Doubts About a Federal Central Panel, by Ronald M. Levin
*This is the fourth post in a symposium on the decisional independence of administrative adjudicators. For other posts in the series, click here.
In an earlier post in this symposium, Rick Levy and Rob Glicksman (hereinafter L&G) endorse the concept of a federal central panel for administrative adjudication. Their post draws upon an article that the two of them published in the Minnesota Law Review in 2020. That article gave impetus to a resolution that the National Conference of the Administrative Law Judiciary (NCALJ) submitted to the ABA House of Delegates last summer. As the authors note, the resolution’s support for legislation to create a federal central panel “faced considerable pushback and was eventually withdrawn for further study.”
Part of that pushback came from the Section of Administrative Law and Regulatory Practice, which opposed the resolution. As the Section’s representative in the House, I helped to draft its statement of opposition, and the following observations are based on that statement.
In a central panel system, cases from multiple administrative agencies would be adjudicated by administrative judges who would be employed by the panel, instead of being lodged within individual agencies, as has been the norm for most federal agencies since the Administrative Procedure Act (APA) was enacted in 1946. L&G do not specify which agencies’ judges should be folded into the entity that they support, but they imply that many and perhaps most of them would be—especially since their critique of the status quo extends to “[t]he vast majority of administrative adjudications [that] are now conducted outside of the APA.” This would require a massive reorganization of the federal establishment.
L&G acknowledge that “[w]hen the APA’s adjudication provisions apply, they contemplate a formal on the record evidentiary hearing before an independent Administrative Law Judge (ALJ) who is protected by statutory separation of functions requirements, good cause prerequisites for disciplinary action, salary determinations shielded from agency control, and competitive hiring processes.” I would add that Congress has created unique adjudicative systems for regularized decisionmaking by a number of regulatory agencies that do not rely on the APA adjudication procedures, such as the Patent and Trademark Appeals Board and the Board of Veterans’ Appeals. Regulations and well-defined practice norms also contribute to administrative regularity in these areas. But L&G maintain that these longstanding structural features should be supplemented or replaced by a central panel structure. As I will explain, I do not think the authors have made a persuasive case for that proposition.
The Issue of Interference with Decisional Independence
For L&G, an overriding concern is the “problem that arises when nominally independent and impartial adjudicators are employed by the agencies whose cases they decide, including both the appearance of bias and improper efforts to exert political influence in individual cases.” Indeed, they report, many ALJs have reached out to them to say that “behind-the-scenes pressure from the agency’s political leadership to decide cases in a given way was a very common experience among ALJs.” To L&G, the central panel model would ameliorate this situation: “by removing administrative adjudicators from the direct oversight of the agency whose cases they adjudicate, the central panel model severs the direct lines of control that facilitate improper agency pressure, thereby promoting impartial adjudication.”
However, L&G may have accepted the ALJs’ assessment too uncritically. I do not mean to suggest that the ALJs who have reported these pressures are insincere, but their viewpoint is not necessarily the only legitimate one. They are by no means disinterested parties in the controversy; NCALJ’s own report accompanying its ABA proposal acknowledged that its members “would directly benefit from the creation of a federal central panel.” Meanwhile, the voices of agency leadership have not been heard in this debate. I trust that administrative law judges would not, in their own hearing rooms, wish to adjudicate a contested dispute without hearing from both sides, and the same principle would seem to apply to the central panel issue.
It’s true that the Reagan administration earned well-deserved condemnation for its policies of auditing Social Security ALJs to require them to increase their rates of denials of disability claims. But that episode is now four decades old, and there is no public record of subsequent administrations doing anything similar. More recently, a union of Social Security ALJs brought suit alleging that, in the court’s words, “by requiring its administrative law judges to decide at least 500 social security disability cases a year the Administration has interfered with the administrative law judges’ decisional independence.” In this instance, however, the Seventh Circuit, in an opinion by Judge Posner, rejected the judges’ appraisal of the policy and ruled for the agency, noting that “the aim of the quota is to speed up decision-making rather than to prod administrative law judges to grant more applications for disability benefits.”
