//  7/30/18  //  In-Depth Analysis

The Trump Administration is changing the rules around hiring and firing of Administrative Law Judges, and (no surprise) not being transparent about what they’re doing and why. Earlier this month, President Trump issued Executive Order 13843, which changed the process for selecting Administrative Law Judges. The Administration dressed this up as a technical update in response to a recent Supreme Court decision. But it instead appears part of the Trump White House’s effort to “deconstruct[] the administrative state” (in Steve Bannon’s words). The Trump Administration’s actions through the Executive Order -- and a just revealed secret Justice Department memo to federal agencies -- threaten to transform administrative law judges from independent expert professionals who apply the law in cases before them into hand-picked loyalists whose tenure in office requires pleasing political higher-ups. That’s not what Congress enacted and not something the Supreme Court says the Constitution requires.

Administrative law judges (ALJs) are a pillar of the work of the federal government. ALJs work within federal agencies and resolve important issues for parties before them and the public in formalized legal proceedings. In the United States, people are more likely to see an administrative law judge than any other kind of federal judge. ALJs hear hundreds of thousands of cases per year ranging from mine safety issues to social security benefit determinations.           

On July 10, 2018, President Trump signed an Executive Order (EO) that changes how ALJs are hired. Until the EO, ALJs were chosen through a “competitive” selection process used for most of the civil service, whereby they go through impartial interviews and a written examination and the federal personnel agency (the Office of Personnel Management or OPM) presents departments with a list of three finalists to choose from for any given spot. Trump’s Executive Order removes ALJs from this merit-based competitive vetting process, switching to a political selection process.

The White House claims the Executive Order was a response to the Supreme Court’s June decision in Lucia v. Securities and Exchange Commission. Section 1 of Trump’s EO dwells at length on the decision in Lucia; it references the case three different times and claims that the Order will “reduce the likelihood of successful Appointments Clause challenges, and forestall litigation in which such concerns have been or might be raised.” In releasing the EO, James Sherk, Special Assistant to the President told reporters that: “What we’re trying to do is protect agencies against challenges to the legitimacy of their ALJs.”

This is disingenuous. Lucia did not require the EO or the changes in the accompanying DOJ memo.

In Lucia, the plaintiff argued that his proceeding before a Securities and Exchange Commission (SEC) ALJ was invalid because the ALJ had been appointed by the staff of the SEC rather than the Commission itself. The Supreme Court agreed, holding that SEC ALJs are “officers of the United States” and -- as a result -- can’t be appointed by staff members at the Commission. The Supreme Court’s holding applies only to the five ALJs employed by the SEC. It’s true enough that the reasoning of the Lucia decision could apply to ALJs at other agencies and so not allow them to be appointed by agency staff (emphasis on could as it’s a fact specific analysis that might turn out differently for some ALJs than for others).  

But there’s no need for an Executive Order to deal with that scenario. The holding in Lucia could have been addressed in other, narrower ways. For example, the SEC and other federal agency heads could have reappointed ALJs to prevent any potential issues without a need for an executive order. Indeed, in response to Lucia, many agencies, including the Labor Department and Centers for Medicare and Medicaid Services, took steps to re-appoint their judges.

Notably, the decision in Lucia says nothing at all about whether the competitive service process can be used for identification and review of ALJ candidates who are presented to the agency head. In Lucia, the Court made explicit that it was not identifying any flaw in this approach. As it explained (Lucia footnote 6 of the majority opinion, with citations omitted): “While this case was on judicial review, the SEC issued an order ‘ratif[ying]’ the prior appointments of its ALJs. Lucia argues that the order is invalid. We see no reason to address that issue.”   

In short, Lucia is not about whether competitive service selection procedures can be used for hiring ALJs, so the EO eliminating those procedures cannot be justified as a fix to Lucia. Read carefully, the EO admits as much. It says, without any explanation, that Lucia may also raise questions about the method of appointing ALJs, including whether competitive examination and competitive service selection procedures are compatible with the discretion an agency head must possess.” And then it explains: “Regardless of whether those procedures would violate the Appointments Clause as applied to certain ALJs, there are sound policy reasons” for the change. As Marilyn Zahm, the President of the Association of Administrative Law Judges (AALJ), put it, “I do not believe [the Supreme Court decision] is the reason, because I do not see anything in Lucia that mandates this change . . . Lucia does not dictate that you move from the competitive to the excepted service. It simply doesn’t.”

There’s something similar going on with the recently brought-to-light DOJ memo, but it concerns the process for the removal of ALJs, not their selection. When the ALJ Executive Order was first issued, some commentators believed that it changed the removal protections around ALJs -- since it exempts them from the competitive service. But the EO by its terms leaves in place statutory requirements relating to removal of ALJs (section 3(a)(iii)). And a federal statute, 5 U.S.C. 7521, specifically provides that firing an ALJ or a similar such action (like suspension or reduction in pay) can only be made “for good cause established and determined by the Merit Systems Protection Board (MSPB) on the record after opportunity for hearing before the Board.” The DOJ memo (page 9) acknowledges that “[t]he Executive Order recently issued by the President does not alter ALJs’ statutory removal protections.”

