The Securities and Exchange Commission lost its bid Wednesday to have the 10th U.S. Circuit Court of Appeals in Denver reconsider a Dec. 29 decision that its administrative law judge hiring process violates the Constitution.
A majority on the judicial panel voted against a rehearing in the case brought by Colorado businessman David Bandimere against the SEC, but Judges Carlos Lucero and Nancy Moritz strongly disagreed in a dissenting opinion, saying that the matter “presents numerous questions of constitutional importance” that the Supreme Court may ultimately decide. “The impact of this opinion will be substantial, and it presents a threat of disruption throughout our government,” the dissenting judges wrote.
The December decision was the second by an appeals court to weigh in on the constitutional question, following an Aug. 9 decision by the District of Columbia Circuit, which upheld the SEC’s use of administrative law judges. That three-judge decision was vacated in February when the Washington appeals court granted a rehearing by a full 10-judge panel, scheduled for May 24.
Other challenges have been rebuffed before addressing the constitutional question, or are still awaiting rulings in other circuits.