Most of the justices — including newly confirmed Justice
That could prevent the
The high court is pondering whether venture capitalist Charles Kokesh must return $35 million from investor funds he used to pay himself and others at his New Mexico-based operation from 1995 to 2006.
The federal appeals court in Denver ruled that Kokesh must pay the full amount to the SEC. Lawyers for Kokesh say the five-year window should reduce his payment to just $5 million because the SEC did not bring charges against him until 2009.
At issue is a law that prevents the government from going back more than five years to impose penalties or seek forfeiture of assets. The SEC argues the time limit doesn't apply because it's not assessing a penalty, only trying to recover illicit profits.
But justices across ideological lines seemed skeptical of the distinction.
"It does seem to me that we kind of have a special obligation to be concerned about how far back the government can go when it's something that Congress did not address," Chief Justice Roberts said.
"It's a little bit artificial to try to tear them apart," she said.
Kokesh's attorney Adam Unikowsky told the justices that if disgorgement is about both recovering assets and imposing a penalty, it has to be considered punitive overall and subject to the five-year limit.
"The purpose of the remedy is to impose unpleasant legal consequences of wrongdoing," he said.
But Gorsuch noted that in a criminal case, the same kind of remedy would be considered a penalty.
"So why does it make a difference that we just happen to be in the civil context," he said. "I mean, goodness gracious, the difference between civil and criminal has vexed this court for many years."
The case comes to the high court from the 10th U.S. Circuit Court of Appeals, where Gorsuch served for more than a decade before he was confirmed to the Supreme Court. Gorsuch was not part of the three-judge panel that ruled against Kokesh last year. But he might find himself in the position of reversing his former colleagues if the high court sides with Kokesh.