Preserving the Adjudicative Capacity of Non-Article III Tribunals

In Trump v. Slaughter, the U.S. Supreme Court has spoken clearly and loudly: Humphrey’s Executor v. United States and the removal protections of the so-called independent administrative agencies comprising the heralded or infamous “headless Fourth Branch” are dead—save for the historically pedigreed Board of Governors of the Federal Reserve.

But is the adjudicative capacity of Article I courts like the U.S. Tax Court and the U.S. Court of Federal Claims also now subject to plenary presidential control and, in that sense, “dead” as independent arbiters as well? Are largely adjudicatory administrative agencies like the National Labor Relations Board, the Occupational Safety and Health Review Commission, and the Social Security Administration (SSA)—the latter named “probably the largest adjudicative agency in the western world”—also dead in that sense?

There is certainly language in Chief Justice John G. Roberts, Jr.’s opinion for the Court to support that broader view: “When an agency ‘executes’ a congressional mandate against private property, it executes executive power, no ifs, ands, or quasis about it.” The Court also stated that the “power to flesh out such statutory regimes—and to do so through discretionary actions, largely outside the remit of courts—is executive through and through.”

Justice Neil Gorsuch, in an important concurrence aiming for a reinvigorated nondelegation doctrine, emphasized the delegation by Congress of “extensive lawmaking and adjudicative functions” and warned against the danger of “allowing Presidents to control not only executive functions, but also vast new reservoirs of legislative and judicial power.”

The Court, in Part III of the opinion, shifts the tone a bit by highlighting the facts before it. The Court notes that the Federal Trade Commission (FTC) had grown well beyond its britches since its founding as principally an adjudicatory and reporting agency, performing functions that the Court in 1938 unanimously agreed could operate free of at-will presidential removal of its commissioners. The modern FTC, however, was “not a close case,” as the FTC now “enforces and administers 80 statutes, which cover almost every facet of our national economy.” With substantive rulemaking and merger-review powers as well as the ability to seek compliance with its orders “on pain of monetary penalties before the case reaches the courts,” this agency fell so clearly “within the heartland of executive power” that there was “no occasion today to define the bounds of what such power entails.”

In the same part of the opinion, Chief Justice Roberts says that “the permissibility of tenure protections for the judges of ‘non-article III courts,’ such as the Tax Court and Court of Federal Claims, is not ‘presented’ or ‘briefed’ in this case and poses a ‘different set of questions.’” The Court also left relatively undisturbed the 1958 unanimous decision in Wiener v. United States that the adjudicatory function of the War Claims Commission required protection of its members from presidential removal without “cause,” even in the absence of an express statutory provision to that effect.

Although admittedly influenced by Humphrey’s Executor, the Wiener Court was concerned that agency adjudicators could not always proceed with integrity if they knew they could lose their position should they displease the President or his allies or friends. As Justice Felix Frankfurter stated for the Court:

If, as one must take for granted, the War Claims Act precluded the President from influencing the Commission in passing on a particular claim, a fortiori must it be inferred that Congress did not wish to have hang over the Commission the Damocles’ sword of removal by the President for no reason other than that he preferred to have on that Commission men of his own choosing.

A similar intuition also lies at the heart of the lifetime tenure and protection against salary diminution of Article III judges. Most adjudications involve fact-specific disputes not likely to warrant the attention of anyone in the President’s circle. But some cases have broader import or directly affect friends of the chief executive, and it is precisely those cases that test the integrity of the tribunal, as well as the willingness of good people to serve. Even a benefits determination agency like the SSA faced challenges in the 1980s from attempted imposition of political controls on agency adjudications. These attempts were strongly resisted in some of the federal courts and ultimately led to Congress’s decision in March 1995 to convert the SSA into an independent agency.

Not all adjudications can be assigned to Article III courts without radically altering their role in our society.  Aside from costs, the sheer number of cases would overwhelm the special character of Article III judges who, owing to their fierce sense of independence, are essential to our system of ordered liberty. Moreover, a decisional docket of seemingly unending routine cases will prove unappetizing to many aspirants to judicial office and likely dramatically reduce the average caliber of the people willing to fill these posts. Article III judges are of necessity generalists, and they would not be likely to provide the experience with a particular statutory scheme that is an important hallmark of non-Article III tribunals and agencies.

What can be done after Slaughter to preserve the country’s adjudicative capacity outside of Article III courts? Three approaches come to mind: (1) turning non-Article III adjudications into purely advisory determinations; (2) assigning the appointment of non-Article III adjudicators to heads of departments or courts of law; and (3) converting administrative agencies into purely adjudicatory bodies without rulemaking authority or the ability to go to court to enforce their orders.

1. Turning non-Article III adjudications into advisory decisions having no legal effect unless agreed to or enforced in a de novo court proceeding. This would appear to be the safest course legally. Note in this regard the Court’s 8-1 decision this past term in Federal Communications Commission v. AT&T, ruling that FCC penalty assessments did not require a jury trial under Securities and Exchange Commission v. Jarkesy because the agency here issued only advisory determinations that had legal effect only if acquiesced in by the regulated party or were enforced by federal court in a de novo proceeding.

