Skip to content
National Association of Attorneys General
  • Issues
    • Issues
      • Anticorruption
      • Antitrust
      • Bankruptcy
      • Charities
      • Civil Law
    • Issues
      • Consumer Protection
      • Criminal Law
      • Cyber and Technology
      • Disaster Preparedness & Response
      • Elder Justice
    • Issues
      • Ethics
      • Human Trafficking
      • Medicaid Fraud
      • Opioids
      • Powers & Duties
    • Issues
      • Public Health
      • The U.S. Supreme Court
      • Tobacco
      • Veterans & Military
  • Our Work
    • Training & Research
    • Centers
      • Center for Consumer Protection
      • Center for Supreme Court Advocacy
      • Center for Tobacco & Public Health
    • Committees
    • Initiatives
      • Presidential Initiative
      • Strategic Partnerships
      • International Fellows
      • COVID-19
    • Bankruptcy
    • Policy & Advocacy
  • Events & Training
    • Event Calendar
    • Attorney General Symposium
    • Presidential Summit
    • Capital Forum
    • Region Meetings
    • CLE Credit
    • NAAG Trainings
    • Online Learning
    • NAMFCU Trainings
    • NAAG Faculty
  • News & Resources
    • Attorney General Journal
    • Reports & Publications
    • Newsroom
    • NAAG Policy Letters
    • Podcasts
    • Online Learning
    • Research & Data
    • Member Directory
  • Attorneys General
    • What Attorneys General Do
    • Who is my Attorney General?
    • Attorneys General Office 101
    • Research & Data
    • Awards & Recognition
    • Careers in Attorney General Offices
    • Careers in Medicaid Fraud Control Units
  • About NAAG
    • NAAG Staff
    • NAAG Leadership
    • NAAG Member Services
    • NAAG Regions
    • NAAG FAQs
    • SAGE
    • NAMFCU
    • Newsroom
    • Careers at NAAG
  • Find my AG
  • About NAMFCU
    • About the Medicaid Fraud Control Units
    • Reporting Fraud and Abuse
    • MFCU Member Hub
    • Careers with a MFCU
  • Contact Us
National Association of Attorneys General
  • Find My AG
  • Consumer Complaints
  • Member Benefits
  • Contact Us
Log In
  • Issues
    • Issues
      • Anticorruption
      • Antitrust
      • Bankruptcy
      • Charities
      • Civil Law
    • Issues
      • Consumer Protection
      • Criminal Law
      • Cyber and Technology
      • Disaster Preparedness & Response
      • Elder Justice
    • Issues
      • Ethics
      • Human Trafficking
      • Medicaid Fraud
      • Opioids
      • Powers & Duties
    • Issues
      • Public Health
      • The U.S. Supreme Court
      • Tobacco
      • Veterans & Military
  • Our Work
    • Training & Research
    • Centers
      • Center for Consumer Protection
      • Center for Supreme Court Advocacy
      • Center for Tobacco & Public Health
    • Committees
    • Initiatives
      • Presidential Initiative
      • Strategic Partnerships
      • International Fellows
      • COVID-19
    • Bankruptcy
    • Policy & Advocacy
  • Events & Training
    • Event Calendar
    • Attorney General Symposium
    • Presidential Summit
    • Capital Forum
    • Region Meetings
    • CLE Credit
    • NAAG Trainings
    • Online Learning
    • NAMFCU Trainings
    • NAAG Faculty
  • News & Resources
    • Attorney General Journal
    • Reports & Publications
    • Newsroom
    • NAAG Policy Letters
    • Podcasts
    • Online Learning
    • Research & Data
    • Member Directory
  • Attorneys General
    • What Attorneys General Do
    • Who is my Attorney General?
    • Attorneys General Office 101
    • Research & Data
    • Awards & Recognition
    • Careers in Attorney General Offices
    • Careers in Medicaid Fraud Control Units
  • About NAAG
    • NAAG Staff
    • NAAG Leadership
    • NAAG Member Services
    • NAAG Regions
    • NAAG FAQs
    • SAGE
    • NAMFCU
    • Newsroom
    • Careers at NAAG
  • Find my AG
  • About NAMFCU
    • About the Medicaid Fraud Control Units
    • Reporting Fraud and Abuse
    • MFCU Member Hub
    • Careers with a MFCU
  • Contact Us

