The US Supreme Court Monday heard oral arguments in Securities and Exchange Commission v. Cochran. The court will decide whether the federal district courts have the ability to hear challenges against US Securities and Exchange Commission (SEC) proceedings, or whether those challenges must remain within the SEC’s administrative courts.

Michelle Cochran was a public accountant working for the SEC. A SEC administrative law judge (ALJ) fined her $22,500 and banned her from practicing before the SEC for five years because she failed to comply with auditing standards in violation of federal law. Cochran objected, but before the SEC could rule on it, the Supreme Court decided Lucia v. SEC. That case held that all ALJs must be appointed by the president, a court of law or a department head. As a result, the SEC sent all pending cases, including Cochran’s, back down for new hearings before constitutionally appointed ALJs.

Cochran then filed suit in federal court claiming that, because ALJs have multiple layers of protection at the administrative level, ALJs are unconstitutionally protected from the US president’s removal power. Thus, the question arose of whether the federal court could hear constitutional challenges against the SEC’s proceedings.

Cochran supported her argument with a study that found from 2010 to 2015, the SEC won 90% of its cases that were brought before its own ALJs. However, the SEC only won 69% of its cases in federal court. Cochran claims that she is highly unlikely to win against the SEC in its administrative courts, especially given the protections afforded ALJs.

On the other hand, the SEC argues that a congressional law implicitly strips federal district courts from hearing SEC case challenges until there has been a final order.

This case is considered in conjunction with Axon Enterprise, Inc. v. Federal Trade Commission. The question in that case is almost identical except it deals with the jurisdiction of the Federal Trade Commission (FTC) rather than the SEC.