Elliot Goldberg has worked as a Pennsylvania-based financial professional for over 20 years. He was shocked when Pennsylvania’s Department of Banking and Securities accused him of violating provisions of the Pennsylvania Securities Act of 1972, including securities fraud.
Even worse, rather than bringing its case in an independent court and proving its allegations to a jury, the Department prosecuted the case before a Department-appointed hearing officer. When the hearing officer sided with the Department, Goldberg’s only option was to appeal to the Department itself—which ultimately adopted the hearing officer’s findings and affirmed the decision.
In the process, the Department investigated the matter, prosecuted the case, made findings of fact, and imposed nearly $1 million in civil penalties—all without affording Goldberg his constitutional right to a jury trial in an independent court. Goldberg’s case centers on whether the U.S. and Pennsylvania Constitutions allow the government to impose such penalties through an in-house process rather than through the jury trials that historically decided similar these kinds of disputes.
The right to a civil jury trial has deep roots in American history and was viewed by the Founders as a critical protection against government overreach. That principle remains relevant today, especially when the government seeks to punish alleged wrongdoing by imposing substantial financial penalties. In SEC v. Jarkesy, the U.S. Supreme Court ruled that the Seventh Amendment does not allow federal agencies to impose civil penalties for fraud through in-house proceedings without a jury. Goldberg’s case asks whether the Pennsylvania Constitution provides the same protection.
Represented free of charge by Pacific Legal Foundation with the assistance of attorney William Uchimoto, Mr. Goldberg has asked the Pennsylvania Supreme Court to consider whether the Pennsylvania Constitution guarantees that protection when state agencies seek to impose severe financial punishment. PLF and Mr. Goldberg are prepared to take the Seventh Amendment question to the U.S. Supreme Court.
What’s At Stake?
- When the government seeks to impose substantial civil penalties for alleged fraud, the Pennsylvania and U.S. Constitutions protect the right to defend oneself in a court of law before a jury.
- Pennsylvania’s enforcement scheme unconstitutionally concentrates prosecutorial, adjudicatory, and punitive power in a single agency, undermining the separation of powers and the historic role of the jury as a safeguard against government overreach.
- If Pennsylvania fails to protect the right to a jury, the Seventh Amendment’s right to a jury should be applied to state administrative proceedings.
