The U.S. Supreme Court is examining the constitutionality of agency adjudication, a process where administrative law judges (ALJs) oversee regulatory disputes. This scrutiny comes amid concerns that recent legal developments may undermine the impartiality of these judges, potentially rendering the system unconstitutional without robust safeguards.
For 80 years, these adjudications have relied on procedures designed to ensure impartiality. The Administrative Procedure Act (APA), enacted in 1946, restricted the removal of ALJs to cases of proven good cause, safeguarding their independence. This provision was a direct response to complaints in the 1930s about biased agency officers, which studies confirmed. The APA’s for-cause removal rule was hailed by the Supreme Court in its 1950 decision in Wong Yang Sung v. McGrath as a codification of due process principles.
Supreme Court Rulings Challenge Agency Adjudication
Recent Supreme Court decisions have raised concerns about this system. In Jarkesy v. SEC, the Fifth Circuit ruled that the SEC’s authority to handle securities fraud cases violated the nondelegation doctrine and the Seventh Amendment. The Supreme Court upheld the Seventh Amendment argument but, in its 2024 opinion, left the Fifth Circuit’s decision on ALJ removal unchanged, without explanation.
In Trump v. Slaughter, the Court declared the for-cause removal limit for FTC commissioners unconstitutional, explicitly including adjudication among agency functions requiring officers removable at will by the President. This, along with the Court’s silence on Jarkesy, suggests a potential shift toward at-will removal of ALJs.
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The 2018 Lucia decision granted agency heads the power to appoint ALJs. President Trump issued an executive order eliminating merit-based selection, allowing agency heads to appoint any bar member as an ALJ. The combination of complete discretion to appoint ALJs and complete discretion to remove ALJs would create a system of adjudication that clearly violates due process.
Immigration Judges as a Warning
The situation with immigration judges, who are subject to at-will removal, serves as a cautionary tale. President Trump removed immigration judges and appointed replacements with limited experience, training them to prioritize deportations. This system illustrates the kind of impermissibly biased adjudication that can arise when judges are removable at will.
Historical Background and Current Issues
In the 1930s, complaints about biased agency officers led to studies confirming these issues. Congress responded in 1946 with the APA, ensuring ALJs’ independence through for-cause removal and other safeguards. These measures were designed to insulate ALJs from agency pressure, ensuring impartial decision-making. However, recent court decisions threaten these protections, raising questions about the constitutionality of agency adjudication without them.
Possible Solutions and Consequences
The AT&T v. FCC decision upheld agency adjudication when subject to independent judicial review by an Article III court. If the Court holds that ALJs can be removed at will, Congress could amend the APA to authorize agencies to adjudicate disputes subject to such review. This would create a less effective system but preserve due process by ensuring impartial judicial oversight.
