Raymond J. Lucia Companies, Inc. v. SEC

Case Updates

The petition for review was denied by an equally divided court.

The U.S. Chamber filed an amicus brief urging the D.C. Circuit to hold that SEC administrative law judges are inferior officers for purposes of the Appointments Clause of Article II of the Constitution.

This case arises from an SEC administrative action against Raymond J. Lucia and his investment company. On August 9, 2016, a panel of the D.C. Circuit rejected Lucia’s argument that the administrative proceeding was unconstitutional because the presiding ALJ was unconstitutionally appointed. Relying on the D.C. Circuit’s prior decision in Landry v. FDIC, the panel held that SEC ALJs are employees not subject to the Appointments Clause because they do not issue final decisions.

On February 16, 2017, the D.C. Circuit granted rehearing en banc. The Chamber’s brief in support of Lucia argues that SEC ALJs are “Officers” under the Appointments Clause because they exercise significant authority and discretion in administrative proceedings, and that the D.C. Circuit’s decision in Landry should be overruled. The brief also details the increasingly important role that ALJs play in the SEC’s enforcement activities.

Andrew J. Pincus, Scott A. Chesin, and Karen W. Lin of Mayer Brown LLP served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.