Supreme Court: District Courts Have Jurisdiction to Hear Constitutional Challenges to ALJ Regimes

The administrative law regimes under federal securities and other laws have been under increasing scrutiny and subject to repeated challenges by respondents in administrative proceedings. Traditionally, a respondent in an administrative proceeding must exhaust administrative remedies before securing a hearing in federal court. On April 14, 2023, the U.S. Supreme Court ruled unanimously that U.S. district courts have jurisdiction in some circumstances to hear constitutional challenges to administrative proceedings prior to their conclusion, thus resolving a split between the Fifth and Ninth Circuits. See “Fifth Circuit Decision Could Hamstring SEC Enforcement Abilities” (Jun. 22, 2022).

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