The jury trial issue is not the same as the removability issue, which was not present in that case, as the FCC leadership had indicated publicly that commissioners lack removal protections. Much will turn on the language of the particular statute, but if Congress chose to provide such protections to an advisory group whose determinations did not serve, as a practical matter, as definitive decisions of the agency, this should not be problematic under Article II.

The advisory adjudicator option, while safest from a legal standpoint, may not provide the same assurance of decisional independence to regulated parties or statutory beneficiaries. It also would find difficulty attracting high-caliber personnel.

This brings us to administrative law judges (ALJs). According to what appears to be the latest available release of data from the Office of Personnel Management, about 1,900 ALJs serve in agencies across the federal government, including nearly 1,600 ALJs at the SSA who handle disability hearings. ALJs are the backbone of the Administrative Procedure Act. They preside over hearings, make preliminary findings of fact, and issue provisional conclusions of law. Under Lucia v. Securities and Exchange Commission, many ALJs are “officers of the United States” under the U.S. Constitution’s Appointments Clause—Article II, section 2. But they are “inferior Officers” who need not be appointed by the President but can, if so authorized by Congress, be appointed by “Courts of Law” or “Heads of Departments.”

2. Assigning appointment of non-Article III adjudicators to heads of departments or courts of law. It is unclear whether ALJs would still be “officers of the United States” under Lucia, rather than employees who might come under civil service protections, if they issued only advisory rulings which would not become agency law, even if not appealed. But even if Lucia goes that far, could Congress pass a law centralizing the selection and discipline of ALJs in a new Court of Administrative Adjudications, providing removal protections for all ALJs and members of the new court? Any “congruence” test from Morrison v. Olson would seem satisfied by the close relation between the function of the new court and its appointment authority. The President would not be able to remove the ALJs, but the question would be whether the President could remove without cause members of the new court before expiration of their terms even when not given that authority by the statute. There would seem to be a strong case that Congress could provide at-will dismissal protection for ALJs, plainly nonprincipal officers, at least if the appointing body were subject to at-will executive removal.

But is it constitutionally required that members of a new Court of Administrative Adjudications, doubtless principal officers under the Appointments Clause, be subject to plenary executive removal?

In Freytag v. Commissioner of Internal Revenue, the Court upheld by a split decision the appointment of special trial judges (STJs) by the Chief Judge of the Tax Court because they were “inferior Officers” and the Tax Court, although an “Article I court,” was nevertheless a “Court of Law” under Article II, section 2. The members of the Tax Court were appointed by the President with senatorial confirmation. The members of the court sit for 15-year renewal terms and, presently, can be removed only for “inefficiency, neglect of duty, or malfeasance in office, but for no other cause.”

Freytag sheds only partial light. The Court’s opinion does not deal with the issue of removability of STJs, and the statutory provisions authorizing the appointment of STJs do not provide for any term of office or removal protection. The STJ in that case was appointed by the Chief Judge of the court who enjoyed protection against at-will removal. The Court treated the Tax Court as a “Court of Law” for Appointments Clause purposes, without discussing whether the removal protections for the members of the court mattered.

It is an open question whether Congress can protect inferior officers, like ALJs and STJs, from at-will executive removal only when the appointing authority is subject to plenary presidential control.

3. Converting administrative agencies into purely adjudicative bodies. In earlier work published in The Regulatory Review, I—with coauthors—have advocated converting administrative agencies into purely adjudicative bodies. The key here is to convert agencies into exclusively adjudicative bodies. It is critical that several features, present in the modern-day FTC, are avoided:

• Substantive rulemaking, whatever its analytic or historic kinship to legislative action, is a formulation or declaration of national policy under a statute intended to have binding force of law across the nation. Certainly in light of Slaughter, if not before, rulemaking is properly the exclusive province of the executive.
• Assessments of civil or criminal penalties, unless purely advisory as in Federal Communications Commission v. AT&T, also require the approval of the President or the President’s delegatee. The same is true for merger review and approval authority and negotiation of international agreements.
• Agency adjudications, including preliminary injunctive orders, cannot be self-enforcing after Slaughter. Until enforced by a court, they cannot have the force of law. Access to the court to enforce or challenge an agency order should be at the behest of a delegatee of the President or by the party subject to the order. Representation of the agency in court should be by the agency’s general counsel or the U.S. Department of Justice.

In addition, it is essential that the President should be able to appoint a majority of the members of the adjudicative body from his own party at least by the midterm elections in the first term.

Attention to these points is essential. This option may not satisfy strong advocates of “unitary executive” theory who will say, in significant part, that adjudications also give rise to binding policy directives when statutes and regulations are unclear. True enough, but this argues too much. Article III courts also make policy in these interstices, but they are not subject to executive control.

Neither lifetime tenure of the adjudicators nor its absence transforms the incidental, though important, policy dimension of some adjudicatory orders into the sphere of national policy promulgation and implementation that is in the executive’s exclusive bailiwick.

Samuel Estreicher is the Dwight D. Opperman Professor of Public Law and the director of the Institute of Judicial Administration and Center for Labor and Employment at New York University School of Law.