Every day, Americans find themselves and their businesses shunted into administrative proceedings at federal agencies. For many Americans, it is jarring to find themselves subject to severe financial, reputational, and professional penalties in adjudications very different from a federal court. The Federal Rules of Evidence do not apply, juries are nonexistent, and the hearing officers are not life tenured. Quietly and routinely, people lose their businesses and their livelihoods. Some parties, however, are challenging these pernicious agency practices that have accumulated over decades.

Frank Bonan had been the chairman of a small Illinois bank before he was subjected to administrative proceedings at the Federal Deposit Insurance Corporation (FDIC). After the bank’s debtor failed to pay its debt, the FDIC’s investigators suspected that Bonan failed to exercise due diligence when approving the loan. In 2021, the FDIC initiated an enforcement proceeding against Bonan, which was adjudicated by an FDIC administrative law judge (ALJ) employed by the agency. Ultimately, that ALJ issued a “Recommended Decision” that levied a $105,000 civil monetary penalty against Bonan and barred him from the banking profession. The FDIC’s Board of Directors affirmed the Recommended Decision.

Now Bonan has petitioned the Seventh Circuit to review his case, arguing that the proceedings violated his Seventh Amendment right to a jury trial. And Cato has filed an amicus brief supporting him. In our brief, we explain why the American Founders were opposed to jury-less trials, and we explain the implications of the Supreme Court’s recent SEC v. Jarkesy decision for Bonan’s case.

First, Jarkesy strengthens Bonan’s argument that his Seventh Amendment rights were violated when the FDIC denied him a jury trial. The Supreme Court in Jarkesy emphasized the broad nature of the Seventh Amendment’s jury trial guarantee. A jury trial is required for nearly any action by the government to recover civil penalties, unless it is subject to the “public rights” exception. Second, the public rights exception that the government relies on is narrow, and the FDIC’s case against Bonan falls outside the exception. Finally, the government’s argument for a broad conception of the public rights exception would create a massive loophole to the broad jury trial guarantee of the Seventh Amendment.

The government argues that Congress should have broad power to deprive Americans of jury trials in regulatory cases because jury trials are “incompatible” with efficient regulatory enforcement. However, the Founding generation adopted the Seventh Amendment to prevent lawmakers from shunting Americans into specialized and jury-less courts. Government practices must conform to the Constitution, not the other way around. The Seventh Circuit should hold that the FDIC’s procedures violated Bonan’s Seventh Amendment rights.