Notice & Comment

A Shared Power to Appoint ALJs?

A key question on every adlaw geek’s mind is how the Supreme Court’s decision in Lucia might affect the process for appointing Administrative Law Judges (ALJs).  What if the Supreme Court holds that ALJs are inferior officers who must be appointed in compliance with Article II’s Appointments Clause?  What implications, if any, would this have for the Administrative Procedure Act’s (APA) division of appointment responsibility between the Office of Personnel Management (OPM) and individual, adjudicating agencies?

Other contributors to this symposium will address the question of whether the Court’s decision in Lucia is likely to meaningfully affect an agency’s decision to appoint any specific individual as an ALJ.  In this post, I will focus on the related, but more generic question of how the case might affect agency authority to decide whether to appoint ALJs, as opposed to non-ALJ adjudicators, to preside over hearings.

The question of whether to appoint ALJs can manifest in two ways.  First, an agency may be called upon to determine whether it is required by statute to conduct hearings in accordance with the APA’s adjudication provisions and, therefore, to appoint ALJs.  See 5 U.S.C. §§ 554, 556, 557.  Second, in the absence of such a statutory requirement, an agency may consider voluntarily appointing ALJs to preside over hearings.  In 2014, the Office of the Chairman of the Administrative Conference prepared a report offering guidance to the Equal Employment Opportunity Commission (EEOC) as to the considerations relevant to this second question.  At the time, the EEOC was considering whether to convert from Administrative Judges to ALJs in its Federal Sector Hearing Program.  (I was then serving as an Attorney Advisor at ACUS and acted as the principal author of the report’s legal analysis.)

The question of whether to appoint ALJs in a hearing program is not one that adjudicating agencies answer independently–OPM has long had a role in the decision.  This role is grounded in the APA’s attempt to provide ALJs with some decisionmaking independence from their employing agencies by interjecting OPM and the Merit Systems Protection Board into the employment relationship.  With respect to ALJ appointments, OPM’s role is the most relevant.  By statute, OPM is responsible for determining ALJ qualifications, designing and administering the ALJ examination, certifying individuals as eligible for appointment, and maintaining the registry of certified ALJ candidates.  When an agency appoints an ALJ, OPM offers that agency a choice among the top three candidates in the ALJ registry.

The aspect of this process that may surprise administrative law experts is that OPM only cooperates in the appointment of an ALJ when it agrees with the adjudicating agency’s determination that it is appropriate for ALJs to preside over the hearings in question.  That is, OPM interprets its statutory authority over the ALJ program to include an independent authority and responsibility to determine whether an adjudicating agency can appoint ALJs at all.

This view seems contrary to statute–the APA appears to vest ALJ appointment authority in the agency that conducts the hearings.  The relevant statutory provision states that: “Each agency shall appoint as many administrative law judges as are necessary for proceedings required to be conducted in accordance with sections 556 and 557 of this title.”  5 U.S.C. § 3105 (emphasis added).

OPM’s approach finds greater support in history than it does in law.  Decades ago, when the Social Security Administration and the Department of Labor sought to appoint ALJs to newly created hearing programs, the Civil Service Commission (CSC) (OPM’s predecessor) initially refused. This refusal was grounded in the CSC’s own determination that the statutes creating the hearing programs did not require adjudication under the APA’s adjudication provisions.  But the CSC’s rationale for thwarting the adjudicating agencies’ efforts to appoint ALJs was more practical than legal.  At the time, there was absolute cap on how many “supergrade” positions could be filled across government.  Since ALJs fill supergrade positions, the CSC sought to save the limited number of those positions for proceedings that were, in its view, “required to be conducted in accordance with sections 556 and 557.”  5 U.S.C. § 3105.  In each instance, the adjudicating agency was unable to appoint ALJs until Congress broke the interagency impasse in its favor.

The practical justification for the CSC’s historical position is no longer relevant: the absolute cap on supergrade positions has been eliminated.  Nonetheless, OPM continues to adhere to the CSC’s view.  OPM’s modern version is somewhat softened, allowing that the requirement for APA adjudication may imposed by regulation and not only by statute. Before it says “yes” to an agency’s request to appoint ALJs, however, OPM must be satisfied that the relevant statute or regulations require the hearings “to be conducted in accordance with sections 556 and 557.”  5 U.S.C. § 3105. In this analysis, OPM gives no deference to the adjudicating agency’s interpretation of its own statute or regulations.

The upshot is that OPM asserts that it, and not the adjudicating agency, is the final arbiter of whether ALJs can be appointed to a particular program.   As a practical matter, this view stands as an impediment to any agency that seeks to offer additional procedural protections by appointing ALJs in the absence of a clear statutory mandate.  At a deeper level, OPM’s position fundamentally challenges traditional notions of agency procedural discretion.

Coming back to Lucia, the question is whether the Supreme Court’s decision might affect OPM’s view of ALJ appointment as a shared power.  If the Constitution requires the SEC to appoint its ALJs, will that holding and its supporting reasoning narrow OPM’s role?  Depending on how the opinion is written, Lucia could help adjudicating agencies recover some of the ground that they have lost over the years to OPM.

This post is part of a symposium on Lucia v. SEC. All of the posts can be read here.

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