Case: 19-11969 Date Filed: 12/30/2019 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 19-11969 Non-Argument Calendar ________________________
D.C. Docket No. 1:19-cv-01014-WMR
CHRISTOPHER M. GIBSON,
Plaintiff - Appellant,
versus
SECURITIES AND EXCHANGE COMMISSION, CHAIRMAN OF THE SECURITIES AND EXCHANGE COMMISSION, UNITED STATES ATTORNEY GENERAL,
Defendants - Appellees.
________________________
Appeal from the United States District Court for the Northern District of Georgia ________________________
(December 30, 2019)
Before WILSON, ANDERSON and DUBINA, Circuit Judges.
PER CURIAM: Case: 19-11969 Date Filed: 12/30/2019 Page: 2 of 7
Appellant, Christopher M. Gibson, appeals the district court’s order denying
his motion for preliminary injunctive relief, requesting that the district court
preliminarily enjoin, based on constitutional grounds, the Securities and Exchange
Commission (“SEC”) from continuing an administrative proceeding against him.
Relying on circuit precedent, the district court determined that it lacked subject
matter jurisdiction over the case, denied the request for injunctive relief, and
dismissed Gibson’s complaint in its entirety. After reviewing the record and
reading the parties’ briefs, we affirm the district court’s order.
I. BACKGROUND
In 2016, the SEC instituted an administrative enforcement proceeding
against Gibson to determine whether he had violated the Securities and Exchange
Act by acting as an investment adviser to a private pooled investment fund. The
allegation was that in his role, Gibson had “engaged in a deceptive scheme to
front-run [the Fund’s] trades and benefit himself and those close to him at the
expense of the Fund and his other clients by exploiting the investment advice he
provided to the Fund.” See Order Instituting Administrative and Cease-and-Desist
Proceedings, at 9 (SEC Mar. 29, 2016) (Violations E. 54.),
https://go.usa.gov/xVA7g. An Administrative Law Judge (“ALJ”) held a hearing
and issued an initial decision adverse to Gibson. The SEC granted Gibson’s
2 Case: 19-11969 Date Filed: 12/30/2019 Page: 3 of 7
request to review that initial decision and ordered merits briefing. While Gibson’s
case was pending, the United States Solicitor General submitted a brief in the
Supreme Court in Lucia v. SEC, No. 17-130, agreeing with the petitioner’s
argument that the ALJ’s are inferior officers under the Appointments Clause who
must be appointed by the President, a Court of Law, or the Head of a Department,
such as the SEC. Because of this brief, the SEC issued an order that ratified the
previous appointments of its ALJs and remanded all pending administrative
proceedings, including Gibson’s case, to its ALJs. The ALJ assigned to Gibson’s
case ratified her earlier decision, and Gibson petitioned for SEC review.
While Gibson’s petition for review was pending, the Supreme Court issued
its decision in Lucia v. SEC, ___ U.S. ___, 138 S. Ct. 2044 (2018), holding that the
SEC’s ALJs were inferior officers who had not been properly appointed at the time
of petitioner’s administrative proceeding. The Court’s remedy was a remand to the
agency for a new hearing before a properly appointed officer; however, the
properly appointed officer could not be the same officer who previously heard the
case. Id. at ___, 138 S. Ct. at 2055. Hence, the SEC remanded Gibson’s case for a
new hearing before a different, properly appointed, ALJ.
Gibson filed an answer and raised several objections to the administrative
proceedings, such as (1) the proceedings violated the separation of powers, (2) the
3 Case: 19-11969 Date Filed: 12/30/2019 Page: 4 of 7
statutory restrictions on removing the SEC’s ALJs violated Article II, (3) the
SEC’s ALJs had not been properly appointed, (4) the proceedings were based on
an impermissible delegation of legislative authority, (5) the proceedings violated
his due process rights, (6) the proceedings violated his equal protection rights, (7)
the proceedings violated his right to a jury trial, (8) the statute of limitations had
run, and (9) the proceedings were barred by laches. The ALJ held proceedings in
July and August 2019, took the case under advisement, but has not issued an initial
decision.
While these administrative proceedings were underway, Gibson sued in the
district court to enjoin these proceedings. Gibson raised in the district court many
of the same claims he raised in his administrative proceeding. The district court
dismissed the complaint for lack of jurisdiction based on our court’s holding in Hill
v. SEC, 825 F.3d 1236, 1237 (11th Cir. 2016), which construed the judicial review
provisions of the Securities and Exchange Act, 15 U.S.C. § 78y. The district court
also denied Gibson’s motion for preliminary injunctive relief.
II. DISCUSSION
On appeal, Gibson primarily challenges the district court’s reliance on our
Hill decision by attempting to distinguish his case from the Hill case. He also
argues that the SEC administrative proceedings deny him his Seventh Amendment
4 Case: 19-11969 Date Filed: 12/30/2019 Page: 5 of 7
right to a jury trial, that the district court should exercise its jurisdiction to consider
whether the SEC proceedings are now barred by the statute of limitations, and that
his due process claims can only be determined by the district court. We are
unpersuaded by Gibson’s arguments.