Even though the publicly released EO leaves in place removal protections for ALJs, the DOJ memo itself portends a significant change. It states that DOJ only will defend the ALJ removal statute if the statute is construed to mean something different from what it says. Whereas the statute provides for an MSPB process, DOJ says the statute should be construed to “allow for removal of an ALJ who fails to perform properly” and that MSPB review must be “suitably deferential to the determination of the Department Head.” In other words, whereas Congress said that ALJs should keep their jobs unless there is good cause to remove them and that the MSPB should determine whether there’s “good cause,” the DOJ memo says instead that it’s up to the agency head and the MSPB has to be deferential to that.  

Here again, there’s no basis for this approach in Lucia. The Trump Administration in its briefing in Lucia asked the Supreme Court to find that there was a constitutional problem with the statutory provisions on ALJ removal. But the Court declined to take the issue up. As the Court explained (Lucia footnote 1 of the majority opinion, citations omitted), “the Government asked us to add a second question presented: whether the statutory restrictions on removing the Commission’s ALJs are constitutional. When we granted certiorari, we chose not to take that step. The Government’s merits brief now asks us again to address the removal issue. We once more decline. No court has addressed that question, and we ordinarily await ‘thorough lower court opinions to guide our analysis of the merits.’” Put another way, not only did the Supreme Court decline to question the constitutionality of the removal provisions -- no lower court has either.

So if the EO isn’t a necessary response to Lucia, what is it doing? And what about the accompanying DOJ memo? Given that Lucia is more pretext than basis for these actions, it’s hard to disagree with those who have criticized the EO. Zahm, president of the AALJ, argued that the order’s function “is to make it easier to hire ideologues who are less likely to act fairly and independently.” Some in Congress have echoed this view, with several Members issuing a joint statement that, “The executive order will allow the Administration to appoint judges based on politics and nepotism rather than competence,” and Rep. Richard Neal (D-Mass.) stating that “Impartiality plays a central role in administrative law judges’ work. Allowing the appointment of judges who are big campaign donors, beholden to industry, or otherwise unqualified will result in unfair, biased rulings that harm ordinary Americans.” Over at Just Security, Professor Hills argues that the EO won’t have too much of an impact on the fairness of administrative hearings because “the ALJ is a faithful agent of the true fact-finder, the agency chief” analogizing their role to that of Magistrate Judges whose work is reviewed by a District Court.  But just as we wouldn’t want Magistrate Judges selected because of their loyalty to a particular political party or agenda, we should be concerned about the same thing happening with ALJs.

Taking seriously the changes wrought by the ALJ EO also makes sense in light of other moves from the Trump Administration to undermine the independence of the civil service. Since President Trump took office, it has targeted civil service through a variety of ways, including bullying civil servants based on perceptions of their loyalty to the White House, and re-assigning employees at the DOI due to their work on climate change, among others.

Because the Trump Administration has been hiding the ball on what it’s doing here, our organization, Protect Democracy, is investigating to see what else is in the works. We’ve filed Freedom of Information Act (FOIA) requests with the DOJ, the Office of Personnel Management (OPM), SEC, and Office of Budget Management (OBM) seeking records related to, among other things, what process the Administration plans to use to pick ALJs, including whether this process will run through the White House personnel office, and any plans to pick or push out particular ALJs. We also want to know what back and forth the Administration has had with Congress on changing the role of ALJs, and whether there’s any connection between what the Administration is doing and a 2017 proposal from Steven Calebresi and Shams Hirji that calls for an overhaul of the ALJ role.

People seeking redress in administrative courts should not be met with judges whose loyalties and decisions are beholden to President Trump’s (or any other politician’s) personal and political preferences. We’re not naive -- we recognize that the civil service process is not perfect and that judges are not fully impartial superhumans, immune from biases and other pressures. But the merit-based hiring and firing rules that Congress enacted for ALJs mean that parties appearing before these judges know their matter is being heard by somebody selected for their talents, experience, and expertise -- not because they will carry out a particular political agenda. Likewise, the removal protections that Congress enacted ensure that ALJs can decide the cases before them fairly based on the law, not with fear that their job security depends on adhering to the views of political higher-ups.

As Aziz Huq and Tom Ginsburg have warned, “When government workers hired on the basis of merit are replaced by partisans, this not only removes one potential source of opposition to the executive branch; it enables a would-be autocrat to direct formidable prosecutorial and investigative apparatuses against political foes.” ALJs take an oath to uphold the Constitution, and not political agendas from the White House. The new EO and DOJ Memo shouldn’t be brushed aside as just a technical response to a recent Supreme Court decision -- instead they are another step toward undermining a key institution of our democracy.  

Justin Florence is Legal Director and Stephanie Llanes is Counsel at Protect Democracy.

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