If the longstanding APA model of administrative adjudication is to be overhauled on the basis of a desire to curb improper influence, the reform ought to be based on a careful and disinterested inquiry into the scope of such interference. To date, no such study exists.
I myself do not pretend to know the facts underlying this debate. I will, however, discuss three areas in which the arguments made by L&G and NCALJ have, in my view, gone astray.
The Positive Side of the APA Structural Model
L&G clearly disapprove of the state of affairs that exists when administrative judges are employed by agencies whose cases they decide. What is missing from their discussion, however, is any acknowledgement that this arrangement might also have structural advantages. After all, agency heads have a fundamental obligation to carry out their statutory mandates and implement programs effectively. To do so, they must oversee the adjudications that their agencies conduct. It is unclear whether a federal central panel would be able to maintain the advantages that accrue under the current APA structural model. A central panel director, lacking the agency’s substantive expertise and program responsibilities, might make decisions on an arbitrary or unwise basis; and political accountability for such improvident decisions might be hard to maintain, because they would likely have less visibility than a typical agency head has.
I have already mentioned the example of productivity goals. As a 2019 ABA report submitted by NCALJ itself recognized, “the courts have held, apparently without exception, that reasonable productivity goals are permissible and do not infringe on the decisional independence of the adjudicator.” Someone in a supervisory capacity must determine the level and structure of such initiatives. An agency head that undertakes to prescribe “reasonable productivity goals” can be guided by program needs, but a director with no responsibility for implementing the substantive statute would lack that baseline. To be sure, NCALJ, or at least some of its members, might prefer not to have anyone exercising oversight to monitor their productivity; but, as just noted, the courts have not supported that preference.
Other oversight issues could raise similar concerns. A 2013 recommendation of the Administrative Conference of the United States (ACUS) mentioned, as possibilities, monitoring submissions by litigants to ALJs or AJs (administrative judges); determining when to use video hearings; and coordinating interactions between ALJs or AJs and decisionmakers or other support staff. And just last month, another ACUS recommendation dealing with quality assurance systems (i.e., practices for assessing and improving the quality of decisions in adjudicative programs) stated that “[a]gencies should ensure that quality assurance personnel . . . have the expertise necessary to review the work of all personnel who have important roles in adjudicating cases.” Such decisions can best be made by agency officials who know the needs of the specific program(s) that the judges are charged with implementing through adjudication. Central panel directors would be unlikely to possess the same level of insight and sensitivity with regard to all of the different and varied programs that may fall within their jurisdiction.
None of this is intended to ignore the public interest in maintaining reasonable safeguards to protect the decisional independence of administrative judges. But the public also has an interest in efficient and effective disposition of administrative claims, and both sides of this equation should be taken into account in any decision about whether a federal central panel should be instituted.
Executive and Judicial Developments
L&G seem to recognize that the longstanding and largely stable history of the APA model would ordinarily be considered to weigh heavily in its favor. But, they argue, the situation has changed recently. The independence of ALJs is “under siege” because of recent executive and judicial developments that “increase the risk” of improper pressure from the White House or political appointees. Specifically, they are referring to Executive Order 13,843, issued by the Trump administration, which exempted ALJs from the civil service system of merit selection. As a result, according to L&G’s law review article, “the traditional safeguards intended to ensure ALJ competence and prevent cronyism and patronage are no longer in place.” L&G’s article also voiced concern about a pair of recent Supreme Court cases, Free Enterprise Fund v. PCAOB and Seila Law, LLC v. CFPB, which hold that in some circumstances the President must be able to remove executive officials at will. (The more recent decision in Collins v. Yellen points in the same direction.) L&G suggest that these holdings may soon be extended in a manner that would result in invalidation of good-cause removal protections for ALJs. Alternatively, the cases might lead to dilution of those guarantees through statutory interpretations that would seek to avoid the supposed constitutional defect; President Trump’s Justice Department actually advocated such an interpretation.
