In April, the Supreme Court will hear oral argument in Lucia v. SEC to consider whether administrative law judges (ALJs) in the Securities and Exchange Commission (SEC) are “Officers of the United States.” If they are, the ALJs are subject to the Appointments Clause, requiring them to be appointed by the President, a department head, or a court of law. Both the private litigant challenging ALJ enforcement action and the government now agree that the SEC’s ALJs are officers, meaning they need appointment by the President or the SEC Commissioners—not by staff. In its brief to the Court, the Solicitor General’s office also contends that the Court should revisit ALJ tenure protections that are too robust and insulary to provide meaningful supervision under Supreme Court precedent.
Recent blog commentary suggests that the SG’s brief will upend the ALJ program. Will it? And even if the Court considers the constitutionality of ALJ appointments in conjunction with removal, as cases like Free Enterprise Fund, Edmond, and even Morrison v. Olson suggest it should—is that concerning? Ultimately, the actors most protected by accountability and transparency in executive appointment and removal are the members of the public, who have consent in their government only to the extent that it reports back up the chain to an elected President.
Even for those who disagree with this theory of democratic accountability and favor a functionalist progressivism, there are reasons to reconsider the claim that the existence of an expert corps of agency adjudicators necessitates nearly impervious removal protections. For one, it seems to be a contemporary misimpression that the existence of a dedicated merit-based civil service system necessarily carries with it the freedom from ever being fired. The origins of the federal civil service in contrast rested primarily on a theory of merit-based selection of officers—not on stringent protection from removal. In his well-known essay, “The Study of Administration,” President Woodrow Wilson described “rectifying methods of appointment” as the method to “establishing the sanctity of public office as a public trust”—not removal. And the 1883 Pendleton Act creating the Civil Service Commission provided a statutory bar on removal only when it was motivated by retaliation based on political campaign activity or support. Even the move to the more generous modern removal protections first enacted in the Lloyd-La Follette Act (§ 6, 37 Stat. 555, 1912) as part of an annual postal appropriations bill seems to have been motivated by a specific concern over protecting the free speech rights of whistleblowing employees. (See, e.g., the Supreme Court’s discussion of civil service history at 462 U.S. 367, 381-85 (1983).) Not by a general belief that expert civil service workers would be corrupted if they were subject to firing for improper performance of their jobs.
Moreover, the reevaluation of ALJ removal protections requested by the SG in Lucia arguably is relatively modest. The SG is not suggesting the elimination of tenure protections for ALJs. Rather, the SG is requesting that the Court clarify the scope of the statutory language permitting removal of ALJs “only for good cause [as] established . . . by the Merit Systems Protection Board.” The government brief underscores that good cause excludes any arbitrary or irrational disciplinary decisions and that the President and principal executive officers should not have the power to direct the outcome in a specific case of adjudication. Rather, the government requests clarification that “good cause” includes grounds such as failing to follow lawful agency directives, personal misconduct, or poor performance—with a role for the MSPB in reviewing whether factual evidence supports the agency’s alleged grounds.
The parties in this case have debated whether ALJs are inferior officers as opposed to employees—not whether ALJs are principal officers subject to presidential appointment and Senate consent. The Supreme Court has repeatedly emphasized, in both Edmond and Free Enterprise Fund, that inferior officers must be subject to supervision within the Executive Branch by an officer other than just the President. Rightly or wrongly, the Court has considered the strength of an officer’s removal protections as highly relevant to whether that officer has meaningful supervision. (This is in conjunction with other possible measures of supervision such as the degree to which the superior may direct the inferior’s job performance.) Under the reasoning of the Supreme Court and the D.C. Circuit, the more insulated an officer is from firing, the more that official appears to be a principal officer who must be appointed by the President with Senate consent. In Part V of its opinion in Free Enterprise Fund, the Supreme Court almost seemed to treat the issue of removal protections as nearly dispositive—insinuating that the Court’s decision to strike the tenure protections for Public Company Accounting Oversight Board members was what made them inferior officers properly appointable by the SEC. Similarly, in 2012 in Intercollegiate Broadcasting System, Inc. v. Copyright Royalty Board, the D.C. Circuit invalidated a statutory provision limiting the Librarian of Congress to removing Copyright Royalty Judges (CRJs) only for neglect of duty or misconduct. The D.C. Circuit determined that giving the Librarian “unfettered” ability to remove the CRJs would make the CRJs “inferior officers” properly appointed by the Librarian instead of the President.
In Edmond v. United States—perhaps the first case in which the Supreme Court directly tied “inferior officer” status to supervision by a higher-level executive officer—the Court considered whether Coast Guard Court of Criminal Appeals judges were sufficiently subject to supervision as inferior officers. One of numerous factors supporting the Court’s finding of adequate supervision was the Judge Advocate General’s power to “remove a Court of Criminal Appeals judge from his judicial assignment without cause.” At-will removal from judicial assignments—for judges with the authority to review “court-martial proceedings that result in the most serious sentences, including those ‘in which the sentence, as approved, extends to death.’” In comparison to the at-will removal structure in Edmond, it is hard to understand why civilian ALJs could not be subject to removal if there is cause based on improper performance. If something feels inherently more appropriate about subjecting military adjudicators to at-will removal by military superiors due to their clearly executive military function, that may be a tacit acknowledgment that the powers ALJs engage in often are not appropriately classified as executive.
Perhaps the strong instinct to maintain independence for ALJs engaged in enforcement actions impacting private rights derives from intuitive awareness that in such cases, ALJs in fact cross over the line into traditional judicial power. In cases stripping vested private rights, the only truly adequate insurance of independence is resolution by the exclusively proper holders of federal judicial power—Article III courts.
Advocates for independent and fair adjudication of private rights should not advocate circumvention of the only workable mechanism for democratic accountability over executive adjudication—the transparent appointment and removal system envisioned by the Framers of Article II. Rather, proponents of adjudicative independence should advocate for agencies to bring enforcement actions directly to the Article III judiciary instead of the agencies’ own subordinate adjudicators.