When the justices started their last week of arguments this morning with Lucia v. Securities and Exchange Commission, they were well aware of the implications the decision holds for the administrative state. Because the case presents a constitutional challenge to the method by which civil-service administrative law judges are appointed, it raises the possibility that the justices might (in the words of Justice Stephen Breyer) “driv[e] wedges of dependence into what was to be since Chester Alan Arthur a merit-based civil service.”
The problem comes from the Constitution’s appointments clause, which requires that all “officers” of the United States be appointed by the president, by the “courts of law,” or by the “heads of departments.” As Chief Justice John Roberts emphasized repeatedly during the argument, the clause reflects the concern of the Constitution’s drafters with “accountability” – the idea that some readily identifiable official could be held accountable for the selection of any “officer” of the United States. There is considerable tension between that principle, which necessarily ties all who qualify as constitutional “officers” to political appointees, and the principles that undergird the Administrative Procedure Act’s conception of administrative law judges, who are established by design as a base of activity independent from political influence.
To give some context, the case before the court involves the administrative law judges of the Securities and Exchange Commission, traditionally selected as civil-service employees rather than as appointees of the SEC itself, much less the president. As relevant here, the main activity of those ALJs is to adjudicate enforcement proceedings that the commission brings against private individuals such as petitioner Raymond Lucia – found by one of the ALJs to have violated a variety of antifraud provisions of the securities laws.
Although the argument ranged broadly, four distinct threads provide a good overview. The first is sympathy for the development of an independent and merit-based civil-service system. Breyer, for example, plainly approached the case from the premise that the Constitution could accommodate that system. Thus, in conversation with Deputy Solicitor General Jeffrey Wall (arguing for the government that existing appointments are unconstitutional), Breyer commented: “One thing I’m certain of, or fairly certain, or moderately certain, [is] that the Constitution does not inhibit the creation of a merit-based civil service and an adjudicatorily merit-based system of hearing examiners, ALJs.”
More expansively, Justice Elena Kagan seemed viscerally sensitive to the importance of maintaining the independence of adjudicators from political influence. Thus, challenging Wall’s view that the appointments are unconstitutional because of their independence from the commission, Kagan explained:
There are different ways to interfere with decisional independence. One is by docking somebody’s pay. One is by having a removal power that you hang over your head. And another is by being the person who gets to decide who gets the job or not.And so all of these things in some manner tie the adjudicator more closely to the political system. And the APA came up with this foundational compromise which had as a very significant part of it that the hearing examiners, the adjudicators, would have some detachment, would have some insulation from the political system. Not the way an Article III judge does, but still something.And you want to ratchet that down.
A second thread, almost diametrically opposed to the first, is evident in the emphatic view of Roberts that the APA’s effort to “insulat[e]” judges from the elected executive derogates directly from the Constitution’s requirement of accountability. Thus, in a dialogue with Anton Metlitsky (appearing in support of the existing appointments), Roberts commented:
One of the principles that caused the drafters to give the authority to appoint officers to the President was the important one of accountability. … But in this case, you don’t have that accountability. The Commission can say: Don’t blame us. We didn’t do it. The President can say: Don’t blame me. I didn’t appoint them. And, instead, it’s something in the administrative bureaucracy which operates as insulation from the political accountability that the drafters of the Constitution intended.
A third thread noted the odd circumstances of the challenge to this particular group of appointments, which argues that the existing judges were unduly biased despite the civil-service methodology of their appointment. It seemed troublesome both to Kagan and to Justice Anthony Kennedy that a shift to appointment by the commission itself would, if anything, produce judges who were even less independent than the judges that Lucia challenges. As Kagan put it, “where we have adjudications … we typically think we want the decisionmaker to be insulated from political pressures. So wouldn’t putting these decisionmakers even closer to the political body only exacerbate the problem that you’re complaining of?” As much as anybody, Kagan shared Breyer’s embrace of the process-based values behind the shift away from patronage-based hiring at the end of the 19th century.
If that summary captured the entire argument, I might have expected a strong majority to rule in favor of the existing appointments, perhaps with a dissent from Roberts and Justices Clarence Thomas and Neil Gorsuch. But to complete the picture I have to mention a fourth and final thread: the strong sense that the court’s prior decisions all but compel a ruling invalidating the challenged appointments. The basic point is that the activities of the officers here are similar to the activities considered by the Supreme Court in its 1991 decision in Freytag v. Commissioner, which held that “special tax judges” of the Tax Court qualified as officers for purposes of the appointments clause. The activities of ALJs are quite similar to the activities of the Freytag judges, who also supervised trial-like proceedings, formed an evidentiary record and reached preliminary decisions in the matters before them.
Thus, Roberts brusquely cut off Metlitsky’s effort to begin his argument with a recitation of the standard under which he recommends validation of the existing appointments:
If I were trying to figure out who an officer is, I think I might have started with Freytag. And your test that you just proposed doesn’t seem similar to what Freytag talked about which was a laundry list – not that long perhaps – of particular authorities. And I don’t see, other than the contempt power, I suppose, what’s different here than in Freytag.
Even Kagan, who plainly shared Metlitsky’s concerns about fostering an independent civil service, found it hard to swallow Metlitsky’s attempt to distinguish Freytag:
I guess what strikes me, Mr. Metlitsky, is that if you had a list and you said top 10 attributes of the judges that were involved in Freytag and the judges that are involved here, you’d pretty much say that nine of them are the same and maybe one is different… [I]t’s just so hard to get around … the commonalities of these judges and the judges in Freytag.
Indeed, as Metlitsky’s argument wound down, Kagan suggested to him that however much she liked his proposal as a matter of institutional design, she found it quite difficult to reconcile with the Constitution as it previously has been understood:
As I listen to you, and especially as I compare your test to some of the others on offer, you know, there seems to be a good deal to be said for yours, except I don’t know where it’s coming from, honestly.So you spent a lot of time in your brief talking like this is a historical test, this is a traditional test… And I guess it seems to me like the test actually, it’s sort of the opposite, the test you would make up if you were doing everything on a blank slate. But I don’t really see what the source of this test is.
I suggested in my preview that Kagan’s views might be central to discerning the side to which the court might tip. A comment like that last one certainly makes it hazardous to say much about her likely disposition. I would, though, add two closing observations. First, the justices seem to view this as a case likely to have broad implications. Mark Perry (appearing on behalf of Lucia to challenge the appointments) tried repeatedly to limit the breadth of his argument to a small group of only 150 administrative law judges scattered around the federal government, suggesting that the court’s decision would apply only to cases of wholly adversarial adjudication – a group from which he pointedly tried to exclude Social Security adjudications. That approach seemed to accomplish little, as several justices (with Justice Sonia Sotomayor probably the most vehement) rejected Perry’s efforts to limit the breadth of a potential decision. Second, if any of my readers are thinking that the “originalist” camp is likely to accept these appointments, I would mention that the only comment of the often-voluble Gorsuch during the oral argument was a question about what the appropriate remedy would be if the existing appointments are held unconstitutional.
In sum, the defenders of the administrative state are not entirely out of the woods. Although some of the justices are sympathetic to the goals that motivate independent appointments, it is not at all clear that five of them will agree that those goals pass muster under the constitutional framework the court’s decisions establish.
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