Cochran v. SEC

Case: 19-10396 Document: 00516128227 Page: 1 Date Filed: 12/13/2021

United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit

FILED
December 13, 2021
No. 19-10396
Lyle W. Cayce
Clerk
Michelle Cochran,

Plaintiff—Appellant,

versus

U.S. Securities and Exchange Commission; Gary
Gensler, in his official capacity as Chairman of the U.S. Securities and
Exchange Commission; Merrick Garland, U.S. Attorney General,

Defendants—Appellees.

Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:19-CV-66

Before Owen, Chief Judge, and Jones, Smith, Stewart, Dennis,
Elrod, Southwick, Haynes, Graves, Higginson, Costa,
Willett, Duncan, Engelhardt, Oldham, and Wilson, Circuit
Judges. 1

1
Judge Ho is recused and did not participate in this decision.
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No. 19-10396

Haynes, Circuit Judge, joined by Jones, Smith, Elrod, Willett, 2
Duncan, Engelhardt, Oldham, and Wilson, Circuit Judges:
The question presented is whether a provision of the Securities
Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78y, implicitly strips
federal district courts of subject-matter jurisdiction to hear structural
constitutional claims. The district court held yes, and a panel of our court
affirmed. Rehearing the case en banc, we determine that the Exchange Act
does not disturb the district court’s jurisdiction over such claims.
Therefore, as explained below, we AFFIRM the district court’s
judgment in part, REVERSE in part, and REMAND for further
proceedings consistent with this opinion.
I. Background
In April 2016, the Securities and Exchange Commission (“SEC”)
brought an enforcement action against Michelle Cochran, a certified public
accountant. The SEC alleged that Cochran violated the Exchange Act by,
inter alia, failing to comply with auditing standards issued by the Public
Company Accounting Oversight Board (“PCAOB”) when performing
quarterly reviews and annual audits between 2010 and 2013. After a hearing,
an SEC administrative law judge (“ALJ”) ruled against Cochran, imposing a
$22,500 penalty and a five-year ban on practicing before the SEC. The SEC
adopted the ALJ’s decision. Cochran objected.
Before the SEC ruled on Cochran’s objection, the Supreme Court
intervened. In Lucia v. SEC, the Court held that SEC ALJs are officers of the

2
Judge Willett concurs in the judgment because he believes this case is
controlled by Free Enterprise Fund v. Public Co. Accounting Oversight Board, 561 U.S. 477,
489 (2010) (“[T]he text [of § 78y] does not expressly limit the jurisdiction that other
statutes confer on district courts. See, e.g., 28 U.S.C. §§ 1331, 2201.”).

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United States under the Appointments Clause, who must be appointed by
the President, a court of law, or a department head. 138 S. Ct. 2044, 2049,
2051 & n.3 (2018). Because the ALJ who had issued the initial decision in
Lucia had not been appointed by a person or entity in one of those three
categories (but had instead been appointed by SEC staff members), the Court
remanded the case to the SEC for further proceedings before a
constitutionally appointed ALJ. Id. at 2050, 2055.
In response to Lucia, the SEC remanded all pending administrative
cases for new proceedings before constitutionally appointed ALJs. 3
Cochran’s case was reassigned to a new ALJ.
Cochran filed suit in federal district court to enjoin the SEC’s
administrative enforcement proceedings against her. Though the SEC had
fixed the appointment problem Lucia addressed, Cochran contended it did
not fix a removability problem Lucia declined to reach: she alleged that,
because SEC ALJs enjoy multiple layers of “for-cause” removal protection,
they are unconstitutionally insulated from the President’s Article II removal
power. Cochran also asserted that the SEC violated her due process rights
by failing to adhere to its own rules and procedures.
The district court dismissed Cochran’s case for lack of subject-matter
jurisdiction, reasoning that because § 78y permits judicial review of final SEC
orders in the courts of appeals, the Exchange Act implicitly strips district
courts of jurisdiction to hear challenges to ongoing SEC enforcement
proceedings. In the district court’s view, Cochran was required to raise her
constitutional claims in the ALJ proceeding and then petition for review in
the Fifth Circuit or the District of Columbia Circuit if she was dissatisfied

3
The SEC had previously cured the constitutional defect identified in Lucia by
ratifying the appointment of all of its ALJs.

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with the outcome. Cochran timely appealed, and we enjoined the SEC
administrative proceedings pending appeal.
Subsequently, a panel of this court affirmed the district court’s
dismissal of Cochran’s claims for lack of jurisdiction. Cochran v. SEC,
969 F.3d 507, 511–18 (5th Cir. 2020). Although there was no disagreement
on the ultimate decision to affirm as to Cochran’s due process claim, the
panel reached a 2-1 decision affirming on the removal power claim. See id. at
518 & n.1 (Haynes, J., dissenting in part). We then granted rehearing en banc.
Cochran v. SEC, 978 F.3d 975 (5th Cir. 2020) (mem.).
II. Jurisdiction and Standard of Review
The sole issue on appeal is whether the district court had subject-
matter jurisdiction over Cochran’s claims. 4 Nevertheless, the district court
undoubtedly had “jurisdiction to determine its own jurisdiction.” United
States v. Ruiz, 536 U.S. 622, 628 (2002). We have appellate jurisdiction
under 28 U.S.C. § 1291. We review de novo a district court’s dismissal for
lack of subject-matter jurisdiction. Rothe Dev., Inc. v. U.S. Dep’t of Def.,
666 F.3d 336, 338 (5th Cir. 2011).

4
In her en banc briefing, Cochran does not argue that the district court erred by
dismissing her due process claim. At oral argument, however, Cochran’s counsel insisted
that Cochran had not abandoned that claim. It is well established that a litigant cannot
resuscitate an abandoned claim by raising it at oral argument. See United States v. Menesses,
962 F.2d 420, 425–26 (5th Cir. 1992) (holding that a litigant waived an argument by failing
to brief the issue, instead raising it for the first time at oral argument). Accordingly, we
conclude that Cochran has abandoned her due process claim and therefore affirm the
district court’s dismissal of it. See Coke v. Gen. Adjustment Bureau, 640 F.2d 584, 586 n.2
(5th Cir. Mar. 1981) (en banc) (“[The party] has not renewed this argument in his briefs to
the en banc court, and we therefore consider the argument to have been abandoned.”);
Justiss Oil Co. v. Kerr-McGee Refin. Corp., 75 F.3d 1057, 1067 (5th Cir. 1996) (explaining
that “[w]hen an appellant fails to advance arguments in the body of its brief in support of
an issue it has raised on appeal, we consider such issues abandoned”).

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III. Discussion
The SEC presents two bases for affirming the district court. First, the
SEC argues that Congress implicitly stripped district courts of jurisdiction to
hear structural constitutional claims under § 78y. Second, the SEC argues
that Cochran’s claims are not yet ripe. We discuss and reject each argument
in turn.
A. Implicit Jurisdiction Stripping
We first consider the text of § 78y. We conclude that it did not
explicitly or implicitly strip the district court of jurisdiction over Cochran’s
claim. We next consider Supreme Court precedent. The Supreme Court has
already rejected the SEC’s precise jurisdictional argument under § 78y, so we
do the same. Finally, we independently consider the so-called “Thunder
Basin factors.” We conclude those factors do not warrant departing from the
statutory text or deviating from the Supreme Court’s interpretation of § 78y.
1. Statutory Text
Congress gave federal district courts jurisdiction over “all civil actions
arising under the Constitution.” 28 U.S.C. § 1331 (emphasis added). Not
some or most—but all. It is undisputed that Cochran’s removal power claim
arises under the Constitution. Moreover, the Supreme Court has repeatedly
told us that “when a federal court has jurisdiction, it also has a ‘virtually
unflagging obligation . . . to exercise that authority.’” Mata v. Lynch,
576 U.S. 143, 150 (2015) (ellipsis in original) (quoting Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800, 817 (1976)); see, e.g.,
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996) (“We have often
acknowledged that federal courts have a strict duty to exercise the
jurisdiction that is conferred upon them by Congress.”).

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It is true, however, that Congress can limit district court jurisdiction
if it so chooses. See Sheldon v. Sill, 49 U.S. 441, 449 (1850) (confirming
congressional control over lower federal court jurisdiction). The SEC argues
that Congress chose to limit district court jurisdiction by enacting § 78y.
That section provides, in relevant part:
A person aggrieved by a final order of the Commission entered
pursuant to this chapter may obtain review of the order in the
United States Court of Appeals for the circuit in which he
resides or has his principal place of business, or for the District
of Columbia Circuit, by filing in such court, within sixty days
after the entry of the order, a written petition requesting that
the order be modified or set aside in whole or in part.
15 U.S.C. § 78y(a)(1). By giving some jurisdiction to the courts of appeals,
the SEC argues, Congress implicitly stripped all jurisdiction from every other
court—including district courts’ jurisdiction over removal power claims
under § 1331.
In assessing the merits of this argument, “[w]e start, of course, with
the statutory text.” BP Am. Prod. Co. v. Burton, 549 U.S. 84, 91 (2006). See
generally Salinas v. U.S. R.R. Ret. Bd., 141 S. Ct. 691, 698 (2021) (noting that
there is a “strong presumption favoring judicial review of administrative
action” that the Government may rebut only by carrying the “‘heavy
burden’ of showing that the statute’s ‘language or structure’ forecloses
judicial review” (quoting Mach Mining, LLC v. EEOC, 575 U.S. 480, 486
(2015))). The text of § 78y conflicts with the SEC’s position in three ways.
First, § 78y provides that only “person[s] aggrieved by a final order of
the Commission” may petition in the relevant court of appeals to review that
final order. The statute says nothing about people, like Cochran, who have
not yet received a final order of the Commission. Nor does it say anything
about people, again like Cochran, who have claims that have nothing to do

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with any final order that the Commission might one day issue. Cochran’s
removal power claim challenges the constitution of the tribunal, not the
legality or illegality of its final order. Her injury has absolutely nothing
whatsoever to do with a final order, and therefore her claim falls outside of
§ 78y. 5
Second, § 78y(a)(1) is phrased in permissive terms. It says a person
aggrieved by a final order “may” petition for review in the court of appeals.
But it does not say that anyone “shall” or “shall not” do anything. It would
be troublingly counterintuitive to interpret § 78y(a)(1)’s permissive language
as eliminating alternative routes to federal court review, especially in the
context of separation-of-powers claims of the sort at issue here. See Burton,
549 U.S. at 91 (“[S]tatutory terms are generally interpreted in accordance
with their ordinary meaning.”); cf. Collins v. Yellen, 141 S. Ct. 1761, 1780
(2021) (explaining that, generally, “whenever a separation-of-powers
violation occurs, any aggrieved party with standing may file a constitutional
challenge” in federal court because “the separation of powers is designed to
preserve the liberty of all the people”).
Third, § 78y elsewhere uses mandatory terms—and they confirm our
understanding that Congress did not strip district courts of § 1331

5
Here’s a different way of saying the same thing. Imagine two different SEC
investigation targets, Jane and Sue. Jane thinks the SEC is investigating her unfairly and
that she’s innocent. Implicit jurisdiction stripping helps the SEC avoid judicial review of
Jane’s claims until after the completion of its enforcement proceeding and the issuance of
a final order. The SEC could argue, by giving Jane the right to challenge a final order in
§ 78y, Congress implicitly stripped Jane’s right to pre-enforcement review before the
issuance of a final order. But what about Sue? Sue is aggrieved by the fact that her ALJ is
unconstitutionally appointed. Section 78y cannot strip jurisdiction over Sue’s claims
because Sue is completely outside the statute from the word go. The only way for the SEC
to avoid judicial review of Sue’s claims is to say that Congress implicitly stripped review of
Jane’s claims and that implicitly also stripped review of Sue’s. It’s implicit stripping
squared.

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jurisdiction over structural constitutional claims. Under § 78y(a)(3),
jurisdiction “becomes exclusive” in the court of appeals only after (1) the
SEC issues a final order, (2) an aggrieved party files a petition, and (3) the
SEC submits its administrative record. The use of the word “exclusive” in
§ 78y(a)(3) shows that Congress knew how to strip jurisdiction when it
wanted to—and it only highlights that Congress did not strip § 1331
jurisdiction elsewhere. 6 Cf. Vaden v. Discover Bank, 556 U.S. 49, 59 n.9
(2009) (“[W]hen Congress wants to expand [federal-court] jurisdiction, it
knows how to do so clearly and unequivocally.” (second alteration in
original) (citation omitted)). The SEC’s contrary position would effectively
write § 78y(a)(3) out of the statute—there would be no point in making
jurisdiction “exclusive” in the court of appeals if no other court ever had
jurisdiction. We are loath to reach such a result. See Duncan v. Walker, 533
U.S. 167, 174 (2001) (noting that courts are “‘reluctan[t] to treat statutory
terms as surplusage’ in any setting” (alteration in original) (quoting Babbitt
v. Sweet Home Chapter of Cmtys. for a Great Or., 515 U.S. 687, 698 (1995))).
Consequently, the text of § 78y does not support the SEC’s position with
respect to Cochran’s removal power claim. 7

6
Similarly, the statute’s use of the linking verb “become” adds a temporal
element, telling us that the subject (“jurisdiction”) is only linked to the complement
(“exclusive”) after a petition is filed. In contrast, for example, the statute could have said
that jurisdiction “is exclusive,” or that the court of appeals “has exclusive jurisdiction.”
See, e.g., 15 U.S.C. § 717r(d)(1) (providing that “[t]he United States Court of
Appeals . . . shall have original and exclusive jurisdiction over any civil action for the review
of an order or action of a Federal agency”). But the use of “becomes” necessarily implies
a transformation.
7
Our holding is limited to the specific removal power claim at issue here; as this is
not a “mine-run” securities law case, we do not consider the question of whether the text
of the Exchange Act evinces an intent to strip district courts of jurisdiction over claims that
actually relate to a final SEC order.

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2. Free Enterprise Fund
Any doubts we might have were put to rest by the Supreme Court’s
decision in Free Enterprise Fund v. Public Co. Accounting Oversight Board, 561
U.S. 477 (2010). In Free Enterprise Fund, the Supreme Court rejected the
precise argument the SEC makes here—that the Exchange Act divests
district courts of jurisdiction over removal power challenges. See id. at 489.
Hence, Free Enterprise Fund is squarely on point, foreclosing any possibility
that § 78y strips district courts of jurisdiction over structural constitutional
challenges.
In Free Enterprise Fund, the PCAOB inspected an accounting firm,
issued a report criticizing its auditing practices, and opened a formal
investigation. Id. at 487. The accounting firm (and a nonprofit organization
it belonged to) then filed suit in federal district court, seeking a declaratory
judgment that the PCAOB was unconstitutionally structured, as well as an
injunction preventing the PCAOB from exercising its powers. Id. The
accounting firm argued that the PCAOB’s double for-cause removal
protection violated the President’s Article II removal power. Id. It also
asserted that the members of the PCAOB had not been properly appointed
under the Appointments Clause. Id. at 487–88. Just as it does now, the
Government maintained that § 78y deprived the district court of jurisdiction
to hear the accounting firm’s constitutional challenges. 8 Id. at 489.
The Supreme Court rejected the Government’s argument and held
“the text [of § 78y] does not expressly limit [district court]
jurisdiction . . . . Nor does it do so implicitly.” Id. In reaching that result, the

8
According to the Government, § 78y was relevant in Free Enterprise Fund because
the SEC had the power “to review any [PCAOB] rule or sanction”; thus, § 78y permitted
review of PCAOB actions that were ratified as final SEC orders. 561 U.S. at 489.

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Court explained that “we presume that Congress does not intend to limit
jurisdiction if [1] ‘a finding of preclusion could foreclose all meaningful
judicial review’; [2] if the suit is ‘wholly collateral to a statute’s review
provisions’; and [3] if the claims are ‘outside the agency’s expertise.’” Id.
(quoting Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 212–13 (1994) (laying
out these considerations, referred to as the “Thunder Basin factors”)).
First, the Court determined that the Government’s theory would
foreclose all meaningful judicial review because “[s]ection 78y provides only
for judicial review of [SEC] action, and not every [PCAOB] action is
encapsulated in a final [SEC] order or rule.” Id. at 490. The Court explained
that the PCAOB’s investigation of the accounting firm had not led to any
sanction and that the PCAOB’s critical inspection report was not subject to
judicial review. Id.
Second, the Court determined that the accounting firm’s challenge
was “collateral” to § 78y’s review provisions because it “object[ed] to the
[PCAOB]’s existence, not to any of its auditing standards.” Id. Thus, the
Court rejected the Government’s suggestion that the accounting firm could
have sought SEC review of a PCAOB rule or regulation, as such a challenge
would have been a pointless pretext for its structural constitutional claims.
Id. (noting that “[r]equiring petitioners to select and challenge a [PCAOB]
rule at random [would be] an odd procedure for Congress to choose”).
Finally, the Court held that the accounting firm’s constitutional
claims were outside the SEC’s expertise because they were “standard
questions of administrative law” that did not require any “fact-bound
inquiries” or “‘technical considerations of [agency] policy.’” Id. at 491
(alteration in original) (quoting Johnson v. Robinson, 415 U.S. 361, 373 (1974)).
Consequently, the Court concluded that § 78y did not deprive the district
court of jurisdiction over the accounting firm’s constitutional claims. Id.

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Just like Free Enterprise Fund, this case concerns the question of
whether the Exchange Act divests district courts of jurisdiction to consider
removal power challenges; every material aspect of the Supreme Court’s
reasoning in Free Enterprise Fund would seem to apply with equal force here.
Nevertheless, the SEC urges us to depart from Free Enterprise Fund, even
though that case involved the same statutory-review scheme and the same
type of constitutional claim.
The SEC primarily argues that Free Enterprise Fund is distinguishable
because, in that case, the PCAOB had not yet commenced an administrative
proceeding against the plaintiff accounting firm. Since Cochran is already in
the midst of an administrative proceeding, and that proceeding could
eventually result in a final SEC order that Cochran may challenge under
§ 78y, the SEC contends that she has a meaningful opportunity for judicial
review. Yet, this difference lacks meaning: although Cochran’s case is
farther along than in Free Enterprise Fund, she is still not guaranteed an
adverse final order, as the SEC might resolve her case in her favor. Hence,
just as in Free Enterprise Fund, it remains possible that Cochran will not be
able to obtain judicial review over her removal power claim unless the district
court hears it now. In short, Free Enterprise Fund still controls. 9

9
The dissenting opinion attempts to salvage the SEC’s “enforcement-
investigation distinction” on the basis that permitting district court jurisdiction over
challenges to pending enforcement proceedings would disrupt the statutory scheme. See
Dissenting Op. at 88 n.15. Of course, given the Supreme Court’s decision in Free Enterprise
Fund, the dissenting opinion is forced to concede that district court jurisdiction over
challenges to SEC investigations does not disrupt the statutory scheme. Id. Yet, the
dissenting opinion fails to point to anything in the text of the Exchange Act or in Free
Enterprise Fund that distinguishes between investigation and enforcement. Consequently,
we see no basis for supposing that permitting judicial review over ongoing SEC
enforcement proceedings would be more disruptive than judicial review over SEC
investigations.

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Nevertheless, the SEC asserts that other circuits have adopted its
view of Free Enterprise Fund and held that the Exchange Act strips district
courts of jurisdiction over structural constitutional claims. 10 But the other
circuits are not as unanimous as they appear, as their decisions have drawn
powerful dissents that largely support our position. See Tilton v. SEC, 824
F.3d 276, 292 (2d Cir. 2016) (Droney, J., dissenting) (“I conclude that Free

10
See Tilton v. SEC, 824 F.3d 276, 281–91 (2d Cir. 2016) (concluding that the
Exchange Act precluded district court jurisdiction over an Appointments Clause challenge
to an ongoing SEC proceeding); Bennett v. SEC, 844 F.3d 174, 186 (4th Cir. 2016)
(concluding that § 78y precluded district court jurisdiction over a removal power claim and
reasoning that Free Enterprise Fund did not control because the plaintiff was “already
embroiled in an enforcement proceeding”); Bebo v. SEC, 799 F.3d 765, 774–75 (7th Cir.
2015) (same); Hill v. SEC, 825 F.3d 1236, 1248, 1252 (11th Cir. 2016) (same); Jarkesy v.
SEC, 803 F.3d 9, 20, 30 (D.C. Cir. 2015) (holding that § 78y precluded district court
jurisdiction over various constitutional claims, including a nondelegation doctrine claim,
and determining that Free Enterprise Fund did not control because the plaintiff was “already
properly before the [SEC] by virtue of his alleged violations of [the securities] laws”); see
also Axon Enter., Inc. v. FTC, 986 F.3d 1173, 1182–83 (9th Cir. 2021) (holding that the
district court lacked jurisdiction to hear a pre-enforcement removal power challenge
regarding Federal Trade Commission ALJs and embracing the reasoning of Tilton, Bennett,
Bebo, Hill, and Jarkesy).
We note that several of the other circuits relied on their own precedents in
concluding that the plaintiffs’ claims were precluded. See Tilton, 824 F.3d at 285; Hill, 825
F.3d at 1248; Jarkesy, 803 F.3d at 19, 22, 24, 26, 29–30. It is likely that these courts were
required to follow their own prior decisions. See Christiansen v. Omnicom Grp., Inc., 852
F.3d 195, 199 (2d Cir. 2017) (per curiam) (explaining that the court is “bound by the
decisions of prior panels until such time as they are overruled either by an en banc panel of
our Court or by the Supreme Court” (quoting United States v. Wilkerson, 361 F.3d 717, 732
(2d Cir. 2004))); In re Burgest, 829 F.3d 1285, 1287 (11th Cir. 2016) (per curiam) (same);
United States v. Eshetu, 898 F.3d 36, 37 (D.C. Cir. 2018) (per curiam) (noting that “one
panel cannot overrule another”). By contrast, an en banc decision allows us to consider
again any prior precedents, although we do not have any that require a different outcome
here, as we explain. See United States v. Anderson, 885 F.2d 1248, 1255 (5th Cir. 1989) (en
banc) (noting that, when sitting en banc, we do not “hesitate[]” to overrule incorrect panel
decisions). Thus, we are free to focus exclusively on the Supreme Court’s precedents;
based on those precedents, we are bound to rule in Cochran’s favor, despite our reluctance
to disagree with our fellow circuits.

