October 31, 2018

Congress approves language supporting ALJ independence

Congress included language emphasizing the importance of the independence of administrative law judges (ALJs) in the conference report on H.R. 4167, a fiscal year 2019 appropriations bill signed into law Sept. 28 as P.L. 115-245.

The language, which the ABA urged be included, states that is it vital that ALJs be “independent, impartial, and selected based on their qualifications.” The conferees expressed the expectation that the Social Security Administration (SSA) will maintain a high standard for the appointment of ALJs, including the requirement that ALJs “have demonstrated experience as a licensed attorney and pass an ALJ examination administered by the Office of Personnel Management (OPM).”  

The ABA sought the language in response to an executive order signed July 10 by President Donald J. Trump that replaces the current competitive selection process for ALJs through OPM with a system providing for the appointment of ALJs by the president and federal agency heads. The executive order raised concerns about politicization of the process.

ALJs, who preside over administrative proceedings on the record before federal agencies, are employed throughout the federal government and currently apply for their jobs through OPM. The process requires applicants to pass an examination to evaluate the skills, competencies/knowledge, and abilities essential to performing ALJ work. Agencies then select the ALJs they hire from a list of individuals that OPM has determined are qualified for the position.

The executive order creates a new excepted service “Schedule E” for ALJs that allows agencies to bypass the OPM process and hire ALJs directly. The White House stated in a fact sheet that, under the new process, “agencies will be free to select from the best candidates who embody the appropriate temperament, legal acumen, impartiality, and judgment required of an ALJ, and who meet the other needs of the agencies.”

The president’s executive order followed the June 21 Supreme Court decision in Lucia v. Securities and Exchange Commission, 585 U.S. (2018), which determined that ALJs are officers of the United States, not employees, and must be appointed under the Constitution’s Appointments Clause. The clause requires that only the president, a court of law, or a head of a department can appoint an officer. The case originated when plaintiff Raymond J. Lucia appealed an ALJ ruling from the SEC, arguing that the ALJ who heard his case had not been properly appointed.

While the Lucia decision pertained only to ALJs at the SEC, there was widespread concern that the decision had implications for ALJs at other agencies. In their jobs, ALJs rule on preliminary motions, conduct pre-hearing conferences, issue subpoenas, conduct hearings (which may include written and/or oral testimony and cross-examination), review briefs, and prepare and issue decisions. All but about 300 of the approximately 1,900 ALJs are at the SSA.

In a related action, Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) introduced legislation Aug. 23 to restore ALJs to the competitive service, which would require those seeking appointment to be chosen based on a competitive exam. In addition, the bill would require that final ALJ appointments be made by the agency head from a list of eligible candidates provided by the OPM or based upon OPM approval of the qualifications of an individual seeking the position.

“Administrative law judges make decisions every day that affect people’s lives like Social Security and Medicare benefits, workers’ compensation claims, and even licenses for radio stations and nuclear power plants. We must ensure these judges are fair, impartial, and qualified, Cantwell said.

The bill, S. 3387, has been referred to the Senate Committee on Homeland Security and Governmental Affairs.