Frank William Bonan, II v. FDIC

In the United States Court of Appeals For the Seventh Circuit ____________________ No. 24-3296 FRANK WILLIAM BONAN, II, individually and as an institu- tion-affiliated party of GRAND RIVERS COMMUNITY BANK, GRAND CHAIN, ILLINOIS (INSURED STATE NONMEMBER BANK), Petitioner, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Respondent. ____________________ Petition for Review of an Order of the Federal Deposit Insurance Corporation. Nos. FDIC-16-0254e & FDIC-16-0256k. ____________________ ARGUED SEPTEMBER 3, 2025 — DECIDED AUGUST 12, 2026 ____________________ Before SCUDDER, KIRSCH, and PRYOR, Circuit Judges. SCUDDER, Circuit Judge. Frank William Bonan II was a banker in Illinois. In 2021, the Federal Deposit Insurance Cor- poration commenced an administrative enforcement action against him related to misconduct at Grand Rivers Commu- nity Bank. During the administrative proceedings, the FDIC’s Board of Directors found that Bonan had engaged in unsafe 2 No. 24-3296 or unsound banking practices and breached his fiduciary du- ties to Grand Rivers. It then imposed an order pursuant to 12 U.S.C. § 1818(e) prohibiting Bonan from working at any FDIC-insured institution and assessed a $105,000 civil money penalty pursuant to 12 U.S.C. § 1818(i)(2)(B). In his petition for review, Bonan urges us to reverse the FDIC’s decision and vacate its orders, primarily contending that the administra- tive adjudication violated his jury trial right under the Sev- enth Amendment. While Bonan’s Seventh Amendment claim presents a close question, we ultimately find no violation un- der the law as it stands today. As for Bonan’s other challenges to the FDIC’s administrative enforcement action, we see no compelling ground for relief. In the end, then, we deny the petition for review. I A Frank Bonan served as chairman of the Board of Directors of Grand Rivers Community Bank. He also sat on the Bank’s loan committee. By all accounts, Bonan managed Grand Riv- ers with an iron fist, acting as the dominant and uncompro- mising decisionmaker. Grand Rivers is a federally insured de- pository institution under the Federal Deposit Insurance Act. Bonan simultaneously held meaningful roles at People’s Na- tional Bank in McLeansboro, Illinois. Beyond serving as pres- ident for PNB’s southern region, Bonan had positions on the institution’s Board of Directors and Executive Loan Commit- tee. The key events underlying the FDIC’s enforcement action began in 2015. At the heart of it are Evergreen Drilling and Evergreen Properties (and related borrowers), which No. 24-3296 3 operated an oil-drilling business based in Carmi, Illinois. Ev- ergreen had outstanding secured loans with both Grand Riv- ers and PNB, and Bonan managed the Evergreen loan rela- tionship for both banks. The FDIC’s enforcement action fo- cused on Bonan’s involvement in two matters arising from Grand Rivers’s financial relationship with Evergreen. 1. The 618 Holdings Loan In 2015, the oil-drilling industry faced a severe downturn. Evergreen, in turn, confronted financial difficulties, prompt- ing concern from Bonan and others at PNB that the company would not be able to service its debt. In September 2015, Bo- nan prepared a “Plan for Evergreen” that proposed the com- pany sell collateral and refinance its debt to pay down its loans from PNB and Grand Rivers. One piece of Bonan’s plan centered on a local commercial warehouse that served as Evergreen’s headquarters. In the fall of 2015, there were two liens on the warehouse, one secur- ing PNB’s $358,000 first mortgage and another securing Grand Rivers’s $638,000 second mortgage. Bonan contem- plated that Evergreen would engage in a sale and leaseback transaction through which the company would sell its ware- house, use the proceeds to pay down its loans, and then con- tinue to use the warehouse under a new lease. While Bonan originally envisioned that his personal com- pany would purchase the Evergreen warehouse, he ulti- mately found two other buyers: James Harbison and Adam Tate. In December 2015, Bonan asked them to purchase the warehouse with financing from Grand Rivers. At the time, both Harbison and Tate personally worked for Bonan and lived rent free in housing that Bonan owned. Neither was 4 No. 24-3296 financially stable: Harbison had negative net worth of $190,000 and earned $62,000 annually, and Tate’s net worth was $20,000 with annual earnings of $27,000. On or before December 17, 2015, Bonan directed Grand Rivers’s Chief Financial Officer to prepare a loan request on behalf of Harbison and Tate. The request stated that the loan was to purchase the warehouse from Evergreen for $1.25 mil- lion and came in the name of 618 Holdings, LLC—an