The SEC Case That Could Expand Jury Trial Rights

In this episode of Unwritten Law, NCLA Senior Litigation Counsel John Vecchione is joined by Senior Litigation Counsel Russ Ryan to discuss Smith v. SEC, a case raising fundamental questions about jury trial rights, administrative adjudication, and constitutional exhaustion requirements.The case began more than a decade ago when FINRA initiated an investigation into George Smith. After years of proceedings before FINRA and the SEC, Smith challenged the process itself, arguing that he was entitled to have his case heard in an Article III court before a jury rather than through an administrative enforcement system.Russ explains how a Sixth Circuit panel recently suggested that Smith's constitutional arguments may have substantial merit—but nevertheless ruled against him on the ground that he failed to raise those arguments before the SEC itself.The discussion explores why agencies lack expertise and authority to resolve constitutional questions, how recent Supreme Court decisions such as Axon, Cochran, and Free Enterprise Fund bear on the issue, and why forcing litigants to exhaust constitutional claims before agencies creates a procedural trap.John and Russ also discuss the amicus briefs supporting rehearing, including filings from the Pacific Legal Foundation, the New Civil Liberties Alliance's allies in the administrative law space, and a brief submitted on behalf of entrepreneur Mark Cuban.The episode highlights broader questions about due process, administrative power, and whether Americans can truly be said to have "waived" constitutional rights by failing to raise them before agencies that have no power to grant relief.