The ALJ Executive Order: A Modest Step Towards Re-Integrating the Executive Branch

“Our Constitution was adopted to enable the people to govern themselves, through their elected leaders. The growth of the Executive Branch, which now wields vast power and touches almost every aspect of daily life, heightens the concern that it may slip from the Executive’s control, and thus from that of the people.”

 

--Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 499 (2010)

“I thought I was the president, but when it comes to these bureaucrats, I can’t do a damn thing.”

--President Harry S Truman

On July 10, 2018, President Trump issued an Executive Order (EO or Order) making an exception to competitive hiring rules for Administrative Law Judges (ALJs).1  Depending on where you read the news, this was either a tyrannical, politically-motivated power grab,2  or else this was simply a logical, necessary move in light of the Supreme Court’s recent decision in Lucia v. SEC.3  Politics aside, while the Order reads like a minor technocratic modification to the selection of administrative adjudicators, the EO does amount to a modest step towards re-integrating the diffuse, politically-decentralized executive branch. In light of the significant degree of independence from the President that most administrative agencies already possess,4  any step towards re-instilling some semblance of political accountability within the administrative state is a welcome one.

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Article II of the Constitution vests “[t]he executive power” in one president. Part of that power vested in the President is to “nominate[] and . . . appoint . . . officers of the United States.” The text goes on to permit Congress “by law” to “vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments.” This provision, called the Appointments Clause, was “designed to preserve political accountability relative to important Government assignments.”5  Article II generally, in fact, is designed to give the President “general administrative control of those executing the laws.”6 

That’s the theory, anyway. In reality, the Executive Branch now consists of 441 federal agencies7  (we think8 ), employing well over one million individuals.9  No President could possibly supervise so broad a swath of regulators, let alone their day-to-day regulatory activity.10  A hierarchical structure, with the President atop the chain of command, instills some centralized oversight and accountability with respect to some agencies. In many instances, however, these agencies have been largely carved out of that chain of command (so-called “independent agencies”), creating what “is routinely described as the ‘headless fourth branch of government.’”11  This creates the (well-founded) impression that these agencies are beyond the President’s control12 —a concerning development in a world where bureaucrats in these agencies wield legislative, executive, and judicial power, and exercise authority over nearly every aspect of our economic, social, and political activities.13 

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The scheme for appointment of executive branch actors in the Constitution was intended, in part, to prevent this sort of bureaucratic insulation from political forces. The Framers were quite familiar with the dangers accompanying the accumulation of governmental powers in the hands of politically unaccountable individuals or entities.14  Thus, the Framers adopted a system whereby anyone serving as an “officer of the United States” would have to be politically appointed to the post, either by the President “by and with the advice and consent of the Senate,” or else by either “the President alone,” “the courts of law,” or “the heads of departments.”15  “[B]y specifying only a limited number of actors who can appoint . . . , the Appointments Clause maintains clear lines of accountability,” ensuring that there is some transparency and political check on the selection of bureaucrats.16  The Constitution prescribed a particular process to prevent politicians from colluding in order to shield themselves or other government actors from any political accountability whatsoever. As pertains to the Executive Branch at least, then, the animating purpose of the Appointments Clause was, in part, to prevent government officials from becoming “safely encased within a Matryoshka doll” of bureaucratic insulation from political forces, “immune from Presidential oversight, even as they exercised power in the people’s name.”17 

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Of course, the question arises: of the motley assortment of executive branch actors and employees, who is an “officer of the United States” subject to some sort of constitutionally-prescribed appointment process? The Supreme Court has concluded rather opaquely that an “officer” is anyone who “exercise[s] significant authority pursuant to the laws of the United States.”18  As far as those “inferior officers” whose appointment can be committed to the discretion of either the President, the courts, or the agency heads, the Court has concluded that these individuals are those “whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”19 

In Lucia v. SEC, the Supreme Court just this past term reaffirmed that ALJs—specifically those at the SEC—are “inferior officers” whose appointment must conform to the Constitution’s prescriptions.20  The ALJs at the SEC had been appointed, until very recently, by staff rather than the commission itself.21  Per Article II, that was at least one degree of separation too far removed from the President to pass muster.

