Amicus Briefs
Barton v. SEC
CASE SUMMARY
NCLA urges the Supreme Court to hear this challenge to the practice of courts appointing receivers to control bankrupt companies’ assets at SEC’s request when the agency prosecutes them in regulatory enforcement cases. The district court in this case appointed a receiver with so much authority and discretion that he became an “officer” of the United States under Supreme Court precedent regarding the Constitution’s Appointments Clause, despite Congress never having vested courts with the power to make such appointments. The U.S. Court of Appeals for the Fifth Circuit upheld the appointment. NCLA urges the Justices to consider and overturn this unconstitutional arrangement that the Supreme Court has never approved.
Enabled by courts, SEC uses receiverships of this kind to circumvent the bankruptcy procedures established by Congress through decades of legislative trial and error, replacing it with an ad hoc, non-statutory shadow process. These receivers exercise both judicial and executive power, but they are not supervised by anyone at SEC or elsewhere in the Executive Branch. Article I vests Congress—not courts—with the power to pass laws governing bankruptcy, and no Congressional statute grants courts the ability to appoint receivers like the one in this case who effectively act as officers of the United States.