Arizona Court of Appeals, Division Ones holds that there is no right to a jury in ACC enforcement actions.

Petitioners sought to transfer to the Arizona superior court an Arizona Corporation Commission (ACC) enforcement action brought against them under the Arizona Securities Act. They claimed a constitutional right to a jury trial under the United States Supreme Court’s recent decision in Securities & Exchange Commission v. Jarkesy, 603 U.S. 109 (2024), which held that the Seventh Amendment to the United States Constitution guarantees a right to a jury trial when the SEC seeks civil penalties for securities fraud.

After the ACC’s administrative law judge denied the petitioners’ motion for a change of venue, they filed a special action petition in the Arizona Court of Appeals. The appellate court accepted jurisdiction over the special action but denied the petitioners’ request for relief.

The Court rejected the petitioner’s reliance on Jarkesy. Because the United States Supreme Court has not incorporated the Seventh Amendment’s right to a civil jury trial against the States, Jarkesy does not control the right to a jury in state-court civil cases.

As such, Arizona law governs whether petitioners have a right to a jury trial in ACC enforcement actions. The Court explained that the Arizona Constitution grants the ACC authority to enforce its own rules in internal enforcement proceedings. Neither the Arizona Constitution nor state statute requires a jury trial as a condition to the ACC’s power to impose civil penalties.

The Court clarified that its decision only addresses the ACC’s own, internal enforcement proceedings, but did not reach ACC suits initiated in the superior court.

Judge Morse authored the Opinion of the Court, in which Judges Perkins and Williams joined.

Posted by: Payslie M. Bowman