DEMAND A JURY TRIAL IN A NEVADA ADMINSISTRATIVE PROCEEDING?
JURY TRIALS MUST BE PROVIDED IF REQUESTED
In a recent United States Supreme Court case, the issue arose of whether the right to trial by jury is implicated where an administrative agency, in that case, the Securities Exchange Commission, proceeds extrajudicially to impose civil penalties. SCOTUS determined that, pursuant to the Seventh Amendment to the United States Constitution, in administrative actions for civil remedies at common law, such as penalties, jury trials must be provided if requested. This could have significant implications in proceedings before state tribunals such as The Nevada State Contractors Board, State and Federal regulatory bodies such as: Manufactured Housing, Southern Nevada Health District, Department of Air Quality and Clark County Business Licensing and others.
The Seventh Amendment to the United States Constitution provides:
In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.
Nevada’s counterpart is broader and provides, in Article I, Section 3 of the Constitution of the State of Nevada:
The Right Of A Trial Jury Shall Be Secured
The right of trial by Jury shall be secured to all and remain inviolate forever; but a Jury trial may be waived by the parties in all civil cases in the manner to be prescribed by law; and in civil cases, if three fourths of the Jurors agree upon a verdict it shall stand and have the same force and effect as a verdict by the whole Jury, Provided, the Legislature by a law passed by a two thirds vote of all the members elected to each branch thereof may require a unanimous verdict notwithstanding this Provision.
In the case SEC v. Jarkesy, 114 S. Ct. 2117, 219 L. Ed. 2d 650 (2024), the United States Supreme Court determined that: The right to trial by jury is “of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right” has always been and “should be scrutinized with the utmost care.” Dimick v. Schiedt, 293 U. S. 474, 486, 55 S. Ct. 296, 79 L. Ed. 603 (1935). SEC v. Jarkesy, 144 S. Ct. 2117, 2128 (2024). The Court addressed whether the civil penalties sought by the SEC were “legal in nature” and determined that the penalties are civil and subject to the requirement of a trial by jury.
The Seventh Amendment extends to a particular statutory claim
The Seventh Amendment extends to a particular statutory claim if the claim is “legal in nature.” Granfinanciera, 492 U. S., at 53, 109 S. Ct. 2782, 106 L. Ed. 2d 26. As we made clear in Tull, whether that claim is statutory is immaterial to this analysis. See 481 U. S., at 414-415, 417-425, 107 S. Ct. 1831, 95 L. Ed. 2d 365. In that case, the Government sued a real estate developer for civil penalties in federal court. The developer responded by invoking his right to a jury trial. Although the cause of action arose under the Clean Water Act, the Court surveyed early cases to show that the statutory nature of the claim was not legally relevant. “Actions by the Government to recover civil penalties under statutory provisions,” we explained, “historically ha[d] been viewed as [a] type of action in debt requiring trial by jury.” Id., at 418-419, 107 S. Ct. 1831, 95 L. Ed. 2d 365. To determine whether a suit is legal in nature, we directed courts to consider the cause of action and the remedy it provides. Since some causes of action sound in both law and equity, we concluded that the remedy was the “more important” consideration. Id., at 421, 107 S. Ct. 1831, 95 L. Ed. 2d 365 (brackets and internal quotation marks omitted); see id., at 418-421, 107 S. Ct. 1831, 95 L. Ed. 2d 365.
In this case, the remedy is all but dispositive. For respondents’ alleged fraud, the SEC seeks civil penalties, a form of monetary relief. While monetary relief can be legal or equitable, money damages are the prototypical common law remedy. See Mertens v. Hewitt Associates, 508 U. S. 248, 255, 113 S. Ct. 2063, 124 L. Ed. 2d 161 (1993). What determines whether a monetary remedy is legal is if it is designed to punish or deter the wrongdoer, or, on the other hand, solely to “restore the status quo.” Tull, 481 U. S., at 422, 107 S. Ct. 1831, 95 L. Ed. 2d 365. As we have previously explained, “a civil sanction that cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment.” Austin v. United States, 509 U. S. 602, 610, 113 S. Ct. 2801, 125 L. Ed. 2d 488 (1993) (internal quotation marks omitted). And while courts of equity could order a defendant to return unjustly obtained funds, only courts of law issued monetary penalties to “punish culpable individuals.” Tull, 481 U. S., at 422, 107 S. Ct. 1831, 95 L. Ed. 2d 365. Applying these principles, we have recognized that “civil penalties are] a type of remedy at common law that could only be enforced in courts of law.” Ibid. The same is true here.
