Analysis Law and Policy

The Trump Administration Made Another Move to Install Judges Eager to Deny Disability Benefits

Lisa Needham

This may feel like a lot of arcane administrative and legal maneuvering—but it means issues like Social Security, immigrant employment, and disability benefits could be increasingly decided by partisan appointees.

Earlier this month, President Donald Trump signed an executive order that makes it easier for agency heads, who are appointed political officials, to directly hire administrative law judges (ALJs) instead of selecting them through a more objective, skills-based process. Now, a new legal opinion from the solicitor general of the U.S. Department of Justice (DOJ) makes it easier to fire existing ALJs, further weakening the ability of the administrative state to function in a fair and impartial way.

ALJs act as judges, but not in traditional court settings. Instead, they’re attached to executive branch agencies, and they preside over everything from informal hearings to full trials. Generally, they deal more with regulations promulgated by agencies rather than the laws written by Congress—meaning issues like Social Security, immigrant employment, and disability benefits could be increasingly decided by partisan appointees.

This shift all started with a case the U.S. Supreme Court decided earlier this year. In Lucia v. Securities and Exchange Commission (SEC), the Court addressed whether ALJs that ruled on matters before the SEC were “officers” or “employees.” The latter are hired, while the former are appointed by the president, a court, or agency heads, in accordance with the Constitution’s Appointment Clause. Like all other ALJs, those ruling on issues before the SEC had been hired by agency staff, not appointed. In Lucia, the Supreme Court reasoned that the administrative law judges in the SEC functioned as officers because they held career positions, they exercised discretion while performing tasks like taking testimony and reviewing evidence, and their orders were final if the SEC declined to review the action. The Supreme Court determined, therefore, that within the SEC, ALJs needed to be appointed officials rather than hired employees.

The SEC solved part of this by simply ratifying the appointment of all the existing ALJ employees, thus preserving its cadre of expert judges while complying with the rule in Lucia.​ However, the SEC also stayed all administrative proceedings, grinding the oversight function of that agency to a halt. The 30-day stay was originally issued June 22, but the SEC extended it to August 22. It is unclear as to how or when the SEC will begin working through these matters again.

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For an administration led by people who want to radically deconstruct the regulatory state, the ruling was an absolute gift. The Trump administration saw Lucia as an opening through which it could force the appointment of partisan ALJs in all agencies, using the opinion as the foundation for the executive order from earlier this month. This stance neatly ignores the fact that Lucia only applies to the ALJs for the Securities and Exchange Commission.

While the earlier executive order paved the way to get more partisan ALJs in the door, the DOJ’s new legal opinion—a confidential memo reported by Reuters—offers a strategy to push existing ALJs out of their positions. The DOJ has no specific authority over the nomination or removal process, but the DOJ’s opinion essentially gives agency heads greater latitude to remove ALJs.

The opinion starts out by acknowledging that the Court’s holding in Lucia only dealt with the constitutional status of the ALJs working at the SEC. It then leaps directly to saying that the Court’s reasoning encompasses all ALJs at other agencies if they preside over adversarial administrative proceedings. Adversarial proceedings are similar to trials. For example, when the government seeks to impose penalties on a polluter, it goes through an adversarial proceeding based on the rules that relate to the Clean Water Act. When the Department of Labor finds out a company has failed to pay its workers at least the minimum wage, it begins an adversarial proceeding against that company.

While that might be a defensible reading of Lucia, the DOJ then goes one step further. Although Lucia didn’t address the status of ALJs who provide over non-adversarial proceedings—such as certain types of hearings about obtaining federal benefits—the DOJ’s legal opinion extends its reading of the Lucia case to those judges as well.

At the same time, the DOJ has declared it won’t fight any Appointments Clause claims, as Lucia was. Basically, a litigant in an adversarial proceeding at the SEC argued that the use of a non-appointed ALJ was a violation of that clause. Under this new legal opinion, the DOJ is treating all existing Appointments Clause claims as if they have merit, and explicitly stating it won’t fight them. Instead, the DOJ says, agencies must reassign the cases in question to a different ALJ.

This is a big problem: Some agencies only have one ALJ or use ALJs that are on loan from another agency. Reassigning those cases can create a significant backlog. For a high-volume agency that deals with federal benefits, such as the Social Security Administration—which currently has more than 61,000 unprocessed appeals—additional barriers to efficiently processing decisions is a huge problem. For this administration, however, that’s a feature, not a bug.

To be fair, the DOJ’s opinion does discuss how agencies should ratify the appointment of their existing ALJs, but this pales in comparison to the last key point of this opinion, mentioned almost in passing at the end: that agency chiefs will get more control over the removal of administrative judges.

The opinion does this in an incredibly roundabout way, but it’s a bombshell nonetheless. It points out that the Constitution does limit the ways in which ALJs can be removed by an agency head. Additionally, there’s a statutory protection that says ALJs can only be removed for “good cause” as determined by the politically neutral Merit Systems Protection Board (MSPB) after the opportunity for a hearing. That would seem to indicate that Congress believed it was appropriate to provide ALJs a significant level of insulation from partisan politics. However, the solicitor general says that the DOJ is prepared to defend the constitutionality of that statutory protection, but only if “properly construed.”

What does “properly construed” mean in this context? Well, according to the DOJ, it means the president and agency heads are entitled to a “constitutionally adequate degree of control” over the removal of ALJs. Further, it means that the review by the MSPB has to be “suitably deferential” to the decision of an agency head. Only then would the DOJ defend an ALJ against removal. In fact, during the Lucia case, the DOJ argued that the real role of the MSPB is just to decide whether there’s enough evidence to support the decision of the agency head.

In the future, this could mean an ALJ could be fired for issuing an opinion with which the administration disagrees. In theory, that isn’t supposed to happen: There’s supposed to be a reason for the removal of the ALJ besides wishing to influence the outcome of a proceeding. But imagine a situation where an ALJ that works for the Department of the Interior issues an opinion about surface coal mining that neither Trump nor Secretary Ryan Zinke likes. There’s now a greater chance that ALJ could be forced out, particularly because the decision of the MSPB, according to the DOJ opinion, is supposed to defer to the department secretary.

All this adds up to a one-two punch: Trump’s executive order made it easier to appoint new partisan judges, and the DOJ’s opinion makes it easier to let existing judges go.

This may feel like a lot of arcane administrative and legal maneuvering. But it’s all connected as part of a larger plan that the GOP has waited to execute for years. Trading neutral decision makers who are experts in their field for a raft of partisan appointees will only hasten the demise of the bureaucratic layer of government.

Once that happens, expect to see administrative agencies tilt towards things Republicans want: pro-corporate rulings at the expense of the environment, harsher treatment of immigrants when they attempt to gain employment or are prosecuted for allegedly having fraudulent immigration documents, and impossible barriers to obtaining federal benefits. It’s a terrible future to envision, but it’s real—and it’s imminent.

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