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What, then, of Congress’s chosen system for employing federal government workers generally? Well over a century ago,22  Congress created a civil service, nowadays consisting of “all appointive positions in the executive, judicial, and legislative branches of the Government of the United States . . . .”23  Congress also created classes within that service. For instance, Congress created a “competitive service,” which is “all civil service positions in the executive branch, except . . . positions which are specifically excepted from the competitive service by or under statute . . . .”24  Those “specifically excepted” positions are part of the “excepted service,” defined in circular fashion as “those civil service positions which are not in the competitive service . . . .”25 

Applicants for positions in the competitive service are required to go through a competitive hiring process before being appointed.26  By regulation, the appointing officer is required to select an eligible candidate for a vacancy from the top three performers in that competitive process.27  While the President “may prescribe rules which shall provide . . . for . . . open, competitive examinations for testing applicants for appointment,”28  the President has limited discretion in hiring for the competitive service, because by law “[a]n individual may be appointed in the competitive service only if he has passed an examination.”29 

That is not the case, however, if the position is “specifically excepted from examination” by presidential reclassification of the position from the competitive service to the excepted service.30  Indeed, Congress recognized the President’s authority here by directing that the President should “prescribe rules governing the competitive service,” rules which “shall provide” for “necessary exceptions of positions from the competitive service.”31  The Office of Personnel Management regularly lists in the Federal Register those “positions that it excepts from the competitive service” pursuant to the President’s authority to make such exceptions.32 

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By statute, federal agencies have been authorized to “appoint as many administrative law judges as are necessary for proceedings required to be conducted in accordance with [the Administrative Procedure Act].”33  As the Order details, these ALJs—who number nearly 2,00034 —discharge significant duties and exercise significant discretion in enforcing and applying federal law. They are also frequently the final word for the agencies in which they work on important questions of law.

Given the significant discretion and ultimate authority ALJs possess, ALJs appear by all accounts to be “officers of the United States.”35  The trouble is that, since the position of ALJ has existed, ALJs have been considered part of the competitive service, subject to the competitive process and restricted hiring criteria prescribed by the relevant laws and regulations.36  This has meant that “[i]t is very difficult for agencies to hire the applicant (or even the type of applicant) they want for an ALJ position.”37  This is a problem if the power to appoint such individuals must belong, per the Constitution, to either the President or the respective agency head. In name only does Congress vest the power to appoint such officers in “the heads of departments” if those agency heads are hamstrung by statute in their ability to select the officers they desire. Just as it would unduly interfere with the President’s appointment power if Congress tried to dictate criteria the President had to consider before choosing, say, a judicial nominee, so too it would seem to unduly interfere with an agency’s constitutionally-authorized and statutorily-granted appointment power to force the agency to make its selection pursuant to a specific process.  

This is the problem the EO endeavors to fix. Exercising his congressionally-recognized authority to make “necessary exceptions of positions from the competitive service,”38  President Trump created a new class of “excepted service” positions, consisting of ALJs.39  Additionally, President Trump exempted ALJs from the removal restrictions found in civil service rules and regulations except where statute provides to the contrary.40 

This rather modest reform removes potential constitutional infirmities with the previous status quo for ALJ selection by ensuring that the constitutionally-appropriate actor has the proper discretion to appoint these “officers of the United States.” This reform has the extra salutary effect—albeit a small one—of inserting a modicum of political accountability into the process of selecting ALJs by putting the selection decision squarely on the shoulders of either the President, or else someone the President has appointed. If ALJs are going to exercise “significant authority pursuant to the laws of the United States”41 —to apply the law to individuals’ cases, making determinations that have significant consequences in the lives of citizens—then their appointment should have some close nexus to the public so that, if the ALJs themselves cannot be held directly accountable for their actions by the people, at least those responsible for appointing them can be.

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“The President cannot ‘take Care that the Laws be faithfully executed’ if he cannot oversee the faithfulness of the officers who execute them.”42  President Trump’s ALJ EO hardly deconstructs the administrative state.43  To that end, ‘tis but a scratch.44  However, this modest tweak to how ALJs are selected is a step in the right direction towards the perhaps somewhat more ambitious goal of re-constitutionalizing the administrative state, so that we might, in the end, preserve “a government of laws and not of men.”45