On June 21, 2018, the Supreme Court held that administrative law judges (ALJs) of the SEC are “inferior officers of the United States subject to the Appointments Clause of the Constitution,” and so must be appointed by the President, Courts of Law, or Heads of Departments. Because prior to November 2017, none of those actors had appointed the SEC’s ALJs, the decision forces the re-review of pre-November 2017 decisions before SEC ALJs, and calls into question whether ALJs in other federal agencies have been unconstitutionally appointed, and thus also lacked the power to conduct agency adjudications.
The Court’s decision requires that the Commission itself must appoint its ALJs (as it has done since November 2017), rather than delegating the selection of ALJs to the Commission’s staff (as was the previous practice). The Supreme Court held that matters reviewed by ALJs prior to November 2017 must be re-reviewed before a different ALJ. Finally, by ruling that SEC ALJs are officers of the United States, and not simply civil service employees, the Court has likely made it easier for heads of departments to remove ALJs from their positions.