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Enterprise controls here.”); Axon Enter., Inc. v. FTC, 986 F.3d 1173, 1196 (9th
Cir. 2021) (Bumatay, J., concurring in part and dissenting in part) (addressing
a different statute and concluding, based on Free Enterprise Fund, “that all
three Thunder Basin factors—meaningful review, wholly collateral, and
agency expertise—favor[ed] district court jurisdiction” over the plaintiff’s
removal power claim). Moreover, the consensus view is not always correct.
See, e.g., Rehaif v. United States, 139 S. Ct. 2191, 2201 (2019) (Alito, J.,
dissenting) (noting that Rehaif rejected an interpretation of the relevant
statute that had “been adopted by every single Court of Appeals to address
the question”). So the SEC’s tallying of the circuits does not change our
conclusion.
The SEC also relies on Bank of Louisiana v. FDIC, where we discussed
the “ongoing proceeding” distinction in holding that the district court lacked
jurisdiction over a separation-of-powers challenge to an administrative
proceeding before the Federal Deposit Insurance Corporation (“FDIC”).
919 F.3d 916, 925–27, 930 (5th Cir. 2019). Critically, the statutory-review
scheme at issue in that case differed in a key respect from the Exchange Act’s:
in Bank of Louisiana, the scheme included an explicit statutory bar on any
court enjoining “the issuance or enforcement of any . . . [FDIC] order.” Id.
at 920 (quoting 12 U.S.C. § 1818(i)(1)). Accordingly, we held that district
court jurisdiction was explicitly divested. Id. at 924 (explaining that “the plain
terms of section 1818(i) bar jurisdiction here”). Although we proceeded to
analyze the Thunder Basin factors, we did so merely to “reinforce” our
conclusion based on the explicit jurisdictional bar. Id. at 925. Consequently,
we clarify that Bank of Louisiana was addressing the explicit statute at issue
there—not all statutes that may be questioned—and it does not mandate the
outcome here. Thus, the SEC’s effort to rely on Bank of Louisiana is
unconvincing.

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3. The Supreme Court’s Other Precedents
As stated above, Free Enterprise Fund is enough to decide this case.
However, because the SEC contends otherwise, we will proceed by assuming
arguendo that we cannot rely exclusively on Free Enterprise Fund and conduct
a further analysis using the so-called “Thunder Basin factors.” Before doing
so, it is necessary to review the Supreme Court’s two other major precedents
on implicit jurisdiction stripping, Thunder Basin itself and Elgin v. Department
of Treasury, 567 U.S. 1 (2012).
i. Thunder Basin
In Thunder Basin, the Supreme Court set forth the framework now
used to determine whether Congress implicitly precluded initial judicial
review by creating a statutory framework that delegates initial review to an
administrative agency. See 510 U.S. at 207. First, the Court considered
whether Congress’s intent to preclude district court jurisdiction was “fairly
discernible in the statutory scheme.” Id. (quoting Block v. Cmty. Nutrition
Inst., 467 U.S. 340, 351 (1984)). Then, it addressed whether the claims at
issue could “be afforded meaningful review” if the agency considered the
claims first. Id. To determine whether a claimant would receive meaningful
judicial review, the Court considered three factors: (1) whether “a finding of
preclusion could foreclose all meaningful judicial review”; (2) whether the
claims were “‘wholly “collateral”’ to a statute’s review provisions”; and
(3) whether the claims were “outside the agency’s expertise.” Id. at 212–13
(quoting Heckler v. Ringer, 466 U.S. 602, 618 (1984)).
Then the Court applied that framework to the Federal Mine Safety
and Health Amendments Act of 1977 (the “Mine Act”), 30 U.S.C. §§ 811–
26. Like the Exchange Act, the Mine Act provides a detailed statutory
scheme for review of administrative orders. In particular, mine operators are
able to challenge adverse orders before the Federal Mine Safety and Health

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Review Commission (the “Mine Commission”). Thunder Basin, 510 U.S. at
207 (citing 30 U.S.C. § 815(a) and (d)). Such challenges are heard before an
ALJ. Id. at 207–08. The Mine Commission may review the ALJ’s decision
or simply permit it to become the Commission’s final order. Id. at 208 n.9.
Aggrieved persons may appeal adverse Mine Commission decisions to a
court of appeals. Id. at 208 (citing 30 U.S.C. § 816(a)(1)–(2)). Like the SEC
in this case, the Department of Labor argued that the Mine Act’s review
scheme prevented district courts from exercising subject-matter jurisdiction
over pre-final decision challenges to the Mine Act. Id. at 202.
The Supreme Court held that the Mine Act’s detailed statutory
scheme evidenced Congress’s intent to preclude district court jurisdiction
over pre-enforcement challenges. Id. at 207–10. Further, the Court
determined that the Mine Commission had exclusive original jurisdiction
over claims like the plaintiff mine operator’s National Labor Relations Act
(“NLRA”) and due process claims. Id. at 216. Although the Mine
Commission had no particular experience with the NLRA, the mine
operator’s claims were ultimately about interpretation of the Mine Act’s
posting requirement. Id. at 214–15. That is, the mine operator’s NLRA
challenge was not “wholly collateral” to the provisions of the Mine Act and
was actually “squarely within the Commission’s expertise.” Id. at 212, 214.
Further, even if the operator’s constitutional claim was “beyond” the Mine
Commission’s jurisdiction, the operator’s “statutory and constitutional
claims . . . [could] be meaningfully addressed in the Court of Appeals.” Id.
at 215 (citation omitted).
Finally, the Court held that the mine operator had a meaningful
opportunity for judicial review of its claims. Id. at 216–18. The Court
determined that compliance with the posting requirement would not be
overly burdensome for the mine operator because the operator’s fear that its
NLRA rights would be violated was “speculative” and any such violation

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could be separately remedied. Id. Further, despite the fact that the Mine
Act’s penalties were “onerous,” the Court concluded that they did not have
the “practical effect” of “foreclos[ing] all access to the courts” because they
would not become “final and payable” until after appellate review. Id. at 218.
Thus, the mine operator did not face “a constitutionally intolerable choice.”
Id. Consequently, the Court held that the Mine Act was intended to preclude
district court review of the mine operator’s claims and that those claims
could be meaningfully reviewed. Id.
ii. Elgin
Decided two years after Free Enterprise Fund, Elgin is the Supreme
Court’s most recent application of the Thunder Basin factors. Although the
case further illustrated the framework, it did not break new ground.
In Elgin, the Supreme Court considered whether the Civil Service
Reform Act of 1978 (“CSRA”), Pub. L. No. 95-454, 92 Stat. 1111, “provides
the exclusive avenue to judicial review when a qualifying employee
challenges an adverse employment action by arguing that a federal statute is
unconstitutional.” 567 U.S. at 5. Just as it did in Free Enterprise Fund, the
Elgin Court applied the Thunder Basin factors.
First, the Elgin Court held that the CSRA’s “elaborate” statutory-
review scheme evidenced Congress’s intent to foreclose district court
jurisdiction. Id. at 10–13. Next, the Court rejected the plaintiff-employees’
argument that the Thunder Basin factors indicated that their claims were not
the type Congress intended to be reviewed through the CSRA. Id. at 15–16.
The Court concluded that the CSRA offered the plaintiffs meaningful review
of their claims because the Federal Circuit was “fully competent to
adjudicate [those] claims” on appeal. Id. at 17. Then the Court held that the
plaintiffs’ claims were not “wholly collateral” to the CSRA’s statutory-
review scheme because these claims were “the vehicle by which [plaintiffs]

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seek to reverse the removal decisions,” and the CSRA scheme was designed
to process removal challenges. Id. at 21–22. Finally, the Court determined
that the Merit Systems Protection Board (“MSPB”)’s expertise was still
relevant because there were many “preliminary questions unique to the
employment context [that could] obviate the need to address the
constitutional challenge.” Id. at 22–23. Consequently, the Court ruled that
“the CSRA review scheme was intended to preclude district court
jurisdiction over [the employees’] claims.” Id. at 23.
iii. Application of the Thunder Basin Factors
We follow Free Enterprise Fund in breaking the Thunder Basin analysis
down into two steps: first, whether a “‘statutory scheme’ displays a ‘fairly
discernible’ intent to limit jurisdiction,” and second, whether “the claims at
issue ‘are of the type Congress intended to be reviewed within th[e] statutory
structure.’” 561 U.S. at 489 (quoting Thunder Basin, 510 U.S. at 207, 212).
At step two, “we presume that Congress does not intend to limit jurisdiction
if [1] ‘a finding of preclusion could foreclose all meaningful judicial review’;
[2] if the suit is ‘wholly collateral to a statute’s review provisions’; and [3] if
the claims are ‘outside the agency’s expertise.’” 11 Id.

11
At no point did the Elgin Court say or suggest that it was changing the Thunder
Basin inquiry or overruling all or part of Free Enterprise Fund, which is yet another reason
we remain bound by Free Enterprise Fund. We “should not lightly assume that a prior
decision has been overruled sub silentio merely because its reasoning and result appear
inconsistent with later cases.” Williams v. Whitley, 994 F.2d 226, 235 (5th Cir. 1993). As
between the directly on-point decision (Free Enterprise Fund) and some other decision
(Elgin), we must follow the former—even if we think it is inconsistent with the latter: “We
reaffirm that ‘[i]f a precedent of this Court has direct application in a case, yet appears to
rest on reasons rejected in some other line of decisions,’ the Court of Appeals should follow
the case which directly controls, leaving to this Court the prerogative of overruling its own
decisions.” Agostini v. Felton, 521 U.S. 203, 237 (1997) (emphasis added) (quoting
Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989)); see also
Bryan A. Garner et al., The Law of Judicial Precedent 302 (2016).

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Assuming arguendo that Congress intended § 78y to have a
jurisdiction-stripping effect as to some securities-law claims, we advance to
step two and hold that Cochran’s removal power claim is not the type of
claim Congress intended to funnel through the Exchange Act’s statutory-
review scheme. Our conclusion is supported by the “wholly collateral,”
“agency expertise,” and “meaningful judicial review” Thunder Basin
factors.
First, Cochran’s removal power claim is wholly collateral to the
Exchange Act’s statutory-review scheme. Elgin suggests that whether a
claim is collateral to the relevant statutory-review scheme depends on
whether that scheme is intended to provide the sort of relief sought by the
plaintiff. 567 U.S. at 22 (ruling that the employees’ claims were not “wholly
collateral to the CSRA scheme” because they were “requesting relief that
the CSRA routinely affords”). This rule accords with Thunder Basin:
although the mine operator in that case brought claims under the NLRA and
the Constitution, it ultimately sought to avoid compliance with the Mine
Act’s posting requirement. 510 U.S. at 205, 213–14. By contrast, the Free
Enterprise Fund accounting firm did not seek relief of the sort the Exchange
Act’s scheme is designed to offer; rather than seeking to challenge the
propriety of any particular rule or regulation, or to establish that it was not
liable for a violation, the accounting firm sought to abolish the PCAOB. 561
U.S. at 490 (explaining that the plaintiffs “object[ed] to the [PCAOB]’s
existence”). That is, the accounting firm’s claims were structural

Indeed, even if the tension between the two cases was so stark that we could confidently
predict Free Enterprise Fund’s impending demise, we would still have to follow it—it is the
Supreme Court’s “prerogative alone to overrule one of its precedents.” State Oil Co. v.
Khan, 522 U.S. 3, 20 (1997).

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constitutional claims, rather than substantive securities claims, and were
therefore beyond the bounds of the Exchange Act’s statutory-review scheme.
As in Free Enterprise Fund, Cochran challenges the existence of SEC
ALJs. The nature of her challenge is structural—it does not depend on the
validity of any substantive aspect of the Exchange Act, nor of any SEC rule,
regulation, or order. Indeed, she is challenging the Exchange Act’s statutory-
review scheme itself. Contra Thunder Basin, 510 U.S. at 218 n.22 (noting that
the mine operator “expressly disavow[ed] any abstract challenge to the Mine
Act’s statutory review scheme”). Further, the outcome of her constitutional
challenge to the ALJs’ removal protection will have no bearing on her
ultimate liability for allegedly violating the securities laws. Consequently, she
does not seek relief of the sort the Exchange Act’s scheme is designed to
provide, meaning that the “wholly collateral” factor weighs against
preclusion.
Second, Cochran’s removal power claim is outside the SEC’s
expertise. As in Free Enterprise Fund, there is no doubt that Cochran’s claim
presents only “standard questions of administrative law, which the courts are
at no disadvantage in answering.” 561 U.S. at 491. For example, her claim
does not depend on a special understanding of the securities industry. Contra
Thunder Basin, 510 U.S. at 214–15 (determining that the mine operator’s
NLRA challenge was within the Mine Commission’s expertise because it
rested on interpretation of the Mine Act’s posting requirement). Nor is there
any suggestion that the SEC is an experienced adjudicator of structural
constitutional issues. See Carr v. Saul, 141 S. Ct. 1352, 1360 (2021) (noting
that “agency adjudications are generally ill suited to address structural
constitutional challenges, which usually fall outside the adjudicators’ areas

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of technical expertise”). Thus, the “agency expertise” factor also weighs
against preclusion. 12
Third, the Exchange Act’s statutory-review scheme threatens to
deprive Cochran of the opportunity for meaningful judicial review. Thunder
Basin and Elgin both held that even if the agency was incapable of
adjudicating a constitutional claim, meaningful judicial review was still
available in the court of appeals. Thunder Basin, 510 U.S. at 215; Elgin, 567
U.S. at 17. Yet this rule cannot be absolute: even though § 78y similarly
provides for eventual court of appeals review, in Free Enterprise Fund, the
Supreme Court held that the accounting firm “could [not] meaningfully
pursue [its] constitutional claims.” 561 U.S. at 490. The key question is why
Free Enterprise Fund had an outcome different from those in Thunder Basin
and Elgin.
The answer is that the Thunder Basin and Elgin plaintiffs sought
substantive relief, while the Free Enterprise Fund accounting firm sought

12
Elgin is not to the contrary. There, the Court held that the employees’
constitutional challenge was not outside the expertise of the MSPB because there were non-
constitutional “threshold questions” that, once resolved, could “obviate the need to
address the constitutional challenge.” Elgin, 567 U.S. at 22–23. Here, the SEC might
similarly resolve the administrative proceedings in Cochran’s favor on a threshold
securities-law issue, rather than on the basis of her removal power challenge. But Cochran
is not similarly situated to the Elgin plaintiffs because she asserts that she will be harmed
by the very act of having to appear in proceedings before an ALJ who is unconstitutionally
insulated from the President’s removal power. Therefore, if the SEC were to decide
Cochran’s case in her favor on other grounds, it would be denying her any opportunity for
meaningful judicial review of her alleged source of harm. By contrast, in Elgin, the MSPB
could meaningfully review the employees’ source of harm—their terminations—without
reaching their constitutional challenges. Id. Consequently, Elgin does not alter our analysis
based on Free Enterprise Fund. See Axon Enter., 986 F.3d at 1186 (concluding that the
Federal Trade Commission lacked the expertise to adjudicate a removal power challenge
to its ALJs and explaining that Elgin “does not establish a broad rule that an agency can
always moot a claim by simply ruling for the party”).

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structural relief: while the mine operator in Thunder Basin ultimately desired
to avoid potential harm from third parties (the miners), 510 U.S. at 215, the
accounting firm in Free Enterprise Fund asserted that it was harmed by being
investigated by a constitutionally illegitimate agency, 561 U.S. at 490.
That is, the accounting firm in Free Enterprise Fund asserted that it was
harmed by the structure of the Exchange Act’s statutory-review scheme
itself. By contrast, in Thunder Basin, the Court determined that the mine
operator would face only “speculative” harm if it complied with the Mine
Act’s statutory-review scheme. 510 U.S. at 216–17. As for Elgin, if the MSPB
had granted those plaintiffs the substantive relief they sought—
reinstatement, backpay, and attorney’s fees—their harm would have been
fully redressed, and they would have had no basis to seek further review in
the court of appeals. 567 U.S. at 22. Accordingly, the structural nature of
the accounting firm’s claim explains the different results in Free Enterprise
Fund on the one hand and Thunder Basin and Elgin on the other.
To put it plainly: Free Enterprise Fund held that § 78y does not provide
an adequate possibility of meaningful judicial review for challenges to the
structure of the Exchange Act’s statutory-review scheme. Like the
accounting firm in Free Enterprise Fund, Cochran is challenging the
constitutional authority of her adjudicator. The Exchange Act’s statutory-
review scheme does not guarantee Cochran meaningful judicial review of her
claim because the enforcement proceedings will not necessarily result in a
final adverse order; as a final adverse order is a prerequisite for judicial review
under § 78y(a)(1), Cochran may thus be left unable to seek redress for the
injury of having to appear before the SEC. Consequently, “a finding of
preclusion could foreclose all meaningful judicial review.” Free Enter. Fund,
561 U.S. at 489 (quoting Thunder Basin, 510 U.S. at 212–13). Therefore, Free
Enterprise Fund itself as well as all three Thunder Basin factors indicate that

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we should presume that Congress did not intend to preclude district court
jurisdiction over Cochran’s removal power claim. 13
The SEC contends Cochran’s alleged harm is not irreparable, so it
urges us to disregard the possibility that Cochran may never get her day in
court. On this point, the SEC relies on FTC v. Standard Oil Co. of California,
in which the Supreme Court ordered the dismissal of a collateral attack on an
administrative enforcement proceeding before the Federal Trade
Commission (“FTC”). 449 U.S. 232, 234–37, 247 (1980). There, the Court
strongly rebuffed the plaintiff’s argument that it would suffer irreparable
harm if forced to undergo the administrative proceedings because “[m]ere
litigation expense, even substantial and unrecoupable cost, does not
constitute irreparable injury.” Id. at 244 (quoting Renegotiation Bd. v.
Bannercraft Clothing Co., 415 U.S. 1, 24 (1974)); see also id. (further explaining
that “the expense and annoyance of litigation is ‘part of the social burden of
living under government’” (quoting Petroleum Expl., Inc. v. Pub. Serv.
Comm’n, 304 U.S. 209, 222 (1938))).

13
Contrary to the SEC’s protestations, the Thunder Basin factors do not lend any
credibility to its argument that we should not follow Free Enterprise Fund because Cochran
is involved in an ongoing administrative enforcement proceeding. At bottom, the SEC’s
proffered distinction between pre- and para-enforcement challenges fails to explain the
implied preclusion holding in Thunder Basin. In that case, the mine operator sought an
injunction prior to any adverse order from the Secretary of Labor, meaning that there were
no ongoing proceedings at the time the case was filed. Thunder Basin, 510 U.S. at 205. If
the SEC’s interpretation of Free Enterprise Fund was right, then the operator in Thunder
Basin should have been able to proceed with at least its constitutional claims in federal
district court. But the Court barred the operator from proceeding with any of its claims.
Id. Hence, the rule the SEC is apparently proposing—that district court jurisdiction is
precluded once administrative proceedings begin but is not precluded prior to the initiation
of such proceedings—is untenable. By contrast, our analysis above—focusing on the relief
sought by the plaintiff—squares all three of the Supreme Court’s major precedents.

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By contrast, Cochran challenges the entire legitimacy of her
proceedings, not simply the cost and annoyance. Nevertheless, even
assuming arguendo that Cochran’s alleged harm is “mere litigation
expense,” we find this argument unpersuasive. Standard Oil did not concern
implied jurisdiction stripping; rather, the issue before the Court was whether
the FTC had taken a “final agency action” within the meaning of the
Administrative Procedure Act (“APA”), 5 U.S.C. § 704. 449 U.S. at 233,
238. Consequently, Standard Oil is irrelevant to our inquiry. 14
Further, although the threat of irreparable harm may justify pre-
enforcement judicial review under principles of equity, see Ex parte Young,
209 U.S. 123, 145–48 (1908), irreparable harm is not ordinarily required to
invoke a district court’s general § 1331 federal question jurisdiction. As the
SEC seems to concede, the Thunder Basin inquiry offers the only possible
path to determining that Cochran cannot rely on § 1331; on that inquiry, the
SEC loses so long as “a finding of preclusion could foreclose all meaningful
judicial review”—no irreparable harm is required. Free Enter. Fund, 561 U.S.
at 489 (emphasis added) (quoting Thunder Basin, 510 U.S. at 212–13). It
seems plain that if a plaintiff ends up without any avenue to having her claim
heard by a court, judicial review is foreclosed, regardless of whether the harm
she suffers is truly irreparable (as Cochran contends it is). To be sure, it is

14
We take no position regarding Standard Oil’s relevance to the questions of
(1) whether Cochran may rely on the APA’s cause of action; and (2) whether she is entitled
to a preliminary injunction. See 5 U.S.C. § 704 (limiting judicial review under the APA to
“[a]gency action made reviewable by statute and final agency action for which there is no
other adequate remedy in a court”); Janvey v. Alguire, 647 F.3d 585, 595 (5th Cir. 2011)
(noting that to obtain a preliminary injunction, a plaintiff “must establish . . . a substantial
threat of irreparable injury if the injunction is not issued” (quoting Byrum v. Landreth, 566
F.3d 442, 445 (5th Cir. 2009)); cf. Free Enter. Fund, 561 U.S. at 508, 513 (holding that the
PCAOB’s structure violated the Constitution, but nevertheless concluding that the
plaintiffs were not entitled to injunctive relief).

