Agencies should use ACUS’s recommendation to develop transparent approaches to precedent.
Agency appellate review of adjudication decisions by administrative law judges (ALJs) has long been a central feature of federal administrative law. The Administrative Procedure Act of 1946 reflects its centrality by empowering an agency head to decide a case on appeal without deferring to an ALJ’s initial decision. As the Supreme Court suggested two years ago in United States v. Arthrex, appellate review by a presidentially appointed, Senate-confirmed principal officer may, in some adjudication systems, even be a constitutional imperative.
Agencies decide a lot of appeals and, in doing so, they write a lot of appellate decisions—many of them similar in form and length to judicial decisions. A typical agency issues hundreds of decisions each year. Mass adjudication appellate tribunals such as the Board of Immigration Appeals, Social Security Administration’s (SSA) Appeals Council, and the Board of Veterans’ Appeals (BVA) issue tens of thousands. Last year, the BVA issued nearly 100,000. All the U.S. Courts of Appeals, by contrast, decided about 50,000 appeals.
Although agency appellate review can be structured in multiple ways, by statute or regulation, two structures are most prevalent. In the first, agency heads decide appeals of hearing-level decisions themselves. This structure is most common at multi-member boards and commissions. In the second, the agency head delegates review authority to an appellate tribunal, which issues a final decision for the agency, subject to infrequently exercised discretionary review authority by the agency head. This structure is most common in cabinet departments.
Agencies’ appellate decisions prompt numerous questions: What legal status do all these decisions enjoy? Do they bind agency adjudicators in future cases? Are they, in a word, precedential? If not all, which ones? By what criteria do agencies treat only some decisions as precedential? By what procedures? What objectives might precedential decision-making serve?
It turns out that the administrative state, in marked contrast to the federal court system, has never really reckoned with these and related questions in any systematic way.
As a result, the Administrative Conference of the United States (ACUS) engaged us to study precedential decision-making in agency adjudication as a follow-on to an earlier study that two of us (Walker and Wiener) conducted for ACUS on agency appellate systems generally. That earlier study resulted in a 2020 ACUS recommendation, discussed previously in The Regulatory Review.
To study precedential decision-making in agency adjudication, we began with a conventional definition of our subject: A decision is precedential when it announces a decisional rule that binds agency adjudicators in future cases until it is overruled. Lawyers will often call a decisional rule a “holding.” An agency decision can be precedential whether it take the form of a broad policy pronouncement implementing a statute that might have been issued as a regulation, a narrow technical interpretation of a statute or regulation, or something in between.
Bindingness means different things depending on where adjudicators sit in the agency hierarchy. Hearing-level adjudicators must always follow a precedential decision. Those who fail to do so face certain reversal on appeal and even administrative sanctions. The agency itself—that is, usually its head or the head’s delegate—must also follow a precedential decision, but with one important difference: The agency may always overrule or modify the decision so long as it acts consistent with statutory and regulatory law and adequately explains its reasoning.
We conducted in-depth reviews of nearly twenty agency appellate systems. Independent agencies and cabinet departments were represented in roughly equal numbers. Every high-volume adjudication system was included. We reviewed, among other things, each agency’s rules and other publicly available information. We also interviewed, in most cases, the top officials at each system.
What we found, unsurprisingly, is that agencies vary enormously on how they approach precedent. Some agencies treat all of their appellate decisions as precedential. Others follow the model of the U.S. Courts of Appeals and treat some decisions as precedential and other (usually many more) decisions as non-precedential. Two high-volume agencies, the SSA and BVA, treat none of their decisions as precedential; instead, they rely on detailed regulations and guidance documents to supply decisional rules.
Such procedural variation is a common and inevitable, if not desirable, feature of the administrative system.
We also found, surprisingly and less desirably, that many agencies have given little thought to precedential decision-making. Many agencies’ procedural rules say nothing about precedent, and their decisions do not indicate whether they are precedential. The rule-driven practices of U.S. Courts of Appeals offer a stark contrast.
Our study underlies ACUS’s December 2022 recommendation Precedential Decision Making in Agency Adjudication. Directed to all federal agencies, it should help address the shortcomings we identified. It should also help agencies identify exemplary and innovative practices adopted by some agencies.
Like our report, ACUS’s recommendation does not tell agencies whether they should treat any, all, or some of their decisions as precedential. We see no one right answer to this question that could be given confidently at every agency. Adjudicative systems vary too much to expect cross-agency uniformity.
Instead, the ACUS recommendation identifies the considerations that should inform an agency’s answer. These considerations include “the extent to which” an agency writes its decisions in a manner that would make it useful precedent for other adjudicators, decides cases that “mainly concern only case-specific factual determinations” in reliance on well-established policies rather than establishing policies themselves, and decides “such a large volume of decisions that adjudicators cannot reasonably be expected to identify those which should control future decisions.”
For agencies that choose to treat only some of their decisions as precedential, as many do under the model of the U.S. Courts of Appeals, the ACUS recommendation identifies specific criteria to inform agencies’ choice. They include whether a decision addresses an “issue of first impression,” clarifies points of law that have “caused confusion” among adjudicators and practitioners, highlights decisional rules that adjudicators overlook or apply inconsistently, or accounts for changes in statutes or regulations.
Precedential Decision Making also identifies potential processes and procedures for agencies’ consideration. They include soliciting the views of adjudicators who did not participate in a decision as to whether it should be designated as precedential, allowing parties and the public to suggest precedential designation of decisions, and singling out specific issues in cases to address in a precedential decision.
Like other ACUS recommendations, Precedential Decision Making seeks to make agency adjudicative materials more accessible, understandable, and transparent. To this end, it recommends that agency websites and public-facing documents clearly distinguish between precedential and non-precedential decisions and identify when a precedential decision has been overruled or modified. It also recommends, relatedly, that when an agency departs from a precedent, it do so explicitly by overruling or modifying it.
Responding to a key shortcoming we identify above, Precedential Decision Making recommends that agencies disclose several key features of their adjudication systems in procedural rules, such as whether their decisions are precedential. And if only some are precedential, agencies should disclose who designates them as precedential, by what criteria, according to what procedures, with what public input, and to which legal effect. Too many agencies leave these and important matters unaddressed in their procedural rules. Precedential Decision Making is one of several ACUS recommendations that seek to address the lack of transparency over agency adjudication.
As the recommendation’s preamble notes, effective use of precedential decision-making along the lines that ACUS suggests can help “ensure” decisional “consistency, predictability, and uniformity.” It is not, however, the only mechanism for doing so. Rules, quality assurance reviews, and other bureaucratic mechanisms can also help. But precedential decision-making remains the predominant one. Agencies that choose to use a system of precedential decision-making will surely find in ACUS’s recommendation invaluable best practices for making their adjudication systems more efficient, transparent, and consonant with basic norms of administrative justice.
This essay is part of a three-part series on Improving and Disclosing Agency Decisions.