WEBVTT - Bloomberg Law Brief: SEC Loses In-House Judge Challenge (Audio)

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<v Speaker 1>Now it's time for our daily Bloomberg Law of Brief,

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<v Speaker 1>exploring legal issues in the news, and Today, Bloomberg Law

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<v Speaker 1>host Doing Grosso discusses why one appeals court ruled the

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<v Speaker 1>SEC's use of in house judges unconstitutional while another allowed

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<v Speaker 1>the practice to continue. She speaks with Peter Henning, a

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<v Speaker 1>law professor at Wayne State University, and Gregory Murvillo, founding

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<v Speaker 1>partner and Morvillo LLP. Peter explained the reasoning that led

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<v Speaker 1>these appellate courts to come to different conclusions, completely different conclusions. Well,

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<v Speaker 1>the issue here is whether the secs administrative law judges

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<v Speaker 1>are what are called inferior officers. The Constitution requires that

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<v Speaker 1>an inferior officer be appointed either by the President or

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<v Speaker 1>by someone who Congress designates who can appoint that person,

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<v Speaker 1>and so you have to go through a particular appointment process.

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<v Speaker 1>If you're just an employee like I was back long ago,

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<v Speaker 1>then you're just hired through the regular civil service process.

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<v Speaker 1>The split here is whether these judges are inferior officers.

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<v Speaker 1>Do they qualify for that position? And there's some history

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<v Speaker 1>in the Supreme Court about that, but it's really a

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<v Speaker 1>pretty simple straightforward issue. Are they or aren't they. Of

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<v Speaker 1>course playing that out will be the really difficult part.

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<v Speaker 1>Greg The SEC has been using administrative judges since shortly

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<v Speaker 1>after it was created in four Why the controversy now, Well,

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<v Speaker 1>the controversy stems from the fact that most defendants don't

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<v Speaker 1>believe it is an inherently fair process. The SEC wins

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<v Speaker 1>somewhere in the neighborhood of of their cases that are

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<v Speaker 1>brought in front of an SEC a l J, whereas

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<v Speaker 1>when they bring cases in federal court there down and

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<v Speaker 1>around the seventy mark. So the difference between going to

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<v Speaker 1>federal court and going to have your case heard before

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<v Speaker 1>in a l J is a huge one in terms

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<v Speaker 1>of the of whether you can or can't win. And indeed,

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<v Speaker 1>there are some a ljs who have never decided for

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<v Speaker 1>anyone but the SEC and to defendants look at it

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<v Speaker 1>and they think this is an inherently unfair process. That's

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<v Speaker 1>how it started this kind of a challenge. As Gregory Morvillo,

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<v Speaker 1>founding partner at moorevilleo l LP, and Peter Henning, a

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<v Speaker 1>law professor ed Wayne State University, speaking with Bloomberg Law

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<v Speaker 1>host joom Garrosso. You can listen to Bloomberg Law wait

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<v Speaker 1>days at one pm Wall Street Time here on Bloomberg

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<v Speaker 1>Radio Now Among the top legal stories from Bloomberg Law

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