SEC v. Jarkesy: What Does It Mean for Laboratory Animals?

By Blair Eagleson | February 11th, 2026

While many were focused on what would become of the Chevron Doctrine in June 2024, the Supreme Court was also deciding another case that cut against agency authority, Securities and Exchange Commission v. Jarkesy. The ramifications of this case could be far-reaching. For federal agencies that enforce regulations through administrative proceedings, including the United States Department of Agriculture (USDA), this ruling has raised questions about how civil penalties can be imposed. Laboratory animals protected under the Animal Welfare Act (AWA) could be unexpected victims of this move to reduce agency power.

Case Overview

In Jarkesy, the Supreme Court addressed whether George Jarkesy was entitled to a jury trial under the Seventh Amendment after the SEC brought civil penalties against him. After an investigation, the SEC alleged that he had violated the federal securities laws’ “antifraud provisions.” The SEC pursued the case through an in-house administrative proceeding using an Administrative Law Judge (ALJ), who ordered Jarkesy to pay a civil penalty.

The Fifth Circuit reversed, and the Supreme Court affirmed the decision by a 6-3 vote, holding that when the SEC seeks civil penalties against a defendant, the defendant is entitled to a jury trial under the Seventh Amendment. The majority opinion noted that the antifraud provisions replicated common law fraud claims, and under the Seventh Amendment, “[for] suit[s] at common law . . . the right of trial by jury shall be preserved.” Furthermore, the Court emphasized that the SEC’s civil penalty is a legal remedy intended to punish the defendant rather than to secure restitution and is thus subject to the Seventh Amendment.

Impact on USDA Enforcement Strategies

Because of Jarkesy, it is now unconstitutional for an SEC ALJ to decide securities fraud cases. If the Commission seeks civil penalties for fraud, it must sue a defendant in an Article III forum. While the SEC was the only petitioner in this case, the dissent noted that this decision could affect more than a dozen agencies that impose civil penalties through administrative proceedings. 

This fear of potential legal challenges creates a chilling effect that can affect laboratory animals who rely on the USDA’s enforcement. Pursuant to 7 U.S.C. § 2149(b) of the AWA, “any. . . research facility. . . that violates any provision of this chapter. . . may be assessed a civil penalty by the Secretary.”  There has already been a chilling effect on the USDA following this case. In a report by the Animal Welfare Institute, following the SEC v. Jarkesy decision, the USDA has opted to issue more warnings rather than fines for violations of the Animal Welfare Act. There still have been penalties; specifically, five fines were issued in the 14 months following the Jarkesy ruling. Given that the AWA is already underenforced, requiring the USDA to go to federal court to seek civil penalties from violators would create obstacles to holding them accountable. These obstacles include increased burdens of proof, longer legal processes, and strains on agency resources. If the USDA must litigate every civil penalty in federal court, animals will be left at risk due to delays and increased burdens.

What About the Public Rights Exception?

To not implicate the Seventh Amendment, the matter would have to qualify under the public rights exception. The Supreme Court noted in this case that the public rights exception did not apply because this was a “common law suit in all but name.”  This exception permits matters that do not relate to private rights to be resolved outside an Article III court.

Even if a court were to hold that Jarkesy applies beyond the SEC to other agencies, the USDA should argue that the public rights exception governs AWA enforcement proceedings. Research facilities must register with the USDA as a prerequisite to using live animals for research or testing, and the AWA imposes minimum standards of humane care and treatment of laboratory animals. Enforcement of actions for violations, such as unsafe housing or handling practices that cause stress, is more akin to a regulatory compliance measure than to the adjudication of traditional private rights. Because research facilities function within a comprehensive federal regulatory scheme, AWA enforcement falls directly under the public rights exception.

How to Protect Lab Animals Post Jarkesy

Some have argued that SEC v. Jarkesy applies to all agencies, which is why we are seeing a decrease in civil penalties being brought by the USDA. Like other agencies, the USDA may hesitate to pursue civil penalties due to uncertainty about whether they must be adjudicated in federal court or through agency proceedings.

All agencies, aside from the SEC, have a statutory duty to impose civil penalties when applicable. The issue presented to the Court was a particularized question regarding civil penalties for fraud being adjudicated within SEC administrative proceedings. Thus, the Jarkesy ruling is, on its face, limited. The USDA has issued five penalties since the decision, showing that the agency recognizes this ruling does not affect its authority to enforce penalties.

The dissent stated, “the majority claims that its ruling is limited to ‘civil penalty suits for fraud’ pursuant to a statute that is ‘barely over a decade old.” Although the current administration appears determined to dismantle the regulatory state, and the majority opinion may open the door to future challenges to any agency’s ability to impose civil penalties through in-house adjudication, it remains to be seen how the ruling’s impact will unfold in subsequent cases.

Agencies such as the USDA should continue to use civil penalties through administrative proceedings unless future rulings explicitly curtail their authority to do so. In the meantime, laboratory animal advocates, policymakers, and researchers should monitor USDA enforcement and ensure that civil penalties remain an effective means of safeguarding laboratory animals.

The views expressed do not necessarily reflect the official policy or position of Johns Hopkins University or Johns Hopkins Bloomberg School of Public Health.