HR-9653-119
Sponsor introductory remarks on measure. (CR H4422)
Sponsored by Brad Knott (R-NC)
What it does
This bill would allow any party facing a federal agency adjudication (an in-house enforcement hearing) to file a "demurrer" — a one-page legal motion — that automatically triggers dismissal of the agency proceeding with prejudice. The agency would then have 90 days to refile the same case as a civil lawsuit in federal district court, where the defendant would be entitled to a jury trial. The bill would also create a new defense allowing defendants to argue that their alleged violation was "reasonable under the circumstances." It would not apply to immigration, national security, tax, bankruptcy, patent, or federal benefits matters.
Who benefits
Businesses and individuals currently subject to federal agency enforcement actions — particularly those regulated by the FTC, SEC, NLRB, CFPB, EPA, and other agencies with in-house adjudication systems. Large corporations with resources to litigate in federal court would benefit most, as they can afford extended litigation. Defendants who believe agency adjudicators are biased toward the agency that employs them. Civil defense attorneys and law firms whose practices would expand. Defendants in pending agency proceedings who could use the new "reasonableness" defense.
Who is hurt
Federal agencies whose enforcement capacity could be significantly slowed or strained by mandatory court filings within a 90-day window. Taxpayers who may bear increased costs from expanded federal court litigation. Individuals and small businesses harmed by the conduct agencies are trying to regulate, who may face longer waits for enforcement relief. Agency staff and administrative law judges whose roles would be diminished. Whistleblowers and complainants who rely on faster agency processes. Agencies that miss the 90-day refiling deadline would lose the ability to pursue enforcement entirely.
Supporters argue
Supporters argue that the Supreme Court's decision in SEC v. Jarkesy (2024) recognized that defendants in agency enforcement proceedings have Seventh Amendment rights to a jury trial, and that this bill codifies and extends that constitutional protection across the federal regulatory system. They contend that agency adjudicators — employed by the same agency bringing the charges — create a structural conflict of interest, and that Article III federal courts with independent judges and juries provide a fairer forum. They point to studies showing defendants lose the vast majority of cases before in-house administrative law judges compared to federal courts.
Opponents argue
Opponents argue that the bill would effectively allow any regulated party to unilaterally shut down agency enforcement by filing a single motion, then exploit the 90-day deadline as a hard cutoff that permanently bars enforcement if the agency cannot refile in time. They contend this would overwhelm already-strained federal district courts, delay or eliminate accountability for fraud, consumer harm, and environmental violations, and give well-resourced defendants a procedural escape hatch unavailable to less sophisticated parties. They further argue the "reasonableness" defense is undefined and could be used to relitigate settled regulatory standards in every enforcement case.
Constitutional context
The Seventh Amendment guarantees the right to a jury trial in federal civil cases, and the Supreme Court's decision in SEC v. Jarkesy (2024) held that defendants in certain agency fraud proceedings are entitled to that right — making this bill's jury trial provision directly responsive to active constitutional doctrine. Post-Loper Bright (2024), courts now independently review agency statutory interpretations, which heightens scrutiny of the broad adjudicatory powers agencies have historically claimed under the Administrative Procedure Act (5 U.S.C. § 706).
Checks and balances
Judicial branch gains authority as federal district courts would replace agency adjudicators for covered enforcement matters; the executive branch (agencies) loses its primary in-house enforcement forum, though it retains the ability to refile in court within 90 days.
Historical precedent
The Administrative Procedure Act of 1946 established the current framework for agency adjudications; no prior legislation has created a universal defendant opt-out mechanism of this kind, though Jarkesy (2024) has prompted multiple legislative proposals to restructure agency enforcement.