Fifth Circuit Holds That District Courts May Hear Structural Constitutional Challenges To Ongoing SEC Enforcement Actions

Federal district courts are imbued with "original jurisdiction" over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78y, however, provides that "[a] person aggrieved by a final order of the [Securities and Exchange Commission ("SEC")] may obtain review of the order in the United States Court of Appeals for the circuit in which he resides or has his principal place of business, or for the District of Columbia Circuit." In recent years, several circuit courts of appeals have held that this provision of the Exchange Act implicitly strips federal district courts of subject matter jurisdiction to hear challenges to ongoing SEC enforcement proceedings.