On The Case

As Trump claims power to pick federal agency judges, skeptics fear court-packing

(Reuters) - In an executive order issued Tuesday, the Trump administration abruptly ended the longtime bureaucratic process by which federal agencies select administrative law judges – the judicial officers who preside over millions of administrative proceedings a year, from the smallest of Social Security claims to multimillion-dollar enforcement cases.

ALJ candidates have long been screened by the Office of Personnel Management, a neutral civil service agency that evaluated applicants based on fixed criteria, including performance on a civil service exam. Under the Trump executive order, federal agencies can bypass the OPM and make their own hiring decisions. The executive order said the change will give agency heads more freedom, flexibility and responsibility to hire ALJs without compromising the judges’ independence.

Skeptics aren’t so sure. Two administrative law experts told me Wednesday that the order will allow the Trump administration to reshape administrative courts to reflect its policies – and could presage even more aggressive attempts to get rid of ALJs who don’t toe the line.

“I’m growing more concerned,” said University of Georgia law professor Kent Barnett. “This feels like a movement to burn down the entire administrative state.”

Barnett, you should know, is not a radical. He told me (and said in an email to a listserve for administrative law profs) he agrees with the executive order’s premise that the ALJ hiring process needed streamlining. He also said the order seems to have been shrewdly crafted to stay within the bounds of the president’s power because no statute spells out ALJ hiring procedures.

On its face, said Barnett and Loyola Marymount law professor Adam Zimmerman, the executive order doesn’t pose an immediate threat to ALJ independence. In fact, in a guidance memo accompanying the executive order, OMB director Jeff Pon said the order would not change statutory protections against removal, pay cuts or demotions for ALJs already appointed under the old system.

So why are Barnett and Zimmerman worried the Trump order could lead to big changes in the ALJ regime, which already encompasses nearly 2,000 judges working in dozens of federal agencies? There’s a short-term and long-term answer to that question. Right away, the profs said, the order seems to empower agency heads to hire new judges based on only their assessment of candidates’ “temperament, legal acumen, impartiality and judgment.” Replacing OPM’s objective hiring criteria with subjective standards, Zimmerman said, “opens the door” to politicization of the ALJ system.

The executive order also appears to give Trump administration officials discretion over the need to bring in additional ALJs. Under the current system, OPM decides when federal agencies need new judges. By cutting OPM out of the hiring process, the order shifts that power to agency heads.

That means, according to Barnett and Zimmerman, that Trump officials can stack administrative courts with new judges they’ve hand-selected. “I’m concerned that this packing is going to lead to a one-sided culture within the ALJ corps” and criticism that ALJs are biased and unprofessional, Zimmerman said in an email.

The profs said their deeper fear is that Tuesday’s executive order is a harbinger of ALJ purges. To understand why, you have to look back to a case the U.S. Supreme Court decided last month. In Lucia v. Securities and Exchange Commission, the justices said the SEC ALJ who oversaw an enforcement proceeding against financial advisor Raymond Lucia was unconstitutionally appointed. SEC ALJs, the court said, exercise enough authority to be considered officers of the U.S., subject to the constitution’s Appointments Clause. Because the agency’s commissioners did not directly appoint the ALJ who heard Lucia’s case, the ALJ’s hiring violated the clause.

The Trump administration wanted a much broader ruling from the Supreme Court in the Lucia case. The Justice Department’s brief backing Lucia argued that the president and agency heads not only have the power to appoint ALJs but also the power to remove them.

Under existing statutes, ALJs can only be fired if an independent executive agency called the Merit Systems Protection Board finds good cause for their removal. The Justice Department asserted in the Lucia case that the MSPB process violates the president’s constitutional authority over executive branch officers. “Without the authority to remove an ALJ for misconduct or for failure to follow lawful instructions or perform adequately, the president (and his chosen principal officers) cannot properly supervise those who exercise executive authority,” DOJ said.

The Justice Department’s bold theory provoked a raft of amicus briefs, including a brief from the union that represents more than 1,000 ALJs, arguing that administrative law judges can’t be independent if they can be fired at the whim of the president or agency heads. More than two dozen administrative law scholars said in their Lucia amicus brief that adopting DOJ’s position on firing ALJs would produce a “devastating effect on the decisional independence of ALJs … If the SEC could remove an ALJ without having shown good cause for removal, the risk that SEC ALJs would behave in a manner that is biased in favor of the agency would increase dramatically.”

The Supreme Court explicitly ducked the Justice Department’s argument about the constitutionality of the process for getting rid of ALJs, pointing out in a footnote that it hadn’t agreed to review that question, which hasn’t yet had an airing in the lower courts.

But if policymaking is a poker game, the Trump administration showed its hand in Lucia. The president wants the power to get rid of ALJs. Barnett told me the circumstances of Tuesday’s executive order suggest the new rules are just the first move in a long game to gain that authority.

For one thing, the order said the Supreme Court’s Lucia decision prompted the new appointment process for ALJs. Giving agency heads broad discretion, the order said, would “reduce legal uncertainty” about whether ALJs in agencies other than the SEC were hired in accordance with the Appointments Clause.

But according to Barnett (who pioneering the Appointments Clause theory in a 2013 law review article), the executive order didn’t actually address the problem the Supreme Court identified in Lucia, since the order changed the process for new ALJs and the Lucia case raised questions about ALJs already serving in the government. The new order, Barnett said, uses a sword to solve a problem that was better suited to a scalpel.

“This came out of the blue - the Supreme Court said nothing about the OPM process,” he said. “The order is based on a feigned argument. Why this change? Why was it done so quickly?” Barnett elaborated on his email to other administrative law profs: “The EO looks like an attempt to undermine ALJ impartiality in fact and certainly appearance, not improve the hiring process itself.”

For now, as I mentioned, the Trump administration is not trying to strip away protections for ALJs already working in the federal government. The Office of Personnel Management said in its memo that the new order does not interfere with the Merit Systems Protection Board process for removing or demoting ALJs only after a good-cause finding. That memo will make it harder for ALJ unions to protest the new order.

But if Barnett is right and Tuesday’s order is only the first move in a plan to reshape the administrative justice system, Trump has begun a project with consequences of millions of people a year. The president has already put a stamp on the federal judiciary, which will become more indelible if Brett Kavanaugh is confirmed for the Supreme Court. But his mark on administrative justice could turn out to be just as important.