entity not legally formed until December 30, 2015. On December 23, the Grand Rivers Board of Directors voted to approve the $1.25 million loan to 618 Holdings, an entity that still did not exist. The votes were three in favor, none opposed, and two abstaining. Bonan initially voted in favor but ultimately abstained. Grand Rivers’s Chief Finan- cial Officer, who voted in favor of the loan, later testified that he did so at Bonan’s direction, fearing he would lose his job if he voted no and crossed Bonan. Several aspects of the resulting transaction bear emphasis. The final loan from Grand Rivers to 618 Holdings was for $1,262,109.75 and required a monthly payment of $7,752.94 (totaling $93,035.28 per year). The amount due annually ex- ceeded the combined incomes of Harbison and Tate ($89,000). Additionally, 618 Holdings used this loan to purchase the warehouse, which it then leased back to Evergreen. The loan proceeds paid off the debts secured by PNB’s and Grand Riv- ers’s liens on the warehouse. The deal also placed $150,000 of the remaining proceeds into an escrow account to be automat- ically applied for the first 18 months of Evergreen’s lease pay- ments to 618 Holdings. No. 24-3296 5 What all of this means is that Grand Rivers’s loan funded both the purchase of the warehouse and Evergreen’s initial ability to make lease payments, which, in turn, supplied 618 Holdings with money to repay the loan. Grand Rivers’s Chief Financial Officer testified that he structured the transaction this way at Bonan’s instruction. Overall, the terms of purchase and the lease agreement were nearly identical to those that Bonan had negotiated when contemplating the purchase him- self. In January 2016, two FDIC examiners reviewed the 618 Holdings loan. They classified it as substandard “due to the lack of financial capacity of the debtors, the inappropriate structuring of the 618 Holdings credit in which an indirect [principal and interest] reserve account was established to make loan payments, the lack of collateral protection, and the questionable ability of Evergreen Properties to generate suffi- cient income to pay lease payments.” In April 2016, Grand Rivers placed the 618 Holdings loan on non-accrual status. In January 2017, Grand Rivers charged off $500,000 from the loan, effectively deeming that amount uncollectible. 618 Holdings then defaulted on the loan, enter- ing into a deed-in-lieu of foreclosure with Grand Rivers. At the time of the FDIC’s administrative proceedings, Grand Rivers still held title to the Evergreen warehouse. 2. The Release of the Rig 23 Collateral The second event involves a series of errors related to an- other piece of Evergreen’s collateral securing a separate loan from Grand Rivers. In November 2015, officers at Grand Riv- ers mistakenly released the Bank’s purchase money security interest in Rig 23, an oil-drilling rig that Evergreen owned. 6 No. 24-3296 The mistake occurred in conjunction with Evergreen’s sale of Rig 24, a less valuable oil drilling rig in which Grand Rivers never had a security interest. When Grand Rivers discovered the erroneous release in early 2016, it took a lower priority blanket lien in Evergreen’s assets, now subordinate to PNB’s interest. In January 2017, Grand Rivers charged off $489,268 from its Evergreen loan originally secured by Rig 23. B In May 2021, the FDIC initiated an administrative enforce- ment action against Bonan. Based on his role in the 618 Hold- ings loan and the release of Rig 23, the agency alleged that Bonan had engaged in unsafe or unsound banking practices and breached his fiduciary duties to Grand Rivers. The Notice of Charges sought an order prohibiting Bonan from working at federally insured banks (12 U.S.C. § 1818(e)) as well as a civil money penalty (12 U.S.C. § 1818(i)). In January 2023, an FDIC administrative law judge con- ducted a six-day hearing, at which Bonan testified and cross- examined other witnesses. In November 2023, the ALJ issued a recommended decision, concluding that Bonan engaged in professional misconduct that merited both sanctions. For his part, Bonan disagreed and filed exceptions to the recom- mended decision. In December 2024, the FDIC Board issued its decision and orders. The Board found that Bonan’s misconduct in pushing through the financially unsound 618 Holdings loan satisfied the requirements for a prohibition order under § 1818(e). And, based on similar reasoning, the Board also found that Bonan’s involvement in the 618 Holdings loan merited a sec- ond tier civil money penalty under § 1818(i)(2)(B) in the No. 24-3296 7 amount of $105,000. Finally, the Board determined that Bo- nan’s misconduct related to the Rig 23 release, which largely involved