A Declaration of Independence from the Administrative State?

At gatherings this July 4, there will likely be impassioned conversations about recent Supreme Court decisions. But it’s a ruling a few weeks ago from a federal appeals court that could be most relevant to the causes celebrated on Independence Day.

Critics and proponents of the ruling by the U.S. Court of Appeals for the Fifth Circuit in Jarkesy v. SEC have called revolutionary the new limits it places on federal regulatory agencies’ use of administrative law judges, a core tool of the administrative state. “A potential blockbuster” is how Bill Funk, Distinguished Professor of Law Emeritus at Lewis & Clark Law School, describes the decision for the Center for Progressive Reform, before blasting it and saying it “begs reality.”

Jarkesy is indeed revolutionary—both in the jurisprudence it could usher in limiting the power of the administrative state and in its concern for issues involved in the American Revolution. The ruling “has taken what could be a historic step toward restoring the Constitution’s checks and balances,” predicts Mario Loyola, professor at Florida International University and my colleague as senior fellow at the Competitive Enterprise Institute (CEI), writing for the Wall Street Journal.

These checks and balances—including the right to a jury trial for common law offenses and a separation of powers of the different branches of government—came about due to the abuses the Founding generation suffered at the hands of Great Britain. Documents of the Founding era from the writings of George Washington to the Declaration of Independence itself list as grievances the quasi-courts created by the British to prosecute tax and trade offenses. These courts, which bypassed jury trials and due process for the colonists, and were under the rhetorical thumb of the British officials prosecuting the alleged offenses, bear a striking resemblance to the administrative venues run by regulatory agencies today.