Appointments Clause and ALJs
Appointments Clause and Administrative Law Judges (ALJs)
What is the Appointments Clause?
The Appointments Clause is found in Article II, Section 2, Clause 2 of the U.S. Constitution.
It governs the process for appointing "Officers of the United States."
It states that the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint... Officers of the United States."
It also allows Congress to vest the appointment of inferior officers in the President alone, courts of law, or heads of departments.
Why is the Appointments Clause Important for ALJs?
ALJs conduct hearings, make findings, and issue decisions in federal administrative agencies.
The key legal question: Are ALJs “Officers” or mere employees?
If ALJs are Officers, they must be appointed consistent with the Appointments Clause.
If ALJs are employees, the appointment process is less formal and not constitutionally constrained.
This distinction affects the validity of their decisions and agency enforcement.
ALJs and Appointment Process
Traditionally, ALJs were appointed by agency heads or the Office of Personnel Management.
Debate centers on whether this violates the Constitution if ALJs are Officers.
Case Law Analysis: Appointments Clause and ALJs
1. Free Enterprise Fund v. Public Company Accounting Oversight Board (2010)
Background: While not directly about ALJs, this case is pivotal for understanding the Appointments Clause.
Issue: Whether the structure of the PCAOB violated the Appointments Clause by limiting removal of board members.
Holding: The Supreme Court ruled that officers must be appointed consistent with the Clause and must be removable by the President or agency heads.
Significance: Established limits on removal protections and reinforced the importance of proper appointment and supervision of officers.
2. Lucia v. Securities and Exchange Commission (2018)
Facts: Raymond Lucia was sanctioned by an SEC ALJ. Lucia challenged the ALJ’s appointment, claiming it violated the Appointments Clause because ALJs were appointed by SEC staff, not by the SEC Commissioners or President.
Issue: Are SEC ALJs “Officers of the United States” requiring appointment consistent with the Appointments Clause?
Supreme Court Decision: The Court ruled yes — SEC ALJs are Officers under the Constitution, so their appointment must comply with the Appointments Clause. The Court held that the SEC’s appointment of ALJs by staff violated the Clause.
Significance:
Confirmed ALJs as Officers, requiring constitutionally valid appointments.
Sparked agency reviews of ALJ appointments and procedural reforms.
Raised questions on validity of decisions made by improperly appointed ALJs.
3. Butterfield v. Securities and Exchange Commission (2019)
Facts: Following Lucia, Butterfield argued that decisions by improperly appointed ALJs should be vacated.
Issue: Whether the improper appointment of an ALJ requires vacatur of agency decisions.
Holding: Courts have held that if an ALJ was not validly appointed under the Appointments Clause, their decisions may be invalidated or subject to rehearing.
Significance: Reinforced consequences of improper appointment for administrative proceedings.
4. Bandimere v. Securities and Exchange Commission (2020)
Facts: Bandimere, an investment advisor, challenged SEC ALJ’s authority based on Lucia precedent.
Issue: Whether Lucia requires all SEC ALJ decisions to be reheard or vacated.
Decision: Courts have differed, but many allowed agency heads to cure defective appointments by ratification or new appointment.
Significance: Highlights ongoing procedural complexities post-Lucia in administrative law.
5. Rivkin v. Department of Justice (pending / circuit cases)
Issue: DOJ ALJs’ appointment challenged on Appointments Clause grounds.
Status: Various federal courts have examined whether DOJ ALJs qualify as Officers and whether their appointment satisfies constitutional requirements.
Significance: Part of a broader trend extending Lucia beyond SEC to other federal agencies.
Summary and Key Principles
| Aspect | Explanation |
|---|---|
| Are ALJs Officers? | Supreme Court (Lucia) confirmed federal ALJs exercising significant authority are Officers. |
| Appointment Requirements | Officers must be appointed by President, courts, or heads of departments (Appointments Clause). |
| Consequences of Violation | Decisions made by improperly appointed ALJs may be vacated or subject to rehearing. |
| Remedies | Agencies may ratify appointments or conduct proper appointments to cure defects. |
| Broader Impact | Impacts appointment procedures across federal agencies employing ALJs. |
Conclusion
The Appointments Clause imposes constitutional requirements on the appointment of Administrative Law Judges who exercise significant authority. The landmark case Lucia v. SEC clarified that ALJs are Officers requiring proper appointment, ensuring procedural fairness and validity of administrative adjudication. Subsequent cases are shaping the application and remedies related to ALJ appointments in federal agencies.
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