right would attach in certain cases. Under our government of enumerated and separated powers, an executive agency may not exercise the judicial power of the United States—no matter how efficient the practice may be. Like all other parts of government, executive agencies act at the direction of the People. Footnote #11 content: We acknowledge that certain adjudications within the executive branch may constitute the exercise of “executive” as opposed to “judicial” powers. We also do not contend that any adjudication is judicial simply because it has judicial-like elements. We instead say merely that whether a power is judicial or executive cannot turn on an individual’s “waiver,” “consent,” or any other extraconstitutional consideration. We also take seriously Chief Justice Roberts’s observation that “The rise of the modern administrative state has not changed th[e] duty” of Article III courts to “say what the law is.” City of Arlington v. FCC, 569 U.S. 290, 316 (2013) (Roberts, C.J., dissenting) (quoting Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803)).
At bottom, the federal government’s powers cannot be divorced from the Constitution’s broader structure and context. Instead, the Founders created a government assigning certain actors limited and enumerated powers to ensure ordered liberty. The Constitution—its text, its history, its meaning—tell us what Congress, the executive, and judiciary may do as our agents. Any attempt to circumvent those authorizations undermines the fiduciary nature of the document. And no one may, in the face of convenience, waive or alter these principles.
With this background in mind, this article proceeds in three parts: Part I explores the nature of the Constitution’s structure and text reflecting a fiduciary relationship between the people and the government, with the people as principals delegating limited powers to their government agents. Part II shows how this fiduciary understanding supports the enumerated powers doctrine, which in turn informs the separation of powers and subdelegation doctrines. Part III applies these principles and reexamines the constitutional debate over the Seventh Amendment Right to a Civil Jury Trial and Article III’s grant of “judicial Power” to the federal courts. It argues that, properly understood, the enumerated powers and separation of powers doctrines largely obviate the need to define the scope of these Article III and Seventh Amendment guarantees in the context of agency adjudication of “public rights” cases.
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