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possible that Cochran could ultimately wind her way through enforcement
proceedings and get some later chance at judicial review 15—but it is also
possible that she could never have that opportunity, and that is enough to
preserve district court jurisdiction. 16

15
At least one individual has successfully followed this path. See Pet. for Review,
Jarkesy v. SEC, No. 20-61007 (5th Cir. Nov. 2, 2020). In addition to Jarkesy, the dissenting
opinion cites three other cases in which litigants were able to raise separation-of-powers
claims in federal court after undergoing administrative proceedings. Dissenting Op. at 81–
82 (citing Lucia, 138 S. Ct. at 2049–50, NLRB v. Noel Canning, 573 U.S. 513, 520–21 (2014),
and Carr, 141 S. Ct. at 1356–58, 1362). But the fact that only a handful of litigants have
been successful in navigating the administrative process demonstrates how difficult that
process is—these cases are the exceptions that prove the rule, so to speak. Cf. Adam M.
Katz, Eventual Judicial Review, 118 Colum. L. Rev. 1139, 1153 (2018) (explaining that
because the SEC wins the “vast majority” of the cases it brings through administrative
proceedings, “the incentive to settle SEC enforcement actions is therefore paramount,
making it, practically speaking, extremely unlikely for defendants to . . . have the
opportunity to appear before a federal court”). It is the likelihood of success for the many
that concerns us; the question is whether delaying Cochran’s claims will deny her
meaningful judicial review, not any possibility of judicial review. Consequently, the cases
relied on by the dissenting opinion do not support affirmance.
16
The dissenting opinion asserts that, because cases like Lucia and Carr have
recognized a meaningful opportunity to bring post-enforcement Appointments Clause
challenges, and the injury Cochran would suffer from an enforcement proceeding presided
over by an unconstitutionally insulated ALJ is supposedly less “serious” than the injury
caused by an enforcement proceeding presided over by an unconstitutionally appointed
ALJ, Cochran must have a meaningful opportunity for post-enforcement judicial review of
her claim. Dissenting Op. at 83–84. In making this curious argument, the dissenting
opinion relies solely on the Supreme Court’s recent decision in Collins, which held that the
Director of the Federal Housing Finance Agency was unconstitutionally insulated from the
President’s removal power, but that this constitutional defect did not render the Director’s
acts “void.” 141 S. Ct. at 1787.
Collins does not impact our conclusion in this case because Cochran does not seek
to “void” the acts of any SEC official. Rather, she seeks an administrative adjudication
untainted by separation-of-powers violations. Although we will not engage in the
dissenting opinion’s efforts to weigh the relative severity of constitutional injuries,
Cochran’s injury is sufficiently serious to justify pre-enforcement review in federal court.
Moreover, the dissenting opinion seems to imply that, because a removal power
violation does not render an improperly insulated official’s acts void, Cochran would not

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The SEC’s final fallback position—that other statutory schemes will
be threatened if we permit structural challenges to the Exchange Act to be
brought in district court—fares no better. Specifically, the SEC asserts that
there are many administrative schemes similar to the Exchange Act’s and
that these schemes are equally vulnerable to separation-of-powers
challenges. Consequently, the SEC contends, if we carve out structural
challenges from what it views as the general rule of implied preclusion,
“every person hoping to enjoin an administrative proceeding [will be able to]
sue in district court to allege that the proceedings were unconstitutional,”
wreaking havoc across the Government’s operations. This is a “policy
consideration[] more properly addressed to Congress than to this Court.”
Reiter v. Sonotone Corp., 442 U.S. 330, 345 (1979). Such a consideration
surely “cannot govern our reading of the plain language” of § 1331 and § 78y.
Id.
In any event, there are four reasons that the approach we take today is
unlikely to be as disruptive as the SEC fears. First, this case presents only
the issue of whether the Exchange Act divested district court jurisdiction
over claims that SEC ALJs are unconstitutionally insulated from the
President’s removal power; our holding extends no further, and the result in
other cases, even those concerning similar statutory schemes and claims, may
be different. 17 Second, even if Congress did not divest jurisdiction, other

be entitled to any relief on post-enforcement review even if she prevailed on her removal
power claim. See Dissenting Op. at 84. If it were true that Cochran could not obtain any
post-enforcement relief, then Cochran’s only hope for meaningful judicial review would be
through the present lawsuit. Therefore, even under the dissenting opinion’s view,
Cochran’s removal power claim was properly before the district court.
17
The dissenting opinion asserts that we “make[] no effort” to delineate between
structural constitutional claims that go beyond the Exchange Act’s statutory-review
scheme and substantive securities claims that do not. See Dissenting Op. at 86 n.14. But it
is unnecessary to delineate between the two because our limited holding applies only to the

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doctrines, such as standing, ripeness, exhaustion, sovereign immunity, and
abstention, may prevent district courts from hearing challenges to ongoing
administrative enforcement proceedings. Third, to actually prevail on their
claims, plaintiffs must demonstrate that their arguments are meritorious, a
task that will only grow more difficult as more of these cases are resolved and
the Government accordingly adjusts its operations (or is ruled to already
comply with the Constitution).
Finally, as the Texas Public Policy Foundation notes as amicus curiae,
our court does not break new ground by allowing Cochran to challenge her
adjudicator at the outset of her case. “Since 1792, federal statutes have
compelled district judges to recuse themselves when they have an interest in
the suit . . . .” Liteky v. United States, 510 U.S. 540, 544 (1994). Congress
has since enacted statutes to expand judicial recusal requirements. 13D
Charles Alan Wright et al., Federal Practice and
Procedure § 3551 (3d ed. 2002) (citing 28 U.S.C. §§ 144, 455). These
statutes serve “to protect the parties’ basic right to a fair trial in a fair
tribunal.” Caperton v. A.T. Massey Coal Co., 556 U.S. 868, 887 (2009). They
also serve to prevent harm to the public’s confidence in these tribunals. In re
Sch. Asbestos Litig., 977 F.2d 764, 776 (3d Cir. 1992). Given that
disqualification disputes concern the basic integrity of a tribunal, they must
be resolved at the outset of the litigation. So “virtually every circuit” allows
parties to promptly challenge a judge’s decision not to recuse. Id. at 778
(collecting cases, including from our circuit); see, e.g., In re Chevron U.S.A.,
Inc., 121 F.3d 163, 165 (5th Cir. 1997) (noting that “mandamus is an

issue presented here—whether the Exchange Act divested district court jurisdiction over
claims that SEC ALJs are unconstitutionally protected from removal. Accordingly, our
decision will not bear on related statutory-review scheme challenges, including, as the
dissenting opinion notes, the issue of whether the Seventh Amendment requires a jury for
securities fraud cases being decided in agency proceedings.

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appropriate legal vehicle for challenging the denial of a disqualification
motion”). That does not create an undue hindrance to the judicial system,
and the same logic applies to the SEC’s administrative system.
To sum up, Cochran’s removal power claim is wholly collateral to the
Exchange Act’s statutory-review scheme, is outside the SEC’s expertise, and
might never receive judicial review if district court jurisdiction were
precluded. Therefore, the Thunder Basin inquiry simply reaffirms that Free
Enterprise Fund controls this case and that Cochran’s removal power claim is
within the district court’s jurisdiction.
B. Ripeness
We now turn to the SEC’s other argument for affirmance: a lack of
ripeness. Ripeness doctrine reflects “Article III limitations on judicial
power” and “prudential reasons for refusing to exercise jurisdiction.” Reno
v. Cath. Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993); see also Abbott Lab’ys v.
Gardner, 387 U.S. 136, 148 (1967) (explaining that the doctrine’s “basic
rationale is to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract disagreements”),
abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977). The
ripeness inquiry hinges on two factors: (1) “the fitness of the issues for
judicial decision”; and (2) “the hardship to the parties of withholding court
consideration.” Roark & Hardee LP v. City of Austin, 522 F.3d 533, 545 (5th
Cir. 2008) (quoting Monk v. Huston, 340 F.3d 279, 282 (5th Cir. 2003)).
Generally, issues are fit for judicial decision if “any remaining questions are
purely legal ones; conversely, a case is not ripe if further factual development
is required.” Id. However, some degree of hardship is always required to
establish ripeness. Id.
There is no dispute that Cochran’s removal power claim is a pure
issue of law, meaning that it is fit for judicial decision without any additional

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fact-finding. Further, if Cochran’s claim is meritorious, then withholding
judicial consideration would injure her by forcing her to litigate before an ALJ
who is unconstitutionally insulated from presidential control. See Stolt-
Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 670 n.2 (2010)
(determining that the petitioners had adequately demonstrated hardship
where withholding judicial review would have forced them to participate in
an arbitration proceeding that they alleged to be “ultra vires”); Sea-Land
Serv., Inc. v. Dep’t of Transp., 137 F.3d 640, 648 (D.C. Cir. 1998) (“The
concrete cost of an additional proceeding is a cognizable Article III injury.”).
Hence, both factors indicate that Cochran’s removal power claim is ripe.
In support of its argument that Cochran’s claim is not ripe, the SEC
principally relies on Energy Transfer Partners, L.P. v. FERC, 567 F.3d 134 (5th
Cir. 2009), and TOTAL Gas & Power North America, Inc. v. FERC, 859 F.3d
325 (5th Cir. 2017). As relevant here, in Energy Transfer Partners, a natural
gas company challenged the statutory authority of the Federal Energy
Regulatory Commission (“FERC”) to require it to participate in trial-type
enforcement proceedings before an ALJ. 567 F.3d at 137–38. TOTAL Gas
concerned a similar challenge to FERC administrative proceedings, including
a structural claim that FERC ALJs were unconstitutionally appointed.
859 F.3d at 334. In both cases, we concluded that the plaintiffs’ claims were
not ripe. Energy Transfer Partners, 567 F.3d at 146; TOTAL Gas, 859 F.3d at
339. Based on these cases, the SEC asserts that structural challenges to
ongoing administrative enforcement proceedings are not ripe until those
proceedings conclude.
Energy Transfer Partners and TOTAL Gas are both materially
distinguishable from this case. In Energy Transfer Partners, the plaintiff
sought judicial review of particular FERC orders, which we determined were
not sufficiently “final” so as to be susceptible to judicial review. 567 F.3d at
136, 139–44. By contrast, Cochran did not seek review of any particular SEC

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order; rather, she sought a declaration that SEC ALJs are unconstitutionally
insulated from the president’s removal power and an injunction barring the
SEC from continuing its administrative proceedings against her. Thus, the
concern in Energy Transfer Partners—the finality of agency action—is not
relevant to the issue of ripeness in this case.
Like Cochran, the TOTAL Gas plaintiffs sought a declaration that
FERC was precluded from conducting administrative enforcement
proceedings against them. 859 F.3d at 327. However, in that case, FERC
had not actually scheduled a hearing before an ALJ prior to the plaintiffs filing
suit. Id. at 336. Consequently, we held that the plaintiffs’ fear of being
subjected to a constitutionally defective proceeding was too speculative to
establish hardship for ripeness purposes. Id. at 337 (explaining that “whether
FERC ultimately takes actions that Total claims would violate its
constitutional rights rests on a series of contingencies and is not a certainty”).
As the SEC has already assigned Cochran’s case to an ALJ, her risk of
hardship is substantially more concrete than in TOTAL Gas. Therefore, we
hold that Cochran’s removal power challenge is ripe.
Accordingly, we AFFIRM the district court’s dismissal of Cochran’s
due process claim, REVERSE the dismissal of her removal power claim,
and REMAND for further proceedings consistent with this opinion.

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No. 19-10396

Andrew S. Oldham, Circuit Judge, joined by Smith, Willett,
Duncan, Engelhardt, and Wilson, Circuit Judges, concurring.

I agree with the majority that this case can be resolved based on the
statutory text in 28 U.S.C. § 1331 and 15 U.S.C. § 78y, along with Supreme
Court precedent interpreting those provisions. The dissent nonetheless looks
behind text and precedent to the purposes and policies of the Securities
Exchange Act of 1934. I disagree with the dissent for two principal reasons.
First, as should go without saying by now, “our inquiry begins with
the statutory text, and ends there as well if the text is unambiguous.” BedRoc
Ltd., LLC v. United States, 541 U.S. 176, 183 (2004). Here, the text is as
unambiguous as can be. Section 1331 creates jurisdiction, and § 78y strips
only part of it. The part that § 78y strips (as to “[a] person aggrieved by a
final order of the [SEC]”) undisputedly does not apply to Cochran. So
jurisdiction remains. And any conceivable dispute on that score is resolved
by Free Enterprise Fund v. Public Company Accounting Oversight Board, 561
U.S. 477 (2010). That should end this case.
Second, even if the dissent is correct to peer behind the text of § 78y,
what lurks back there is profoundly disturbing. Section 78y reflects the
thinking of men like Woodrow Wilson who argued that universal suffrage
would make the three branches of government ignorant, indolent, and
incapable of regulating modern affairs. Wilson’s solution? He wanted
administrative agencies to operate in a separate, anti-constitutional, and anti-
democratic space—free from pesky things like law and an increasingly
diverse electorate. One of Wilson’s acolytes, James Landis, was the SEC’s
founding father and drafted § 78y into the original Securities Exchange Act.
Landis hoped that the SEC could set upon Americans without interference
from courts—unless and until the SEC gave courts permission to review its

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work. That is obviously not how our government is supposed to work. And
in the Landisonian view, that’s precisely the point.
The balance of this opinion joins the dissent in considering “the 80-
plus year history of the SEC,” the purported policy “benefit[s] of agency
expertise,” and the supposed “efficiency” purpose of § 78y. Post, at 70, 90,
94 (Costa, J., dissenting). Part I explains the intellectual and statutory history
of § 78y. Part II explains Landis’s purposes and policy objectives. Then Part
III shows that § 78y falls short of Landis’s goal. It fails to give the SEC the
separate, anti-constitutional, and unaccountable space Landis wanted. And
all of this underscores why it’s important to interpret the words that
Congress enacted rather than the purposes Landis pursued. 1
I.
The separation of powers is the defining feature and virtue of our
Constitution. As James Madison wrote, “[t]he accumulation of all powers,
legislative, executive, and judiciary, in the same hands, whether of one, a few,
or many, and whether hereditary, self-appointed, or elective, may justly be
pronounced the very definition of tyranny.” The Federalist No. 47, at
301 (C. Rossiter ed. 1961). So the Founders separated the legislative,
executive, and judicial powers into three distinct branches and then balanced
them against one another. See The Federalist No. 51, at 321–23;
Bowsher v. Synar, 478 U.S. 714, 722 (1986) (“Even a cursory examination of
the Constitution reveals the influence of Montesquieu’s thesis that checks

1
I obviously do not think that any of my esteemed colleagues are sympathetic to
the profoundly anti-democratic views that motivated the SEC’s founding fathers. To the
contrary, I have the utmost respect for my colleagues, and I believe that all of us are
attempting to interpret the law as Congress wrote it and not as Landis imagined it. I also
believe, however, that we should take seriously the origins of § 78y rather than dismiss
them as a “screed.” Post, at 70 n.2 (Costa, J., dissenting).

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and balances were the foundation of a structure of government that would
protect liberty.”).
Wilson and Landis fundamentally disagreed with the Founders’
vision. Wilson and Landis thought the accumulation of all powers into one
set of hands was—far from a vice—a virtue. And they wanted those all-
powerful hands connected to an administrative agency, far away from the
three branches of government the Founders worked so hard to create,
separate, and balance. And most of all, Wilson and Landis wanted power as
far away from democracy and universal suffrage as possible.
A.
Woodrow Wilson derived his political theories from German
historicism. See Ronald J. Pestritto, Woodrow Wilson and
the Roots of Modern Liberalism 14 (2005); Philip
Hamburger, Is Administrative Law Unlawful? 458 (2014). In
1883, Wilson began his doctoral studies in history and government at Johns
Hopkins, where he studied under professors who had themselves been
educated in Germany—most notably, Richard T. Ely and Herbert Baxter
Adams, who both studied at the University of Heidelberg under Johann K.
Bluntschli, a renowned Hegelian state theorist. Pestritto, supra, at 8, 18.
These German historicists considered history an evolutionary process. See
id. at 9, 14 (citing Joseph Dorfman, The Role of the German Historical School in
American Economic Thought, 45 Am. Econ. Rev. 17 (1955)). They viewed
history as “a progression of . . . epochs,” through which each age’s “spirit”
becomes more advanced than the one preceding it. Id. at 15. “More advanced
historical spirits replace inferior ones through a dialectical process, where
progress is the result of great clashes, conflicts, and struggles.” Ibid. (citing
G.W.F. Hegel, The Philosophy of History 17–18 (J. Sibree

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trans., Dover Publ’ns 1956)). 2 “[H]istoricism has a particular future in mind,
and progress is all about reaching it.” Id. at 16.
In Wilson’s view, administration was key to reaching his idealized
future. Wilson lamented that “[u]p to [his] own day all the political writers
. . . had thought, argued, dogmatized only about the constitution of
government; about the nature of the state, the essence and seat of
sovereignty, popular power and kingly prerogative; about the greatest
meanings lying at the heart of government; and the high ends set before the
purpose of government by man’s nature and man’s aims.” Woodrow Wilson,
The Study of Administration, 2 Pol. Sci. Q. 197, 198 (1887). Back when the
nation was founded, he wrote, “[t]he functions of government were simple,
because life itself was simple.” Id. at 199. But things were different now: The
“difficulties of governmental action” in the modern era required a new
“science of administration which shall seek to straighten the paths of
government, . . . [and] strengthen and purify its organization.” Id. at 200–01.
Wilson lauded Europe for embracing this new science and chided
America for supposedly staying stuck in the past. The study of
administration, Wilson noted, “is a foreign science, speaking very little of the
language of English or American principle. It employs only foreign tongues;
it utters none but what are to our minds alien ideas.” Id. at 202. Though
Wilson appeared to recognize the implications of adopting German political
principles, he tried to reassure liberty-minded readers that administration
could be “Americanize[d].” Ibid. As Wilson put it:
If I see a murderous fellow sharpening a knife cleverly, I can
borrow his way of sharpening the knife without borrowing his

2
Hegel, like Wilson, held outrageous views on race. Hegel’s dialectic depended in
part on “advanced races” clashing with “inferior ones” and then either “defeating them”
“or assimilating them.” Pestritto, supra, at 15.

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probable intention to commit murder with it; and so, if I see a
monarchist dyed in the wool managing a public bureau well, I
can learn his business methods without changing one of my
republican spots. . . . We can thus scrutinize the anatomy of
foreign governments without fear of getting any of their
diseases into our veins; dissect alien systems without
apprehension of blood poisoning.
Id. at 220.
Notwithstanding his reassurance that German political principles
could be Americanized, Wilson elsewhere made clear that he would scrap the
Constitution if he could. One of his most notable departures from the
Constitution was his distaste for democracy and popular sovereignty—
especially after the document was amended to allow for an increasingly
diverse electorate. See Perez v. Mortgage Bankers Ass’n, 575 U.S. 92, 129 n.6
(2015) (Thomas, J., concurring in the judgment) (crediting Wilson’s “deep
disdain for the theory of popular sovereignty” as contributing to the
Progressive Era’s “move from the individualism that had long characterized
American society to the concept of a society organized for collective
action”); Hamburger, supra, at 371 n.e (noting that Wilson despised
democracy and described it as “a stage of development” that had to be left
behind).
During his early career—including his time at Johns Hopkins—
Wilson “complained bitterly about the ills of universal suffrage.”
Pestritto, supra, at 201. In his notes on English historian John Richard
Green, Wilson rhetorically questioned:
Is the principle of universal suffrage for instance consistent
with those principles of government which bear the sanction of
the wisest Englishmen of eight centuries and which have
secured personal freedom and political liberty to a great nation

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for more than eight hundred years? Is it necessary or even
compatible with the healthy operation of a free government?
Woodrow Wilson, Marginal Notes on John Richard Green, in 1 The Papers
of Woodrow Wilson 388 (Arthur S. Link ed., 1966). One entry in his
diary—which stated that “universal suffrage is at the foundation of every evil
in this country”—indicates that Wilson had answered his own questions:
“no” and “no.” Woodrow Wilson, Shorthand Diary, in 1 Papers, supra, at
143. And these views didn’t stay on the pages of his private papers. He also
included them in his seminal work on administration:

Even if we had clear insight into all the political past, and could
form out of perfectly instructed heads a few steady, infallible,
placidly wise maxims of government into which all sound
political doctrine would be ultimately resolvable, would the
country act on them? That is the question. The bulk of
mankind is rigidly unphilosophical, and nowadays the bulk of
mankind votes. A truth must become not only plain but also
commonplace before it will be seen by the people who go to
their work very early in the morning; and not to act upon it
must involve great and pinching inconveniences before these
same people will make up their minds to act upon it.
And where is this unphilosophical bulk of mankind more
multifarious in its composition than in the United States? To
know the public mind of this country, one must know the mind,
not of Americans of the older stocks only, but also of Irishmen,
of Germans, of negroes. In order to get a footing for new
doctrine, one must influence minds cast in every mould of race,
minds inheriting every bias of environment, warped by the
histories of a score of different nations, warmed or chilled,
closed or expanded by almost every climate of the globe.
Wilson, The Study of Administration, supra, at 209. And though Wilson
“dropped his overt opposition to universal suffrage as he matured,” even his

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post-presidency works remained steeped in racism. Pestritto, supra, at
202; see, e.g., Woodrow Wilson, The State 17, 20 (1918)
(contrasting “progressive races” and “stagnated nationalities”). 3

Wilson’s concern with democracy was that it “assume[s] a
discriminating judgment and a fullness of information on the part of the
people touching questions of public policy.” Wilson, The State, supra,
at 305. But because he believed people “do not often possess” such
judgment, ibid., Wilson concluded that “[t]he people should not govern; they
should elect the governors: and these governors should be elected for periods
long enough to give time for policies not too heedful of transient breezes of
public opinion,” Woodrow Wilson, Notes for “The Philosophy of Politics”, in
9 Papers, supra, at 132; but see Perez, 575 U.S. at 129 n.6 (Thomas, J.,
concurring in the judgment) (“In President Wilson’s view, public criticism
would be beneficial in the formation of overall policy, but ‘a clumsy nuisance’
in the daily life of Government—‘a rustic handling delicate machinery.’”
(quoting Wilson, The Study of Administration, supra, at 215)). And if a
government official must consult the public, he should have to hear only
“those who hit upon opinions fit to be made prevalent, and have the capacity
to make them so.” Woodrow Wilson, Democracy, in 7 Papers, supra, at 355.

