Hill, Jr. v. SEC

Congress set forth a detailed process for exclusive judicial review of final Commission orders in the federal courts of appeals. An SEC administrative enforcement action culminates in a final order of the Commission, which in turn is reviewable exclusively by the appropriate federal court of appeals under 15 U.S.C. 78y. At issue in this consolidated appeal is whether respondents in an SEC administrative enforcement action can bypass the Securities Exchange Act’s, 15 U.S.C. 78u(d), 78u-1, 78u-2, 78u-3, review scheme by filing a collateral lawsuit in federal district court challenging the administrative proceeding on constitutional grounds. From the text of the statute, the court could fairly discern Congress’s general intent to channel all objections to a final Commission order - including challenges to the constitutionality of the SEC ALJs or the administrative process itself - into the administrative forum and to preclude parallel federal district court litigation. The court found no indication that respondents’ constitutional challenges are outside the type of claims that Congress intended to be reviewed within this statutory scheme. Accordingly, the district court erred in exercising jurisdiction and the court vacated the district court’s preliminary injunction orders and remanded with instructions to dismiss each case for lack of jurisdiction. View "Hill, Jr. v. SEC" on Justia Law