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High court must preserve right to jury trial

Sometimes there are rights that are so accepted as part of the fabric of our democracy it’s believed they never will change.

No, I’m not discussing the current hot-button controversial abortion rights issue. Rather, I’m speaking about a bedrock constitutional principle that even colonists fought to defend — the right to trial by jury.

Incredibly, the Supreme Court last week heard a case, SEC v. Jarkesy, that, going forward, could set a new precedent regarding that right.

At the center of the case is hedge fund founder George Jarkesy, who was charged with securities fraud several years ago. He was tried in a 2014 administrative hearing, not in a court of law, brought by the U.S. Securities and Exchange Commission. An administrative law judge ruled against Jarkesy, and SEC commissioners upheld the ruling on appeal six years later. He was fined and banned from working in the industry.

This happened all without ever getting his day in a court, before a jury of his peers. That was legal because of laws enacted by Congress in recent decades that expand enforcement powers of administrative agencies. The 2010 Dodd-Frank Act granted the SEC unbridled power to seek penalties administratively against any individual for violating securities laws.

As reported recently in the Wall Street Journal, administrative tribunals like this allow SEC prosecutors to present hearsay evidence and unauthenticated documents that would be inadmissible in a traditional federal court. Defendants also enjoy fewer procedural protections including the tools of legal discovery.

The Wall Street Journal states at the time of Jarkesy’s administrative trial in 2014, the SEC had a 100% in-house victory rate, versus 61% in federal court in 200 contested cases.

Jarkesy appealed the ruling to the Fifth Circuit Court of Appeals, arguing SEC tribunals violate his Seventh Amendment right to trial by jury. He also is arguing the way the system is set up, involving presidential protections of administrative law judges, violate separation of powers rules spelled out in our Constitution.

Jarkesy won his appeal in the Fifth Circuit Court.

Now, before the U.S. Supreme Court, the SEC is arguing the Seventh Amendment applies only when private, not public, rights are at stake. Earlier court decisions have exempted claims from the right to a jury trial if they involve public rights such as government-granted benefits and privileges.

“That seems problematic to say that the government can deprive you of your property, your money, substantial sums in a tribunal that is at least perceived as not being impartial,” Justice Brett Kavanaugh said, according to The Associated Press.

Justice Department lawyer Brian Fletcher warned the justices during last week’s hearing their decision could have effects reaching far beyond the SEC, noting roughly two dozen agencies have similar enforcement schemes.

In my eyes, that might not be a bad thing.

After all, this is still America, where we all are innocent until proven guilty and our Constitution gives us a right to a trial before a jury of our peers before conviction or being found liable and penalized. A jury trial in federal court ensures due process for defendants and protects against abuses of enforcement power. A court of law is where penalties for common law offenses should be heard and enforced.

As the Wall Street Journal correctly points out, today’s administrative tribunals resemble those the British government used to punish colonists and religious dissidents before the revolution. The British government used admiralty courts without juries to impose civil penalties on colonists for violating things like the Sugar and Stamp Acts.

In fact, the denial of “the benefits of trial by jury” was among the colonists’ chief grievances. Our nation’s founders pushed to enshrine the right in the Constitution to prevent the new Congress from creating special forums to adjudicate civil penalties as Parliament and the king had done.

It’s sad to see the protections against tyrannical government our forefathers fought so hard to enshrine slowly being eroded. Still, I have hope and faith the high court’s decision will take into account the larger picture.

The U.S. Supreme Court is expected to rule on the case sometime this summer.

Linert is editor of the Tribune Chronicle and The Vindicator.

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