Notice & Comment

Who is an Inferior Office, and Why Does It Matter?, by Alan B. Morrison, Robert L. Glicksman, Dmitry Karshtedt, Mark A. Lemley & Joshua D. Sarnoff

On March 1, 2021, the Supreme Court will hear argument in three cases arising from the Federal Circuit’s Arthrex decision. The main issue before the Court is whether the more than 250 administrative patent judges (APJs) who are employed by the Patent & Trademark Office (PTO) are inferior or principal officers under the Constitution. Riding on the outcome of that ruling are not only all of the patent validity trials heard by APJs, but potentially hundreds of thousands of cases in other agencies heard by administrative law judges (ALJs) and administrative judges (AJs), which include social security disability claims and immigration cases of all varieties. If Congress has mis-classified these adjudicators, not only will many hearings have to be repeated, but the structure of agency adjudications generally is likely to be significantly altered.

The starting place for this inquiry is the Appointments Clause in Article II, § 2, cl, 2 of the Constitution under which the President

shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States … but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

Far from being a housekeeping rule that does no more than explain how officers are to be appointed, the requirement of Senate confirmation for “principal officers” is an important check on the President’s power to choose those high-level officials who work for him (and for the nation). As this provision makes clear, only Congress by legislation can exercise the Constitutional power to create “inferior officers,” and it can assign the appointment responsibility only to certain specified persons. Everyone agrees that the purpose of the inferior officer exception was to enable Congress to bypass Presidential nomination and Senate confirmation for less important offices. But to create an exception, the President and both Houses of Congress must concur.

There is no dispute that Congress intended to make APJs inferior officers because it provided for their appointment by the head of their department (the Secretary of Commerce). The question presented in Arthrex is whether Congress properly characterized them as inferior officers for whom this method of appointment is constitutionally permitted. Equally important as the answer to that question is the basis for that characterization, because of its impact on similar offices across the federal government whose status is already, or is certain in the future to be, subject of litigation.

The Federal Circuit in Arthrex correctly noted that the Supreme Court had not established a single test for inferior officer status. Its response was to interpret the Supreme Court’s precedents to create an open-ended three-factor inquiry, from which it concluded that APJs are principal officers because two of the factors pointed that way. In the Supreme Court, none of the parties nor any of the many amici supports the test adopted by the Federal Circuit. Instead, Arthrex defends that result and urges the adoption of an easy-to-apply test for agency adjudicators: the officer who has the final say in any agency adjudication must be a principal officer, appointed by the President and confirmed by the Senate.

Because no other officer at the PTO reviews APJ decisions on the merits, therefore, APJs must be principal officers. Arthrex then argues that, because the APJs were not appointed as principal officers, their decisions are invalid. No case has come close to creating such a stringent test for determining inferior officer status. If the Supreme Court were to agree with the Federal Circuit’s conclusion, there would be very serious practical consequences for many agencies, no matter how Congress sought to fix the problem.

The Solicitor General and the private party opposing Arthrex argue that APJs are properly treated as inferior officers based on what they refer to as a “holistic” analysis of the relation between APJs and the two principal officers in the Department: the Secretary and the Director of the PTO. According to the Solicitor General, the combination of the powers of the Director to set policy, to determine whether a decision has precedential value, to prompt rehearings, to make procedural rules, and to decide who will sit on some panels, coupled with the power of the Secretary to initiate proceedings that may lead to the removal of an APJ for cause, are enough to make APJs inferior officers.

The main trouble with this is approach is that it gives no guidance to Congress in deciding whether a particular office has inferior status, which is the judgment that Congress must make in the first instance in determining the status of a particular office. Moreover, the Government noted additional potential ways, not found in the applicable statutes, that the Director may exercise control and thereby confirm the inferior officer status of APJs. In doing so, it raised the troublesome possibility that actions by the Director might undermine (or elevate) the status of APJs through regulations or other actions. That possibility would also mean that Congress could not make its judgment based on the duties of the office when it enacted the applicable laws because the officers’ status might be subsequently altered by principal or perhaps even other inferior officers.

Our amicus brief agrees that APJs are inferior officers but takes a different approach. It begins by focusing on the text of the Constitution. The key phrase is the one creating an exception to the default rule of Presidential appointment and Senate confirmation, which authorizes Congress, by law, to do that for “such inferior Officers, as they think proper.” Following the leads of three Justices—Stephen Breyer, Ruth Bader Ginsburg, and David Souter—who all found in prior opinions that those words gave considerable discretion to Congress to choose which offices are inferior, our brief takes the position that the courts should defer to Congress’ determination unless it is clearly unreasonable.

We agree that Congress could not turn any of the positions specifically listed in the Appointments Clause into inferior officers, and it could not, for example, provide that the courts of law could appoint Assistant Secretaries of State, who exercise significant policy-making powers. Our brief also points out the internal checks that would prevent such mis-characterizations from happening: neither the President nor the Senate will be willing to support the required law if it stripped either of them of the power to participate in the appointment process for truly important offices.

In addition to its reliance on text, our approach has the virtues of placing primary responsibility for the “inferior officer” designation in Congress and of giving the courts a decidedly secondary role. Thus, in this case, Congress could adopt the holistic approach that the Solicitor General is urging the Court to establish in deciding on the status of APJs, but unlike courts, Congress would not have to make reasoned distinctions for why it treated adjudicators in one program differently from those in another. Of course, there will still be lawsuits, and courts will still have to decide close cases. But a ruling in Arthrex giving appropriate deference to Congress is what the text of the Appointments Clause provides, and it assures greater respect for what Congress and the President have decided best serves our government.

Alan B. Morrison, Robert L. Glicksman, Dmitry Karshtedt, Mark A. Lemley, and Joshua D. Sarnoff are law professors who filed an amicus brief in the cases discussed in this essay, supporting the position that the officers in question are inferior officers.

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