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NCLA Asks Full Fifth Circuit to Rehear Case Concerning Unlawful SEC Administrative Proceedings

Washington, D.C., Sept. 24, 2020 (GLOBE NEWSWIRE) -- The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, today filed a petition for rehearing en banc in the U.S. Court of Appeals for the Fifth Circuit in the case of Michelle Cochran v. U.S. Securities and Exchange Commission. NCLAa??s client, Michelle Cochran, is contesting last montha??s 2-1 panel decision that erroneously dismissed her case based on a purported lack of subject-matter jurisdiction. Ms. Cochran wants to challenge the unconstitutional protections from removal by the President enjoyed by Administrative Law Judges (ALJs) at the Securities and Exchange Commission (SEC).Instead, the panel decision would deny her the immediate opportunity to have her constitutional claim heard by a real Article III federal judge. The ALJ would not be able to rule on her constitutional claim, so it makes no sense to deny her access to a judge competent to decide the validity of her claims. Forcing her to go through a second unconstitutional SEC hearing before she can raise her constitutional objections is illogical.Ms. Cochran argues that these ALJs enjoy multiple layers of protection from removal by the President of the United States. Currently, ALJs can only be removed for cause,A andA the only people who can remove them are SEC Commissioners and the Merit Systems Protection Boarda??people whom the President can only remove for cause. Such double insulation of powerful bureaucrats from presidential control violates the Constitution.NCLA seeks full court review on behalf of Ms. Cochran because the panel decision conflicts with a 2010 U.S. Supreme Court decision inA Free Enterprise Fund v. PCAOB,A which held that federal officers may only enjoy one layer of for-cause removal protection. Two layers of protection (or double insulation) unduly interferes with the Presidenta??s Article II constitutional duty to ensure that officers are doing their jobs. The PCAOB case also held unanimously that federal district courts have jurisdiction to hear removal-based constitutional challenges.The panel majority also misapplies a recent Fifth Circuit panel decision in the case ofA Bank ofA Louisiana v. FDIC. That case was decided under an entirely different statute (that explicitly stripped jurisdiction), and the judges there neither considered nor ruled on any statute or issue that bears on the law to be applied in this case.
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