Latest Case: Liu v. Securities and Exchange Commission (Civil Procedure)

William Barr Has Made the Federal Death Penalty a Weapon in Trump’s Campaign Arsenal

AUSTIN SARAT

Austin Sarat—Associate Provost, Associate Dean of the Faculty, and William Nelson Cromwell Professor of Jurisprudence and Political Science at Amherst College—comments on Attorney General William Barr’s recent order to resume federal executions and the political implications of that order. Sarat briefly describes the history of the federal death penalty in the United States and explains that, regardless of what state we live in, when the federal government puts someone to death, it does so in all of our names.

Read More

Liu v. Securities and Exchange Commission

Docket: 18-1501

Opinion Date: June 22, 2020

Judge: Sonia Sotomayor

Areas of Law: Civil Procedure, Government & Administrative Law, Securities Law

Petitioners solicited foreign nationals to invest in a cancer-treatment center. A Securities and Exchange Commission investigation revealed they misappropriated the funds. The SEC may seek “equitable relief” in civil proceedings, 15 U.S.C. 78u(d)(5). The SEC brought a civil action for disgorgement equal to the amount raised from investors. Petitioners argued that the remedy failed to account for their legitimate business expenses. The Ninth Circuit affirmed an order holding Petitioners jointly and severally liable for the full amount. The Supreme Court vacated A disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief authorized under section 78u(d)(5). Equity practice has long authorized courts to strip wrongdoers of their ill-gotten gains; to avoid transforming that remedy into a punitive sanction, courts restrict it to an individual wrongdoer’s net profits to be awarded for victims. These long-standing equitable principles were incorporated into section 78u(d)(5). If on remand the court orders the deposit of the profits with the Treasury, the court should evaluate whether that order would be for the benefit of investors, consistent with equitable principles. Imposing disgorgement liability on a wrongdoer for benefits that accrue to his affiliates through joint-and-several liability runs against the rule in favor of holding defendants individually liable but the common law permitted liability for partners engaged in concerted wrongdoing. On remand, the court may determine whether Petitioners can, consistent with equitable principles, be found liable for profits as partners in wrongdoing or whether individual liability is required. The court must deduct legitimate expenses before awarding disgorgement.