US Supreme Court Clarifies Agency Powers in Pair of New Rulings

Why It Matters

The rulings reinforce regulators’ ability to collect penalties and pursue equitable remedies, providing certainty for agencies and regulated industries, and signal that the Court will not broadly apply Jarkesy to dismantle agency enforcement.

Key Takeaways

• FCC forfeiture orders require DOJ lawsuit before collection
• Supreme Court upheld SEC's ability to seek disgorgement without proving loss
• Rulings limit Jarkesy’s reach, preserving agency enforcement tools
• Decisions arrive as Court moves away from Chevron deference

Pulse Analysis

The Supreme Court’s recent activity marks a pivotal shift in the balance between the judiciary and federal agencies. After the landmark Loper Bright decision stripped away Chevron deference, the Court has been fine‑tuning its stance on administrative authority. By revisiting the Jarkesy precedent, the justices signaled a willingness to preserve agency tools that include procedural safeguards, rather than dismantling them wholesale, thereby offering a more nuanced approach to administrative law.

In FCC v. AT&T, the justices clarified that the FCC’s monetary forfeiture orders are not self‑executing. Before any funds can be seized, the Department of Justice must file a separate lawsuit, granting the affected company a right to a jury trial. This procedural gatekeeper protects telecom giants like AT&T and Verizon from automatic penalties exceeding $100 million, while still allowing the FCC to enforce its rules through the traditional judicial process.

The unanimous Sripetch v. SEC decision bolsters the SEC’s enforcement arsenal by confirming that disgorgement can be imposed based on the defendant’s illicit gains alone. By removing the requirement to demonstrate actual investor losses, the ruling streamlines the agency’s ability to combat pump‑and‑dump schemes and other securities fraud. Practitioners can now anticipate more aggressive disgorgement actions, and market participants face heightened deterrence, reinforcing the SEC’s role as a guardian of market integrity.