NCLA Amicus Brief Calls for Supreme Court to Review Unconstitutional FDIC ALJ Te… – Press Release

Washington, D.C., March 06, 2023 (GLOBE NEWSWIRE) — The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, has filed an amicus curiae brief urging the Supreme Court to review a case, Calcutt v. Federal Deposit Insurance Corporation, that challenges the tenure protections enjoyed by FDIC’s administrative law judges (ALJs). In its brief, NCLA argues that the U.S. Court of Appeals for the Sixth Circuit declined to decide this important separation-of-powers question based on a mistaken belief that it could afford Calcutt no remedy.

Calcutt, a former bank executive and director, petitioned the Sixth Circuit to review a final FDIC administrative order that removed him from his position, permanently barred him from the banking industry, and imposed a $125,000 penalty. In his petition, Calcutt argued, among other things, that FDIC’s Board of Directors and ALJs are unconstitutionally shielded from removal by the President. The Sixth Circuit ultimately declined to reach the substance of Calcutt’s separation-of-powers challenge, concluding that he would not be entitled to any remedy—even if successful—because he could not demonstrate particularized harm caused by the constitutional violation.

NCLA argues that the Sixth Circuit’s refusal to decide the merits of Calcutt’s challenge is an unconventional, even illogical approach that contrasts with Supreme Court precedent and the Fifth Circuit’s recent decision in Jarkesy v. SEC, an analogous case in which an administrative target challenged a final order resulting from a proceeding superintended by an SEC ALJ. Among several questions answered by Jarkesy was essentially the same one presented by Calcutt: whether the ALJ was unconstitutionally protected by multiple layers of protection from removal by the President. The Fifth Circuit in Jarkesy answered that question first—in the affirmative—and only then considered the appropriate remedy. That sequencing mirrored the Supreme Court’s approach in…

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