Supreme Court Justices Question Administrative Law

Opinions from Justices Kagan and Kennedy speak to the need to restore constitutional constraints.

Is America’s administrative state unconstitutional? That’s a question usually associated with conservative legal scholars. But on Thursday Justices Elena Kagan and Anthony Kennedy each produced an opinion questioning longstanding features of the modern administrative state. Both opinions should encourage further reform and modernization of administrative law.

Justice Kagan’s majority opinion in Lucia v. SEC involved “administrative law judges.” ALJs are a significant feature of modern administrative law, but they are not actually judges. They don’t serve on courts, enjoy judicial independence or have life tenure. Instead, they are employed by agencies to adjudicate disputes in a quasijudicial process authorized in the Administrative Procedure Act of 1946.

The Securities and Exchange Commission’s ALJs wield significant powers, exercising discretion and issuing decisions that become final and binding unless the SEC’s commissioners act to overturn them. Because they have such power, they are what the Constitution calls “officers,” and thus can be appointed only through the process that the Constitution mandates—by the president with Senate consent; or, if they are (in the Constitution’s words) “inferior” officers, then by the president alone or by department heads (or perhaps by the courts). The SEC’s ALJs, however, were simply appointed by the SEC’s staff, as if they were ordinary employees.

Writing for a six-justice majority, Justice Kagan found that agency officers wielding the ALJs’ powers cannot be appointed by midlevel bureaucrats, shielded from the transparency and accountability that the Constitution’s process ensures.

In Pereira v. Sessions, Justice Kennedy joined an 8-1 ruling that rejected an agency’s interpretation of an immigration statute. In a lone concurrence, he voiced doubts about “ Chevron deference,” the 1984 doctrine of judicial deference to agencies’ statutory interpretations.

“The type of reflexive deference exhibited in some of these cases is troubling,” he wrote. “Given the concerns raised by some Members of this Court”—namely, Chief Justice John Roberts and Justices Clarence Thomas and Neil Gorsuch —“it seems necessary and appropriate to reconsider, in an appropriate case, the premises that underlie Chevron and how courts have implemented that decision.”

Justices Kagan’s and Kennedy’s opinions may surprise observers who assume that the administrative state—for whose “deconstruction” former White House aide Steve Bannon once called—is a right-wing bogeyman. But both opinions fit naturally with their authors’ work.

Justice Kagan is a scholar of “presidential administration,” keenly aware of why the Constitution ensured that the appointment of constitutional “officers” could not be delegated down into the bureaucracy itself. Justice Kennedy has repeatedly expressed concerns about committing too much power and discretion to agencies, and has joined other justices’ opinions raising explicit questions about judicial deference.

The Kagan and Kennedy opinions, then, are useful reminders that one need not be an archconservative to see flaws in modern administrative law. Both Chevron deference and the ALJ structure reflect old attempts to strike balances. Chevron was the Court’s compromise between the courts’ power to interpret laws independently, and the executive branch’s role in making policy choices accountably. ALJs are Congress’s compromise between adjudicative independence and efficiency.

Whatever the merits of those compromises at the time they were struck, changes in our administrative state since 1984 and 1946 should cause us all to ask whether those decades-old compromises are appropriate and sustainable—and constitutional.

Wall Street Journal Opinion by Adam White dated June 24 2018



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