3
Some believe Wilson’s views were based on his upbringing in the Confederate
South. See, e.g., Dan McLaughlin, The Confederate Roots of the Administrative State,
National Review (July 30, 2020) (“Bureaucratic, unelected, managerial government
in America had a surprising birthplace: the Confederate States of America. It would
ultimately be imported into the theory and practice of the federal government by a son of
the Confederacy: Woodrow Wilson.”). Others trace his opinions to German historicism.
See, e.g., Pestritto, supra, at 44 (“Wilson’s racism lies at a much more fundamental
level than mere prejudice. For him, some races are advanced historically and others are
backward; the best thing that can happen to the inferior races and peoples is to be defeated
and assimilated by their historical superiors.”); see also supra n.2 (recounting Hegel’s view
of slavery).

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In Wilson’s mind, most modern Americans didn’t meet that standard. See
Hamburger, supra, at 370–71 (describing Wilson’s classism and his view
that administration had the virtue of insulating elite power from popular
politics).
Wilson ran into an obvious problem: The Constitution affirmatively
prohibited the anti-democratic administrative system he wanted. Wilson saw
the separation of powers and the Founders’ system of checks and balances as
two of the Constitution’s chief defects. While at Johns Hopkins, Wilson
wrote:
It is . . . manifestly a radical defect in our federal system that it
parcels out power and confuses responsibility as it does. The
main purpose of the Convention of 1787 seems to have been to
accomplish this grievous mistake. The “literary theory” of
checks and balances is simply a consistent account of what our
constitution-makers tried to do; and those checks and balances
have proved mischievous just to the extent to which they have
succeeded in establishing themselves as realities. It is quite safe
to say that were it possible to call together again the members
of that wonderful Convention to view the work of their hands
in the light of the century that has tested it, they would be the
first to admit that the only fruit of dividing power had been to
make it irresponsible.
Woodrow Wilson, Congressional Government: A Study
in American Politics 187 (1885). Like democracy, Wilson thought
such structural limitations on power were unnecessary and even
incompatible with a functional government. In Wilson’s view: “No living
thing can have its organs offset against each other, as checks, and live.”
Woodrow Wilson, The New Freedom 47 (1913).

Wilson’s primary criticism of the separation of powers was that it
made government inflexible and inefficient. See Pestritto, supra, at 5

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(“Each of these features, to Wilson’s mind, made American government
inflexible and incapable of adjustment to necessary historical change.”). And
a government that was inflexible and inefficient could only trudge—not
sprint—toward progress:
It was the separation of powers that, among all of the objects of
Wilson’s criticism in the founders’ Constitution, caused him
the greatest distress and occupied much of his attention. For
Wilson, the separation of powers, and all of the other
institutional remedies that the founders employed against the
danger of faction, stood in the way of government’s exercising
its power in accord with the dictates of progress.
Id. at 6. For Wilson, that simply would not do.
Wilson therefore set out his own anti-constitutional vision in The
Study of Administration. “Judging by the constitutional histories of the chief
nations of the modern world,” Wilson believed there were “three periods of
growth through which government has passed in all the most highly
developed of existing systems.” Wilson, The Study of Administration, supra,
at 204. Nations begin in the period of “absolute rulers, and of an
administrative system adapted to absolute rule.” Ibid. As they progress, they
reach the second period, “that in which constitutions are framed to do away
with absolute rulers and substitute popular control, in which administration
is neglected for these higher concerns.” Ibid. And finally, they reach a level
of sophistication “in which the sovereign people undertake to develop
administration under this new constitution which has brought them into
power.” Ibid. Wilson was ready to lead America past its own Constitution
and into the third period “under this new constitution.” Ibid.
Wilson’s “new constitution” would ditch the Founders’ tripartite
system and their checks and balances for a “more efficient separation of
politics and administration, which w[ould] enable the bureaucracy to tend to

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the details of administering progress without being encumbered by the
inefficiencies of politics.” Pestritto, supra, at 227. The “political” sector
would encompass the three constitutional branches, while the
“administration” sector would operate independently. Wilson’s goal was to
completely separate “the province of constitutional law” from “the province
of administrative function.” Hamburger, supra, at 464.
Within this new dichotomy, the emphasis in government would shift
to administration. This newly conceptualized government—with a new
administrative “branch”—would “see[] to the daily rulemaking and
regulation of public life.” Pestritto, supra, at 165 (citing Woodrow
Wilson, Constitutional Government in the United
States 82–85 (1908)). “Administration, after all, is properly the province
of scientific experts in the bureaucracy; the experts’ competence in the
specific technological means required to achieve those ends on which we are
all agreed gives them the authority to administer or regulate progress,
unhindered by the realm of politics.” Id. at 127–28.
That of course required concomitant changes to the three branches of
constitutional government. And rather than amend the Constitution to
accomplish his purposes, Wilson thought it would be far more efficient to
simply command the three branches to submit. In Wilson’s view, Congress
must “understand its appropriate role in modern times.” Id. at 136.
Specifically, it must “abandon its stubborn insistence on its constitutionally
defined duty to legislate” and “cede[] rulemaking authority to the
bureaucracy.” Ibid. Only then could Congress step into its new role in
“oversee[ing] this function, not . . . attempt[ing] to carry it out itself.” Id. at
165.
The same was true of the President. In Wilson’s view, a modern
President must “look beyond his role as it is defined in the Constitution.” Id.

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at 168. The modern president should be focused on connecting to the public
and coordinating the government’s activities to the end of progress.
So too with the courts. Wilson subscribed to Bagehot’s theory of a “living
constitution,” and he believed that judges should “reflect what it is that each
generation wants out of government, and not [remain] stuck on an outdated
understanding of the purpose and role of government.” Id. at 115–17. “[T]he
members of the courts are necessarily men of their own generation,” and
Wilson “would not wish to have them men from another.” Wilson,
Constitutional Government, supra, at 185, 193.
B.
In the 1930s, President Franklin D. Roosevelt, James Landis, and their
fellow progressives picked up where Wilson had left off. “Reflecting th[e]
belief that bureaucrats might more effectively govern the country than the
American people, the progressives ushered in significant expansions of the
administrative state, ultimately culminating in the New Deal.” Perez, 575
U.S. at 129 n.6 (Thomas, J., concurring in the judgment).
One of Roosevelt’s most pressing progressive projects was securities
reform—an issue of debate since the 1907 stock market crash, which came
back into the spotlight after the 1929 market crash and the Depression.
During his presidential campaign, Roosevelt’s platform “advocated
‘regulation to the full extent of federal power, of . . . exchanges in securities
and commodities.’” Steve Thel, The Original Conception of Section 10(b) of the
Securities Exchange Act, 42 Stan. L. Rev. 385, 414 (1990) (quoting 7
History of American Presidential Elections 2742–43 (A.
Schlesinger, Jr. ed. 1985)).
“The process of transforming Roosevelt’s securities policy into a bill
began within hours of Roosevelt’s election.” Joel Seligman, The
Transformation of Wall Street 50 (1982). Roosevelt’s advisor,

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Felix Frankfurter, “looked to assemble a team to assist the new
administration in crafting a plan to implement the goals on which Roosevelt
had campaigned.” Ronald J. Pestritto, The Progressive Origins of the
Administrative State, 24 Soc. Phil. & Pol’y 16, 26 (2007). Frankfurter’s
team included Landis—his junior colleague at Harvard Law School—and
several other up-and-comers in the field of administrative law. Ibid. “[T]he
bill that became the Securities Act of 1933 was drafted over a weekend by
James Landis, Benjamin Cohen, and Thomas Corcoran, who were perhaps
aided by an excess of Scotch.” Cynthia A. Williams, The Securities and
Exchange Commission and Corporate Social Transparency, 112 Harv. L.
Rev. 1197, 1227 (1999) (citing Larry D. Soderquist & Theresa A.
Gabaldon, Securities Law 12 (1998) (discussing the legend that the
rushed Act was drafted over a case of Scotch)). Congress vested enforcement
of the 1933 Act in the newly created Federal Trade Commission—and
confirmed Landis as one of its inaugural Commissioners.
The next year, in 1934, Roosevelt decided to go further. And whom
did Roosevelt tap to lead the effort? Landis, of course. See Karl Shumpei
Okamoto, Rereading Section 16(B) of the Securities Exchange Act, 27 Ga. L.
Rev. 183, 229 n.153 (1992) (describing Landis as “the principal architect of
the [1934] Exchange Act”). Landis’s first draft of the bill contained a judicial-
review provision that is virtually identical to the one Congress enacted in
1934 and that continues to exist in § 78y today. Section 23(a) of Landis’s draft
provided in full:
Any person aggrieved by an order of the Commission may
obtain a review of such order in the Circuit Court of Appeals of
the United States, with any circuit wherein such person resides
or has his principal place of business, or in the Court of Appeals
of the District of Columbia, by filing in such court, within sixty
days after the entry of such order, a written petition praying
that the order of the Commission be modified or be set aside in

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whole or in part. A copy of such petition shall be forthwith
served upon the Commission, and thereupon the Commission
shall certify and file in the court a transcript of the record upon
which the order complained of was entered. No objection to the
order of the Commission shall be considered by the court
unless such objection shall have been urged before the
Commission. The finding of the Commission as to the facts, if
supported by evidence, shall be conclusive. If either party shall
apply to the court for leave to adduce additional evidence, and
shall show to the satisfaction of the court that such additional
evidence is material and that there were reasonable grounds for
failure to adduce such evidence the hearing before the
Commission, the court may order such additional evidence to
be taken before the Commission and to be adduced upon the
hearing in such manner and upon such terms and conditions as
to the court may seem proper. The Commission may modify
its findings as to the facts, by reason of the additional evidence
so taken, and it shall file such modified or new findings, which,
if supported by evidence, shall be conclusive, and its
recommendation, if any, for the modification or setting aside of
the original order. The jurisdiction of the court shall be
exclusive and its judgment an decree, affirming, modifying, or
setting side, in whole or in part, any order of the Commission,
shall be final, subject to review by the Supreme Court of the
United States upon certiorari or certification as provided in
sections 23 and 240 of the Judicial Code as amended (U.S.C.
title 28, secs. 346 and 347).
H.R. 7852, 73d Cong. § 23(a) (1934).
Roosevelt reviewed Landis’s draft bill, and he recommended it go
straight to Congress. Thel, supra, at 424–25. When the bill reached the
House Committee on Interstate and Foreign Commerce, Landis was the first
witness to testify. Id. at 395 n.39. And Landis told Congress that, naturally,
he and his agency would be perfect for enforcing the new 1934 Act: “The
Federal Trade Commission, I think, can be credited with efficiency in

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operation, a tradition of true service, and one of integrity; all qualities
demanded by an act of this type, and for that reason, the Commission itself,
I think, feels that it would like to undertake an activity of this type.” Stock
Exchange Regulation: Hearing on H.R. 7852 and H.R. 8720 Before the H. Comm.
on Interstate and Foreign Commerce, 73d Cong. 23 (1934) (statement of James
M. Landis, Commissioner, Federal Trade Commission). Congress reached a
sort of compromise. It adopted Landis’s bill—including the provision that
today appears in § 78y; rejected his request to make the FTC responsible for
enforcing it; but then confirmed Landis to lead the new agency (the Securities
and Exchange Commission) it created to enforce the 1934 Act. See Securities
Exchange Act of 1934, Pub. L. No. 73-291, § 25(a), 48 Stat. 881, 901–02;
Erwin N. Griswold, James McCauley Landis—1899-1964, 78 Harv. L.
Rev. 313, 314 (1964).
II.
The dissent makes much of the purposes behind the 1934 Act—
including the so-called “investigation/enforcement distinction,” the
importance of agency expertise, and the SEC’s purported need to complete
its work without judicial oversight. Obviously, none of this is in the text of the
Act itself.
It’s true, however, that these purposivist concepts date back to
Landis. Landis was convinced that bureaucrats had a monopoly on
governmental wisdom and that their critics were simply too stupid to
understand it. For example, Landis thought it “[s]omewhat hysterical[]”
that some derogatorily labeled the administrative state as the “fourth
branch” of government. James M. Landis, The Administrative
Process 47 (1938). He viewed the condemnation of the fourth branch as
superstitious—based “upon the mystical hypothesis that the number ‘four’
bespeaks evil or waste as contrasted with some beneficence emanating from

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the number ‘three.’” Ibid. And he chided these critics as being hindered by
“a too casual reading of constitutional history.” Ibid.
Landis took particular umbrage at criticisms from the judiciary. Judges
who failed to appreciate the SEC’s efforts were as ignorant as Americans
guided by numerology. And that’s why Landis did not trust courts to review
the SEC’s work. To the contrary, Landis wanted agencies to do the courts’
work.
A.
In The Administrative Process, Landis described the SEC’s process for
investigating potentially fraudulent statements included in a securities
registration form. See id. at 136–37. When a registrant filed a statement
including seemingly fraudulent statements, the SEC would begin “[a] quiet
investigation into the facts.” Id. at 137. If the investigation led the SEC to
believe there was in fact fraud, the agency would impose a stop order against
the registrant. Ibid. To avoid public attention and the pain of such
proceedings, registrants would often try to withdraw their registration
statements. Ibid. Landis did not think the SEC’s targets should get off so
easily, however. So the SEC promulgated a rule that disallowed registrants
from withdrawing their registration statements without the Commission’s
consent. Ibid. And pursuant to that rule, the SEC would deny its consent and
force registrants to defend themselves before the Commission—even after
the registrants stated that they did not want to defend themselves or their
statements. Ibid.
One such registrant challenged the rule and the SEC’s enforcement
practices. See Jones v. SEC, 298 U.S. 1 (1936). The petitioner asked the
Court: (1) whether the SEC could deny a request to withdraw a registration
statement, see id. at 18–25; and if so, (2) whether the SEC had the authority

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to interrogate the registrant about allegedly fraudulent propositions in his
registration statement after it had been withdrawn, see id. at 25–29.
In a stinging rebuke of the SEC, the Court answered each question
with an emphatic “no.” The Court concluded that “[t]he act contains no
provision upon the subject; and it may not be construed as attempting to
confer upon the commission an arbitrary power, under rule or otherwise, to
deny, without reason, a motion to dismiss.” Id. at 19. Not only was the Act
silent—the Court was also “unable to find any precedent for the assumption
of such power on the part of an administrative body.” Ibid. And, of course,
“at least in the absence of a statute to the contrary, the power of a
commission to refuse to dismiss a proceeding on motion of the one who
instituted it cannot be greater than the power which may be exercised by the
judicial tribunals of the land under similar circumstances.” Ibid. Given the
general rule for the federal courts—“that a plaintiff possesses the unqualified
right to dismiss his complaint at law or his bill in equity unless some plain
legal prejudice will result to the defendant other than the mere prospect of a
second litigation upon the subject matter”—the SEC would need to show
prejudice. Ibid. That it could not do. Id. at 22 (“We are unable to find
anything in the record, the arguments of the commission, or the decision of
the court below that suggests the possibility of any prejudice to the public or
investors beyond the assumption . . . that an unlimited privilege of withdrawal
would have the effect of allowing registrants whose statements are defective,
to withdraw before a stop order was issued and then to submit another
statement with slight changes.” (quotation omitted)).
The Court could have concluded there. But instead, it proceeded to
explain the danger of adopting the SEC’s argument to the contrary:
The action of the commission finds no support in right
principle or in law. It is wholly unreasonable and arbitrary. It
violates the cardinal precept upon which the constitutional

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safeguards of personal liberty ultimately rest—that this shall be
a government of laws—because to the precise extent that the
mere will of an official or an official body is permitted to take
the place of allowable official discretion or to supplant the
standing law as a rule of human conduct, the government
ceases to be one of laws and becomes an autocracy. Against the
threat of such a contingency the courts have always been
vigilant, and, if they are to perform their constitutional duties
in the future, must never cease to be vigilant, to detect and turn
aside the danger at its beginning.
Id. at 23–24. If administrative agencies “are permitted gradually to extend
their powers by encroachments—even petty encroachments—upon the
fundamental right, privileges and immunities of the people,” the Court
warned that “we shall in the end, while avoiding the fatal consequences of a
supreme autocracy, become submerged by a multitude of minor invasions of
personal rights, less destructive but no less violative of constitutional
guaranties.” Id. at 24–25.
Having determined that the registrant was entitled to withdraw his
registration statement, the Court continued to consider whether the SEC
may nevertheless interrogate him. See id. at 25. Given the reason for the stop
order had disappeared, the Court concluded that there was no longer any
basis to hail the registrant before the tribunal. Ibid. To require his presence
without reason, the Court stated, would lead to a mere “‘fishing expedition
. . . for the chance that something discreditable might turn up’—an
undertaking which uniformly has met with judicial condemnation.” Id. at 26
(alteration in original) (quoting Ellis v. Interstate Commerce Comm’n, 237 U.S.
434, 445 (1915)). And “[t]he fear that some malefactor may go unwhipped of
justice weighs as nothing against this just and strong condemnation of a
practice so odious.” Id. at 27.

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What’s more, there was no reason for the agency to insist upon its own
adjudication in the first place. The Constitution anticipated violations such
as fraud, and it instituted both a tribunal and proper procedures to review
such allegations: “The federal courts are open to the government; and the
grand jury abides as the appropriate constitutional medium for the
preliminary investigation of crime and the presentment of the accused for
trial.” Id. at 27. An investigation that disregards Article III and the Fifth
Amendment “is unlawful in its inception and cannot be made lawful by what
it may bring, or by what it actually succeeds in bringing, to light.” Ibid.; see
also id. at 26–28 (citing In re Pac. Ry. Comm’n, 32 F. 241 (N.D. Cal. 1887)
(Field, J.) (prohibiting unlawful inquisitorial investigations); Boyd v. United
States, 116 U.S. 616 (1886) (prohibiting compulsory self-accusation); Entick
v. Carrington, 19 How. St. Tr. 1030 (1765) (prohibiting unlawful searches and
seizures)). Allowing such investigations would bring back “those intolerable
abuses of the Star Chamber, which brought that institution to an end at the
hands of the Long Parliament in 1640.” Id. at 28. Based on that brooding risk,
the Court concluded, “[e]ven the shortest step in the direction of curtailing
[individual] rights must be halted in limine, lest it serve as a precedent for
further advances in the same direction, or for wrongful invasions of the
others.” Ibid.
Landis stated that he was “startle[d]” by the Court’s stinging rebuke
of his brainchild. Landis, supra, at 138. Had the Court stopped after
concluding that the SEC should have allowed the registrant to withdraw his
registration statement, Landis said, “one might have regretted its conclusion
as weighting the scales in favor of fraudulent promoters, but that would have
been all.” Ibid. Instead, the Court went on to compare the SEC to the Star
Chamber:
Such an outburst indicates that one is in a field where calm
judicial temper has fled. Deep feelings underlie this unguarded

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language of Mr. Justice Sutherland. They underlie, too, the
suggestion by the Chief Justice that the administrative is prone
to abuse the powers intrusted it. . . . If it is fair to apply the legal
rule that one intends the natural and probable consequences of
his acts, certainly the effect if not the purpose was to breed
distrust of the administrative.
Id. at 139–40.

Landis was deeply frustrated by the Jones Court’s rhetoric. In
Landis’s view, the Court’s reaction to the SEC’s efforts could be explained
only by the judiciary’s inability to understand his wisdom. And that judicial
ignorance spilled over to the public, again to Landis’s chagrin. Following the
Court’s decision in Jones, “every effort [by the SEC] to deal with fraudulent
promoters was met by the accusation that Star Chamber tactics were being
employed.” Id. at 140. Thus Landis lamented that America’s profoundly
ignorant people, “who have neither time nor the ability to grasp the precise
issue involved by a particular case,” understood the SEC’s “administrative
action as arbitrary and violative of ancient rights and privileges.” Ibid. That
was the judiciary’s fault—not the SEC’s.