pressuring his subordinates into making a mistake, also supported a $105,000 civil money penalty. Bonan then petitioned for our review. See 12 U.S.C. § 1818(h)(2). He raises five challenges to the FDIC’s enforce- ment action and orders. The first three are constitutional claims, while the fourth and fifth dispute the FDIC’s decision and penalties on mainly evidentiary grounds. II We begin with Bonan’s contention that the FDIC’s in- house adjudication of its enforcement action based on §§ 1818(i) & (e) violated his Seventh Amendment right to a jury. The Seventh Amendment provides that “[i]n Suits at com- mon law, … the right of trial by jury shall be preserved.” U.S. Const. amend. VII. In SEC v. Jarkesy, the Supreme Court es- tablished a two-step framework for applying this constitu- tional guarantee in the context of administrative enforcement proceedings. 603 U.S. 109 (2024). First, we ask the “threshold” question whether the administrative action “implicates the Seventh Amendment.” Id. at 120. If the answer at the first step is yes, we “next consider whether the ‘public rights’ exception to Article III jurisdiction applies.” Id. When the public rights exception applies, “Congress may assign the matter for deci- sion to an agency without a jury, consistent with the Seventh Amendment.” Id. at 127. The first step is straightforward here. The Seventh Amendment, the Court has explained, extends to statutory claims if they are “legal in nature.” Id. at 122 (cleaned up). To 8 No. 24-3296 make this determination, we examine both “the cause of ac- tion and the remedy it provides,” giving more weight to the nature of the remedy. Id. at 122–23; see also Tull v. United States, 481 U.S. 412, 421 (1987) (“[T]he relief sought is more important than finding a precisely analogous common-law cause of action in determining whether the Seventh Amend- ment guarantees a jury trial.” (cleaned up)). The FDIC acknowledges that the civil money penalty it imposed on Bo- nan pursuant to 12 U.S.C. § 1818(i) is “the prototypical com- mon law remedy,” Jarkesy, 603 U.S. at 123, and it therefore does not contest that this aspect of its administrative enforce- ment action implicated the Seventh Amendment. As for the FDIC’s claim seeking a prohibition order pursuant to 12 U.S.C. § 1818(e), we accept Bonan’s invitation to treat this as- pect of the agency’s enforcement action as legal in nature—a point the FDIC does not dispute. So we proceed to Jarkesy’s next step for both claims. Step two of Jarkesy’s Seventh Amendment framework em- beds a notorious thicket in the law: the public rights exception to Article III jurisdiction. At a high level, this doctrine roots itself in the principle of separation of powers. See id. at 127. Article III of the Constitution provides that “[t]he judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” U.S. Const. art. III, § 1. “Under the basic concept of separation of powers that flows from the scheme of a tripartite government,” this judicial power “cannot be shared with the other branches.” Jarkesy, 603 U.S. at 127 (cleaned up). As a result, the Supreme Court has understood Article III’s vesting of judicial power to re- quire that “matters concerning private rights … not be re- moved from Article III courts.” Id. At the same time, the Court No. 24-3296 9 has recognized “a class of cases” concerning “public rights,” where “no involvement by an Article III court in the initial adjudication is necessary.” Id. at 128. The Supreme Court “has not definitively explained the distinction between public and private rights.” Id. at 131 (cleaned up); see also id. at 130 (acknowledging that “[t]his is an area of frequently arcane distinctions and confusing prec- edents” (cleaned up)). In Jarkesy, the Court suggested that cases involving public rights fall into a set of “historic catego- ries of adjudications.” Id. at 130. But the Court did not over- rule, and indeed relied on, a separate line of precedent apply- ing the public rights exception to the adjudication of statutory claims. See id. at 132–40 (discussing Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), and Atlas Roofing Co. v. Occupa- tional Safety and Health Review Comm’n, 430 U.S. 442 (1977)); see also Axalta Coating Sys. LLC v. Fed. Aviation Admin., 144 F.4th 467, 473 (3d Cir. 2025) (observing that the Supreme Court “resolved the public rights question in Jarkesy in a no- tably uncomplicated way: by analogizing the [agency’s] en- forcement action to the action at issue in one public rights precedent … and distinguishing it from the enforcement ac- tion at issue in another”); Sligo Creek Ctr. v. United States Dep’t of Health & Hum. Servs., 177 F.4th 556, 559–60 (4th Cir. 2026) (agreeing with the