Justices may shrink the bureaucracy

“I want a government small enough to fit inside the Constitution.” -- Harry Browne

Politico is concerned that the deep state will no longer get to shove people around.

It reported:

A decade-long conservative crusade against financial regulators will come to a head soon with a crucial Supreme Court ruling, part of a legal strategy that has spread across multiple Washington agencies into a broad attack on a core power of the federal government.

The court’s ruling on Securities and Exchange Commission v. Jarkesy, a case challenging the power of in-house federal judges, could hobble a whole range of agencies in unpredictable ways, cutting the powers of antitrust enforcers, labor regulators and consumer finance watchdogs.

Good. They should be hobbled.

The bureaucracy makes the rules, enforces them and hires the judge-jury-and-executioner to hear the case. The president — or someone else in the administration — appoints them without Senate confirmation.

The abuse of this power by bureaucrats goes way, way back like a Jim Thome homerun. A half-century ago, Donald Trump made the Front Page of the New York Times for the first time — Major Landlord Accused Of Antiblack Bias in City.

HUD thought it had him. Trump and his dad hired Roy Cohn, the prosecutor of the Rosenberg traitors (and lefty icon) who took the case out of the hands of an administrative law judge by suing HUD for $100 million in federal court. Two years later they settled with the Trumps agreeing to be sure to rent to black people. No fine. No admission of guilt. No Front Page story.

This case is similar.

The American Bar Association’s summary was “This case concerns the Securities and Exchange Commission’s ability to bring enforcement actions for securities fraud before administrative law judges, rather than in federal district court. The target of an enforcement action argues this venue choice stems from an unconstitutional delegation of legislative power to the SEC and that the proceeding violates the Seventh Amendment right to a jury trial. In U.S. Securities and Exchange Commission v. Jarkesy, the Court has the potential to change the way government agency claims are adjudicated.”

I am not really sure how the agency judges square with the right to a fair trial.

The ABA said, “The proceeding is similar to a trial except that many of the hallmarks of due process are absent: there is no jury, there is no discovery, the evidentiary rules are relaxed, and guilt is determined by a preponderance of evidence. Either side may appeal the ALJ’s decision to the SEC commissioners, and the SEC’s final decision may be appealed to a federal appeals court. The appeals court may only reverse the SEC’s ruling if the findings were unsupported by ‘substantial evidence’ in the record.”

The ALJ’s decision cost Jarkesy (a company) just under a million bucks. The legal fees to bring the case to the highest court in the land likely exceeded that. The federal government has an unlimited supply of money.

Mark Cuban, owner of the Dallas Maverick’s NBA team, squared off against the SEC’s rigged system a decade ago — and lost.

He told Politico, “I support the right to a jury trial. Period, end of story. There is no constitutional reason or support for the SEC or any government agency to supersede that.”

Other billionaires are fighting back.

Politico said, “Since Jarkesy was filed, companies including Meta (Zuckerberg), SpaceX (Musk) and Amazon (Bezos) have escalated it into a broader fight against federal power by suing other agencies over their own courts — a way of fighting unfavorable judgments by attacking the system that delivered it.”

The bureaucracy uses the ALJ system for the sake of convenience. But the Constitution’s sole purpose is to make governing as inconvenient as possible.

Politico said, “Others have fretted that the high court’s ruling could even hit the routine in-house courts of agencies like the Social Security Administration, which employs about 1,200 administrative judges. If not properly tailored, they say, the decision could wind up sending a wave of relatively low-dollar Social Security claims into the already bustling federal courts.”

The Constitution says, “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”

20 bucks is 20 bucks.

If the actual judiciary cannot deal with all these cases that is a sign that you have too many laws and too many bureaucratic regulators.

Why do we need an EPA? The air and water have never been cleaner. Why do we have a Department of Education? We flooded the schools with trillions of dollars over the years and the results are worse. Why do we have a Department of Transportation? We built an interstate system before it came along. Under the gay guy, we are destroying parts of it in the name of fighting a racism that no longer exists.

The agency judicial system is corruptible. Nationally, about 54% of appeals of Social Security disability claims denials are reversed in the system.

However, in the early 21st century, in Huntington, West Virginia, if you hired Kentucky attorney Eric C. Conn to appeal, you had a 100% chance of winning. That’s because he kicked back more than $600,000 to ALJ David B. Daugherty. The feds eventually prosecuted and Daugherty got 4 years in prison while Conn received 12 years with another 15 years tacked on for fleeing to Honduras. The story is here.

But David Vladeck, a Georgetown law professor and former head of consumer protection at the Federal Trade Commission in the Obama administration, ominously warned that doing away with the ALJs will spell doom.

Politico reported:

In practice, though, a jury trial might not always be the best option strategically for defendants, said Vladeck — especially those like Jarkesy facing claims of securities fraud.

“Juries hate scam artists,” Vladeck said. “Be careful what you wish for.”

The Constitution hates tyranny and you had best believe the bureaucracy is tyrannical. The USA has so many laws that bureaucrats can pick and choose which laws they want to pick against whom.

If ridding us of this ALJ system overloads the courts and makes enforcement of all these rules impossible, so be it.

As Thomas Jefferson wrote of King George III, “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”

He and 55 other patriots signed off on that — as part of the Declaration of Independence.

When Harry Browne said, “I want a government small enough to fit inside the Constitution,” he spoke for every single patriot in the country alive today — and all of the dead ones.