Kokesh v. SEC (16-529)

argument 16-529

Kokesh v. SEC

Supreme Court of the United States 1h 1m 7 speakers 8 chapters transcribed 4 days ago official recording ↗

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What is the government’s position on the statute of limitations for disgorgement?

John G. Roberts 0:00

We'll hear argument this morning first in Case 16-529, Kokesh v. the Securities and Exchange

Jeffrey M. Unikowski 0:06

Commission. Mr. Unikowski. Mr. Chief Justice, and may it please the Court. The government contends it can bring sovereign enforcement actions seeking backwards-looking monetary liabilities. based on conduct dating back forever, with no statute of limitations at all. That position both contradicts the text of Section 2462 and is antithetical to legal traditions dating back to the early republic. I guess your

John G. Roberts 0:34

phraseology is technically correct, but the government says there's a multi-factor analysis that a court would go through to determine that maybe the government's brought its action too

Jeffrey M. Unikowski 0:45

late. Your Honor, actually the government doesn't really take that position because it contends that latches does not apply to the government at all. So the government's supposed equitable restriction, or at least the government has taken that position in every court and certainly does not contradict that position in its brief. So the government's view is that there's some kind of equitable limitation that only applies at the remedial stage after the trial and the remedial stage is already over. So the person's already stood trial after, you know, 10, 20, 30 years after the incident. And even then, it's a pretty weak, equitable restriction. I think the recent Wiley case kind of illustrates this restriction in action, where the government sought 22 years of prejudgment interest at a very high interest rate.

Jeffrey M. Unikowski 1:26

And the district court said that because the SEC was partially responsible for the delay, it was going to apply a somewhat lower prejudgment interest rate that lowered the amount of prejudgment interest from $200 to $100 million. And that is not really an adequate substitute for a statute of limitations in our view. So we think that a statute of limitations is necessary for actions to be dismissed pretrial. And we think that also our position falls within the heartland of the word forfeiture. We ask the Court to apply the ordinary definition of forfeiture, which has not changed between the 19th century and today. It's an order requiring turnover of money or property to the government as a result of wrongdoing.

Elena Kagan 2:05

Counselor, before the 1970s, and you haven't shown me anything to the contrary — Forfeiture was an in-ren proceeding where the property was attached, the money, the bank account, a piece of property, a home, whatever. But it was not a personal action against an individual. So how do we get from that traditional understanding, which governed this statute, to your meaning today? Because there is a vast difference between in-ren and in-persona actions.

Jeffrey M. Unikowski 2:39

Well, I'd give two responses to that. First of all, I would dispute the premise that there was no concept of in personam forfeitures before 1970. I think that there was. For instance, as the government itself says in its brief, an in personam money judgment in the form of a fine was considered a forfeiture. And so the government has this odd position where…

Elena Kagan 2:58

A fine has, I mean, a disgorgement is an equitable remedy. on getting back money that doesn't belong to you. A fine is a payment in addition to the conduct that you committed. So there is a difference there.

Jeffrey M. Unikowski 3:14

That

Elena Kagan 3:15

begs the question.

Jeffrey M. Unikowski 3:16

No, I agree with you, Justice Sotomayor. The position I'm trying to say is that the government says that the word forfeiture encompasses these in personam money fines and also encompasses these in rem turnovers of tainted property. And disgorgement is kind of right in between those two forfeitures the government recognizes. So like a fine, it's an in personam payment of money. And like an in rem forfeiture, it's a turnover order of tainted property to the government. And so it's somewhat gerrymandered in our view that kind of one and three would be forfeiture, but not two. And the other thing is, historically, I actually think that there were in personam forfeitures of the value of money. So we give the example of these old customs fine forfeitures, excuse me,