The Arizona Supreme Court this morning heard arguments in a crucial case about whether bureaucratic agencies can disregard the constitutional right to a trial by jury. The case, which began when the state’s Corporation Commission accused the owners of a company called EFG of securities fraud, is one of three cases now pending before the state’s high court on the question of whether agencies must honor the Arizona Constitution’s promise that right to a jury trial “shall remain inviolate”—or whether they can instead bring accusations of crimes like fraud before an “administrative law judge” in a hearing overseen by the agency itself.
Two years ago, the U.S. Supreme Court ruled that the federal Constitution barred the Securities and Exchange Commission from bringing fraud cases in internal hearings, and held that the Seventh Amendment’s jury protections apply. While agencies can decide some things “in house” in this way, the Court said that because fraud was a crime that entitled a defendant to a jury trial when the federal Constitution was written, the Seventh Amendment must be respected, not evaded when a bureaucracy finds it convenient.
The Arizona lawsuit is similar, but it concerns the state constitution, which was written in 1910 and which promises that the right to a jury is “inviolate.” That seems clear, but at the same time, the authors of the Arizona Constitution created a state Corporation Commission, which has its own article in the Constitution and which has power to impose fines for illegal actions. The upshot, according to the Commission, is that it can impose fines without having to follow the jury requirement.
But as we pointed out in our brief, that doesn’t make sense. By that logic, the Commission could also ignore the right to due process, or the right to free speech, or any of the other rights guaranteed in the state’s bill of rights. And that point came up in the oral argument this morning (which was presented by our friends at Pacific Legal Foundation) when Justice Clint Bolick asked the Commission’s lawyers whether it could disregard other bill of rights protections. The rather unconvincing reply was that of course it would follow those because they aren’t inconsistent with how the Commission operates, whereas the jury trial right is. That elicited a lengthy silence in the courtroom.
The outcome of the EFG case—along with two very similar cases called Sync Title and Cellebration—could prove crucial for all Arizonans. But its consequence could also be critical for people in other states as well, especially because the Arizona Constitution’s “inviolate” language is echoed in most other state constitutions. And although the dangers of the “administrative state” have received a lot of attention in recent years, it’s often forgotten that state bureaucracies have just as much power—probably more—than the kind of federal agencies that were at issue in the Jarkesy case.
State constitutions hold the potential to protect and promote liberty far more than the federal constitution does. If Arizona follows the Jarkesy Court’s hint and rules that jury trial rights under our state constitution must trulyremain “inviolate,” that could open the door for other state courts to put meaningful constraints on the power of unelected bureaucracies nationwide.
Click here to learn more about our work pushing back against the administrative state.
Timothy Sandefur is the Vice President for Legal Affairs at the Goldwater Institute.
