By a vote of 7-2 the Supreme Court created a lot more questions than answers on the lawfulness of Administrative Law Judges (ALJs).
The decision from the Court in Lucia v. SEC ruled that an ALJ at the Securities and Exchange Commission (SEC) was not lawfully appointed and had no authority to issue a decision. In Lucia v. SEC, the petitioner, Ray Lucia, was found guilty of fraud and fined $300,000 by an ALJ, but the Court’s decision June 21 ruled that the ALJ had no authority to act. Most of the country’s ALJs work for the Social Security Administration and rule on disability cases, but the Court made no broad decision about all ALJs, just ALJs that work for the SEC.
The Lucia argument, which the Court agreed with, was that ALJs at the SEC are “officers” and if they have the authority to make rulings must be appointed by commissioners, as directed in the Constitution, otherwise they have no authority to rule. Basically the Court said the ALJ that issued the decision was illegally appointed. After seeing the writing on the wall, the SEC already has changed how it appoints ALJs, which are now appointed by the commission which does not violate the Supreme Court’s ruling, but Social Security ALJs are not appointed by the commissioner and the Supreme Court never addressed ALJs at Social Security. It seems that all of the Supreme Court Justices purposely stayed away from addressing ALJs at Social Security, but now the agency has to decide what to do next, if anything. The Court’s decision could change how ALJs at Social Security are appointed because this decision clearly stated that ALJs are “officers” and need to be appointed by a commissioner. The problem is there is no current commissioner. President Donald Trump’s appointee Andrew Saul has yet to be confirmed.
