On June 27, 2024, the Supreme Court ruled 6-3 in SEC v. Jarkesy that hedge fund manager George Jarkesy had a constitutional right to a jury trial when the Securities and Exchange Commission sought $300,000 in fraud penalties against him. The SEC had tried Jarkesy in its own administrative court with an agency judge, bypassing federal court. Chief Justice John Roberts wrote that when the government seeks civil penalties designed "to punish and deter, not to compensate," the Seventh Amendment requires a jury trial in federal court, not an agency tribunal.
The Seventh Amendment preserves the right to jury trials "in suits at common law, where the value in controversy shall exceed twenty dollars." This means federal civil cases involving factual disputes over money, property, or legal rights get decided by citizens on juries, not just judges. The Jarkesy decision affects over 200 federal statutes authorizing agencies to impose civil penalties through in-house proceedings. Defendants can now demand jury trials when agencies like the SEC, EPA, or FTC seek fines, forcing the government to prove violations in open court where procedural protections are stronger. The ruling limits agencies'' power to act as both prosecutor and judge in enforcement actions.