Federal regulatory agencies bring thousands of civil enforcement actions every year. The vast majority of these cases are heard, not by independent judges, but by Administrative Law Judges hired and employed by mid-level employees of the agencies bringing suit. Supporters say ALJs streamline the enforcement process, claim the judges are protected from conflicts of interest, and note that ALJ decisions can be appealed to independent Article III courts. Critics claim the scenario may deny regulated parties due process because ALJs can never be wholly independent, and they suggest the option of a later appeal is insufficient because of the deference courts give to agency factual determinations.

But what if the current system for appointing Administrative Law Judges is unconstitutional? In a case the U.S. Supreme Court will hear in April (Lucia v. SEC), the Justices will determine whether the Securities and Exchange Commission’s ALJs exercise sufficient power to be considered “officers of the United States” within the meaning of the Constitution’s Appointments Clause. If they are, the High Court may conclude that ALJs must be nominated by a majority vote of the Securities and Exchange Commissioners as Article II “officers,” rather than by SEC staff – a decision that could change the way regulatory agencies operate.

During this briefing, our expert panel of litigators and legal scholars discussed the meaning of the Lucia case and how the Court is likely to resolve it. They also tackled the thorny questions of how agencies should respond if the Court holds ALJs unconstitutional.

This briefing featured:

Jennifer Mascott
Assistant Professor, George Mason University Antonin Scalia Law School

Mark A. Perry
Partner, Gibson, Dunn & Crutcher LLP

Richard Pierce
Professor, George Washington University Law School