Justices Resolve Circuit Split on Challenges to Judge Appointments

The high court ruled in favor of Social Security claimants challenging the appointment of administrative law judges.

(AP Photo/J. Scott Applewhite)

WASHINGTON (CN) — The Supreme Court ruled Thursday that Social Security applicants who challenge the appointment of administrative law judges are not required to first bring those claims to the agency before taking their case to court.

The six individuals who brought the consolidated suit were denied disability benefits by the Social Security Administration. While they appealed the denials, the Supreme Court ruled in 2018 in Lucia v. Securities Exchange Commission that administrative law judges were improperly appointed to the SEC.

After that decision, the Social Security petitioners argued the administrative law judges handling their cases were not properly appointed — violating the Constitution’s appointments clause – and they should have the opportunity to raise the issue in federal court.

In Thursday’s unanimous decision, the justices agreed, settling a circuit split.

The high court took issue with the federal government’s position that the claimants’ challenges were not timely and should have been brought before an administrative law judge at the time of their hearing. 

“The [Social Security] Commissioner’s contention that petitioners cannot obtain new hearings because they did not ‘timely challenge’ their adjudica­tors’ appointments presumes what the Commissioner has failed to prove: that petitioners’ challenges are, in fact, untimely,” wrote Justice Sonia Sotomayor, a Barack Obama appointee.

Moreover, Sotomayor wrote, administrative law judges cannot address such constitutional matters.

“Petitioners assert purely constitutional claims about which SSA ALJs have no special expertise and for which they can provide no relief,” she wrote.

The appointments clause gives four ways judges can be appointed: by the president with consent of the Senate, by the president alone, by department heads and by the courts.

In 2018, then-President Donald Trump changed the hiring process for administrative law judges with an executive order that puts the appointment power with federal agency heads or the president. That followed the Lucia case, which reversed a fine on an investor by a judge who was not constitutionally appointed.

Previously, the Office of Personnel Management vetted administrative law judge candidates and administered written and oral examinations. Then, a panel – typically made up of a current administrative law judge, a member of the American Bar Association and OPM staff – hired the judge.

However, the Lucia decision deemed the judges as “officers of the United States” and not just employees of the federal government, which makes them subject to appointment by agency directors or the president.

That led the Social Security petitioners to bring cases to federal court. The Eighth and 10th Circuits denied the right to raise a claim not first addressed by an administrative law judge. In contrast, the Third and Sixth Circuits held that claimants can bring appointment challenges in district court without first raising them before the relevant agency. The cases were consolidated on appeal to the Supreme Court.

Thursday’s ruling could have implications for thousands of Social Security claimants denied benefits by administrative law judges appointed by lower-level staff.

“The court made clear that judges shouldn’t be penalizing litigants for not raising issues before agencies that cannot or will not answer them or resolve the issues,” said Jared McClain, an attorney with the New Civil Liberties Alliance who filed an amici brief in the case.

There will “inevitably” be more litigation over whether the ruling will just apply to Social Security cases, McClain said, or reach to other federal agencies.

“It’s important to us that people who are brought before administrative agencies have their constitutional rights protected,” he said.

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