I know from my own conversations with ALJs that these recent developments are causing consternation among many administrative judges. But the temptation to rely on this angst in the debate over whether to adopt a federal central panel should be resisted, because, upon closer analysis, these developments have little bearing on that debate.
If implementation of the executive order does lead to appointment of unqualified or partisan ALJs, that result would be very regrettable, but it is surely not a good reason for wanting to create a new entity that would give these assumedly unqualified or partisan ALJs more decisional independence. Rather, the fear about the order is that such appointees may misuse the decisional independence that ALJs already have. As for removal, it is far from clear that the Court has any intention of extending its recent holdings to ALJs. It has repeatedly gone out of its way to leave that question open, most recently in Free Enterprise Fund itself. I do not think reformers should endorse a major shakeup of the structure of administrative adjudication because of the possibility that the Court might take the step that L&G fear. Moreover, L&G contend that the central panel system that they favor could be reconciled with the Court’s removal case law because “[t]he language in the cases suggests that the Court is more willing to accept good cause removal protection for inferior officers who lack policymaking authority.” Yet that argument can just as easily be applied to ALJs under the current APA model. I can see no reason why the creation of a federal central panel would do anything to ameliorate the impact that the Court’s evolving removal jurisprudence may have, and L&G have not suggested one.
Incidentally, the Trump administration actions just mentioned (including the executive order, which President Biden has not rescinded) cast doubt on L&G’s assumption that a president would be unlikely to appoint a partisan leader to head the federal central panel. We simply cannot know what the motivations of such an appointee would be.
State Central Panels
Finally, L&G contend that “the success of the central panel model in the many states that use it confirms that the model is a workable one.” I am not so sure that the comparison is valid. Administrative adjudication is quite different at the federal level, because of its nationwide in scope, the enormous differences among various federal programs, the technical complexity in many regulatory areas, and the volume of regulations, guidance, and unwritten norms that apply to them. The challenges that a panel director would need to address are at a level of magnitude that dwarfs the corresponding issues in any one state.
Aside from that point, how strong is this claim of success on its own terms? In their article, L&G rely squarely, and more or less exclusively, on an article by Malcolm Rich and Alison Goldstein. But you only need to look at the article’s footnotes to understand the nature of that article. The authors have cited to conversations with almost two dozen state panel directors and chief ALJs—and zero members of agency leadership. The panel directors reported that they play a vital role and have had no real problems. Of course they did. What would you expect them to say—“we’re superfluous and misuse our authority”? Even the section of the article entitled “Addressing Agency Concerns with the Creation or Expansion of a Central Panel System” consisted only of panel directors’ comments as to how they successfully responded to such concerns.
Of course, central panel directors’ voices should be heard, but the complete absence of any reality check in the article demonstrates that its probative value is limited. In a sense, it is more like an advocacy document solicited by a former NCALJ Chair to support a preconceived conclusion—which, as its preface acknowledges, is essentially what it is.
Ironically, a recent well-publicized controversy in Florida grew out of a central panel director’s practice of reviewing final orders of ALJs prior to their issuance and making comments and suggested edits on some of them. One ALJ questioned the propriety of this practice and was suspended for quoting the director’s comments in his published opinion. I do not necessarily endorse the ALJ’s side in this controversy; some of the director’s colleagues defended the director’s review practice as legitimate oversight. What the incident does suggest is that central panel systems are not immune from giving rise to situations in which ALJs may perceive oversight as excessive interference.
That’s only one anecdote, but it returns me to a point I made at the outset. The burden of proof to justify a federal central panel rests with those who would uproot a longstanding statutory scheme. Reformers should not rely on anecdotes in lieu of a careful and disinterested study. In the absence of one, I decline to join the federal central panel bandwagon.
Ronald M. Levin is the William R. Orthwein Distinguished Professor of Law at Washington University in St. Louis.