Supreme Court Report: Securities and Exchange Commission v. Cochran, 21-1239

Home / Supreme Court / Supreme Court Report: Securities and Exchange Commission v. Cochran, 21-1239
June 2, 2022 Supreme Court
Share this

  • Dan Schweitzer
    Director, Center for Supreme Court Advocacy
    National Association of Attorneys General

Volume 29, Issue 14

This Report summarizes opinions issued on May 16 and 23, 2022 (Part I); and cases granted review on May 16, 2022 (Part II).

Case Granted Review: Securities and Exchange Commission v. Cochran, 21-1239

Securities and Exchange Commission v. Cochran, 21-1239.  The Court will resolve “[w]hether a federal district court has jurisdiction to hear a suit in which the respondent in an ongoing Securities and Exchange Commission administrative proceeding seeks to enjoin that proceeding, based on an alleged constitutional defect in the statutory provisions that govern the removal of the administrative law judge who will conduct the proceeding.” The SEC initiated proceedings against certified public accountant Michelle Cochran to determine violations of the Securities Exchange Act of 1934 (Exchange Act or Act) and assigned the matter to an administrative law judge (ALJ) to receive and review evidence and to render an initial decision. The ALJ ruled against Cochran, imposing a $22,500 civil penalty and a five-year ban on practicing before the Commission. In compliance with administrative procedures, Cochran sought review of the ALJ decision. The SEC vacated the decision because under a then-recent Supreme Court ruling, the ALJ had not been properly appointed. The SEC then remanded the matter for rehearing before a properly appointed ALJ. Cochran sued the SEC, Chairman of the SEC, and the Attorney General in district court, alleging “that statutory restrictions on the removal of Commission ALJs violated Article II,” but the district court tossed the suit for lack of subject matter jurisdiction. The court observed that, under the Exchange Act, “a person aggrieved by a final SEC order may obtain review of it in the federal court of appeals.” The court concluded that, by adopting that scheme, Congress had “implicitly divest[ed] district courts of jurisdiction” over challenges to the Commission’s administrative proceedings. The en banc Fifth Circuit reversed the dismissal. 20 F.4th 194.

The Fifth Circuit relied on statutory text, stare decisis, and its own analysis to conclude that Congress did not intend to strip the federal district court of jurisdiction to hear Cochran’s constitutional claim.  The Exchange Act provides that “[a] person aggrieved by a final order of the Commission . . . may obtain review of the order in the United States Court of Appeals . . . or for the District of Columbia Circuit[.]”  15 U.S.C. §78y(a)(1)). The Fifth Circuit concluded that this text neither explicitly nor implicitly stripped the district court of jurisdiction. Next, the court determined that Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010), controls this case because it “rejected the precise argument the SEC makes here—that the Exchange Act divests district courts of jurisdiction over removal power challenges.” Finally, the Fifth Circuit applied the factors in Thunder Basin Coal Company v. Reich, 510 U.S. 200 (1994), concluding that (1) “Cochran’s removal power claim is wholly collateral to the Exchange Act’s statutory-review scheme”; (2) “Cochran’s removal power claim is outside the SEC’s expertise”; and (3) ‘the Exchange Act’s statutory-review scheme threatens to deprive Cochran of the opportunity for meaningful judicial review.”

The parties spent little time on the underlying merits in the petition for certiorari and related briefing, and agreed that the Court should grant review given the important jurisdictional issue and creation of a circuit split.  They diverged, however, on when and how the Court should review this matter in light of its grant of certiorari in Axon Enterprise, Inc. v. Federal Trade Commission, 21-86.1  Axon presents “essentially” the same question in the context of the Federal Trade Commission. The Ninth Circuit there, after applying the Thunder Basin factors, held that the federal district court lacked jurisdiction to consider a structural constitutional challenge.  Here, the SEC proposed that the Supreme Court hold this case pending a decision in Axon and then decide this case accordingly. Cochran requested that her case and Axon be decided together.

