Restoring ALJ Independence

By Richard E. Levy and Robert L. Glicksman. Full Text.

Institutional structures that protect the impartiality of federal agency adjudicators and insulate them from undue political pressure are essential to the constitutional legitimacy of agency adjudication. Those structures are crumbling, leaving the administrative law judges (ALJs) who conduct formal adjudications for the federal government increasingly susceptible to political pressures from the executive branch that threaten the neutrality of ALJs and the fairness of the process by which they make their decisions. First, judicial decisions have drawn into question longstanding safeguards for ALJ impartiality, including merit-based appointment by nonpolitical officials and good-cause requirements for their removal. Second, executive branch actions, including exclusion of ALJs from the merit-based civil service appointment process and expansive construction of presidential authority to remove ALJs for good cause, have further eroded essential safeguards protecting ALJ independence.

This Article argues that these threats to ALJ independence demand a legislative response. It provides the most comprehensive analysis to date of the myriad and interrelated ways in which ALJ independence is being threatened. It then considers several options for restoring the balance between ALJ independence and preserving the policymaking discretion that Congress has delegated to the administrative agencies for which ALJs adjudicate. We argue that the adoption of the central panel model that predominates in state administrative adjudicatory systems within the United States is the most promising reform mechanism. Under this approach, ALJs would no longer be officers of the agencies for which they conduct adjudications. A properly constructed central panel could avoid the constitutional issues presented by recent Supreme Court decisions such as Lucia v. SEC and Free Enterprise Fund v. Public Company Accounting Oversight Board and provide greater security for ALJ neutrality and independence. At the same time, ALJs could continue to specialize in cases for particular agencies and the agency itself would retain final decisional authority and the ability to make policy through legislative rules and precedential adjudications that bind independent ALJs.

Because the impartiality of government adjudicators is integral to the legitimacy of administrative adjudication, the time to restore ALJ independence is now. Adoption of the central panel model is a legally viable means of doing so that could generate the bipartisan support necessary to break the legislative gridlock that has thwarted many other good governance initiatives.