SEC v. Jarkesy, 144 S. Ct. 2117, 2128-29 (2024)
The Court concluded:
The final proof that this remedy is punitive is that the SEC is not obligated to return any money to victims. See id., at 422-423, 107 S. Ct. 1831, 95 L. Ed. 2d 365. Although the SEC can choose to compensate injured shareholders from the civil penalties it collects, see 15 U. S. C. §7246(a), it admits that it is not required to do so, see App. to Pet. for Cert. 124a, n. 116 (citing 17 CFR §201.1100). Such a penalty by definition does not “restore the status quo” and can make no pretense of being equitable. Tull, 481 U. S., at 422, 107 S. Ct. 1831, 95 L. Ed. 2d 365.
Civil penalties are designed to punish and deter, not to compensate
Civil penalties are designed to punish and deter, not to compensate. They are therefore “a type of remedy at common law that could only be enforced in courts of law.” Ibid. That conclusion effectively decides that this suit implicates the Seventh Amendment right, and that a defendant would be entitled to a jury on these claims. See id., at 421-423, 107 S. Ct. 1831, 95 L. Ed. 2d 365. SEC v. Jarkesy, 144 S. Ct. 2117, 2130 (2024) (Emphasis added).
In Nevada, the result should not differ:
Constitutional issues, such as one’s right to a jury trial
Constitutional issues, such as one’s right to a jury trial, present questions of law that we review de novo . As regards the jury trial right, Nevada’s Constitution provides that “[t]he right of trial by Jury shall be secured to all and remain inviolate forever.” We recently have explained that the Nevada Constitution’s framers’ use of the phrase “shall . . . remain inviolate forever,” indicates their intent to perpetuate the jury trial right as they understood it in 1864, when they adopted Nevada’s Constitution. Thus, Nevada’s jury trial right is defined by English common law–the antecedent of this country’s jurisprudence–as modified at the time of the Nevada Constitution’s adoption.
Awada v. Shuffle Master, 123 Nev. 613, 618-619, 173 P.3d 707, 711 (2007). This decision builds upon a prior decision which observed:
Nevada’s Territorial Legislature Mandated Jury Trials
In reaching its decision, the Aftercare court made four observations about the right to a jury trial in justice court at the time of the founding of our great state. First, in 1861, Nevada’s territorial legislature mandated jury trials in justice court for factual issues, without regard to any minimum monetary threshold. Second, the omission of a threshold in our State Constitution was not for lack of a model, given that the United States Constitution’s Seventh Amendment and Utah’s territorial laws impressed a twenty-dollar minimum threshold. Third, during the Nevada constitutional convention, the right to a jury trial in justice court seemed to be an unchallenged assumption. And fourth, two states prominent during Nevada’s development, California and New York, also allowed justice court jury trials without regard to a minimum monetary threshold.
Cheung v. Eighth Judicial Dist. Court of Nev., 121 Nev. 867, 871, 124 P.3d 550-553-554 (2005). If you are facing significant administrative fines, it may make sense to seek an jury rather than rely on whatever administrative agency you are dealing with to appoint their own Hearings Officer to decide the merits of your case,
Simply put, there are numerous methods of compensation that maintain the status quo. But fines do not maintain the status quo. Under federal and Nevada law, fines are designed to punish and deter, not to compensate. As such, they are of a kind that under common law as existed in 1861, that can only be enforced in courts of law. Therefore, the right to trial by jury should apply and can be an effective way to remove the case from the hands of the administrative agency and place the case before an actual judge who is neutral and not aligned with agency.
The Wright Law Group uses all the legal tools available to defend you in administrative or disciplinary proceedings and keeps current developments in the law that might advantage our clients. Removing a case from the regulatory body who is biased may be a first start in resolving your case. Contact us at 702-405-0001 to discuss your matter with an experienced attorney. Or Email Us.