Notice & Comment

Chief Justice Marshall and the Appointments Clause, by Garrett West

Lucia v. SEC seems set to give some content to Buckley v. Valeo’s cryptic distinction: while officers exercise “significant authority under the laws of the United States,” employees are just “lesser functionaries.” Since Buckley, the Court expanded its analysis again in Freytag, but the employee-officer distinction still remains ill-defined. What’s so strange about both Freytag and Buckley, though, is that they fail to grapple with Chief Justice Marshall’s attempt to draw the line in United State v. Maurice. 26 F. Cas. 1211 (C.C.D. Va. 1823) (No. 15,747). As I’ve argued elsewhere, this case should inform the test that distinguishes employees and officers. And the best reading of Maurice supports a rule similar to the one advanced by the Court-appointed amicus: an officer must exercise “delegated power to exercise a portion of the sovereign authority of the United States” (p. 23).

In Maurice, the Secretary of War appointed an “agent of fortifications” who would be responsible, as the title suggests, for building military fortifications. This agent would “provide the materials and workmen,” “pay the labourers,” and otherwise ensure that the fortifications were built. The question was whether this agent of fortification was an “officer” or an “employee.” Chief Justice Marshall articulated the rule:

A man may certainly be employed under a contract, express or implied, to do an act, or perform a service, without becoming an officer. But if a duty be a continuing one, which is defined by rules prescribed by the government, and not by contract, which an individual is appointed by government to perform, who enters on the duties appertaining to his station, without any contract defining them, if those duties continue, though the person be changed; it seems very difficult to distinguish such a charge or employment from an office (26 F. Cas. at 1213).

He does not state directly when or how an “employment” becomes an “office.” The considerations Justice Marshall cites, though, seem to require that the employment be (1) “on the part of the United States” and (2) a “continuing [duty]” or “continu[ous], though the person be changed.” Indeed, later opinions—like Germaine and Hartwell—tend to emphasize the continuity of the office.

But “continuity” doesn’t make sense for two reasons: First, Chief Justice Marshall’s actual application of this test to the “agent of fortification” did not much turn on continuity at all. Instead, he reasoned that the agent had been given “important duties”: to “disburse[] the money placed in [his] hands,” to “provide the materials and workmen deemed necessary,” and to “pay the labourers employed.” Because the agent of fortifications could enter into contracts on behalf of the United States, he could alter the legal relations between private citizens and the U.S. government. Second, continuity seems beside the point. Congress might create a temporary office (e.g., by writing a sunset provision into the statute itself), but a contract might extend indefinitely.

Chief Justice Marshall’s distinction, then, should not be construed to distinguish duties based on continuity in itself. Instead, Chief Justice Marshall’s opinion repeatedly suggests that duties arising out of contracts do not create officers. A better reading, then, is that employees exercise only the sorts of authority that may be permissibly exercised under a contract. Under this reading, the Appointments Clause applies if and only if the duty must arise under a statutory duty. And to make this determination, the Court may turn to other, related principles of constitutional law: First, the private nondelegation doctrine holds that the government “cannot delegate regulatory authority to a private entity.” Dep’t of Transp. v. Ass’n of Am. R.R., 135 S. Ct. 1225, 1231 (2015).  Second, deprivations of life and liberty must be authorized by valid substantive law. Cf. Richard M. Re, The Due Process Exclusionary Rule, 127 Harv. L. Rev. 1885, 1914 (2014).

Under this theory, then, the Appointments Clause’s protections cohere with the Constitution’s insistence that official governmental actions (1) be carried on by government officials and (2) be authorized by substantive law. The Appointments Clause simply adds that officials who exercise these inherently governmental duties must be appointed according to its strictures. And this reading of Maurice might look like the definition advanced by the Court-appointed amicus: Buckley’s “significant authority” test, the amicus writes, should require “delegated sovereign powers”—i.e., powers that “alter the legal rights, duties and relations of persons, whether private parties or government actors” (pg. 24-25, citing Chadha).

This alter-legal-rights test makes good sense, for reasons I elaborate here and also in my forthcoming piece in the Yale Law Journal (comments welcome!). First, it presents a bright-line rule (or, as close to one as possible), rather than a freewheeling test that asks whether some duties should count as “significant.” Bright-line rules in this context respect Congress’s institutional responsibility to structure the administrative state as it chooses, as such a rule helps Congress predict the Court’s judgements. Second, the test balances the competing considerations of efficiency and accountability by letting the government hire some employees outside of Article II’s mechanisms, but it ensures that all those who wield the government’s sovereign power have been appointed according to Article II.

Compared to a theory that any statutory duty triggers officer statutes (a claim that has been advanced most prominently and persuasively by Professor Mascott), this test has a couple more benefits. First, it would treat two kinds of similarly situated “lesser functionaries” in the same way. Suppose, for example, that Congress stated by statute that “EPA employees shall appoint a chauffer to drive them to work events.” This statute, it seems, would create a statutory duty, rendering the chauffer an officer and her appointment thus unconstitutional. By contrast, if the employees called Ubers or contracted with a taxi service, no such issue would arise. But it would be odd to treat these two cases differently, as the source of the duty is a formality. Second, the alters-legal-rights test gives content to the text’s limitation to officers “of the United States.” If the only duties that trigger officer status are those that constitute “delegated sovereign authority,” then this interpretation explains why the Appointments Clause excludes lots of other statutory duties—say, duties that Congress imposes on private citizen or on state governments. 

But even assuming that the Court should apply the test advanced by the Court-appointed amicus, the SEC should still lose. The question, even under this more-restrictive test, is whether or not the SEC ALJs alter the legal rights of private citizens or the government. And the SG’s brief argues persuasively that it does:

Under the Commission’s organic statute, if further review of the ALJ’s decision is not sought, or if a request for such review is denied by the Commission, the ALJ’s initial decision “shall, for all purposes, including appeal or review thereof, be deemed the action of the Commission.” 15 U.S.C. 78d-1(c). To be sure, the Commission has, by regulation, adopted a policy that in cases in which plenary review by the Commission does not occur, the Commission “will issue an order” of its own confirming that the ALJ’s decision has become final. 17 C.F.R. 201.360(d)(2). But the ALJ’s initial decision is still “deemed” by statute to be “the action of the Commission” (pg. 22).

This feature of the statutory scheme—that the SEC’s ALJs may issue decisions that “shall be deemed the action of the Commission”—triggers the strictures of the Appointments Clause.

To conclude: (1) the best reading of Chief Justice Marshall’s decision in Maurice counsels in favor of the alters-legal-rights test; (2) the alters-legal-rights test makes good sense as a matter of constitutional law; and (3) although the Court-appointed amicus offers this alters-legal-rights test in defense of the SEC, the test should lead the Court to find that SEC ALJs are “officers.”

E. Garrett West is a third-year law student at Yale Law School.

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

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