We review de novo the district court’s determination of subject matter
jurisdiction. Hill, 825 F.3d at 1240. We note that federal district courts generally
have jurisdiction over claims that seek declaratory and injunctive relief based on
constitutional violations. See 28 U.S.C. §§ 1331, 2201. However, Congress may
allocate to an administrative body the initial review of such claims, and when it
does, the court must undertake the analysis set forth in Thunder Basin Coal Co. v.
Reich, 510 U.S. 200, 114 S. Ct. 771 (1994).
In Hill, we employed the framework established in Thunder Basin to
examine whether Congress allocated initial review of claims raising constitutional
challenges that seek declaratory and injunctive relief to the SEC’s administrative
process. Hill, 825 F.3d at 1241. We first decided whether Congress’s intent to
preclude initial review in the district court is “fairly discernible in the statutory
scheme.” Id. (quoting Thunder Basin, 510 U.S. at 207, 114 S. Ct. at 776). We
then considered whether the respondents’ claims were “of the type Congress
intended to be reviewed within this statutory structure.” Id. (quoting Thunder
5 Case: 19-11969 Date Filed: 12/30/2019 Page: 6 of 7
Basin, 510 U.S. at 212, 114 S. Ct. at 779). We also examined whether the
respondents’ claims would receive meaningful judicial review within the statutory
structure.
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Case: 19-11969 Date Filed: 12/30/2019 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 19-11969 Non-Argument Calendar ________________________
D.C. Docket No. 1:19-cv-01014-WMR
CHRISTOPHER M. GIBSON,
Plaintiff - Appellant,
versus
SECURITIES AND EXCHANGE COMMISSION, CHAIRMAN OF THE SECURITIES AND EXCHANGE COMMISSION, UNITED STATES ATTORNEY GENERAL,
Defendants - Appellees.
________________________
Appeal from the United States District Court for the Northern District of Georgia ________________________
(December 30, 2019)
Before WILSON, ANDERSON and DUBINA, Circuit Judges.
PER CURIAM: Case: 19-11969 Date Filed: 12/30/2019 Page: 2 of 7
Appellant, Christopher M. Gibson, appeals the district court’s order denying
his motion for preliminary injunctive relief, requesting that the district court
preliminarily enjoin, based on constitutional grounds, the Securities and Exchange
Commission (“SEC”) from continuing an administrative proceeding against him.
Relying on circuit precedent, the district court determined that it lacked subject
matter jurisdiction over the case, denied the request for injunctive relief, and
dismissed Gibson’s complaint in its entirety. After reviewing the record and
reading the parties’ briefs, we affirm the district court’s order.
I. BACKGROUND
In 2016, the SEC instituted an administrative enforcement proceeding
against Gibson to determine whether he had violated the Securities and Exchange
Act by acting as an investment adviser to a private pooled investment fund. The
allegation was that in his role, Gibson had “engaged in a deceptive scheme to
front-run [the Fund’s] trades and benefit himself and those close to him at the
expense of the Fund and his other clients by exploiting the investment advice he
provided to the Fund.” See Order Instituting Administrative and Cease-and-Desist
Proceedings, at 9 (SEC Mar. 29, 2016) (Violations E. 54.),
https://go.usa.gov/xVA7g. An Administrative Law Judge (“ALJ”) held a hearing
and issued an initial decision adverse to Gibson. The SEC granted Gibson’s
2 Case: 19-11969 Date Filed: 12/30/2019 Page: 3 of 7
request to review that initial decision and ordered merits briefing. While Gibson’s
case was pending, the United States Solicitor General submitted a brief in the
Supreme Court in Lucia v. SEC, No. 17-130, agreeing with the petitioner’s
argument that the ALJ’s are inferior officers under the Appointments Clause who
must be appointed by the President, a Court of Law, or the Head of a Department,
such as the SEC. Because of this brief, the SEC issued an order that ratified the
previous appointments of its ALJs and remanded all pending administrative
proceedings, including Gibson’s case, to its ALJs. The ALJ assigned to Gibson’s
case ratified her earlier decision, and Gibson petitioned for SEC review.
While Gibson’s petition for review was pending, the Supreme Court issued
its decision in Lucia v. SEC, ___ U.S. ___, 138 S. Ct. 2044 (2018), holding that the
SEC’s ALJs were inferior officers who had not been properly appointed at the time
of petitioner’s administrative proceeding. The Court’s remedy was a remand to the
agency for a new hearing before a properly appointed officer; however, the
properly appointed officer could not be the same officer who previously heard the
case. Id. at ___, 138 S. Ct. at 2055. Hence, the SEC remanded Gibson’s case for a
new hearing before a different, properly appointed, ALJ.
Gibson filed an answer and raised several objections to the administrative
proceedings, such as (1) the proceedings violated the separation of powers, (2) the
3 Case: 19-11969 Date Filed: 12/30/2019 Page: 4 of 7
statutory restrictions on removing the SEC’s ALJs violated Article II, (3) the
SEC’s ALJs had not been properly appointed, (4) the proceedings were based on
an impermissible delegation of legislative authority, (5) the proceedings violated
his due process rights, (6) the proceedings violated his equal protection rights, (7)
the proceedings violated his right to a jury trial, (8) the statute of limitations had
run, and (9) the proceedings were barred by laches. The ALJ held proceedings in
July and August 2019, took the case under advisement, but has not issued an initial
decision.
