Can the Bandimere 10th Circuit ruling force the SEC to respect due process?
Not yet, no. At this time, Bandimere is only the law of the land in the 10th Federal Circuit. But at this point in time and in this part of the country, the federal judiciary has ruled that only SEC ALJ’s (Administrative Law Judges) that were properly appointed under the Constitution’s Appointments clause (i.e. appointed by the President or otherwise as the clause specifies) are considered fit to preside (or to have presided) over cases before them. In theory, that means that every legal matter ruled on by such a “judge” must be considered a nullity in the 10th circuit.
We have what law geeks refer to as a “circuit split” because some federal circuits have reached the opposite conclusion on the same question. This is a big deal because a circuit split virtually forces the US Supreme Court to step in and clean up the mess.
Before the Supreme Court gets involved, however, the 10th Circuit will almost certainly pull together all its judges “en banc” to see if they still agree or disagree with the 3-judge panel’s ruling against illegally appointed ALJ’s. The SEC is virtually guaranteed to vigorously challenge the 10th circuit at every stop along the way, so it is premature to say that we have yet achieved a meaningful victory for due process or equal protection under the law.
Regardless, this is an important ruling because it signals that the federal bench is finally questioning the wisdom of giving so much unchecked power to a federal policing body. The Bandimere decision is the first time in recent memory that the federal bench has challenged the previously sacrosanct role of the SEC as judge, jury and executioner in civil matters before itself. (And if you don’t like an ALJ’s ruling, you can always appeal to the folks that write their paychecks, the SEC commission! Good luck with that.)