Third Circuit’s characterization of Jarkesy). Those previous decisions guide our analysis here. In Atlas Roofing, the Court announced a broad rule permit- ting agencies to pursue in-house enforcement of federal stat- utory violations. See 430 U.S. at 455. The Occupational Safety and Health Review Commission imposed monetary penalties on two private employers, including Atlas Roofing, finding that they violated safety standards promulgated under the 10 No. 24-3296 Occupational Safety and Health Act of 1970. See id. at 447–48. Atlas and the second company then petitioned for review in federal court, urging that the administrative adjudication of the alleged violations ran afoul of the Seventh Amendment. See id. at 448–49. The Court disagreed and upheld the constitutionality of the administrative enforcement action. See id. at 461. “[W]hen Congress creates new statutory ‘public rights,’” enforced by the government in its sovereign capacity, the Court explained, “it may assign their adjudication to an administrative agency with which a jury trial would be incompatible.” Id. at 455. The Court concluded that the adjudication at issue involved pub- lic rights because Congress, in enacting the Occupational Safety and Health Act, created new statutory obligations, “unknown to the common law,” to remedy national work- place safety concerns. Id. at 450, 461. By its terms, Atlas Roofing recognized that Congress has broad authority to create public rights by developing new causes of action within federal statutes that seek to address national problems. See id. at 461 (“The Seventh Amendment is no bar to the creation of new rights or to their enforcement outside the regular courts of law.”); see also Axalta, 144 F.4th at 483 (“[A]ny time Congress creates a cause of action en- forced by the government, Atlas Roofing presumes that it in- volves a public right.”) (Bibas, J., concurring). While Atlas Roofing remains good law, the Court has nar- rowed its application in two subsequent decisions. The first was Granfinanciera, in which the Court determined that a fraudulent conveyance action codified in the Bankruptcy Code involved private rights. See 492 U.S. at 55. Because “Congress simply reclassified a pre-existing, common-law No. 24-3296 11 cause of action that was not integrally related to the refor- mation of debtor-creditor relations” as one triable by a non- Article III bankruptcy judge, the Court concluded that this “purely taxonomic change” could not render the statutory cause of action one involving public rights. Id. at 60–61. All of this was despite the undeniable observation that the Bank- ruptcy Code reflects a comprehensive statutory scheme for providing debt relief and enabling financial reorganization. The second narrowing came in Jarkesy, when the Court confirmed and emphasized that not all obligations in federal statutes fall within Atlas Roofing’s public rights ambit. The clarification came as the Court considered “whether the Sev- enth Amendment entitles a defendant to a jury trial when the SEC seeks civil penalties against him for [statutory] securities fraud.” Jarkesy, 603 U.S. at 120. The Court resolved the ques- tion in the affirmative, concluding that the statutory securities fraud actions at issue involved private rather than public rights. See id. at 134. “If a suit is in the nature of an action at common law,” the Court emphasized, “then the matter pre- sumptively concerns private rights, and adjudication by an Article III court is mandatory.” Id. at 128. While the statutory fraud actions at issue in Jarkesy were not identical to their common law counterpart, see id. at 126, they “target[ed] the same basic conduct as common law fraud, employ[ed] the same terms of art, and operate[d] pur- suant to similar legal principles,” id. at 134. In short, the SEC’s enforcement action based on the antifraud provisions of the federal securities laws was “a common law suit in all but name.” Id. at 136. This meant that Congress’s placement of the action within a federal regulatory scheme did not transform it into one involving public rights. See id. at 134. 