Supreme Court rules against agency enforcement powers

By Pamela King | 06/27/2024 01:45 PM EDT

The justices’ decision in a securities case is expected to ripple through internal legal matters at the Federal Energy Regulatory Commission and other agencies.

FERC headquarters.

A new Supreme Court ruling weakens the power of agencies like the Federal Energy Regulatory Commission to handle enforcement cases internally. FERC headquarters in Washington is shown. Francis Chung/E&E News

The nation’s highest bench on Thursday dealt a blow to the ability of federal agencies to bring their own cases against polluters and pipeline builders.

In a 6-3 ruling that divided the justices along ideological lines, the Supreme Court found a federal court — rather than an in-house judge at Wall Street’s top regulator — should handle a fraud case against hedge fund manager and conservative radio host George Jarkesy.

“A defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator,” wrote Chief Justice John Roberts, who led the majority in Securities and Exchange Commission v. Jarkesy. “Rather than recognize that right,” he continued, “the dissent would permit Congress to concentrate the roles of prosecutor, judge, and jury in the hands of the Executive Branch.”


The decision is expected to reverberate through other agencies like the Federal Energy Regulatory Commission that use in-house judges to handle enforcement cases.