B.
Landis convinced himself that administrative agencies were superior
to courts in every relevant way. See id. at 95–97 (arguing the judiciary’s role
should be “committed to the administrative for protection”). Landis
presented several reasons for the supposed superiority. For one, agency
adjudications were more efficient than court cases. See id. at 19 (“The
decisions of those [administrative] authorities which exercise judicial powers
are said to be several times as numerous as the recorded decisions of all the
Federal judicial courts.” (quotation omitted)). As another, their standards
and procedures were more practical. See id. at 49–50 (“Its bending of judicial
doctrine and procedure to realistic curvatures tends sometimes to offend the

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courts that supervise its activities.”). And of course, they were much more
modern. See id. at 96–97 (“Judicial interpretation suffered not only from
inexpertness but more from the slowness of that process to attune itself to
the demands of the day.”).
But above all, Landis emphasized, administrative agencies were
staffed by experts—unlike the common lawyers who served in the Third
Branch. Judges were “jacks-of-all-trades and masters of none” due to their
“breadth of jurisdiction and freedom of disposition.” Id. at 31. And if there’s
anything worse than a judge who’s unaware of his own “inadequacies,” id.
at 123, it’s a judge who’s both inadequate and prideful. “We must
remember,” Landis told his readers, “until a comparatively short time ago
Anglo-American government was essentially government by judges.” Id. at
135. “That class . . . had pride in its handiwork,” he continued, “[b]ut the
claim to pride tends, especially in the hands of lesser men, to be a boast of
perfection.” Ibid. Secretly insecure about their “lesser vision,” the judges
“claim[ed] Delphic powers, and rest[ed] the learning of the law upon an
affinity with deep and mysterious principles of justice that none but itself can
grasp.” Ibid. Hearing “any criticism of its inadequacies, any suggestion as to
its biases,” the judiciary developed a “[d]eep resentment” toward the expert
administrators. Ibid. “To admit to the dispensation of justice other
individuals, no matter how wise, who are not bound by the older disciplines,
[wa]s regarded by horror.” Ibid.
Landis’s solution to this problem was the same as Wilson’s: eliminate
or at least minimize the role of courts in our constitutional system.
Obviously, it would be best to eliminate the courts altogether. Otherwise,
“lodg[ing] a great, interpretive power in the judiciary involved the risk that a
policy, which initially was given to the administrative to formulate, might be
thwarted at its most significant fulcrum by judgments antagonistic to its
own.” Id. at 97. It would be far better, in Landis’s view, that the SEC could

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simply interrogate its targets ad infinitum—without the Jones Court ever
getting the right to interfere.
But if courts simply must be part of our constitutional order, Landis
said, their role must be minimized as far as possible. Landis disputed the idea
that all administrative action must be judicially reviewable. Id. at 124. Rather,
courts should be confined to determining little things—like “the regularity
of the procedure employed by the administrative” agency. Ibid. And Landis
was heartened by the Interwar Congresses, which tended “to decrease rather
than to increase the power of judges to impose checks upon the exercise of
administrative power.” Id. at 100.
III.
While it’s clear that Landis wanted to fully insulate his brainchild agency
against judicial oversight, it’s equally clear that the text passed by Congress
and signed by the President did not accomplish that purpose. As the Supreme
Court recently reminded us:
Efforts to ascribe unenacted purposes and objectives to a
federal statute face many of the same challenges as inquiries
into state legislative intent. Trying to discern what motivates
legislators individually and collectively invites speculation and
risks overlooking the reality that individual Members of
Congress often pursue multiple and competing purposes, many
of which are compromised to secure a law’s passage and few of
which are fully realized in the final product.
Va. Uranium, Inc. v. Warren, 139 S. Ct. 1894, 1907–08 (2019); see also
Rodriguez v. United States, 480 U.S. 522, 525–26 (1987) (per curiam) (“[N]o
legislation pursues its purposes at all costs.”).
In this case, however, both the dissent and the SEC would have us
read § 78y to accomplish Landis’s wildest dreams. The SEC’s litigation
position is a combination of “trust us, we’re the experts” and “there will be

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time for judicial review when we’re good and ready, thank you.” And the
dissent insists that our rejection of that position will “inject[] federal courts
into sensitive interbranch disputes.” Post, at 95 (Costa, J., dissenting). I
respectfully disagree with the SEC and the dissent, for all the reasons given
in the majority opinion. Here I merely respond to the dissent’s three principal
arguments to underscore our conclusion that the words in § 78y enacted by
Congress—as opposed to the unenacted purposes that motivated Landis—
do not strip jurisdiction over Cochran’s removal claim. 4
A.
The dissent breaks from the majority most sharply by distinguishing
this case from the Supreme Court’s materially identical case, Free Enterprise.
Though both cases involve plaintiffs challenging the removability of the SEC
adjudicators overseeing their respective administrative proceedings, the

4
Remarkably, Cochran’s removal claim is also connected to Wilson and Landis.
President Wilson and Louis Brandeis became friends during Wilson’s 1912 presidential
campaign. See G. Edward White, Allocating Power Between Agencies and Courts: The Legacy
of Justice Brandeis, 1974 Duke L.J. 195, 205 (1974). Brandeis then participated in drafting
the FTC’s organic statute. Ibid. Then, during the Supreme Court’s 1925–26 Term,
Brandeis’s law clerk was none other than—you guessed it, Landis. And in that Term, the
Court heard Myers v. United States, 272 U.S. 52 (1926)—the canonical removal-power
decision by Chief Justice Taft, which held that the President has the exclusive power to
remove executive officers. Brandeis, of course, dissented. “Both Landis and Brandeis
recognized the threat that this ruling posed to the development of a modern administrative
apparatus with significant discretionary powers and independence from the realm of
politics, and thus Landis worked closely on his Myers dissent.” Pestritto, Progressive
Origins, supra, at 30–31. Then, ironically, it was Landis who convinced Roosevelt that he
had constitutional power to remove William E. Humphrey from his position at the FTC—
thus giving rise to the landmark decision in Humphrey’s Executor v. United States, 295 U.S.
602 (1935), which limited Myers and largely vindicated the Brandeis dissent. Although
Roosevelt followed Landis’s advice and lost Humphrey’s Executor, Landis was “quite
pleased” with the result. Pestritto, Progressive Origins, supra, at 31. “[T]he defeat for the
president was meaningless in comparison with the great independence for administrators
that the Humphrey’s decision helped to secure.” Ibid.

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dissent says Free Enterprise (which involved a pending SEC investigative
proceeding) doesn’t apply in a case like Cochran’s (which involves a pending
SEC enforcement proceeding). See post, at 83–88 (Costa, J., dissenting). Our
sister circuits have made the same distinction. See, e.g., Hill v. SEC, 825 F.3d
1236, 1248 (11th Cir. 2016) (finding the district court lacked jurisdiction
because “[u]nlike the petitioners in Free Enterprise Fund,” Hill was the
subject of an SEC enforcement proceeding); Bennett v. SEC, 844 F.3d 174,
182 (4th Cir. 2016) (distinguishing between an SEC “inspection or
investigation” and an SEC “disciplinary proceeding”). But the
investigation-enforcement dichotomy is a distinction without a textual or
practical difference.
1.
Let’s start with the text. The current version of § 78y is almost
identical to the provision Landis wrote in 1934. See supra, at 12 (quoting
§ 23(a) as proposed and as enacted by Congress without material change in
§ 25(a) of the 1934 Act). Today the provision reads:
A person aggrieved by a final order of the Commission entered
pursuant to this chapter may obtain review of the order in the
United States Court of Appeals for the circuit in which he
resides or has his principal place of business, or for the District
of Columbia Circuit, by filing in such court, within sixty days
after the entry of the order, a written petition requesting that
the order be modified or set aside in whole or in part.
15 U.S.C. § 78y(a)(1). 5 Though Landis surely intended to filter (and
succeeded in filtering) as much litigation as possible through the SEC’s own

5
Under the 1934 Act as Landis wrote it, “[a]ny person aggrieved by an order issued
by the Commission” could seek judicial review, § 25(a), 48 Stat. at 901 (emphasis added),
whereas the current version of § 78y applies to “[a] person aggrieved by a final order of the
Commission,” 15 U.S.C. § 78y(a)(1) (emphasis added). Congress did not add the word

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“final” to § 78y until 1975. See Securities Acts Amendments of 1975, Pub. L. No. 94-29,
§ 20, 89 Stat. 97, 158. Two points about these texts bear emphasis.
First, Landis’s version of the statute precluded even more judicial review than the
current version of § 78y. That’s because Landis also included an exhaustion requirement,
and under the common law that existed at the time, such exhaustion requirements
disallowed judicial review of non-final agency action. See § 25(a), 48 Stat. at 902 (“No
objection to the order of the Commission shall be considered by the court unless such
objection shall have been urged before the Commission.”). As the Supreme Court once
emphasized, such exhaustion requirements—not the “any person aggrieved by an order”
language—operated to deny or delay judicial review:
[T]he long-settled rule of judicial administration [is] that no one is entitled
to judicial relief for a supposed or threatened injury until the prescribed
administrative remedy has been exhausted. That rule has been repeatedly
acted on in cases where, as here, the contention is made that the
administrative body lacked power over the subject matter. Obviously, the
rules requiring exhaustion of the administrative remedy cannot be
circumvented by asserting that the charge on which the complaint rests is
groundless and that the mere holding of the prescribed administrative
hearing would result in irreparable damage.
Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50–51 (1938). And it cannot be
contended that Congress added the word “final” to import this exhaustion-based denial of
judicial review into § 78y because the same 1975 amendment that added the word “final”
also retained the exhaustion requirement. See § 20, 89 Stat. at 159. Thus, whatever work
the word “final” does after 1975, it cannot be read to duplicate the work done by the
exhaustion requirement in Landis’s bill. See Antonin Scalia & Bryan A. Garner,
Reading Law: The Interpretation of Legal Texts 174 (2012) (describing
the canon against surplusage). (Nor can § 78y(c)(1)’s current exhaustion requirement do
the work it did back in Landis’s day without destroying multiple modern doctrines—
including Thunder Basin and pre-enforcement review under Abbott Laboratories v. Gardner,
387 U.S. 136 (1967)—that authorize judicial review before the conclusion of an agency
proceeding.)
Second, when Landis wrote the 1934 Act, Congress had not yet enacted the
Administrative Procedure Act (“APA”). It enacted the latter in 1946. Thus, when Landis
wrote the 1934 Act, its review provision provided the only statutory mechanism to seek
judicial view of “an order issued by the Commission,” whereas today targets like Cochran
can ignore § 78y and rely instead on the APA for a cause of action, see Cochran v. SEC, No.
19-cv-66-A, Doc. 1, at 20–21 (N.D. Tex. Jan. 18, 2019) (APA claims in Cochran’s
complaint). So Landis could limit judicial review of the SEC’s work simply by failing to
authorize it in the 1934 Act, whereas today the SEC must make the much harder showing

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channels, he didn’t capture everything. To the contrary, § 78y draws a bright
line between pre-final order and post-final order review: Those who are
“aggrieved by a final order” and seek “review of the order” fall within
§ 78y’s purview. Ibid. Those who aren’t and don’t, don’t.
The Supreme Court’s analysis in Free Enterprise tracks the distinction
in § 78y’s text. Some parties are aggrieved by a final order, and “[o]nce the
Commission has acted, aggrieved parties may challenge ‘a final order of the
Commission’ or ‘a rule of the Commission’ in a court of appeals under
§ 78y.” Free Enterprise, 561 U.S. at 489. But some parties have claims outside
the scope of § 78y, because the SEC and PCAOB can take actions that are not
“encapsulated in a final Commission order or rule.” Id. at 490. “[T]he text
[of § 78y] does not expressly limit the jurisdiction that other statutes confer
on district courts. Nor does it do so implicitly.” Id. at 489 (citation omitted).
Thus, parties with claims not covered by § 78y—that is, parties aggrieved by
SEC action other than a final order or rule—are free to invoke other
jurisdictional statutes to get their claims into federal court.
The SEC and the dissent attempt to redraw the line created by § 78y
and Free Enterprise. They would prefer an implicit dotted line precariously
positioned between investigation and enforcement. Attempting to justify this
line textually, the dissent invokes the principle that “[s]pecification of the
one implies exclusion of the other,” and argues that “section 78y’s grant of
jurisdiction to the aggrieved party’s local circuit or the D.C. Circuit only after
issuance of a final agency order” implies that other courts lack jurisdiction.

that a provision originally enacted to provide judicial review (however modestly in Landis’s
day) now operates as an implicit strip of jurisdiction over a cause of action that Congress
provided elsewhere. But cf. Abbott Lab’ys, 387 U.S. at 141 (“The mere fact that some acts
are made reviewable should not suffice to support an implication of exclusion as to others.
The right to review is too important to be excluded on such slender and indeterminate
evidence of legislative intent.”).

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Post, at 72–73 (Costa, J., dissenting) (quotation omitted). But the dissent begs
the key question in applying its principle to §78y: Precisely what jurisdiction
does that statute “specify” as allocated to the courts of appeals, such that
other courts are implicitly precluded from exercising it? As just discussed,
the statute draws the line at the point when a “final order of the Commission
[is] entered” and specifies that a court of appeals has jurisdiction over
challenges to that final order. 15 U.S.C. § 78y(a)(1). So, following the
principle that “specification of the one implies exclusion of the other,”
district court jurisdiction over such a challenge to the final order is precluded.
And that is the majority’s position in this case. The dissent claims it is merely
applying a venerable interpretive principle, but its argument really hinges on
its unjustified decision to draw a line between investigation and enforcement.
That line, unlike the majority’s final/non-final line, is unsupported by the
statute’s text.
2.
One might think that if the investigation-enforcement distinction
lacks a textual basis, perhaps it’s nonetheless a practical tool that neatly
tracks two dichotomous sets of on-the-ground SEC activities. Again, wrong.
Investigation and enforcement are two stages of the same administrative
process, conducted by the same division of the SEC. And it makes little
practical sense to draw a neat legal line between them, because the SEC
blends the two activities in a variety of ways, and even conducts both
simultaneously.
Investigation and enforcement are both carried out by the SEC’s
“Enforcement Division,” which is the division that “[1] recommend[s] the
commencement of investigations of securities laws violations,
[2] recommend[s] that the Commission bring civil actions in federal court or
before an administrative law judge, and [3] prosecut[es] these cases on behalf

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of the Commission.” Sec. & Exch. Comm’n, How Investigations Work (Jan.
27, 2017), https://perma.cc/VX42-USC3 (emphasis added). The process
begins when the SEC’s “official curiosity” is aroused, perhaps after a review
of periodic filings or a complaint by a competitor or whistleblower. Marc J.
Fagel et al., SEC Investigations and Enforcement Actions, in Securities
Litigation: A Practitioner’s Guide 14-4 (Robert F. Serio et al.
eds., 2018). Enforcement Division staff might open a “Matter Under
Inquiry” (“MUI”) and ask the target or other witnesses to provide
documents or give testimony voluntarily. From the SEC’s perspective,
“[t]he threshold determination for opening a new MUI is low” because of
the SEC’s incomplete information and desire for additional facts. Sec. &
Exch. Comm’n Div. of Enf’t, Enforcement Manual 13
(2017), https://perma.cc/WQ7R-QPYK.
If the SEC is not satisfied with the information it can procure
voluntarily, it might turn to more formal and coercive investigative tools. The
Director of the Enforcement Division can issue a “Formal Order of
Investigation,” delegating the SEC’s statutory authority to subpoena
documents and testimony, see 15 U.S.C. §§ 77s(c), 78u(b), to specific staff.
See 17 C.F.R. § 200.30–4(a)(1); Enforcement Manual, supra, at 17.
These staff are then “empowered to administer oaths and affirmations,
subp[o]ena witnesses, compel their attendance, take evidence, and require
the production of any books, papers, correspondence, memoranda,
contracts, agreements, or other records” deemed “relevant or material to the
inquiry.” 15 U.S.C. § 78u(b). After issuance of the formal order, staff may
begin to subpoena documents and testimony from the target and third
parties. This process “often last[s] months or even years.” Sec. & Exch.
Comm’n, Investor Bulletin: SEC Investigations (Oct. 22, 2014),
https://perma.cc/9688-Q3XY. And none of it is public unless the SEC
orders otherwise. 17 C.F.R. § 203.5.

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At some point during the investigation, if staff decide that an
administrative proceeding should be brought against the target, the “Wells
Process” begins. 6 At this point, the matter looks a lot like litigation, even
though it has not yet reached the “enforcement” side of the dissent’s
investigation-enforcement line. Staff members send a notice to the target;
this notice discloses the claims the staff have preliminarily determined to
pursue and summarizes the basis for those claims. See Enforcement
Manual, supra, at 19–20. The target is invited to respond with a Wells
submission—“essentially a brief setting forth factual, legal, and policy
arguments why an enforcement action is not appropriate (or at least why
certain charges or remedies are unwarranted).” Fagel et al., supra, at 14-14.
The target is also often permitted to meet with Enforcement Division staff
and view non-privileged portions of the investigative file. See
Enforcement Manual, supra, at 22. Sometimes this process facilitates
settlement between the target and the SEC, or—much less often—persuades
the SEC not to press its claims after all. But if the results of the Wells Process
do not satisfy the SEC staff, they may formally recommend that the
Commission bring an administrative action against the target. If the
Commissioners approve the recommendation, the Enforcement Division will
file an “order instituting proceedings,” at which point an ALJ is selected as
the hearing officer and the administrative adjudication officially begins. See
17 C.F.R. § 201.200(a)–(b).
But the investigation does not necessarily stop when the enforcement
starts. Staff may continue to issue investigatory subpoenas “under the same
investigation file number or pursuant to the same [Formal Order of

6
The SEC has discretion to dispense with the Wells Process. But it conducts the
process “[i]n virtually every case other than those requiring emergency relief.” Fagel et al.,
supra, at 14-14.

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Investigation] under which the investigation leading to the institution of
proceedings was conducted,” as long as the hearing officer is promptly
informed of the subpoenas and the subpoenas are “not for the purpose of
obtaining evidence relevant to the proceedings.” Id. § 201.230(g). And if the
continuing investigation happens to yield relevant evidence, there’s no bar
on using it in the ongoing enforcement proceeding. See ibid. (only requiring
that such evidence be “made available to each respondent for inspection and
copying on a timely basis”).
Meanwhile, the ALJ—like the SEC staff who just investigated and
might still be investigating—may explore the facts by issuing subpoenas,
administering oaths and hearing testimony, and receiving relevant evidence
from both sides. Id. § 201.111(a)–(c). After the ALJ conducts the hearing, the
ALJ prepares an initial decision. Id. § 201.111(i). If the defendant loses, they
may appeal to the full Commission—the same body that already approved
the Enforcement Division’s recommendation to bring an administrative
action against them.
Only after the full Commission considers the appeal and issues a final
decision may the defendant use § 78y to get review in a federal court of
appeals. But most defendants don’t make it to federal court following this
path, because first they’d have to wade through the SEC’s lengthy
investigation-and-enforcement amalgam. See Gideon Mark, SEC and CFTC
Administrative Proceedings, 19 U. Pa. J. Const. L. 45, 57 (2016) (stating
that “during the period 2002-2014 the SEC’s settlement rate remained
constant at about 98%”). Given how little the investigation-enforcement line
matters to the SEC, it’s unclear why it matters so much to the dissent.
3.
Not only is the dissent’s investigation-enforcement line atextual and
artificial, it’s also illogical. The dissent suggests that respondents in

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enforcement proceedings do not face the same catch-22 that the Free
Enterprise petitioners faced as subjects of mere investigation. See post, at 87–
89 (Costa, J., dissenting); see also Bebo v. SEC, 799 F.3d 765, 774–75 (7th Cir.
2015). In other words, the dissent thinks Cochran doesn’t face the intolerable
requirement that she “bet the farm” to “test[] the validity of the law,” see
Free Enterprise, 561 U.S. at 490, because she is already in an enforcement
proceeding and therefore the proverbial “farm” is already bet.
Wrong again. Throughout the entire administrative process—
regardless of whether enforcement has begun—the target must choose
whether to settle or bet the farm. And the SEC places substantial pressure on
targets to choose the former. See Jay Clayton, Statement Regarding Offers of
Settlement (July 3, 2019), https://perma.cc/MTZ9-5HEE (praising the
“demonstrated willingness of the Commission to litigate zealously if a timely
and reasonable offer of settlement is not made”); Urska Velikonja, Are the
SEC’s Administrative Law Judges Biased? An Empirical Investigation, 92
Wash. L. Rev. 315, 364–65 (2017) (noting that enforcement-proceeding
defendants’ “willingness to settle may be affected by their perception that
ALJs are less fair” and that “[t]he SEC has reportedly threatened
investigated parties with litigation before ALJs if they are unwilling to
settle”). In addition to such “sticks,” the SEC also uses powerful “carrots”
to coerce settlements. For example, the Commission will settle on a “neither
admit nor deny” basis that allows defendants to avoid admitting liability; it
will also waive important collateral consequences—like the loss of well-
known seasoned issuer status—that would otherwise follow from an
unfavorable result in enforcement proceedings. See Fagel et al., supra, at 14–
17. Given these carrots and sticks, “choosing to litigate is, in fact, equivalent
to ‘betting the farm.’” Tilton v. SEC, 824 F.3d 276, 298 n.5 (2d Cir. 2016)
(Droney, J., dissenting).