  1. A summary of Axon may be found at National Association of Attorneys General, Cases Granted Review:  Axon Enterprise, Inc. v. Federal Trade Commission, 21-86, Supreme Court Report, Vol. 29, Issue 8, Part II, February 14, 2022, available at <https://www.naag.org/attorney-general-journal/supreme-court-report-axon-v-ftc-21-86/. [↩]

Related Posts

Related Posts

Supreme Court Report, Volume 32, Issue 15

Supreme Court Report, Volume 31, Issue 20

Supreme Court Report, Volume 32, Issue 6

Connect with NAAG and the Attorney General Community

Create a NAAG account to subscribe to our newsletters or mailing lists.

Create Account
Subscribe
Marble columns and the top of a federal building

scroll to filters

White Logo for the National Association of Attorneys General

1850 M Street NW
12th floor
Washington, DC 20036

TEL 202-326-6000
EMAIL 

Youtube
  • Issues
    • Issues
      • Anticorruption
      • Antitrust
      • Bankruptcy
      • Charities
      • Civil Law
    • Issues
      • Consumer Protection
      • Criminal Law
      • Cyber and Technology
      • Disaster Preparedness & Response
      • Elder Justice
    • Issues
      • Ethics
      • Human Trafficking
      • Medicaid Fraud
      • Opioids
      • Powers & Duties
    • Issues
      • Public Health
      • The U.S. Supreme Court
      • Tobacco
      • Veterans & Military
  • Our Work
    • Training & Research
    • Centers
      • Center for Consumer Protection
      • Center for Supreme Court Advocacy
      • Center for Tobacco & Public Health
    • Committees
    • Initiatives
      • Presidential Initiative
      • Strategic Partnerships
      • International Fellows
      • COVID-19
    • Bankruptcy
    • Policy & Advocacy
  • Events & Training
    • Event Calendar
    • Attorney General Symposium
    • Presidential Summit
    • Capital Forum
    • Region Meetings
    • CLE Credit
    • NAAG Trainings
    • Online Learning
    • NAMFCU Trainings
    • NAAG Faculty
  • News & Resources
    • Attorney General Journal
    • Reports & Publications
    • Newsroom
    • NAAG Policy Letters
    • Podcasts
    • Online Learning
    • Research & Data
    • Member Directory
  • Attorneys General
    • What Attorneys General Do
    • Who is my Attorney General?
    • Attorneys General Office 101
    • Research & Data
    • Awards & Recognition
    • Careers in Attorney General Offices
    • Careers in Medicaid Fraud Control Units
  • About NAAG
    • NAAG Staff
    • NAAG Leadership
    • NAAG Member Services
    • NAAG Regions
    • NAAG FAQs
    • SAGE
    • NAMFCU
    • Newsroom
    • Careers at NAAG
  • Find my AG
  • About NAMFCU
    • About the Medicaid Fraud Control Units
    • Reporting Fraud and Abuse
    • MFCU Member Hub
    • Careers with a MFCU
  • Contact Us
  • Find My AG
  • Consumer Complaints
  • Member Benefits
  • Contact Us
  • Accessibility Statement
  • Privacy & Cookies Notice
  • Sitemap
  • Member Login

About the National Association of Attorneys General

As the nonpartisan national forum for America's state and territory attorneys general and their staff, NAAG provides collaboration, insight, and expertise to empower and champion America's attorneys general.
Learn More

© 2025 Copyright National Association of Attorneys General

Website by Yoko Co

Internal Feedback / Report an Error

Request an Update / Report an Error

The change you are requesting will be linked to this page. The URL for the page will be included in a hidden field when the form is submitted.
Please enter your change or describe your request. Be sure to reference where the error appears on the page and what needs to be done specifically.
Upload any files that need to be linked to this page. PDF only. Submit another request if you have more than five files to upload.
Drop files here or
Accepted file types: pdf, docx, xls, Max. file size: 128 MB, Max. files: 5.

    Who is requesting this change?(Required)

    Scroll To Top

    Insert/edit link

    Enter the destination URL

    Or link to existing content

      No search term specified. Showing recent items. Search or use up and down arrow keys to select an item.
        To provide you more clarity about how we collect, store and use personal information, and your rights to control that information, we have updated our privacy policy, which also explains how we use cookies. You consent to our cookies if you continue to use our website.I Agree