12 No. 24-3296 But Jarkesy stopped short of overruling Atlas Roofing. To the contrary, the Court left Atlas Roofing in place for statutory causes of action that cannot “trace[] their ancestry to the com- mon law.” Id. at 137; see also Axalta, 144 F.4th at 475 (observ- ing that in Jarkesy “the Court distinguished, but did not over- rule, its holding in Atlas Roofing”). After Jarkesy, then, Atlas Roofing continues to govern the public rights inquiry for agency enforcement actions based on statutory standards that “bring no common law soil with them,” Jarkesy, 603 U.S. at 137, while Jarkesy applies to “traditional legal claims” embed- ded in statutes, id. (cleaned up). When it comes to discerning whether a statutory claim brings with it “common law soil,” we believe the analysis should focus on the Founding Era. We say this because, in laying the foundation for its public rights analysis, the Court in Jarkesy explained that “[a] hallmark that we have looked to in determining if a suit concerns private rights is whether it is made of the stuff of the traditional actions at common law tried by the courts at Westminster in 1789.” Id. at 127–28 (cleaned up). Jarkesy also explicitly relied on principles it derived from its prior decision in Granfinanciera. See id. at 134 (“Granfinan- ciera effectively decides this case.”). In Jarkesy’s recitation of the relevant points from Granfinanciera, the Court highlighted that “[a] survey of English cases showed that actions to re- cover fraudulent transfers were often brought at law in late 18th-century England.” Id. at 133 (cleaned up). To be sure, Jarkesy did not expressly tell us how its analysis would apply to a statutory claim with an analogue to a cause of action that became part of the common law later than 1789. But our best answer based on the guidance we find in Jarkesy No. 24-3296 13 is that common law at the Founding should be our benchmark for private rights. Putting this all together, our task under Jarkesy’s second step is to determine whether the statutory claims the FDIC administratively brought against Frank Bonan were akin to suits at common law at the Founding and governed by Jarkesy, or are instead unknown to the common law and governed by Atlas Roofing. With this in mind, we consider the two statutory causes of action that the FDIC invoked in its enforcement action against Bonan. The Federal Deposit Insurance Act, as codified at 12 U.S.C. § 1818(i), permits the FDIC to impose a civil money penalty on the director of a federally insured bank who “reck- lessly engages in an unsafe or unsound practice in conducting the affairs of such insured depository institution” or “breaches any fiduciary duty.” 12 U.S.C. §§ 1818(i)(2)(B)(i)(II)–(III). Section 1818(e) in turn allows the FDIC to issue an order prohibiting a director from working at any federally insured depository institution based on similar misconduct. See id. §§ 1818(e)(1)(A)(ii)–(iii). Based on this shared core of prohibited misconduct, we conclude that nei- ther § 1818(i) nor § 1818(e) is akin to a common law action at the Founding. We begin with an “unsafe or unsound practice,” which underlies the FDIC’s imposition on Bonan of both the money penalty and the prohibition order. This standard brings no common law soil with it, as the term likely emerged from nineteenth century state banking laws. See Thomas L. Holzman, Unsafe or Unsound Practices: Is the Current Judicial Interpretation of the Term Unsafe or Unsound?, 19 Ann. Rev. Banking L. 425, 429 n.21 (2000). Congress first used “unsafe or 14 No. 24-3296 unsound practices” in federal banking law in 1933, and it now serves as a basis for enforcement actions against bank direc- tors across many provisions of federal law. See Heidi Man- danis Schooner, Fiduciary Duties’ Demanding Cousin: Bank Di- rector Liability for Unsafe or Unsound Banking Practices, 63 Geo. Wash. L. Rev. 175, 202 (1995). Congress has often left unsafe or unsound practices undefined in these provisions, see id. at 187–89, deliberately allowing the term to serve as a gap-filling prohibition on conduct not otherwise covered in the federal regulatory scheme, see id. at 187. To put the point another way, unsafe or unsound practices is a regulatory—rather than common law—term of art. See Lawrence G. Baxter, Fiduciary Issues in Federal Banking Regulation, 56 Law & Contemp. Probs. 7, 23–24 (1993) (describing the duty not to engage in unsafe and unsound conduct as “a fundamental regulatory principle distinctive to federally insured banking”). The most widespread working definition of an unsafe or unsound practice, which the administrative record shows the FDIC relied upon in its action against Bonan, underscores the unique regulatory origins of the term. This definition comes not from common law principles but from the legislative his- tory of the Financial Institutions Supervisory Act of 1966: Generally speaking, an ‘unsafe or unsound practice’ embraces any action, or lack of action, which is contrary to generally accepted stand- ards of prudent operation, the possible conse- quences of which, if continued, would be abnor- mal risk or loss or damage to an institution, its shareholders, or the agencies administering the insurance funds. No. 24-3296 15 Hearings on S. 3158 Before the House Comm. on Banking and Currency, 89th Cong., 2d