{"id":592,"date":"2024-07-01T18:39:41","date_gmt":"2024-07-01T22:39:41","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/?p=592"},"modified":"2024-07-01T18:39:41","modified_gmt":"2024-07-01T22:39:41","slug":"supreme-court-guts-usdas-power-to-assess-civil-penalties-under-the-animal-welfare-act","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/2024\/07\/01\/supreme-court-guts-usdas-power-to-assess-civil-penalties-under-the-animal-welfare-act\/","title":{"rendered":"Supreme Court Guts USDA\u2019s Power to Assess Civil Penalties Under the Animal Welfare Act"},"content":{"rendered":"

Somewhat overshadowed by Chevron\u2019s<\/em> spectacular crash and burn last week was the Supreme Court\u2019s decision the day before in SEC v. Jarkesy<\/em>, No. 22-859 (U.S. June 27, 2024), holding that the SEC\u2019s assessment of civil penalties in an administrative proceeding is unconstitutional because it deprives the party assessed of its Seventh Amendment right to trial by jury.\u00a0 This result has particular significance for those regulated by the U.S. Department of Agriculture (USDA) under the Animal Welfare Act (AWA).<\/p>\n

Jarkesy<\/em> arose out of penalties assessed in an administrative proceeding before the SEC that were based on the antifraud provisions of the federal securities laws.\u00a0 The majority, in an opinion by Chief Justice Roberts, held that a civil penalty, being a claim for money designed to punish the party assessed, is a type of remedy that, at common law, was legal in nature, could only be enforced in a court of law, and therefore the defendant is entitled to a jury trial under the Seventh Amendment.\u00a0 [Majority Opp. at 11.]\u00a0 At the same time, this type of claim is not excluded from the Seventh Amendment by the \u201cpublic rights\u201d doctrine because, even though the claim rests on the alleged violation of a statute passed by Congress, the civil penalty action targets the same basic conduct as common law fraud and, thus, is a matter of private rather than public right.\u00a0 [Id<\/em>. at 21.]<\/p>\n

Where it gets interesting for USDA and those it regulates is the dissenting opinion by Justice Sotomayor, which characterized the result of the majority\u2019s opinion as taking \u201ca wrecking ball to \u2026 settled law\u201d with \u201cmomentous consequences\u201d and a \u201cseismic shift in this Court\u2019s jurisprudence.\u201d \u00a0[Dissenting Opp. at 17, 33.]\u00a0 The dissent pointed to more than 200 federal statutes that authorize the imposition of civil penalties in administrative proceedings.\u00a0 The dissent also noted that some agencies \u2013 like USDA \u2013 \u201ccan pursue civil penalties only in agency enforcement proceedings.<\/em><\/strong>\u201d\u00a0 [Id<\/em>. at 35 (emphasis added).]\u00a0 As the dissent observed further, \u201c[f]or those and countless other agencies, all the majority can say is tough luck; get a new statute from Congress.<\/em><\/strong>\u201d\u00a0 [Id<\/em>. (emphasis added).]<\/p>\n

\u201cTough luck\u201d indeed.\u00a0 Under the civil penalty provision of the AWA \u2013 20 U.S.C. \u00a7 2149(b) \u2013 civil penalties can be assessed against a \u201cdealer, exhibitor, research facility, intermediate handler, carrier, or operator of an auction sale\u201d for a violation of the Act or a regulation thereunder.\u00a0 But the statute only speaks to penalties assessed by the Secretary in an administrative proceeding with a subsequent appeal to a federal court of appeals.\u00a0 Section 2149(b) does not<\/em><\/strong> provide for penality assessment in an action in federal district court.\u00a0 Because it doesn\u2019t, and because the administrative proceeding authorized by section 2149(b) does not provide (and cannot provide) for a jury trial, the Jarkesy<\/em> holding clearly seems to eliminate USDA\u2019s power to assess civil penalties under the current language of the AWA.\u00a0 Absent an Act of Congress, USDA cannot assess AWA civil penalties at all.<\/p>\n

Moreover, even if Congress fixed this for USDA with a statute that authorized the agency to sue to assess penalties in federal court, Jarkesy<\/em> works a significant change in the law.\u00a0 A federal administrative agency\u2019s power to impose civil penalties in an administrative case presided over by an ALJ, whose paycheck comes from the same agency that is prosecuting the case, and with only a limited right of judicial review under the Administrative Procedure Act, creates huge enforcement leverage over the regulated.\u00a0 As the majority opinion in Jarkesy<\/em> noted, a system that \u201cconcentrates the roles of prosecutor, judge and jury in the hands of the Executive Branch<\/em><\/strong>\u201d is \u201cthe very opposite of the separation of powers that the Constitution demands.<\/em><\/strong>\u201d\u00a0 [Majority Opp. at 27 (emphasis added).]\u00a0 There is a big difference between that one-sided scenario and a case in federal district court where the agency has to prove its case to a jury in a trial governed by the Federal Rules of Evidence and presided over by an Article III judge who \u2013 since Chevron<\/em> is now history \u2013 no longer has to defer to the agency\u2019s overreaching but \u201cpermissible\u201d interpretations of the statute it seeks to enforce.\u00a0 This change is indeed \u201cmomentous.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Somewhat overshadowed by Chevron\u2019s spectacular crash and burn last week was the Supreme Court\u2019s decision the day before in SEC v. Jarkesy, No. 22-859 (U.S. June 27, 2024), holding that the SEC\u2019s assessment of civil penalties in an administrative proceeding is unconstitutional because it deprives the party assessed of its Seventh Amendment right to trial … <\/p>\n

Continue reading “Supreme Court Guts USDA\u2019s Power to Assess Civil Penalties Under the Animal Welfare Act”<\/span><\/a><\/p>\n","protected":false},"author":317,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[49,107,212,984,1030,1029,5,1033,1032,1031,224,113],"ppma_author":[697],"class_list":["post-592","post","type-post","status-publish","format-standard","hentry","category-general","tag-animal-law","tag-animal-welfare-act","tag-awa","tag-chevron","tag-civil-penalties","tag-jarkesy","tag-john-simpson","tag-public-rights-doctrine","tag-right-to-jury-trial","tag-seventh-amendment","tag-u-s-department-of-agriculture","tag-usda"],"authors":[{"term_id":697,"user_id":317,"is_guest":0,"slug":"jmsimpson","display_name":"John M. Simpson","avatar_url":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-content\/uploads\/sites\/38\/2018\/06\/simpsonjohn-125x150.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/posts\/592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/users\/317"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/comments?post=592"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/posts\/592\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/media?parent=592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/categories?post=592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/tags?post=592"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/animallawdevelopments\/wp-json\/wp\/v2\/ppma_author?post=592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}