The U.S. Supreme Court gave presidents more control over key jobs in federal agencies on Thursday, ruling that the way the Securities and Exchange Commission selected in-house judges who enforce investor protection laws violated the U.S. Constitution.
The justices agreed with President Donald Trump’s administration that the SEC, in having low-level staff install administrative law judges, infringed upon powers given to the president in the U.S. Constitution’s “appointments clause” regarding the filling of certain federal posts.
The ruling could reverberate through the federal government, which has nearly 2,000 administrative law judges who decide matters as varied as unfair trade practices, veterans benefits and patent infringement.
The court’s 7-2 decision backed Raymond Lucia, a California-based former radio host and investment adviser who was banned by an SEC administrative law judge from investment-related work and fined $300,000 for making misleading claims in his “Buckets of Money” retirement wealth strategy, reports the Los Angeles Times.
The ruling marked a victory for the Republican president, who has sought to limit the power of certain federal agencies. Trump’s administration sided with Lucia, reversing the government’s previous stance supporting the SEC taken by the administration of his Democratic predecessor, Barack Obama.
The Justice Department said it was pleased with the decision.
The ruling, authored by liberal Justice Elena Kagan, could also make it easier for these in-house judges to be fired by a president’s political appointees in agencies rather than being protected from such action, as is currently the case.
The justices overturned a lower court ruling that had endorsed the SEC’s hiring practice for the judges. The agency’s commissioners, who are presidentially appointed, should have named them, not SEC staff, the justices said.
Six justices found the hiring process unconstitutional while Justice Stephen Breyer said it violated only federal administrative law. Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented.
Lucia must now be given a new hearing in front of a properly appointed administrative judge, or the commission itself, the justices said.
“We are thrilled with the result, which is a victory for the rule of law, constitutional accountability and liberty,” Lucia’s attorney Mark Perry said.
Mr Americana, Overpasses News Desk
June 23rd, 2018