Sess. 49–50 (1966) (memorandum of John Horne, Chairman of the Federal Home Loan Bank Board); see also, e.g., Michael v. FDIC, 687 F.3d 337, 352 (7th Cir. 2012) (using nearly identical language to describe an un- safe or unsound banking practice in the context of § 1818(e)); Matter of Seidman, 37 F.3d 911, 926–27 (3d Cir. 1994) (employ- ing this standard verbatim for an action under § 1818(b)); Schooner, Fiduciary Duties’ Demanding Cousin, at 190 (“In seeking a general definition for unsafe or unsound banking practices, the courts have relied on either Chairman Horne’s definition or one almost identical to it.”). As we see it, this definition addresses itself to actions that present risk to the solvency of regulated banks. See Baxter, Fi- duciary Issues, at 23 (“The duty to act safely and soundly is basically a duty not to take actions that might place the sol- vency of the banking institution in jeopardy.”). And our re- search has turned up no common law cause of action at the Founding that targets the same conduct or operates under similar legal principles. Cf. Jarkesy, 603 U.S. at 134. So too with the other misconduct element underlying the FDIC’s enforcement action against Bonan under §§ 1818(i) & (e): breach of fiduciary duty. At a general level, fiduciary duty is a heartland equitable concept. See Deborah A. DeMott, Be- yond Metaphor: An Analysis of Fiduciary Obligation, 1988 Duke L. J. 879, 880 (1988) (“As a legal principle, [fiduciary] obliga- tion originated in Equity.”). It evolved to prevent the abuse of relationships in which one person has reposed their trust in another. See id. And courts of equity—not common law courts—enforced the obligations arising from these relation- ships. See Chauffeurs, Teamsters and Helpers, Local No. 391 v. 16 No. 24-3296 Terry, 494 U.S. 558, 567 (1990) (observing that “action[s] by a trust beneficiary against a trustee for breach of fiduciary duty” were “within the exclusive jurisdiction of courts of eq- uity” (citing 2 J. Story, Commentaries on Equity Jurispru- dence § 960, at 266 (13th ed. 1886))); CIGNA Corp. v. Amara, 563 U.S. 421, 439 (2011) (explaining that “before the merger of law and equity,” a trust beneficiary “could have brought only in a court of equity” a suit against a trustee who was a “fidu- ciary”); Kamen v. Kemper Fin. Servs., Inc., 908 F.2d 1338, 1351 (7th Cir. 1990) (“[E]nforcing fiduciary duties was equitable in English practice ….”), rev’d on other grounds, 500 U.S. 90 (1991). We therefore do not see an action to enforce the breach of a fiduciary duty as “a common law suit in all but name.” Jarkesy, 603 U.S. at 136. Focusing on the narrower context of banking, Bonan offers us no basis to conclude that fiduciary duties even applied to bank directors at the Founding. See Patricia A. McCoy, A Po- litical Economy of the Business Judgment Rule in Banking: Impli- cations for Corporate Law, 47 Case W. Res. L. Rev. 1, 22 (1996) (placing the first reported bank director liability cases in the nineteenth century). It does appear, however, that toward the end of the nineteenth century, courts began to recognize and enforce the fiduciary duties of bank directors, and not solely as creatures of equity. See id. at 34–38 (discussing the emer- gence of common-law tort standards as the most important basis of bank director liability beginning in the 1890s); see also Bowerman v. Hamner, 250 U.S. 504, 511 (1919) (describing Briggs v. Spaulding, 141 U.S. 132 (1891), as having offered “the rule for determining the common-law liability” of directors of national banks); Atherton v. FDIC, 519 U.S. 213, 217 (1997) (“We recognize … that this Court did once articulate federal No. 24-3296 17 common-law corporate governance standards, applicable to federally chartered banks.”). So, by 1966, when Congress added breach of fiduciary duty to the federal banking laws as a basis for bank director sanction, see Baxter, Fiduciary Issues, at 26, an action for breach of fiduciary duty in the banking context had twentieth cen- tury common law soil. But this is not the kind of common law development that we understand to be legally significant based on Jarkesy. Our focus is on the Founding Era, and at that time, breach of fiduciary duty was an equitable action that does not appear to have extended to bank directors. In our final analysis, then, we conclude that the FDIC’s en- forcement action under §§ 1818(i) & (e) involves public rights under the reasoning of Atlas Roofing. This means that Con- gress may assign the adjudication of these causes of action to an agency without violating the Seventh Amendment. See also Ortega v. OCC, 155 F.4th 394, 403–09 (5th Cir. 2025) (con- cluding that enforcement actions under § 1818 involve public rights by focusing on the history of federal bank regulation). III We see Bonan’s Seventh Amendment claim as a close and challenging call, and it seems prudent to explain why. Here we focus on Congress’s incorporation in §§ 1818(i) & (e) of a claim for breach of fiduciary duty as one basis for in-house agency adjudication. Recall that in Jarkesy the Supreme Court described public rights as an exception “to Article III jurisdiction.” 