As previously reported, the Supreme Court ruled that the process to appoint Administration Law Judges (ALJs), at least at the Security and Exchange Commission (SEC), is unconstitutional, and shortly after President Donald Trump issued an executive order changing how all ALJs are appointed.
First a little background on Lucia v. SEC. The decision from the Court in Lucia v. SEC ruled that an ALJ at the 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. Trump then issued an executive order giving commissioners of agencies the authority to appoint ALJs, a process that previously was controlled by the federal Office of Personnel Management (OPM).
Some disability professionals are concerned that the Supreme Court’s ruling and Trump’s executive order could impact the 90,000 disability cases pending before the Appeals Council. The Appeals Council is in charge of reviewing decisions of ALJs to determine if errors were made and the decision should be overturned or remanded for a new hearing. As you can see from this chart, courtesy of Social Security, the Appeals Council disposed of more than 117,000 cases so far in fiscal year 2018. If the Appeals Council were to decide that all of these cases were decided by an ALJ who had no authority to rule, the Office of Hearings Operation, where ALJs make their rulings, could be inundated with nearly 90,000 new cases to schedule in addition with the more than 1 million cases that are still waiting to be scheduled before an ALJ because of Social Security’s massive backlog.
The ALJ Appointment Process May Now Be Politically Motivated
As we pointed out, Trump’s executive order allows for commissioners and agency heads to appoint new ALJs. The president is in charge of appointing these officials and appointees and they typically share the president’s political point of view. The OPM, which was previously in charge of the process ensured that agencies never appointed ALJs based on political criteria, but that could all change now. Whoever is in the White House will have extreme power in deciding who will be an ALJ and who will not through their subordinates at the commissioner and agency levels. This is not good for Republicans, Democrats or the American people because decisions made by the ALJs at the administrative level are supposed to be free of political influence. There are no term limits set for ALJs, so a commissioner or agency head could end up appointing hundreds of judges who could be politically motivated for decades to come.