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Of course, one cost of settlement is that a defendant gives up her right
to challenge the SEC in court. So the tremendous pressure to settle with the
SEC bears primary responsibility for the “you-must-bet-the-farm-to-get-
your-day-in-court” dynamic that the Court found objectionable in Free
Enterprise. See 561 U.S. at 490. And that pressure persists throughout
investigation and enforcement. Indeed, the pressure is likely greatest after
the SEC converts the investigation into a full-fledged enforcement
proceeding. Barring access to the district court at this point—without a
textual warrant for doing so—is untenable.
The investigation-enforcement distinction also illogically precludes
Cochran’s claim as soon as it ripens. Cochran claims that the ALJ presiding
over her administrative adjudication was unconstitutionally protected from
removal. Before the SEC’s order instituting proceedings, no ALJ had been
assigned to or involved in her case, so any challenge to the removal
protections of SEC ALJs would have been unripe. See Abbott Lab’ys v.
Gardner, 387 U.S. 136, 148–49 (1967) (ripeness requires that the effects of
the challenged policy be “felt in a concrete way by the challenging parties”).
As soon as the SEC issued its order instituting proceedings and assigned an
ALJ to Cochran’s case, her claim ripened because that’s when an official with
an alleged constitutional defect started presiding over her case. But under the
dissent’s dichotomy, that was also the exact moment her claim disappeared.
And her claim would remain illusory, under the dissent’s view, until well
after the ALJ in question is finished with the case, at which point the claim
would suddenly reappear and could be asserted in a federal court of appeals.
Thus, according to the dissent, a removal-power claim can be justiciable
during an SEC investigation (e.g., Free Enterprise); ripen and then
immediately disappear when the SEC commences an enforcement
proceeding (e.g., this case); and reappear again after the SEC concludes its

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enforcement proceeding (e.g., Jarkesy, see post, at 82 (Costa, J., dissenting)).
This peekaboo approach to constitutional claims makes very little sense.
The dissent nonetheless asserts that allowing Cochran to seek review
when her claim ripens would allow a novel and disruptive form of
“midenforcement review.” Post, at 72, 85 n.12 (Costa, J., dissenting). This
characterization distorts both the law and the facts. First, the law: The door
to judicial review remains open under 28 U.S.C. § 1331 unless another statute
closes it. See Free Enterprise, 561 U.S. at 489. So if no statute precludes
review, courts may consider a removal claim while the agency continues
working, as Free Enterprise itself demonstrates. See id. at 487 (reviewing a
challenge brought after PCAOB opened a formal investigation but before that
investigation concluded); see also Thunder Basin Coal Co. v. Reich, 510 U.S.
200, 212–13 (1994) (explaining when judicial review is available and citing
cases where an ongoing administrative proceeding did not preclude review).
Moreover, what the dissent maligns as “midenforcement review” is simply
another form of interlocutory review. And federal courts routinely entertain
applications for interlocutory relief in numerous contexts—without causing
dysfunction in the judicial system. See, e.g., Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541, 546 (1949) (collateral-order doctrine); Johnson v. Jones,
515 U.S. 304 (1995) (qualified immunity); Fed. R. App. P. 8 (stay
motions); Fed. R. Civ. P. 23(f) (class certification); 28 U.S.C. § 1292
(interlocutory decisions); id. § 1651(a) (mandamus).
Second, the facts: Cochran did not wait until the “middle” of her
enforcement proceedings to seek judicial review. Rather, once her case was
reassigned to a new ALJ following Lucia, she presented her claims by motion
to the ALJ and then filed this action—before the ALJ had scheduled a hearing
or the SEC had taken any substantial steps to prosecute her case before the
new ALJ. If some other enforcement target in some future case actually waits
until the middle of an enforcement proceeding before raising a constitutional

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claim, then a federal court could and should consider that fact in deciding
whether the balance of equities favors a stay. See Nken v. Holder, 556 U.S.
418, 434 (2009); Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
That’s precisely what we do in other interlocutory contexts. See, e.g., Benisek
v. Lamone, 138 S. Ct. 1942, 1944 (2018) (exercising interlocutory review over
denial of injunction and affirming because “unnecessary, years-long delay in
asking for preliminary injunctive relief weighed against [plaintiffs’]
request”). Indeed, even under the collateral-order doctrine—where the
standards for appealability are far from clear-cut, see Henry v. Lake Charles
Am. Press, LLC, 566 F.3d 164, 173 (5th Cir. 2009)—we police such
jurisdictional lines on an almost daily basis. The dissent offers no reason to
think that we’ll be less able to weed out abusive SEC petitioners using
Thunder Basin and Nken than we’re able to weed out, say, abusive qualified-
immunity appellants under Johnson v. Jones or abusive civil litigants who
want to stretch the Cohen requirements to appeal routine discovery orders.
In sum, the dissent would bar Cochran from bringing her claim at the
most natural time to adjudicate it—once she begins to concretely suffer harm
from the allegedly unconstitutionally insulated ALJ. And would do so by
relying on an investigation-enforcement distinction that has no basis in the
text of § 78y, makes no practical sense in light of the SEC’s enforcement
procedures, and is illogical. Once the investigation-enforcement distinction
is rejected as atextual, artificial, and illogical, Free Enterprise plainly controls
and gives Cochran the opportunity to bring her claim in district court.
B.
The dissent is quite right that our court is the first to apply Free
Enterprise to investigative and enforcement proceedings alike. But in addition
to faithfully applying that materially indistinguishable opinion, our approach
aligns with other Supreme Court precedent. When faced with a judicial

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review provision like that in § 78y, courts use three “Thunder Basin factors”
to determine whether a plaintiff’s specific “claims are of the type Congress
intended to be reviewed within this statutory structure.” Thunder Basin, 510
U.S. at 212. These factors are (1) whether “a finding of preclusion could
foreclose all meaningful judicial review”; (2) whether the claims are
“‘wholly “collateral”’ to a statute’s review provisions”; and (3) whether the
claims are “outside the agency’s expertise.” Id. at 212–13 (quoting Heckler v.
Ringer, 466 U.S. 602, 618 (1984)). All three factors support Cochran’s right
to pursue her removability claim in district court, as the majority opinion
explains. But two Supreme Court cases decided just this year further solidify
this conclusion and undermine the dissent’s contrary position.
1.
Begin with the “meaningful judicial review” factor. If funneling a
particular claim through the statutory review mechanism will deny a plaintiff
meaningful judicial review of that claim, that suggests the statute did not
implicitly preclude district court jurisdiction over the claim. Applying this
factor to Cochran’s claim, the key case is Collins v. Yellen, 141 S. Ct. 1761
(2021).
Like Cochran, the petitioners in Collins claimed that agency officials
who had made decisions that harmed them were unconstitutionally protected
from removal. The Supreme Court agreed with the petitioners that certain
removability protections were unconstitutional. But “[a]ll the officers [in
question] were properly appointed,” so the Court found that their actions
were not automatically rendered void by virtue of the unconstitutional
removal protections. Id. at 1787. Thus, because Collins was a removability
case, the Supreme Court did not grant the same remedy that it had previously
granted in unconstitutional appointment cases—namely, the right to a new
hearing before a new ALJ after the constitutional defect was cured. E.g., Lucia

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v. SEC, 138 S. Ct. 2044, 2055 (2018) (concluding that petitioner was entitled
to a new hearing before a properly appointed official). The Court chose to
remand the remedy question, but it did suggest that winning retrospective
relief in removability cases requires a showing of harm specifically
attributable to the unconstitutional removal protection. For example,
retrospective relief would be available if “the President had made a public
statement expressing displeasure with actions taken by a Director and had
asserted that he would remove the Director if the statute did not stand in the
way.” Collins, 141 S. Ct. at 1789.
This suggestion indicates that it will be very challenging to obtain
meaningful retrospective relief for constitutional removability claims after
Collins. Winning the merits of the constitutional challenge will not be enough,
as it has been in appointment cases like Lucia. Challengers will also need to
identify a retroactively vindicable harm inflicted by the unconstitutional
removal protection. It is unclear how often challengers will be able to do
this—the examples hypothesized by the Collins Court, like a public statement
that an officer would have been removed but for a removal protection, are
quite uncommon occurrences. Thus, challengers with meritorious
removability claims may often be left without any remedy if they are forced
to wait until after enforcement proceedings conclude and bring their claims
through § 78y.
The “meaningful judicial review” factor thus requires an alternative
path to court for targets of SEC enforcement proceedings. A person subject
to an unconstitutional adjudication should at least be able to sue for
declaratory relief requiring a constitutionally structured proceeding. Cf. Free
Enterprise, 561 U.S. at 513 (finding petitioners “entitled to declaratory relief
sufficient to ensure that the . . . standards to which they are subject will be
enforced only by a constitutional agency accountable to the Executive”).
After Collins, this may be the only way to provide a “‘meaningful’ avenue of

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relief” for claims like Cochran’s and check the agency’s Landisonian
tendency toward exclusive, unimpeded control over the way it investigates
and proceeds against its targets. Free Enterprise, 561 U.S. at 491 (quoting
Thunder Basin, 510 U.S. at 212).
2.
Consider the final two Thunder Basin factors: whether the claims are
“wholly collateral” to a statute’s review provisions, and whether they are
“outside the agency’s expertise.” 510 U.S. at 212 (quotation omitted). The
key case here is Carr v. Saul, 141 S. Ct. 1352 (2021).
In Carr, disability claimants before the Social Security Administration
whose claims had been rejected by the Administration’s ALJs argued that the
ALJs had not been validly appointed under the Appointments Clause. The
Administration responded that the claimants had forfeited this argument by
failing to raise it before the agency. The Supreme Court rejected the
Administration’s position, holding that an issue-exhaustion requirement
should not be imposed on the petitioners’ Appointments Clause claims. This
holding rested on a finding that “adversarial development” of the
petitioners’ structural constitutional claim “simply did not exist” in the ALJ
proceedings. Id. at 1362 (quoting Sims v. Apfel, 530 U.S. 103, 112 (2000)).
This finding suggests that structural constitutional challenges often cannot
be meaningfully aired in administrative proceedings. And that supports the
conclusion that they are “wholly collateral” to those proceedings. 7

7
Unlike the disability claimants in Carr, who could not have made their
constitutional claims to the SSA Commissioner before judicial review, see Carr, 141 S. Ct.
at 1361, the SEC’s administrative review scheme would allow Cochran to make her claim
to the SEC Commissioners before § 78y came into play. But as in Carr, the SEC has
provided no indication that its administrative proceedings could or would yield any
meaningful adversarial development of Cochran’s structural constitutional claim.

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The Carr Court also repeatedly observed that structural
constitutional challenges are outside the expertise of agency ALJs. See id. at
1360 (“[A]gency adjudications are generally ill suited to address structural
constitutional challenges, which usually fall outside the adjudicators’ areas
of technical expertise.”); id. at 1361 (“Petitioners assert purely constitutional
claims about which SSA ALJs have no special expertise.”). These statements
should erase any doubt that the “agency expertise” factor supports Cochran.
The dissent resists this conclusion by arguing that we should consider
whether the ALJ has expertise regarding the “overall case,” not the specific
claim Cochran wants to bring in district court. Post, at 90 (Costa, J.,
dissenting). This is appropriate, the argument goes, because the ALJ’s
expertise-guided ruling on other issues might moot Cochran’s constitutional
claim. This approach has several problems. For one, it stacks the deck against
judicial review, such that the “agency expertise” factor will always favor the
agency—because agency enforcement proceedings, considered in their
entirety, always relate to the agency’s area of expertise. Second, it is flatly
inconsistent with Thunder Basin’s focus on whether “claims . . . [are] outside
the agency’s expertise,” not whether cases are. 510 U.S. at 212. Finally, it
rests on an overreading of Elgin v. Department of Treasury, where the Court
noted that in the particular dispute in that case, the agency might use
statutory interpretation to alleviate the petitioners’ constitutional concerns.
567 U.S. 1, 23 (2012). Elgin did not purport to transform the Thunder Basin
test from a claim-focused inquiry to a case-focused inquiry. And Carr
establishes beyond any doubt that Cochran’s claim is outside the expertise of
the SEC.
C.
Efficiency was James Landis’s biggest worry. He called it “the
desperate need” of government. Landis, supra, at 24. The administrative

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state was the only way that “tripartite political theory” could respond to “the
demand that government . . . provide for the efficient functioning of the
economic processes of the state.” Id. at 16. And the end of efficiency was best
served by moving as many functions as possible—legislative, executive, and
judicial—to administrative agencies. Judicial functions in particular were
best handled by administrative agencies, because “the judicial process”
struggled “to make the necessary adjustments in the development of both
law and regulatory methods” to promote efficient industry and governance.
Id. at 30. In this case, the dissent agrees that administrative rather than
judicial review is the more efficient course. Post, at 93–95 (Costa, J.,
dissenting). But there are at least three problems with that.
First and most importantly, when Congress vests a district court with
jurisdiction, it’s obliged to exercise it—efficiencies aside. Long before Landis
lodged his objections, Chief Justice Marshall affirmed that federal courts
must take cases within their jurisdiction: “We have no more right to decline
the exercise of jurisdiction which is given, than to usurp that which is not
given.” Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404 (1821). By now it is
well established that, with exceptions not relevant here, “federal courts have
a strict duty to exercise the jurisdiction that is conferred upon them by
Congress.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). The
“efficiency” of exercising jurisdiction is irrelevant. If you have it, you
exercise it; if you don’t, you don’t.
Second, even if efficiency mattered, the exercise of jurisdiction would
be no more inefficient in Cochran’s case than in Free Enterprise, where the
Supreme Court held that § 78y did not strip district court jurisdiction during
ongoing investigative proceedings. The dissent identifies four inefficiencies
that may result from “allowing immediate judicial resolution” of Cochran’s
claim: (1) “three courts w[ill] have devoted time to the agency matter” by
the time it concludes; (2) “a respondent will get two bites at a cert petition”;

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(3) “[m]ultiple layers of unsuccessful pre-enforcement judicial review will be
costly to the parties and courts while substantially delaying the agency
proceeding”; and (4) “allowing judicial review both before and after an
agency adjudication risks review of the same matter in different circuits.”
Post, at 93 (Costa, J., dissenting). But the same inefficiencies were at stake in
Free Enterprise, because allowing the target of an investigation to bring a pre-
enforcement challenge in federal court created the same risks of delay and
duplicative litigation. Yet the Court didn’t waver, suggesting that these
concerns should carry little weight in implicit preclusion analysis. Besides,
the dissent’s fears of obstruction and delay are likely overblown, because
district courts will enjoin agency proceedings only if they conclude that a
plaintiff’s constitutional claims are likely to succeed on the merits. The Free
Enterprise litigation itself is an example of this. See Free Enter. Fund v.
PCAOB, No. 06-0217, 2007 WL 891675, at *2, *6 (D.D.C. Mar. 21, 2007)
(denying plaintiffs’ request for “an order enjoining the Board from taking any
further action against [them]”). This screening mechanism decreases the
risk that a party will delay agency action with “weak” constitutional claims,
while allowing parties with meritorious claims to avoid the ongoing injury of
an unconstitutional proceeding.
Third and finally, allowing Cochran to raise her removal-power
challenge at the beginning of her enforcement proceeding may prove more
efficient than requiring her to first wade through the potentially
unconstitutional review process. To see why, consider the case of Raymond
Lucia—a case the dissent cites for the proposition that Cochran could get
meaningful post-enforcement review of her constitutional claim. Post, at 81
(Costa, J., dissenting). Lucia, using § 78y, prevailed in the Supreme Court
after years of SEC enforcement proceedings and appellate review. The Court
agreed with Lucia that the SEC ALJ who adjudicated his enforcement
proceedings “heard and decided Lucia’s case without the kind of

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appointment the Clause requires.” Lucia, 138 S. Ct. at 2055. So, the Court
said, Lucia was entitled to a new hearing before a new, properly appointed
ALJ. Ibid. The SEC did re-initiate enforcement proceedings before a new,
properly appointed ALJ. See Lucia v. SEC, U.S. Dist. LEXIS 143906, at *4
(S.D. Cal. Aug. 21, 2019). But because the Supreme Court chose not to
address his removal-power challenge, see Lucia, 138 S. Ct. at 2050 n.1., Lucia
was still proceeding before an ALJ he contended was constitutionally
illegitimate, Lucia, U.S. Dist. LEXIS 143906, at *5. Lucia raised this
challenge before a district court, which ruled that he must await another SEC
final order before pursuing this constitutional claim. See id. at *8. Lucia
appealed, but the Ninth Circuit refused to stay his case pending appeal. Lucia
v. SEC, 2020 U.S. App. LEXIS 2228 (9th Cir. Jan. 23, 2020). At that point,
Lucia had had enough; like many others in this situation, he settled after eight
years of administrative proceedings and federal court litigation—thus
sacrificing the constitutional claim that Cochran now must press instead. See
Raymond J. Lucia Cos., Inc., Exchange Act Release No. 33895, 2020 WL
3264213 (June 16, 2020). So much for efficiency.
* * *
Woodrow Wilson asked his fellow statesmen to worry less about the
constitution of government and more about its administration. The SEC asks
the same of us today: Let us get on with administration, and you can worry
about how our administrative proceedings are constituted another time. The
majority is right to reject this argument. Under 28 U.S.C. § 1331 and relevant
Supreme Court precedent, Michelle Cochran has the right to ask that her
administrative proceeding conform to constitutional requirements. She’s
entitled to her day in court. And that day is today.

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Gregg Costa, Circuit Judge, dissenting, joined by Owen, Chief Judge,
and Stewart, Dennis, Southwick, Graves, and Higginson,
Circuit Judges:
This appeal is not about whether Michelle Cochran will have the
opportunity to press her separation-of-powers claim—she will. It instead
asks: Where and when?
Before today, every court of appeals to consider the question has
answered that a person facing an SEC enforcement action may not mount a
collateral attack against the agency proceeding in federal district court.
Bennett v. SEC, 844 F.3d 174 (4th Cir. 2016); Hill v. SEC, 825 F.3d 1236 (11th
Cir. 2016); Tilton v. SEC, 824 F.3d 276 (2d Cir. 2016); Jarkesy v. SEC, 803
F.3d 9 (D.C. Cir. 2015); Bebo v. SEC, 799 F.3d 765 (7th Cir. 2015); see also
Axon Enter., Inc. v. FTC, 986 F.3d 1173 (9th Cir. 2021) (holding same for
similar FTC judicial review provision). Now, for the first time in the 80-plus
year history of the SEC, 1 an appellate court is allowing that district court
intervention. 2 The majority’s new path contravenes a statutory scheme that

1
During the infancy of the SEC, the Second Circuit recognized the exclusivity of
section 78y’s review scheme. See SEC v. Andrews, 88 F.2d 441 (1937). In an opinion joined
by Judge Learned Hand, the court explained “[i]t is perfectly clear that a suit against the
Commission, an administrative agency of the United States, can be maintained only in the
courts and upon the terms specified in the statute.” Id. at 441. A defendant facing an SEC
suit in district court thus could not assert a counterclaim challenging a separate agency
administrative action because section 78y “provides how and where a person aggrieved by
an order of the Commission may obtain judicial review of such order.” Id. at 441–42. Any
judicial review, the court further explained, “could only be had in a Circuit Court of
Appeals.” Id. at 442.
2
Grasping to find some toehold to justify its screed on the administrative state, the
concurring opinion misreads the above sentence. Concurring Op. 31 (alleging that the
dissent considers ‘the 80-plus year history of the SEC’”). The sentence does not refer to
what the SEC has done during its 80-plus years, but to what courts have done during that
time when confronted with efforts like Cochran’s to collaterally attack agency proceedings
in district court. The point is that an unbroken chain of decisions starting with Andrews in

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“allocate[s] initial review to an administrative body.” Thunder Basin Coal
Co. v. Reich, 510 U.S. 200, 207 (1994). It invents a new category of
midenforcement review to go along with traditional pre- and
postenforcement review. In doing so, it multiplies the number of court
proceedings arising out of an SEC enforcement action and allows the
anomaly of different courts of appeals’ reviewing the same agency
proceeding. Worst of all, it turns constitutional avoidance on its head by
making separation-of-powers claims a first rather than last resort in resolving
cases.
I.
We are supposed to be chary—not champing at the bit—to create
circuit splits. Alfaro v. Comm’r of Internal Revenue, 349 F.3d 225, 229 (5th
Cir. 2003). The majority’s discounting the wisdom of our brethren is
especially pronounced when it comes to the first question this case poses:
whether it is “fairly discernible” from the SEC enforcement scheme “that
Congress precluded district court jurisdiction” over suits challenging an
agency proceeding. Elgin v. Dep’t of Treasury, 567 U.S. 1, 10 (2012) (first
quotation from Thunder Basin, 510 U.S. at 207). Five circuits have
considered the question. By a count of 15-0, every judge deciding those cases
has answered that the “securities laws’ scheme of Commission adjudication
and ensuing judicial review” in an appellate court divests district courts of
jurisdiction in the “mine-run of cases.” 3 Jarkesy, 803 F.3d at 16; accord

1937 through five circuits’ post-Free Enterprise decisions had rejected district court
intervention in SEC proceedings.
3
It is also notable that Free Enterprise Fund v. Public Company Accounting Oversight
Board, in recognizing district court jurisdiction, does not disagree that section 78y, as a
general matter, provides the exclusive means for judicial review of SEC proceedings. 561
U.S. 477, 489–90 (2010). In fact, it recognized that “[g]enerally, when Congress creates
procedures ‘designed to permit agency expertise to be brought to bear on particular

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Bennett, 844 F.3d at 181–83; Hill, 825 F.3d at 1242–45; Tilton, 824 F.3d at
281–82; 4 Bebo, 799 F.3d at 775.
A distinguished D.C. Circuit panel explained why it was not
“seriously dispute[d] that Congress meant to channel most challenges to the
Commission’s administrative proceedings through the statutory review
scheme.” Jarkesy, 803 F.3d at 17 (Srinivasan, J., joined by Judges Kavanaugh
and Randolph); see also Tilton, 824 F.3d at 282 (noting the plaintiffs did not
even contest this issue). The language and structure of the SEC judicial
review statute are “nearly identical” to those of the Mine Safety Act, which
the Supreme Court recognized “implicitly barred” district court jurisdiction
over pre-enforcement challenges. Jarkesy, 803 F.3d at 16 (citing Thunder
Basin, 510 U.S. at 207–08; 30 U.S.C. § 816(a)(1)).
Starting with the text, section 78y’s grant of jurisdiction to the
aggrieved party’s local circuit or the D.C. Circuit only after issuance of a final
agency order channels review through that scheme. See Jarkesy, 803 F.3d at
16; see also Free Enter., 561 U.S. at 489 (“Generally, when Congress creates

problems,’ those procedures ‘are to be exclusive.’” Id. at 489 (quoting Whitney Nat. Bank
in Jefferson Parish v. Bank of New Orleans & Trust Co., 379 U.S. 411, 420 (1965)). Free
Enterprise Fund found district court jurisdiction only after proceeding to the three Thunder
Basin factors, under which certain types of claims may fall outside an implicit limit on
district court jurisdiction. Id. at 489–90. That analysis would have been unnecessary if, as
the majority surmises, section 78y does not generally create an exclusive avenue for review
of SEC proceedings.
4
In Tilton, Judge Droney dissented on a different ground. 824 F.3d at 292–99
(Droney, J., dissenting). In applying the Thunder Basin factors at the second stage of the
inquiry, he concluded that a separation-of-powers claim is not the type that Congress meant
to exclude in crafting an otherwise exclusive scheme of agency adjudication followed by
review in an appellate court. See id. But he did not dissent from the Second Circuit’s
conclusion that “[g]enerally . . . persons responding to SEC enforcement actions are
precluded from initiating lawsuits in federal courts as a means to defend against them.” Id.
at 282 (citation omitted).