603 U.S. at 120. And, while acknowledging that the boundaries of the ex- ception remain fuzzy, the Court was clear on the consequence when a case involves public rights: “no involvement by an 18 No. 24-3296 Article III court in the initial adjudication is necessary.” Id. at 128. Based on this description, it seems sensible to expect Ar- ticle III (and the case law interpreting it) to inform, if not de- fine, the contours of public and private rights. This conclusion would suggest that the public rights ex- ception is narrower—and the category of causes of action in- volving private rights is larger—than what the Court’s analy- sis in Jarkesy seems to convey. By its terms, Article III extends the “judicial Power” to “all Cases, in Law and Equity.” U.S. Const. art. III, § 2. If the public rights exception attempts to capture those cases that do not fall within this core judicial power, and thereby do not require Article III adjudication in the first instance, see Jarkesy, 603 U.S. at 128, it is unclear based on the Constitution’s text why rights traditionally adjudicated in courts of equity would be subject to a different public rights analysis than those at common law. Put another way, when it comes to first principles, we do not see why the equitable lin- eage of fiduciary duties cannot render them private rights in Article III terms. And, indeed, the Supreme Court’s case law has suggested at times that traditional cases in equity involve private rights. In Murray’s Lessee v. Hoboken Land & Improvement Co., the case that first recognized the public rights exception, the Supreme Court adopted a definition of private rights that tracked more closely Article III’s text, emphasizing that Congress could not “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.” 59 U.S. (18 How.) 272, 284 (1856) (emphasis added). This statement of general principle from Murray’s Lessee has endured to the Court’s most recent cases, even to Jarkesy. No. 24-3296 19 See Jarkesy, 603 U.S. at 132 (referencing this precise language in Murray’s Lessee); see also Granfinanciera, 492 U.S. at 56 (ob- serving in its public rights analysis that “matters from their nature subject to a suit at common law or in equity or admi- ralty lie at the protected core of Article III judicial power” (quoting N. Pipeline Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 71 n.25 (1982) (plurality opinion by Brennan, J.) (cleaned up))). The Supreme Court has even observed, albeit in dicta, that “breach of fiduciary duty claims … involve pri- vate rights which are at the core of matters normally reserved to Article III courts.” Coit Indep. Joint Venture v. Fed. Sav. and Loan Ins. Corp., 489 U.S. 561, 578–79 (1989) (cleaned up). All this to say, there is plenty to support the conclusion that pri- vate rights encompass traditional actions at equity, including the breach of fiduciary duty claims embedded in §§ 1818(i) & (e). See Intuit, Inc. v. FTC, 170 F.4th 411, 418 (5th Cir. 2026) (concluding that traditional actions at both law and equity in- volve private rights under Article III); but see id. at 417 n.5 (suggesting the distinction between law and equity may have been “relevant” if the plaintiff had “claimed a right to a jury trial under the Seventh Amendment”). But we hew closely to the Supreme Court’s most recent direction on applying the public rights exception, which comes from Jarkesy. And Jarkesy clarified that Atlas Roofing’s capacious view of public rights does not apply to statutory causes of action borrowed from the common law. It did not pare back Atlas Roofing’s application from statutory claims re- sembling other cases at the core of Article III, like traditional actions at equity. See Jarkesy, 603 U.S. at 138 (“[Atlas Roofing] does not control here, where the statutory claim is in the na- ture of a common law suit.” (cleaned up)); id. at 137–38 (“The cases that Atlas Roofing relied upon did not extend the public 20 No. 24-3296 rights exception to traditional legal claims. Instead, they ap- plied the exception to actions that were not suits at common law or in the nature of such suits.” (cleaned up)); see also Ax- alta, 144 F.4th at 483 (Bibas, J., concurring) (“Together, [the Su- preme Court’s public rights cases] hold that (1) when Con- gress creates