ALJ Independence Under the Federal Administrative Procedure Act in the Wake of the Supreme Court's Decision in Lucia v. SEC

The Court considered these duties to be comparable to that of a federal district court judge conducting a bench trial.11 After hearing oral argument in April 2018, and considering more than 20 amicus briefs, the Supreme Court held that ALJs appointed under the APA are "officers of the United States" and therefore subject to the requirements of the Appointments Clause of the U.S. Constitution.12 In reaching this ruling, the Court followed the analysis that was applied to special trial judges (STJs) of the U.S. Tax Court as decided by the Court in the early 1990s in Freytag v. Commissioner of Internal Revenue.13 Freytag held that the STJs of the U.S. Tax Court held a continuing office established by law and that they exercised significant discretion when carrying out important functions and therefore were inferior officers and, as a result, were "officers of the United States" subject to the Appointments Clause. In December 2018, Petitioner Lucia filed a lawsuit in the Southern District of California seeking an injunction and contending that proceedings before an SEC ALJ are still unconstitutional based on the argument that the multiple layers of tenure protection for ALJs at the SEC (and MSPB) violate the requirements of Article II of the U.S. Constitution.17 In his Lucia opinion, concurring in part and dissenting in part, Justice Stephen Breyer discussed this issue of two-level forcause removal protections. Eliminating or weakening the "good cause" protections for ALJs would have the effect of transforming them into at-will employees, diminishing their independence in direct contradiction to the language and intent of the APA.23 The heads of the departments and agencies are principal officers and are directly responsible to the president. Because those principal officers may reverse ALJ decisions and are accountable to the president, ALJ removal protections do not violate the Appointments Clause. Congress enacted the APA to provide a measure of independence for the finders of fact in matters before an agency for the benefit of the public seeking fair due process. Because the head of the agency as a principal officer is subject to direct responsibility to the president for policy matters and decisions, the "good cause" protections, which the APA provides to ensure that ALJs are independent fact finders, should be maintained. ?