Every day, Americans find themselves and their businesses shunted into administrative proceedings at federal agencies. For many Americans, it is jarring to find themselves subject to severe financial, reputational, and professional penalties in adjudications very different from a federal court. The Federal Rules of Evidence do not apply, juries are nonexistent, and the hearing officers are not life tenured. Quietly and routinely, people lose their businesses and their livelihoods. Some parties, however, are challenging these pernicious agency practices that have accumulated over decades.

Cornelius Burgess had been serving as the CEO of a small Texas bank for over a decade when he was subjected to administrative proceedings at the Federal Deposit Insurance Corporation (FDIC). After receiving a tip, the FDIC investigated Burgess for allegedly using bank funds for personal expenses. Eventually, the FDIC initiated an enforcement proceeding against Mr. Burgess before an FDIC administrative law judge (ALJ), an agency employee. The ALJ recommended the agency heads remove Burgess from his job and fine him $200,000. After appeals and procedural wrangling, Burgess sued the FDIC in federal court, arguing that his Seventh Amendment right to a jury trial was violated, among other claims.

The Northern District of Texas temporarily enjoined the FDIC actions against Mr. Burgess, finding that the agency proceedings violated his constitutional right to a jury trial. The FDIC then appealed this issue to the Fifth Circuit Court of Appeals. The Fifth Circuit requested supplemental briefing about the jury trial issue after the Supreme Court issued its 2024 opinion in SEC v. Jarkesy, a landmark ruling that reaffirmed the Seventh Amendment right to a jury. And Cato has now filed an amicus brief supporting Mr. Burgess’s right to a jury trial.

In our brief, we explain why the American Founders were opposed to jury-less trials, and we explain the implications of the Supreme Court’s Jarkesy decision for Mr. Burgess’s case. First, Jarkesy strengthens Mr. Burgess’s argument that his Seventh Amendment rights were violated when the FDIC denied him a jury trial. The Supreme Court in Jarkesy emphasized the broad nature of the Seventh Amendment’s jury trial guarantee. A jury trial is required for nearly any action by the government to recover civil penalties, unless it is subject to the “public rights” exception. Second, the public rights exception that the government relies on is narrow, and the FDIC’s case against Mr. Burgess falls outside the exception. Finally, the government’s argument for a broad conception of the public rights exception would create a massive loophole to the broad jury trial guarantee of the Seventh Amendment.

The government argues that Congress should have broad power to deprive Americans of jury trials in regulatory cases because jury trials are “incompatible” with efficient regulatory enforcement. However, the Founding generation adopted the Seventh Amendment to prevent lawmakers from shunting Americans into specialized and jury-less courts. Government practices must conform to the Constitution, not the other way around. The Fifth Circuit should hold that the FDIC’s procedures violated Burgess’s Seventh Amendment rights.