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Supreme Court Narrows Federal Inmates' Ability to Sue Officials
Confirmed
In Short: The Supreme Court has ruled that federal inmates seeking equitable relief must adhere to traditional equitable principles, which do not require a showing of harm.
The Supreme Court has ruled that equitable relief may be sought by investors to benefit them, provided it adheres to traditional equitable principles, which historically do not require a showing of harm suffered by the aggrieved party.
In a unanimous decision in Kokesh v. SEC in 2017, the Court established that disgorgement in securities-enforcement contexts is a 'penalty' under Section 2462 of the Exchange Act, mandating that such actions must be commenced within five years of the date the claim accrues.
The Court further clarified in Liu v. SEC that a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is considered equitable relief under § 78u(d)(5) of the Exchange Act.
However, the Court's decision in Sripetch raises questions about the SEC's ability to order disgorgement when there are no identifiable investors, as funds would previously have been deposited into the Treasury.
Beginning in the 1970s, the SEC urged courts to order disgorgement as an exercise of their 'inherent equity power to grant relief ancillary to an injunction,' a request that federal district courts complied with to prevent wrongdoers from profiting off violations of securities laws and to protect the investing public.
The Court's decision is a win for the SEC, but it leaves open questions that could create uncertainty in future cases.
In this term, the Court is also considering whether local governments can sue oil and gas companies for climate change costs and whether student IDs can be accepted at polling places in New Hampshire.
The Court's decisions could define the scope of Donald Trump's presidential authority and the legitimacy of the Supreme Court itself.
What's confirmed
- The Supreme Court has ruled that equitable relief may be sought by investors to benefit them, provided it adheres to traditional equitable principles, which historically do not require a showing of harm suffered by the aggrieved party.
- In a unanimous decision in Kokesh v. SEC in 2017, the Court established that disgorgement in securities-enforcement contexts is a 'penalty' under Section 2462 of the Exchange Act, mandating that such actions must be commenced within five years of the date the claim accrues.
- The Court further clarified in Liu v. SEC that a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is considered equitable relief under § 78u(d)(5) of the Exchange Act.
- However, the Court's decision in Sripetch raises questions about the SEC's ability to order disgorgement when there are no identifiable investors, as funds would previously have been deposited into the Treasury.
- Beginning in the 1970s, the SEC urged courts to order disgorgement as an exercise of their 'inherent equity power to grant relief ancillary to an injunction,' a request that federal district courts complied with to prevent wrongdoers from profiting off violations of securities laws and to protect the investing public.
- The Court's decision is a win for the SEC, but it leaves open questions that could create uncertainty in future cases.
- In this term, the Court is also considering whether local governments can sue oil and gas companies for climate change costs and whether student IDs can be accepted at polling places in New Hampshire.
- The Court's decisions could define the scope of Donald Trump's presidential authority and the legitimacy of the Supreme Court itself.
What's still developing
- Over time, Congress and the Courts have taken action to strengthen the SEC’s ability to enforce the U.S.
- The U.S. Supreme Court's conservative majority has previously targeted taxpayer programs that explicitly exclude religious programs.
- In this podcast edition of Supreme Court Brief, Jimmy Hoover interviews law professor Neil Seigel about his ongoing scholarship about judicial self-protection and how the Supreme Court has de-escalated conflicts with the Trump administration to preserve its own legitimacy.
- The Supreme Court grilled a lawyer representing former Intel employees seeking to revive claims that the company made bad investment decisions in its retirement plans.
- This edition of Supreme Court Brief previews Tuesday's oral arguments in a sentencing dispute at the Supreme Court and links to last week's podcast deep dive into this term's major climate change case.
- The case focuses on the scope of a 1971 Supreme Court ruling called Bivens v. Six Unknown Fed.
- A federal judge dismissed his suit, citing the Supreme Court's decades of skepticism over such lawsuits.
- The emergency appeal comes after lower courts blocked officials from immediately carrying out the policy adopted after an executive order from President Donald Trump.
- The justices granted the application to pause a lower court’s injunction that required New Hampshire Secretary of State David Scanlan to revise guidance he issued announcing that student IDs could no longer be used for any purpose at all.
- Justice Brett Kavanaugh turned down a Republican-backed emergency appeal that sought to block a Missouri Supreme Court ruling last week restoring earlier district lines and ordering that voters to weigh in on the redistricting plan in November for use in future elections.
- The Supreme Court delivered two significant immigration victories for President Donald Trump, allowing the administration to terminate temporary protected status for over a million migrants and restrict asylum claims at the US-Mexico border.