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procedures ‘designed to permit agency expertise to be brought to bear on
particular problems,’ those procedures ‘are to be exclusive.’” (quoting
Whitney Nat. Bank, 379 U.S. at 420)); ANTONIN SCALIA & BRYAN A.
GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS
107 (2012) (“[S]pecification of the one implies exclusion of the other. . . .”).
Indeed, the statute emphasizes that once the agency’s jurisdiction over the
case ends, the court of appeals has “exclusive” jurisdiction “to affirm or
modify and enforce or to set aside the order in whole or in part.” 15
U.S.C. § 78y(a)(3); Jarkesy, 803 F.3d at 16. Other provisions set forth
exhaustion requirements, the standard of review the court of appeals is to
follow, and the process for remanding to “adduce additional evidence.” 15
U.S.C. §§ 78y(c)(1); (a)(4); (a)(5); see also Jarkesy, 803 F.3d at 16–17. These
rules would have little force if a party could evade them by seeking review in
a district court. Elgin, 567 U.S. at 11–12 (recognizing that when a statute sets
forth a review scheme in “painstaking detail,” it follows that “Congress
intended to deny . . . an additional avenue for relief in district court”).
The structure of the SEC enforcement scheme provides further
evidence that section 78y creates an exclusive review scheme that bypasses
district courts. The SEC has three options when pursuing a case. The
Commission may adjudicate the case itself, pursue charges before an ALJ, or
file suit in district court. 15 U.S.C. §§ 78u(d), 78u-2, 78u-3. The agency’s
statutory power to select the forum would be illusory if defendants could file
an action in district court. Jarkesy, 803 F.3d at 17; Tilton, 824 F.3d at 282
n.3. And the provision authorizing the SEC to seek injunctive relief in district
courts, 15 U.S.C. § 78u(d)(1), would be unnecessary if district courts
retained residual federal question jurisdiction over SEC matters. See Thunder
Basin, 510 U.S. at 209 (citing the fact that the Mine Safety Act allows the
Labor Secretary to file in district court in certain situations as a reason why
other parties’ only recourse was to “complain to the Commission and then

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to the court of appeals” (citing 30 U.S.C. §§ 818(a), 820(j))). The Exchange
Act’s comprehensive statutory scheme for agency adjudication followed by
straightaway review in a court of appeals makes it “fairly discernible that
Congress intended to deny . . . an additional avenue of review in district
court.” Elgin, 567 U.S. at 12.
The majority comes up with three reasons to doubt this
straightforward analysis that heretofore enjoyed unanimous circuit support.
First, it points out that section 78y applies only when there is a “final order
of the Commission.” Maj. Op. 6 (citing 15 U.S.C. § 78y(a)(1)). Second, the
majority notes that section 78y is permissive, saying that a party “may” seek
review in a court of appeals. Maj. Op. 7. Third, the majority contends that
vesting the courts of appeals with “exclusive jurisdiction” after the agency
rules actually means the opposite of what it says—that district courts can
entertain collateral attacks on an SEC proceeding. Maj. Op. 7–8. No court
has ever suggested that these statutory features indicate section 78y does not
displace district court jurisdiction (and, as mentioned, courts have drawn the
opposite conclusion from some of these features). That is for good reason—
each of these arguments is fatally flawed.
Section 78y does nothing new in requiring final agency action before
judicial review. Of course, the Administrative Procedure Act imposes that
requirement for judicial review of agency action. 5 U.S.C. § 704. Agency-
specific judicial review statutes, like the one for the SEC, do the same thing.
See, e.g., 15 U.S.C. § 78y (SEC); 15 U.S.C. § 45(c) (FTC); 29 U.S.C. § 660(a)
(OSHRC); 29 U.S.C. § 160(f) (NLRB). Under the majority’s view, because
these statutes allow judicial review in courts of appeals only after a final
agency order issues, none of them preclude a district court suit against the
agency before the enforcement order issues. That position carries
astonishing consequences. It would, for example, mean that unions and

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employers could sue the NLRB in district courts before the agency rules in
labor disputes.
We know, however, that the law does not allow pre-enforcement
district court suits whenever a judicial review scheme only vests courts of
appeals with postenforcement jurisdiction. After all, that describes the two
judicial-review statutes the Supreme Court has read to impliedly preclude
district court jurisdiction. The Mine Act allows review in the courts of
appeals of “an order of the Commission issued under this chapter.” 30
U.S.C. § 816(a)(1). The Civil Service Reform Act allows review in the
Federal Circuit of “a final order or decision of the Merit Systems Protection
Board.” 5 U.S.C. §§ 7703(a)(1), (b)(1)(A). Although these laws allow review
in the court of appeals only after the agency rules, the Court held that they
displaced district courts’ jurisdiction to hear pre-enforcement challenges.
Elgin, 567 U.S. at 10–13 (holding that Civil Service Reform Act’s statutory
review scheme precludes district court jurisdiction); Thunder Basin, 510 U.S.
at 207–09 (same for Mine Act).
More broadly, the majority’s theory that a postenforcement judicial-
review scheme cannot limit pre-enforcement challenges is at odds with the
very concept of implicit jurisdiction stripping. The premise of implicit
preclusion of district court jurisdiction is that an agency enforcement scheme
combined with postenforcement judicial review can create “a single review
process” in which pre-enforcement judicial challenges “might thwart
effective enforcement of the statute.” Thunder Basin, 510 U.S. at 211, 212;
id. at 207 (“In cases involving delayed judicial review of final agency actions,
we shall find that Congress has allocated initial review to an administrative
body where such intent is ‘fairly discernible in the statutory scheme.’”
(emphasis added) (quoting Block v. Cmty. Nutrition Inst., 467 U.S. 340, 351
(1984) (quoting Ass’n of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150,

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157 (1970)))). The majority is thus rejecting the Supreme Court’s doctrine
of implied preclusion rather than applying it.
The majority’s second reason for why it believes section 78y does not
channel review to postagency appeals—that the statute says that an appeal
“may” be brought in the court of appeals—is even weaker. Statutes
authorizing review of agency decisions commonly use the permissive “may.”
See, e.g., 15 U.S.C. § 78y (SEC); 15 U.S.C. § 45(c) (FTC); 16 U.S.C.
§ 825l(b) (FERC); 29 U.S.C. § 660(a) (OSHRC); 29 U.S.C. § 160(f)
(NLRB) (all stating that a party aggrieved by an agency order may appeal).
The reason should be obvious: a losing party is under no obligation to bring
an appeal; the party has a choice. This supposedly defective feature of the
SEC statute again exists in the judicial review provisions of the Mine Act and
Civil Service Reform Act, which the Supreme Court held strip district courts
of jurisdiction. 30 U.S.C. § 816(a)(1) (Mine Act) (stating that party
“aggrieved by an order of the Commission issued under this chapter may
obtain a review of such order” in a court of appeals (emphasis added)); 5
U.S.C. § 7703(a)(1) (Civil Service Reform Act) (stating that employee
“aggrieved by final order or decision of the Merit Systems Protection Board
may obtain judicial review of the order or decision” (emphasis added)). The
majority’s view— that inclusion of “may” in a review scheme means other
avenues of review remain open—thus wipes away Elgin and Thunder Basin.
The majority’s third argument is a curious one. It theorizes that in
stating that a court of appeals’ jurisdiction “becomes exclusive on the filing
of the record,” the statute somehow means district courts have jurisdiction
before that point. Maj. Op. 8 (citing 15 U.S.C. § 78y(a)(3)). We are getting
into broken-record territory here, but yet again the majority is saying Thunder
Basin is wrong. That is because the Mine Safety Act says the same thing as
the Exchange Act: “Upon such filing [of the agency record], the court shall
have exclusive jurisdiction of the proceeding . . . .” 30 U.S.C. § 816(a)(1).

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The Supreme Court cited that exclusivity language as evidence that the
statute precludes district court jurisdiction. 510 U.S. at 208 (citing 30
U.S.C. § 816(a)(1)). The reason a court of appeals’ jurisdiction becomes
exclusive on the filing of the agency record should be apparent: that is when
the agency loses jurisdiction. The “exclusive” language is discussing the
jurisdiction of the court of appeals vis-à-vis the agency, not the district court. 5
The majority is only thinking of the review scheme in terms of courts. But
section 78y creates a “single review process”—agency adjudication followed
by review in the court of appeals—and nothing in the statute indicates that
district courts can inject themselves into that streamlined path. Certainly
there is no support for that position in the statute’s providing that a court of
appeals’ jurisdiction becomes exclusive once it receives the agency record.
Instead, that exclusivity language reinforces that the statute creates a single
avenue for review that begins when the agency initiates the enforcement
action and ends after the court of appeals or Supreme Court rules. See
Jarkesy, 803 F.3d at 16 (recognizing that granting the court of appeals’
“exclusive jurisdiction” to set aside the agency order shows an intent to
preclude district court jurisdiction).
Beyond these problems with the three novel reasons it identifies for
the view that section 78y does not forbid district court jurisdiction, the
majority’s analysis of this first step of the preclusion analysis suffers from a
more general analytical misstep. In determining “whether it is ‘fairly
discernible’ that Congress precluded district court jurisdiction over
petitioners’ claims, we examine [the statute’s] text, structure, and purpose.”

5
The corresponding FTC statute shows that these types of provisions are talking
about jurisdiction between the agency and the court of appeals, not between trial and
appellate courts. It provides that after a party files a notice of appeal, the agency and court
of appeals enjoy “concurrent” jurisdiction, meaning the agency can still modify orders
“until the filing of the record.” 15 U.S.C. § 45(c).

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Elgin, 567 U.S. at 10 (citation omitted). Nowhere in this inquiry is the focus
on the type of claim a party is seeking to bring in district court. In contrast,
the type of claim matters at the second inquiry—application of the Thunder
Basin factors—which is reached only if the statutory review scheme does, as
a general matter, preclude district court jurisdiction. If Congress’s intent to
preclude jurisdiction is fairly discernible, then the second inquiry considers
if the claim is “of the type Congress intended to be reviewed within this
statutory structure.” Thunder Basin, 510 U.S. at 212; see Elgin, 567 U.S. at
15 (rejecting the argument that the constitutional nature of the claim affects
the first “fairly discernible” question but then proceeding to determine
under the Thunder Basin factors if petitioners’ “claims are not the type that
Congress intended to be reviewed within the CSRA scheme”); Jarkesy, 803
F.3d at 17 (recognizing that the “particular challenges” raised by the plaintiff
become relevant after the court has found that “Congress meant to channel
most challenges to the Commission’s administrative proceedings through
the statutory review scheme”). The majority thus errs by analyzing the
statute-focused first question in the context of Cochran’s specific claim. See
Maj. Op. 6 (“The statute says nothing about people, like Cochran, who have
claims that have nothing to do with any final order that the Commission
might one day issue.”); id. at 8 (“Consequently, the text of § 78y does not
support the SEC’s position with respect to Cochran’s removal power
claim.”).
This first/second step distinction may seem like an academic debate
about which doctrinal box to fit various arguments in. But the ramifications
are far-reaching of the majority’s reasoning that section 78y does not create
an exclusive review scheme because it is permissive and applies only to those
challenging final orders. It would mean that district courts’ federal question
jurisdiction under section 1331 applies across the board to claims relating to

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pending SEC proceedings. 6 A party facing an agency proceeding can sue in
federal district court for any type of claim—be it separation of powers, some
other constitutional claim like due process, or even statutory claims like
whether an investment vehicle is a “security.” The majority tries to obscure
this implication of its ruling with its dubious holding that Cochran forfeited
her due process claim in this appeal. 7 Despite its not remanding the due
process claim, the majority’s view is hiding in plain sight: A district court’s
section 1331 jurisdiction remains in full force when a party facing an SEC
enforcement action wants to sue the agency for any type of claim. Maj. Op.
6 (stating that the “text of § 78y conflicts with the SEC’s position” that the
statute channels jurisdiction to the agency and court of appeals); id. at 7
(arguing that “§ 78y(a)(1)’s permissive language” should not be read as
“eliminating alternative routes to federal review”). 8 This holding risks

6
The concurring opinion is more explicit about this, stating that the case should be
resolved entirely based on the “unambiguous” text of sections 1331 and 78y. Concurring
Op. 30. It apparently believes we can ignore the Supreme Court’s repeated instruction that
“[w]hether a statute is intended to preclude initial judicial review is determined from the
statute’s language, structure, and purpose, its legislative history, and whether the claims
can be afforded meaningful review.” Thunder Basin, 510 U.S. at 207.
7
The record says otherwise. In her original merits brief, Cochran requested a full
reversal of the district court’s jurisdictional dismissal of her “constitutional claims,” and
repeatedly addresses the due process claim, id. 14, 21, 44-46, 51. Plus, the district court’s
ruling was jurisdictional, so forfeiture does not apply.
8
Later in its opinion, the court says its holding is only that the “Exchange Act
divested district court jurisdiction over claims that SEC ALJs are unconstitutionally
insulated from the President’s removal power; our holding extends no further . . . .” Maj.
Op. 25; see also Maj. Op. 8 n.7. This does not appreciate the implications of reasoning at
step one that the Exchange Act evinces no intent to displace district court jurisdiction. As
explained, that is not a claim-specific ruling. If the merely “permissive” section 78y does
not channel challenges to SEC administrative proceedings to the agency and appellate
courts, then general federal question jurisdiction is alive and well in this circuit for any
collateral attack on any SEC proceeding.

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serious disruption of the administrative scheme that the Exchange Act
created.
***
The overarching problem is that the majority analyzes the
“discernible intent” question as if it were writing on a blank canvas. But the
Supreme Court has already painted the picture. Statutes, with language and
structure almost identical to section 28y, that provide for agency adjudication
followed by appellate review generally prevent district courts from
interfering with enforcement proceedings. Even when the judicial review
provision applies only to “final agency action.” Even when the judicial
review provision says a party “may” appeal. Even when a court of appeals’
jurisdiction becomes “exclusive” once the agency record is filed. Even when
the statute gives the agency a choice to bring an administrative proceeding or
lawsuit. As every circuit judge who has looked at the question before today
has concluded, the Exchange Act creates an exclusive review scheme once
the Commission brings an administrative proceeding.
II.
Having had to engage in a far-too-lengthy dive into what should be the
easy question in this case, we arrive at the one that has been the focus in other
courts: whether the separation-of-powers claim Cochran asserts is of the type
that Congress meant to exclude from district court jurisdiction when it
created the SEC-specific scheme or agency review followed by direct appeal
to a circuit court. We can conclude that Congress did not intend for a claim
to go through the statutory review scheme it created only when: (1)
administrative proceedings would foreclose all meaningful judicial review;
(2) “the suit is wholly collateral to a statute’s review provisions”; and (3) the
claim is “outside the agency’s expertise.” Free Enter., 561 U.S. at 489

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(internal quotation marks and citation omitted). Those criteria are not met
here.
A.
Meaningful review is available for Cochran’s separation-of-powers
claims. That opportunity exists when a party can raise its claims to a court of
appeals following an adverse result before the agency. See Elgin, 567 U.S. at
17; Thunder Basin, 510 U.S. at 215. It is indisputable that such an opportunity
exists for separation-of-powers claims brought by parties facing an
enforcement action.
Exhibit A is Lucia v. SEC, 138 S. Ct. 2044 (2018), the case Cochran
relies on to support the merits of her removal-power claim. Lucia’s challenge
to the appointment of SEC ALJs did not require deviation from section 78y’s
review scheme. That landmark ruling came from a postenforcement appeal
that went to the court of appeals and then on the Supreme Court. Id. at
2049−50. Section 78y’s judicial review proved meaningful for Lucia.
Exhibit B is another leading separation-of-powers case, NLRB v. Noel
Canning, 573 U.S. 513 (2014). The Pepsi distributor convinced the D.C.
Circuit and Supreme Court that recess appointments to the NLRB were
unconstitutional after the NLRB ruled that the company had to execute a
collective bargaining agreement. See id. at 520–21; 705 F.3d 490 (D.C. Cir.
2013); 358 N.L.R.B. No. 4 (2012). Judicial review after the agency issued a
final order allowed meaningful review of Noel Canning’s claim under the
Recess Appointment Clause.
Exhibit C is a case the Supreme Court decided earlier this year, Carr
v. Saul, 141 S. Ct. 1352 (2021). Carr holds that Social Security claimants who
lose before an ALJ can raise a separation-of-powers claim during
postadjudication judicial review even without exhausting that claim before
the agency. Id. at 1356–58, 1362. If postadjudication review were not

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meaningful for this type of claim, the no-exhaustion rule would not make
sense. But to allow for a full airing of the petitioner’s appointment-power
claims, the Supreme Court remanded the two cases to courts of appeals. Id.
at 1362. Postadjudication judicial review thus proved meaningful for the Carr
petitioners.
Exhibit D is a case pending on our docket, Jarkesy v. SEC, No. 20-
61007 (appeal filed Nov. 2, 2020). You may recall the name, as Jarkesy was
the person who unsuccessfully tried to file a pre-enforcement suit in federal
court in the District of Columbia. See 803 F.3d at 9. After the administrative
proceeding against Jarkesy ran its course, he filed an appeal in our court. His
appeal raises, among other claims, the same removal-power challenge to SEC
ALJs that Cochran is pursuing. Brief for Petitioners, Jarkesy v. SEC, No. 20-
61007, at 55–57. Jarkesy is thus using the section 78y path to obtain
meaningful review of his separation-of-powers claim. 9
The majority cannot deny that parties have been and are raising
separation-of-powers claims like Cochran’s in postenforcement appeals.
Tellingly, it is only able to say that “the Exchange Act’s statutory-review
scheme threatens to deprive Cochran of the opportunity for meaningful
judicial review.” Maj. Op. 20 (emphasis added). It is not surprising that the
majority cites no authority for this “threatens to” standard; its reason for
why Cochran’s claim may not end up in a court shows that this argument
proves too much. The majority explains there is no “guarantee” Cochran
will obtain judicial review as she may win before the ALJ. Maj. Op. 21. True
enough, but that is also true of other constitutional claims (like due process)

9
Jarkesy’s challenging the final order in the Fifth Circuit after earlier suing the
SEC in the District of Columbia illustrates the risk of duplicative and inconsistent rulings
from different circuits that may result from the majority’s allowing pre-enforcement suits
in district court. See infra p. 20.

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as well as statutory claims. Courts will not review those questions if an ALJ
rules against the agency. So on the majority’s reasoning, statutes allowing
postenforcement judicial review will never provide “meaningful review”
because a party who prevails before the agency cannot appeal. Yet the
Supreme Court has held otherwise, explaining that what matters is the
availability of judicial review if the agency respondent loses. Elgin, 567 U.S.
at 17–18; Thunder Basin, 510 U.S. at 215. Undeniably, judicial review is
available to Cochran if the ALJ rules against her.
The majority thus has to identify something different about claims
alleging that an ALJ enjoys improper removal protection. That difference, it
concludes, is that even if Cochran wins before the ALJ, she would have
suffered the “injury of having to appear before the SEC.” 10 Maj. Op. 21. But
see Jarkesy, 803 F.3d at 25 (rejecting this argument that a claim can avoid the
section 78y review scheme if it involves a harm of “having to undergo a
constitutionally deficient proceeding”). But we now know there is a more

10
This would reach beyond separation-of-powers claims. See Bebo, 799 F.3d at 775
(noting that “[e]very person hoping to enjoin an ongoing administrative proceeding could
make [the] argument” that pre-enforcement review would prevent an unlawful
enforcement action). Consider a common dispute in securities cases: whether an
investment vehicle is in fact a “security” subject to SEC jurisdiction. See, e.g., SEC v.
Edwards, 540 U.S. 389 (2004); SEC v. W.J. Howey Co., 328 U.S. 293 (1946). A party who
prevails on that argument in a postenforcement appeal should never have been subject to
SEC jurisdiction in the first place. But that statutory claim can be raised in
postenforcement appeals, so a district court would not have jurisdiction to consider it.
Thunder Basin demonstrates this point. The mine operator sued in district court
arguing that the Secretary of Labor was applying a regulation in violation of the National
Labor Relations Act. See 510 U.S. at 204–06. But the Supreme Court held that the mine
had to face the enforcement proceeding and could challenge the Secretary’s interpretation
in court only after it lost before the agency. Id. at 216. If the mine ultimately prevailed in a
postenforcement appeal, then it would have endured an unlawful enforcement proceeding.
And one that implicates the separation of powers as an agency oversteps its Article II role
when it takes action that violates law enacted by Congress. But the mine still had to raise
its claim through the review scheme Congress created in the Mine Safety Act.