While these administrative proceedings were underway, Gibson sued in the
district court to enjoin these proceedings. Gibson raised in the district court many
of the same claims he raised in his administrative proceeding. The district court
dismissed the complaint for lack of jurisdiction based on our court’s holding in Hill
v. SEC, 825 F.3d 1236, 1237 (11th Cir. 2016), which construed the judicial review
provisions of the Securities and Exchange Act, 15 U.S.C. § 78y. The district court
also denied Gibson’s motion for preliminary injunctive relief.
II. DISCUSSION
On appeal, Gibson primarily challenges the district court’s reliance on our
Hill decision by attempting to distinguish his case from the Hill case. He also
argues that the SEC administrative proceedings deny him his Seventh Amendment
4 Case: 19-11969 Date Filed: 12/30/2019 Page: 5 of 7
right to a jury trial, that the district court should exercise its jurisdiction to consider
whether the SEC proceedings are now barred by the statute of limitations, and that
his due process claims can only be determined by the district court. We are
unpersuaded by Gibson’s arguments.
We review de novo the district court’s determination of subject matter
jurisdiction. Hill, 825 F.3d at 1240. We note that federal district courts generally
have jurisdiction over claims that seek declaratory and injunctive relief based on
constitutional violations. See 28 U.S.C. §§ 1331, 2201. However, Congress may
allocate to an administrative body the initial review of such claims, and when it
does, the court must undertake the analysis set forth in Thunder Basin Coal Co. v.
Reich, 510 U.S. 200, 114 S. Ct. 771 (1994).
In Hill, we employed the framework established in Thunder Basin to
examine whether Congress allocated initial review of claims raising constitutional
challenges that seek declaratory and injunctive relief to the SEC’s administrative
process. Hill, 825 F.3d at 1241. We first decided whether Congress’s intent to
preclude initial review in the district court is “fairly discernible in the statutory
scheme.” Id. (quoting Thunder Basin, 510 U.S. at 207, 114 S. Ct. at 776). We
then considered whether the respondents’ claims were “of the type Congress
intended to be reviewed within this statutory structure.” Id. (quoting Thunder
5 Case: 19-11969 Date Filed: 12/30/2019 Page: 6 of 7
Basin, 510 U.S. at 212, 114 S. Ct. at 779). We also examined whether the
respondents’ claims would receive meaningful judicial review within the statutory
structure. Lastly, we questioned whether “agency expertise could be brought to
bear on the . . . questions presented” and the extent to which the litigants’ claims
are “wholly collateral to [the] statute’s review provisions.” Id. (quoting Thunder
Basin, 510 U.S. at 212, 214–15, 114 S. Ct. at 780). Applying this framework, we
concluded that the respondents’ claims had to proceed initially in the
administrative forum and then through the judicial review scheme enacted by
Congress in 15 U.S.C. § 78y. Id.
As our court noted, Congress authorized the SEC to bring civil actions to
enforce violations of the Securities and Exchange Act in either federal district
court or in an administrative proceeding before the SEC. Id. at 1237 (citing 15
U.S.C. § § 78u(d), 78u-1, 78u-2, 78u-3). “An SEC administrative enforcement
action culminates in a final order of the Commission, which in turn is reviewable
exclusively by the appropriate federal court of appeals.” Id. (citing 15 U.S.C. §
78y). We concluded that respondents in an SEC administrative enforcement action
could not bypass the Exchange Act’s review scheme by filing a collateral lawsuit
in federal district court challenging the administrative proceedings on
constitutional grounds. See id. at 1243. Because we discerned no Congressional
6 Case: 19-11969 Date Filed: 12/30/2019 Page: 7 of 7
intention to exempt the type of claims the respondents raised from the review
process Congress created, we vacated the district court’s preliminary injunction
orders and remanded to the district court with instructions to dismiss the actions for
lack of jurisdiction. Id. at 1252.
Like the district court, we conclude that Hill controls in this case. Gibson
can receive meaningful judicial review of his claims in a court of appeals, and if
the appellate court finds merit in any of his claims, it may vacate or set aside any
adverse SEC order. Moreover, the SEC may bring its expertise to bear on
Gibson’s claims because it will necessarily have to decide threshold issues, such as
whether Gibson has violated the securities laws or whether the statute of
limitations has expired. Further, Gibson’s constitutional and statutory claims are
“inextricably intertwined with the conduct of the very enforcement proceeding the
statute grants the SEC the power to institute and resolve as an initial matter.”
Jarkesy v. SEC, 803 F.3d 9, 23 (D.C. Cir. 2015). Accordingly, we conclude that
because Gibson cannot bypass the SEC statutory scheme by filing a collateral
action in federal district court, the district court properly dismissed his action for
lack of jurisdiction. Moreover, we find no merit to the other arguments raised by
Gibson on appeal.
AFFIRMED.