a cause of action enforced by the government as sovereign, then it involves public rights, unless (2) it resem- bles a preexisting action at common law.”). As a lower federal court, our role is to follow the Supreme Court’s precedent, not guess its future direction. See Hohn v. United States, 524 U.S. 236, 252–53 (1998) (“Our decisions re- main binding precedent until we see fit to reconsider them, regardless of whether subsequent cases have raised doubts about their continuing vitality.”). The Court has not made clear that statutory causes of action resembling traditional eq- uitable actions involve private rights for the purposes of Sev- enth Amendment analysis. In time the Justices are sure to con- sider this question. Until they do, we believe the appropriate path is to adhere to Atlas Roofing. It is on this basis that Bo- nan’s Seventh Amendment claim fails. IV We turn next to Bonan’s other challenges to the FDIC’s en- forcement proceeding. A Bonan first contends that the FDIC Board and the agency’s administrative law judges were unconstitutionally insulated from presidential oversight during the enforcement proceed- ing. Specifically, he highlights that the FDIC’s Board members serve for a statutorily defined term of years, see 12 U.S.C. § 1812(b)–(c), and that its ALJs enjoy two layers of “for-cause” No. 24-3296 21 protection from removal, see 5 U.S.C. § 7521. Bonan urges that these statutory restrictions on the President’s removal power violate Article II of the Constitution and therefore require us to vacate the Board’s decision and orders. For its part, the FDIC does not defend the constitutionality of these removal protections, instead asserting that Bonan is not entitled to relief because he has not shown the removal restrictions caused him compensable harm. We agree that un- der current law Bonan needs to show harm and has failed to do so, making it unnecessary for us to opine on Bonan’s un- derlying constitutional challenge to the removal restrictions. Five years ago, in Collins v. Yellen, the Supreme Court es- tablished that we need not regard “as void” the actions of an unconstitutionally insulated administrative official. 594 U.S. 220, 258 (2021). Unlike in an instance of improper appoint- ment, the Court found “no basis for concluding” that an ad- ministrative official enjoying unconstitutional protection from the President’s removal power “lacked the authority to carry out the functions of the office.” Id. at 258. In so holding, however, the Court left open the possibility of relief if the un- constitutional restriction “inflict[ed] compensable harm” on the plaintiff. Id. at 259. To date, Collins has come to stand for the proposition that a successful challenge to an administrative action on removal grounds does not entitle a party to relief without a showing that the unconstitutional restriction on the President’s power caused compensable harm. See, e.g., CFPB v. Law Offs. of Crys- tal Moroney, P.C., 63 F.4th 174, 179 (2d Cir. 2023); Axalta, 144 F.4th at 479–80; Calcutt v. FDIC, 37 F.4th 293, 314–15 (6th Cir. 2022), rev’d on other grounds, 598 U.S. 623 (2023); Bhatti v. Fed. Hous. Fin. Agency, 15 F.4th 848, 853–54 (8th Cir. 2021); 22 No. 24-3296 Kaufmann v. Kijakazi, 32 F.4th 843, 849 (9th Cir. 2022); Leachco, Inc. v. Consumer Prod. Safety Comm’n, 103 F.4th 748, 756–57 (10th Cir. 2024); Rodriguez v. Social Sec. Admin., 118 F.4th 1302, 1314 (11th Cir. 2024). But see Space Expl. Techs. Corp. v. NLRB, 151 F.4th 761, 780 (5th Cir. 2025) (limiting Collins’s reach to only “retrospective relief from final agency action”). We too adopt this understanding of Collins. Collins itself went on to offer some guidance on when an unconstitutional removal restriction might inflict harm. “Sup- pose, for example, that the President had attempted to re- move [an administrative official] but was prevented from do- ing so by a lower court decision holding that he did not have ‘cause’ for removal.” Collins, 594 U.S. at 259. “Or suppose the President had made a public statement expressing displeas- ure with actions taken by [the official] and had asserted that he would remove [them] if the statute did not stand in the way.” Id. at 260. We take from these examples that a party challenging a removal restriction must show, at a minimum, that the unconstitutional protection actually impacted the particular action against them. See Leachco, 103 F.4th at 756 (“[H]e must demonstrate that the unconstitutional removal provision actually affected the agency’s decision or conduct against him.”); L. Offs. of Crystal Moroney, 63 F.4th at 179–80 (observing that courts have disagreed in the wake of Collins about how a party must demonstrate compensable harm and adopting