US Supreme Court reshapes the regulatory landscape

By Carol Beaumier

Senior Managing Director and Global Leader, Thought Leadership, Protiviti

Over the course of a few days before the end of its summer session, the U.S. Supreme Court issued three decisions that reshaped the regulatory landscape in the United States. Two of the decisions (SEC v. Jarkesy and Loper Bright Enterprises v. Raimondo) shift the balance of power from the executive to the judicial branch of government and the third (Corner Post, Inc. v. Board of Governors) extends the timeframe in which regulatory actions can be challenged.

• In SEC v. Jarkesy, the Supreme Court ruled that when the Securities and Exchange Commission (SEC) seeks civil penalties from defendants for securities fraud, the Seventh Amendment requires it to bring the action in a court of law where the defendant is entitled to a trial by jury.
• In Loper Bright Enterprises v. Raimondo, the Supreme Court held that federal agencies are no longer entitled to deference when they interpret ambiguous statutes, thus overruling a 1984 Supreme Court ruling — Chevron v. Natural Resources Defense Council. (Despite overturning Chevron, the Supreme Court emphasised that the ruling does not invalidate prior cases decided under the Chevron framework.)
• On the last day of the current term, the Supreme Court issued a decision in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, which held that a claim under the Administrative Procedure Act does not accrue for purposes of the six-year statute of limitations until the plaintiff is injured by final agency action.

These decisions are the latest in the growing trend by courts to curtail the reach of the executive branch and are likely to have far-reaching impacts for many industries, particularly financial services, technology and energy. All three of the decisions were based on a 6–3 opinion.