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serious injury when an ALJ was unconstitutionally appointed than when an
ALJ enjoys unconstitutional removal protections. The Supreme Court just
told us that while the unlawful appointment of an agency official leads to an
“exercise of power that the actor did not lawfully possess,” the same is not
true for agency officials who are improperly insulated from removal. Collins
v. Yellen, 141 S. Ct. 1761, 1787 (2021) (labeling as “neither logical nor
supported by precedent” the argument that the actions of an agency official
who enjoys unconstitutional removal protection are “void”). It follows that
the recent cases recognizing a meaningful opportunity to challenge improper
appointment of ALJs in postenforcement appeals, see Lucia, 138 S. Ct. 2044;
Carr, 141 S. Ct. 1352—even though those ALJs had no power to act in the
first place—must mean there is also a meaningful opportunity to raise
removal claims in postenforcement appeals.
Contrary to the undeniable opportunity for review that section 78y
affords Cochran, by definition postenforcement review does not exist for a
party not facing an enforcement action. As every circuit to consider the
question (including this one in 2019) has recognized, that is the critical
distinction between a case like this one and Free Enterprise Fund. See Bank of
La. v. FDIC, 919 F.3d 916, 926–27 (5th Cir. 2019); Axon Enter., 986 F.3d at
1184; Bennett, 844 F.3d at 186; Hill, 825 F.3d at 1243; Tilton, 824 F.3d at
283−84; Bebo, 799 F.3d at 774−75; Jarkesy, 803 F.3d at 20.
Free Enterprise Fund involved an accounting firm that regulators were
investigating but had not yet charged. Bank of La., 919 F.3d at 926 (discussing
Free Enter., 561 U.S. at 489–91). The SEC judicial review provision does not
provide an avenue for a party to challenge an investigation (as opposed to an
actual enforcement proceeding). See 15 U.S.C. §§ 78y, 7214(h)(2).
Consequently, the firm would have had to “incur a sanction” to get its
constitutional claim before a court via the ordinary SEC review scheme.
Bank of La., 919 F.3d at 926 (quoting Free Enter., 561 U.S. at 490). Having to

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“bet the farm . . . by taking the violative action” is not a “‘meaningful’
avenue” for judicial review, so section 78y does not prevent the target of an
investigation from suing in district court. Free Enter., 561 U.S. at 490–91.
But because Cochran is “already embroiled in an enforcement proceeding,”
she does “not have to ‘bet the farm’ to challenge agency action. The farm
[is] already on the table.” Bank of La., 919 F.3d at 927. 11
Our prior distinction between an investigation that may never reach
an ALJ and a pending adjudication that already has is the same one other
courts have recognized. 12 See Axon Enter., 986 F.3d at 1184; Bennett, 844

11
The majority ignores this language we used just two years ago in a case that raised
the same separation-of-powers claim about tenure protection that Cochran advances. See
Bank of La., 919 F.3d at 921, 930; see also Matter of Bank of La., FDIC-12-489b, FDIC-12-
479k, 2016 WL 9050999, at *13 (Nov. 15, 2016)). While not even acknowledging how Bank
of Louisiana limits Free Enterprise Fund the way every other circuit has—to cases in which
the plaintiff is not “embroiled in an enforcement proceeding,” 919 F.3d at 927 (quotation
omitted)—the majority declares that the decision was “addressing the explicit [FDIC
statute] at issue.” Maj. Op. 13. But Bank of Louisiana’s discussion of Free Enterprise Fund
had nothing to do with the FDIC statute. See 919 F.3d at 926–27 (distinguishing Free
Enterprise Fund without once mentioning the FDIC statute). What is more, Bank of
Louisiana repeatedly relies on other circuits’ rulings in SEC cases. See id. at 923−930
(quoting Bennett, 844 F.3d at 186−87; Hill, 825 F.3d at 1249−51; Tilton, 824 F.3d at 286−90;
Jarkesy, 803 F.3d at 13−14, 16−17, 19, 22–23, 28−29; Bebo, 799 F.3d at 767, 773).
As the majority does not overrule Bank of Louisiana, the decision’s holding about
Free Enterprise Fund and the Thunder Basin factors apparently remain good law. That is
because alternative holdings are binding precedent in our court. United States v. Reyes-
Contreras, 910 F.3d 169, 179 n.19 (5th Cir. 2018) (en banc). The majority’s failure to grapple
with Bank of Louisiana’s application of the three Thunder Basin factors will cause confusion
in future cases.
12
Judge Oldham’s opinion labels the difference between investigation and
enforcement a “so-called” distinction. Concurring Op. 43. But it’s a fundamental
distinction to parties and lawyers involved in such matters. What is new is the majority’s
allowing district court intervention in an ongoing SEC enforcement action. Heretofore
there was postenforcement review of agency decisions along with certain categories of truly
pre-enforcement review. See Abbott Labs. v. Gardner, 387 U.S. 136 (1967). Free Enterprise

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F.3d at 186; Hill, 825 F.3d at 1243; Tilton, 824 F.3d at 283−84; Bebo, 799 F.3d
at 774−75; Jarkesy, 803 F.3d at 20. As the Ninth Circuit recently put it, “Free
Enterprise does not appear to address a scenario where there is eventual
judicial review, but rather speaks only to a situation of no guaranteed judicial
review.” Axon Enter., 986 F.3d at 1184. 13
In departing from the reading a unanimous Fifth Circuit panel gave
Free Enterprise Fund just two years ago, the majority comes up with a
distinction that no other circuit has recognized in the more than ten years
since the Supreme Court decided Free Enterprise Fund. The distinction, the
majority concludes, is that “the Free Enterprise Fund accounting firm sought
structural relief.” Maj. Op. 20–21. The most glaring problem with this
theory is that nowhere does Free Enterprise Fund say that district court
jurisdiction exists because the claim is a structural one. 14 See 561 U.S. at 490;

is of the latter category as the agency had not yet charged the plaintiff. Today’s opinion
creates a new category of midenforcement review.
13
If all these decisions fly in the face of Free Enterprise Fund as the majority
contends, then they would have been ripe for summary reversal at the Supreme Court. But
thrice the Supreme Court denied cert petitions arguing that Free Enterprise Fund grants
district courts’ jurisdiction for separation-of-powers challenges to pending SEC
proceedings. Gibson v. SEC, 141 S. Ct. 1125 (Jan. 11, 2021); Tilton v. SEC, 137 S. Ct. 2187
(May 30, 2017); Bebo v. SEC, 136 S. Ct. 1236 (Mar. 28, 2016).
The argument in those cert petitions will sound familiar. For example, one petition
argues it is challenging a ruling “fundamentally incompatible with this Court’s decision in
Free Enterprise Fund.” Petition for Certiorari, Tilton v. SEC, No. 16-906, 2017 WL 281861,
at *12 (Jan. 18, 2017).
14
Another problem is that it is difficult to delineate and discern when a claim is a
“structural” one, and the majority makes no effort to do so. Consider the claim pending
in our court that the Seventh Amendment requires a jury for securities fraud cases being
decided in agency proceedings. Brief for Petitioners, Jarkesy v. SEC, No. 20-61007, at 7–
34. Is that a structural claim? Maybe so, given that the jury right limits the power of other
governmental actors. In some sense, though, every constitutional claim is about the
separation of powers as a constitutional right is a limit on government. The categorical
exception Cochran seeks thus may be neither a category nor an exception. The Supreme

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see also Axon Enter., 986 F.3d at 1184 (“But the Supreme Court in Free
Enterprise did not carve out a broad exception for challenges to an agency’s
structure, procedure, or existence.”). It would have been simple to make this
distinction. One sentence would have done the trick: “We hold that because
of the structural concerns raised by separation-of-powers claims, judicial
review that follows an enforcement action does not provide meaningful
review of them.”
Instead of saying something along those lines, Free Enterprise Fund
emphasizes that the investigative posture the accounting firm found itself in
is what made section 78y inapplicable: “Section 78y provides only for judicial
review of Commission action, and not every Board action is encapsulated in a
final Commission order or rule.” 561 U.S. at 490. The investigation by the
Public Company Accounting Oversight Board (PCAOB) was not reviewable
under section 78y because an investigation does not culminate in a final
agency order. It follows easily from that fact that section 78y did not provide
for meaningful review of the claim challenging the Board. Id.; see also Axon
Enter., 986 F.3d at 1184 (“[T]he court justified district court jurisdiction on
the narrow ground that the challenged action—the Board’s critical report of
the auditing firm—did not amount to a final order that could be appealed to
a court under the statutory scheme.”). It also follows that section 78y
provides a meaningful avenue of relief for people like Cochran and Lucia who
are “embroiled in an enforcement proceeding” and can appeal an adverse
agency order. Bank of La., 919 F.3d at 927 (quotation omitted); see also Lucia,

Court noted similar line-drawing problems when it rejected carving out certain
constitutional claims from a statute’s channeling scheme because “a jurisdictional rule
based on the nature of a[ ] . . . constitutional claim . . . is hazy at best and incoherent at
worst.” Elgin, 567 U.S. at 15; cf. Weaver v. Massachusetts, 137 S. Ct. 1899, 1910 (2017)
(noting that the concept of “structural error” in criminal cases should not carry
“talismanic significance as a doctrinal matter”).

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138 S. Ct. at 2055–56 (vindicating a claim under the Appointments Clause
raised via section 78y’s review scheme). 15

B.
The investigation/enforcement distinction also explains why the Free
Enterprise Fund claim was wholly collateral to the section 78y scheme
whereas Cochran’s removal power claim may not be. See Jarkesy, 803 F.3d
at 23 (explaining that in Free Enterprise Fund “the Court found that the
plaintiffs’ pre-enforcement Article II claims were ‘collateral’ to the SEC
administrative-review scheme because the Free Enterprise plaintiffs were not
in that scheme at all; hence, their general challenge to the PCAOB’s
existence was ‘collateral to any Commission orders or rules from which
[judicial] review might be sought.’” (quoting Free Enter., 561 U.S. at 490)).
Courts analyzing whether a claim is wholly collateral to the administrative
scheme have usually asked whether the plaintiff’s claim arises as a result of
the actions the agency took during the challenged proceedings. Bank of La.,
919 F.3d at 928−29. Cochran’s challenge—that the official adjudicating her
claim is unconstitutionally insulated from executive control—is
“inextricably intertwined with the conduct of the very enforcement
proceeding the statute grants the [SEC] the power to institute and resolve as
an initial matter.” Id. at 928 (quoting Jarkesy, 803 F.3d at 23). That is,

15
The seemingly anomalous result that a party subject to the less onerous agency
action of investigation may run to federal court while a party that has been charged must
wait flows directly from the principle that federal court jurisdiction is a matter of statute.
Because Congress set forth specific judicial review provisions for SEC proceedings,
allowing recourse to the general grant of federal jurisdiction when there is a pending
enforcement action would disrupt that scheme. See Thunder Basin, 510 U.S. at 207−09.
There is no scheme for judicial review of SEC investigations, so falling back on general
federal question jurisdiction does not undermine any contrary statutory path.

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Cochran would not be able to assert this claim but for the SEC’s charging her
in an enforcement proceeding. See Tilton, 824 F.3d at 287–88 (explaining
that because the plaintiff’s constitutional claims was asserted “in response
to” the SEC’s commencement of administrative proceedings, it was at least
“procedurally intertwined” such that “we cannot conclude that the claim is
wholly collateral to the SEC’s administrative scheme”). Unlike the Free
Enterprise Fund claim then, Cochran’s claim arises out of an SEC proceeding
that is subject to the review scheme in section 78y. Other circuits have held
that feature alone would be enough to conclude that Cochran’s claim is not
wholly collateral to the statutory review scheme. Bennett, 844 F.3d at
186−87; Tilton, 824 F.3d at 287−88; Jarkesy, 803 F.3d at 23-25.
The majority opinion takes a different approach to this factor, asking
whether the substance of Cochran’s claims is intertwined with the
enforcement scheme. Although some circuits have suggested this approach,
our court is the first to adopt it. Bank of La., 919 F.3d at 928 (explaining that
some circuit courts have suggested this approach though none have adopted
it). And the majority’s view echoes reasoning the Supreme Court has
rejected. See Elgin, 567 U.S. at 29–30 (Alito, J., dissenting) (“Administrative
agencies typically do not adjudicate facial constitutional challenges to the
laws that they administer. Such challenges not only lie outside the realm of
special agency expertise, but they are also wholly collateral to other types of
claims that the agency is empowered to consider.”).
But even the majority’s preferred approach on “wholly collateral,”
cannot overcome the other two Thunder Basin factors to give the district
court jurisdiction despite the statutory scheme of agency adjudication plus
an appeal. See Free Enter., 561 U.S. at 489−91 (holding that district court had
jurisdiction because all three Thunder Basin factors favored that result); Axon
Enter., 986 F.3d at 1187 (“[U]nder Supreme Court precedent the presence
of meaningful judicial review is enough to find that Congress precluded

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district court jurisdiction . . . .”); Bebo, 799 F.3d at 774−75 (rejecting district
court jurisdiction even after assuming the plaintiff’s claims were “wholly
collateral” to the scheme). 16
C.
The third Thunder Basin factor—agency expertise—appears at first
blush to help Cochran. Purely legal questions that are not interpretations of
the agency’s statute or regulations—like issues of constitutional law—do not
generally benefit from agency expertise. See Thunder Basin, 510 U.S. at 215;
see also Carr, 141 S. Ct. at 1360 (excusing failure to exhaust in part because an
ALJ does not have expertise on a separation-of-powers claim). But the
Supreme Court’s most recent instruction is that we should not just consider
whether the agency has expertise with respect to the particular claim the
plaintiff wants to resolve in district court. See Elgin, 567 U.S. at 23; Tilton,
824 F.3d at 289 (explaining that Elgin followed “a broader conception of
agency expertise” in “emphasiz[ing] that an agency may bring its expertise
to bear on a constitutional claim indirectly, by resolving accompanying,
potentially dispositive issues in the same proceeding”); Jarkesy, 803 F.3d at
28 (explaining that Elgin “clarified . . . that an agency’s relative level of
insight into the merits of a constitutional question is not determinative” on
the agency expertise factor).
The benefit of agency expertise should instead be assessed by looking
at the overall case, so this factor accounts for the possibility that the agency’s
resolution of other issues “may obviate the need to address the constitutional

16
Other circuits recognize that the “meaningful review” factor is paramount. Hill,
825 F.3d at 1245; Tilton, 824 F.3d at 282; Nat’l Taxpayers Union v. U.S. Soc. Sec. Admin.,
376 F.3d 239, 243 (4th Cir. 2004). It is telling that, despite the primacy of the “meaningful
review” factor, the majority relegates it to the end of its Thunder Basin discussion. Maj.
Op. 20–21.

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challenge.” Elgin, 567 U.S. at 22–23; see also FTC v. Standard Oil Co. of Cal.,
449 U.S. 232, 244 n.11 (1980) (“[T]he possibility that Socal’s challenge may
be mooted in adjudication warrants the requirement that Socal pursue
adjudication, not shortcut it.”). The prospect that agency expertise could
resolve an FDIC enforcement action in favor of the charged party is why we
recently concluded that this Thunder Basin factor did not support exempting
a separation-of-powers claim from the FDIC-review scheme Congress
created. Bank of La., 919 F.3d at 930 (citing Jarkesy, 803 F.3d at 28; Hill, 825
F.3d at 1250–51; Tilton, 824 F.3d at 289).
Considering whether a plaintiff might prevail before the ALJ on
nonconstitutional grounds is consistent with the principle that we should
avoid reaching difficult constitutional claims when alternative resolutions
exist. Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 348 (1936) (Brandeis,
J., concurring). As Judge Sutton has explained, “Elgin and Thunder Basin
promote” constitutional avoidance because “the crucible of administrative
review ensures that the petitioner’s case presents a true constitutional
dispute before the Judiciary steps in to decide those weighty issues.” Jones
Bros., Inc. v. Sec’y of Lab., 898 F.3d 669, 676 (6th Cir. 2018). Allowing
separation-of-powers claims to evade the judicial review scheme that
Congress created gets constitutional avoidance backward. See Jarkesy, 803
F.3d at 25.
The majority refuses to follow Elgin on this point. Its excuse for not
doing so is that Elgin’s holding is supposedly inconsistent with Free Enterprise
Fund and the latter controls because it involved the SEC. Maj. Op. 17 n.11,
20–21 & n.12. But there is no inconsistency. Once again, the fact that the
Free Enterprise Fund accounting firm was not a party to an enforcement
proceeding explains the different outcome. The firm was being investigated
by a Board that it believed (correctly, it turned out) enjoyed unconstitutional
removal protection. There was no ALJ to complain to about the

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investigation. There was no statutory defense that an ALJ could recognize
to get the accounting firm out from under the investigation. Contrast Elgin,
567 U.S. at 22–23 (explaining that a ruling by the agency on whether there
was an “adverse employment action” might “avoid the need to reach [the]
constitutional claims”). As a result, Free Enterprise Fund was not a case in
which resolution of statutory claims the agency “routinely considers”
“might fully dispose of the case.” Id. at 23. In contrast, when there is a
pending SEC administrative case, the ALJ’s expertise in securities law may
resolve the case and avoid the need to decide constitutional claims. Cochran,
for example, might show there was no accounting fraud. This possible
resolution of the enforcement proceeding on a ground in which the agency
has expertise explains why other courts of appeals have been faithful to Elgin
even in SEC cases. See Bennett, 844 F.3d at 187; Hill, 825 F.3d at 1250–51;
Tilton, 824 F.3d at 289; Jarkesy, 803 F.3d at 28; Bebo, 799 F.3d at 771.
***
The Thunder Basin factors thus do not demonstrate that Congress
intended to except separation-of-powers claims from the avenues the
Exchange Act creates for challenging enforcement proceedings. Just as Lucia
followed those procedures to achieve a landmark ruling on the appointment
power, Cochran has the same opportunity for her removal power claim.

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III.
Cochran contends that allowing immediate judicial resolution of her
claim in district court would be the more efficient course. But that is a
myopic view as it assumes the arguments an SEC respondent advances in the
district court will always be winning ones. What if claims brought in district
court fail on the merits? Then, instead of the one court Congress authorized,
three courts would have devoted time to the agency matter: (1) the district
court pre-enforcement; (2) the court of appeals in its review of the pre-
enforcement challenge, and (3) another court of appeals panel in the
traditional postenforcement review. Cf. Standard Oil, 449 U.S. at 242
(recognizing that “piecemeal review” prior to the completion of adjudication
“is inefficient and upon completion of the agency process might prove to
have been unnecessary”). On top of that, a respondent will get two bites at
a cert. petition—one pre-enforcement and one post. Multiple layers of
unsuccessful pre-enforcement judicial review will be costly to the parties and
courts while substantially delaying the agency proceeding. Also problematic
is that allowing judicial review both before and after an agency adjudication
risks review of the same matter in different circuits, a result that would be
inefficient, anomalous, and potentially mischievous. Cf. Elgin, 567 U.S. at 14
(recognizing that allowing district court jurisdiction over challenges to
agency proceedings creates the “potential for inconsistent decisionmaking
and duplicative judicial review”); see also Jarkesy, 803 F.3d at 30.
Even when the pre-enforcement suit succeeds, allowing multiple
layers of review before the agency rules may not necessarily be more efficient.
It is not certain that district court litigation, followed by appellate review,
would produce a quicker resolution than agency adjudication followed by
appellate review. Review schemes that exclude district courts, like those in
section 78y, recognize that a “double layer of judicial review” can be

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“wasteful and irrational.” See Elgin, 567 U.S. at 14 (quoting United States v.
Fausto, 484 U.S. 439, 445 (1988)).
The point, though, is that regardless of whether efficiency concerns
tilt in favor of pre-enforcement review in a particular case, systemic concerns
about piecemeal review in the mine run of cases counsels against adding
layers of review to the scheme the Exchange Act created. See, e.g., Firestone
Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981) (listing reasons that “a
party must ordinarily raise all claims of error in a single appeal following final
judgment on the merits”). Postenforcement review schemes in
administrative law are hardly the only situation in the law when parties have
to wait for review of claims that might end their dispute. For example, the
general prohibition on interlocutory appeals requires a party to litigate its
whole case before challenging on appeal a constitutionally deficient trial. In
criminal cases, that means a defendant may spend months (if not years) in
prison before an appellate court recognizes that he should not have faced the
prosecution in the first place. See Jarkesy, 803 F.3d at 26 (“[W]hen a district
court denies a federal criminal defendant’s pretrial motion, that denial
ordinarily is not immediately appealable.”). And abstention doctrines often
prevent parties from seeking immediate vindication of constitutional rights
in federal court. Id. at 26 (citing Younger v. Harris, 401 U.S. 37, 46 (1971)).
Such rules against premature judicial intervention recognize that piecemeal
review will often prove less efficient. See Cobbledick v. United States, 309 U.S.
323, 325 (1940) (explaining that the final judgment rule “avoid[s] the
obstruction of just claims that would come from permitting the harassment
and cost of a succession of separate appeals”).
At the end of the day, however, which system of review is more
efficient is beside the point. Congress and the President get to make that
policy decision when they enact laws. As every other circuit to consider this
question has held, even when it comes to separation-of-powers claims, the

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Exchange Act allows judicial involvement only after the end of an SEC
proceeding.
***
This case presents a technical but important jurisdictional issue. It is
not a referendum on the Presidencies of Woodrow Wilson and Franklin
Roosevelt. But see Concurring Op. 30–43.
In sticking to our judicial duty of answering the legal question before
us, we take Supreme Court precedent as it is, not as we wish it to be. All five
courts of appeals that have applied that caselaw have concluded it compels
the same result the district court reached in this case: section 78y creates an
exclusive review scheme for pending SEC proceedings that does not allow
district court intervention. Today’s novel ruling to the contrary is at odds
with Elgin and Thunder Basin, overrides the Exchange Act’s exclusive review
scheme, will be inefficient for courts and agencies, and injects federal courts
into sensitive interbranch disputes before seeing if there are other ways to
resolve a case.

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