Over at least the last 10 years, government prosecutors have become increasingly focused on imposing the maximum consequences on individuals who violate the law. When seeking to impose monetary sanctions or forfeiture of assets, the government has expanded its view of what constitutes the proceeds of wrongdoing and has not hesitated to make wrongdoers pay.

Many have applauded this seemingly limitless reach of the government power since it only impacted wrongdoers. Few individuals have the resources to challenge whether the government’s expansion of its power is justified under our laws. Recently, however, two individuals did challenge the government, and the Supreme Court concluded that the government had gone too far. We should all applaud the Supreme Court’s recognition that even the government is bound by the limits of the law.

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On Monday, the Supreme Court decided Kokesh v. SEC, and Honeycutt v. United States. Each of these cases, decided without dissenting or concurring opinions, limited overly-aggressive government claims to assets of those found to have violated the law. It is easy to say that wrongdoers should pay the maximum possible amount as a consequence of their actions, but reasonable limitations on how much punishment the government can impose protect everyone and promote effective prosecutorial decision-making.

In Kokesh, the Securities and Exchange Commission (SEC) sought disgorgement, or repayment of claimed profits from securities law violations, from an individual found to have violated federal securities laws. The concept seems reasonable until one considers that the SEC wanted disgorgement for conduct that was 22 years old.

In Honeycutt, the government sought forfeiture of drug transaction profits from a co-conspirator. Again, the concept seems reasonable, but in Honeycutt, the defendant had not received any profits from the transactions. In each case, the Supreme Court said no, and in each case, the Supreme Court got it right.

The Kokesh disgorgement issue has its origins in 1970, when the SEC, having no statutory authority to seek monetary sanctions from wrongdoers, persuaded the courts that they had the power to order a securities law violator to repay his or her gains from the violation. Over the next 47 years, the SEC successfully expanded the reach of disgorgement to require a wrongdoer to disgorge not only his or her profits from the violation but also to disgorge the profits earned by others in the scheme.

The SEC used its judicially-created remedy to claw back funds earned from securities law violations regardless of how much time had passed since the violation occurred. Courts agreed with the SEC’s assertions that disgorgement was not a penalty subject to a five-year statute of limitations since disgorgement only deprived the violator of funds to which he or she was not entitled.

Before Kokesh, the SEC could sue for alleged violations that occurred as long ago as 1995 and could seek both disgorgement for that 22-year-old conduct and, after 1990, for penalties based on conduct dating back to 2012.

The petitioner in Kokesh challenged the SEC’s limitless ability to obtain disgorgement, claiming that disgorgement is properly viewed as a penalty subject to the five-year limitations period. The Supreme Court agreed. It recognized that disgorgement fit the legal definition of a penalty. The court rejected SEC claims that disgorgement is remedial and merely strips the violator of profits earned from the violation.

Rather, the court noted, disgorgement frequently leaves the violator in a worse position by imposing liability for the profits made by others and by failing to reduce amounts to account for expenses that reduced the profit of the violator. The court also suggested that SEC claims for both disgorgement and additional penalties may constitute double-dipping.

It cautioned that its opinion was not meant to be interpreted as a decision that courts have the authority to order disgorgement or that they had properly applied disgorgement principles in the SEC enforcement context.

In Honeycutt, criminal prosecutors sought to require a defendant to forfeit profits earned by a co-conspirator from drug transactions. The defendant had not received any of the profits or any benefit from those transactions. Nonetheless, the government claimed he had to forfeit the money because his co-conspirator had received the profits and co-conspirators are liable for the actions of others in the conspiracy in furtherance of the plan. The government sought to expand liability beyond the scope of the relevant forfeiture statute.

After detailed analysis of the statute, the court determined that the government may not require a defendant to forfeit the value of property that was used or obtained by his or her co-conspirator. A defendant is only liable for forfeiture of his or her interest in the criminal enterprise. The government was not permitted to apply conspiracy liability concepts to expand forfeiture beyond the scope specified by the law.

Practically, this meant that the government can no longer require a defendant to forfeit amounts beyond what he or she received. As the court explained, the government cannot seek to require a low-level drug dealer who receives $3,600 from selling drugs to forfeit the entire $3 million earned by his or her co-conspirator.

The Kokesh and Honeycutt decisions do not eliminate the government’s power to impose significant sanctions on wrongdoers; those who violate the law will face serious consequences. The SEC can negotiate agreements that toll the statute of limitations during the course of its agreements. It can still obtain disgorgement for profits made during the five years before it files a lawsuit. In addition, it can still seek civil money penalties in multiples of the wrongdoer’s profits.

Similarly, the DOJ retains broad forfeiture authority including the power to substitute untainted property for tainted property that is outside of its reach. Those who violate the law still face the risk of significant sanction. Now, however, there are some limits.

While these cases seem far afield from legal issues faced in the ordinary course of daily life, they are important to everyone. In each of these cases, the government pursued aggressive theories of liability that the Supreme Court determined were not supported by the laws as written by Congress.

In each decision, the Supreme Court reminded the government that there are limits to its ability to exact punishment and that it, like we, are subject to the rule of law. That is welcome news.

Deborah Meshulam is a partner at DLA Piper U.S. She chairs the firm’s securities law practice and regularly defends those charged with violations of the federal securities laws. She formerly served as an assistant chief litigation counsel in the Enforcement Division of the SEC.

The views expressed by contributors are their own and not the views of The Hill.