Justice Sotomayor: Conservatives unleashed 'chaos' with ruling for right-wing hedge fund

U.S. Supreme Court Justice Sonia Sotomayor blasted conservative justices for creating "chaos" with a decision by upending a decades-long practice allowing agencies to impose civil penalties without a jury trial.

In a 6-3 ruling, conservative justices decided that the Security and Exchange Commission (SEC) had limited power to enforce security fraud violations. The conservative court members sided with a hedge fund manager and former conservative radio show host.

Justice John Roberts wrote for the majority that George Jarkesy, Jr. and his firm Patriot28, LLC had a right to a jury trial after it was hit with violations of "antifraud provisions."

Writing for the minority, Sotomayor said that the conservative justices' decision would cause chaos.

"The Constitution, this Court has said, does not require these civil-penalty claims belonging to the Government to be tried before a jury in federal district court," the liberal justice noted. "This Court has blessed that practice repeatedly, declaring it 'the 'settled judicial construction' all along."

"Congress had no reason to anticipate the chaos today's majority would unleash after all these years," she added, noting that Congress "enacted more than 200 statutes authorizing dozens of agencies to impose civil penalties for violations of statutory obligations."

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Sotomayor continued:

According to the majority, the Constitution requires the Government to seek civil penalties for federal-securities fraud before a jury in federal court. The nature of the remedy is, in the majority’s view, virtually dispositive. That is plainly wrong. This Court has held, without exception, that Congress has broad latitude to create statutory obligations that entitle the Government to civil penalties, and then to assign their enforcement outside the regular courts of law where there are no juries.

The minority opinion insisted that the majority's decision "[threatened] the separation of powers."

"Here, that threat comes from the Court's mistaken conclusion that Congress cannot assign a certain public-rights matter for initial adjudication to the Executive because it must come only to the Judiciary," she added. "The majority today upends longstanding precedent and the established practice of its coequal partners in our tripartite system of Government. Because the Court fails to act as a neutral umpire when it rewrites established rules in the manner it does today, I respectfully dissent."