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The Effects of the Supreme Court’s Lucia v. SEC Decision across Administrative Agencies

December 19, 2018

Michael L. Spafford and Igor V. Timofeyev

In Lucia v. SEC, a decision issued in June of 2018, the Supreme Court considered whether the Securities and Exchange Commission (SEC) complied with the Constitution’s Appointments Clause by having the SEC staff—rather than the Commission itself—appoint its administrative law judges (ALJs). The Appointments Clause lays out permissible methods of appointing “Officers of the United States,” vesting appointment power only in the President, a court of law, or a head of a department (depending on the officer’s seniority). In a 7-2 decision, the Court held that the SEC’s ALJs were “Officers of the United States,” not simply Commission employees, and it therefore invalidated their appointment as unconstitutional. The effects of the Supreme Court’s decision extend beyond the five current SEC ALJs. Federal regulatory agencies—both independent commissions and agencies that form part of the Executive Branch—commonly use ALJs to conduct administrative hearings, take testimony, make findings of fact and law, rule on admissibility of evidence, and enforce compliance and discovery orders.

This article was originally published in Infrastructure

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Michael L. Spafford

Partner, Litigation Department

Image: Igor V. Timofeyev
Igor V. Timofeyev

Partner, Litigation Department

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