Lucia v. SEC

(Slip Opinion) OCTOBER TERM, 2017 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

LUCIA ET AL. v. SECURITIES AND EXCHANGE

COMMISSION

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

No. 17–130. Argued April 23, 2018—Decided June 21, 2018

The Securities and Exchange Commission (SEC or Commission) has

statutory authority to enforce the nation’s securities laws. One way

it can do so is by instituting an administrative proceeding against an

alleged wrongdoer. Typically, the Commission delegates the task of

presiding over such a proceeding to an administrative law judge

(ALJ). The SEC currently has five ALJs. Other staff members, ra-

ther than the Commission proper, selected them all. An ALJ as-

signed to hear an SEC enforcement action has the “authority to do all

things necessary and appropriate” to ensure a “fair and orderly” ad-

versarial proceeding. 17 CFR §§201.111, 200.14(a). After a hearing

ends, the ALJ issues an initial decision. The Commission can review

that decision, but if it opts against review, it issues an order that the

initial decision has become final. See §201.360(d). The initial deci-

sion is then “deemed the action of the Commission.” 15 U. S. C.

§78d–1(c).

The SEC charged petitioner Raymond Lucia with violating certain

securities laws and assigned ALJ Cameron Elliot to adjudicate the

case. Following a hearing, Judge Elliot issued an initial decision con-

cluding that Lucia had violated the law and imposing sanctions. On

appeal to the SEC, Lucia argued that the administrative proceeding

was invalid because Judge Elliot had not been constitutionally ap-

pointed. According to Lucia, SEC ALJs are “Officers of the United

States” and thus subject to the Appointments Clause. Under that

Clause, only the President, “Courts of Law,” or “Heads of Depart-

ments” can appoint such “Officers.” But none of those actors had

made Judge Elliot an ALJ. The SEC and the Court of Appeals for the

D. C. Circuit rejected Lucia’s argument, holding that SEC ALJs are

2 LUCIA v. SEC

Syllabus

not “Officers of the United States,” but are instead mere employees—

officials with lesser responsibilities who are not subject to the Ap-

pointments Clause.

Held: The Commission’s ALJs are “Officers of the United States,” sub-

ject to the Appointments Clause. Pp. 5–13.

(a) This Court’s decisions in United States v. Germaine, 99 U. S.

508, and Buckley v. Valeo, 424 U. S. 1, set out the basic framework

for distinguishing between officers and employees. To qualify as an

officer, rather than an employee, an individual must occupy a “con-

tinuing” position established by law, Germaine, 99 U. S., at 511, and

must “exercis[e] significant authority pursuant to the laws of the

United States,” Buckley, 424 U. S., at 126.

In Freytag v. Commissioner, 501 U. S. 868, the Court applied this

framework to “special trial judges” (STJs) of the United States Tax

Court. STJs could issue the final decision of the Tax Court in “com-

paratively narrow and minor matters.” Id., at 873. In more major

matters, they could preside over the hearing but could not issue a fi-

nal decision. Instead, they were to “prepare proposed findings and an

opinion” for a regular Tax Court judge to consider. Ibid. The pro-

ceeding challenged in Freytag was a major one. The losing parties

argued on appeal that the STJ who presided over their hearing was

not constitutionally appointed.

This Court held that STJs are officers. Citing Germaine, the Frey-

tag Court first found that STJs hold a continuing office established

by law. See 501 U. S., at 881. The Court then considered, as Buckley

demands, the “significance” of the “authority” STJs wield. 501 U. S.,

at 881. The Government had argued that STJs are employees in all

cases in which they could not enter a final decision. But the Court

thought that the Government’s focus on finality “ignore[d] the signifi-

cance of the duties and discretion that [STJs] possess.” Ibid. De-

scribing the responsibilities involved in presiding over adversarial

hearings, the Court said: STJs “take testimony, conduct trials, rule

on the admissibility of evidence, and have the power to enforce com-

pliance with discovery orders.” Id., at 881–882. And the Court ob-

served that “[i]n the course of carrying out these important func-

tions,” STJs “exercise significant discretion.” Id., at 882.

Freytag’s analysis decides this case. The Commission’s ALJs, like

the Tax Court’s STJs, hold a continuing office established by law.

SEC ALJs “receive[ ] a career appointment,” 5 CFR §930.204(a), to a

position created by statute, see 5 U. S. C. §§556–557, 5372, 3105.

And they exercise the same “significant discretion” when carrying out

the same “important functions” as STJs do. Freytag, 501 U. S., at

882. Both sets of officials have all the authority needed to ensure fair

and orderly adversarial hearings—indeed, nearly all the tools of fed-

Cite as: 585 U. S. ____ (2018) 3

Syllabus

eral trial judges. The Commission’s ALJs, like the Tax Court’s STJs,

“take testimony,” “conduct trials,” “rule on the admissibility of evi-

dence,” and “have the power to enforce compliance with discovery or-

ders.” Id., at 881–882. So point for point from Freytag’s list, SEC

ALJs have equivalent duties and powers as STJs in conducting ad-

versarial inquiries.

Moreover, at the close of those proceedings, SEC ALJs issue deci-

sions much like that in Freytag. STJs prepare proposed findings and

an opinion adjudicating charges and assessing tax liabilities. Simi-

larly, the Commission’s ALJs issue initial decisions containing factu-

al findings, legal conclusions, and appropriate remedies. And what

happens next reveals that the ALJ can play the more autonomous

role. In a major Tax Court case, a regular Tax Court judge must al-

ways review an STJ’s opinion, and that opinion comes to nothing un-

less the regular judge adopts it. By contrast, the SEC can decide

against reviewing an ALJ’s decision, and when it does so the ALJ’s

decision itself “becomes final” and is “deemed the action of the Com-

mission.” 17 CFR §201.360(d)(2); 15 U. S. C. §78d–1(c). Pp. 5–11.

(b) Judge Elliot heard and decided Lucia’s case without a constitu-

tional appointment. “[O]ne who makes a timely challenge to the con-

stitutional validity of the appointment of an officer who adjudicates

his case” is entitled to relief. Ryder v. United States, 515 U. S. 177,

182. Lucia made just such a timely challenge. And the “appropriate”

remedy for an adjudication tainted with an appointments violation is

a new “hearing before a properly appointed” official. Id., at 183, 188.

In this case, that official cannot be Judge Elliot, even if he has by

now received a constitutional appointment. Having already both

heard Lucia’s case and issued an initial decision on the merits, he

cannot be expected to consider the matter as though he had not adju-

dicated it before. To cure the constitutional error, another ALJ (or

the Commission itself) must hold the new hearing. Pp. 12–13.

868 F. 3d 1021, reversed and remanded.

KAGAN, J., delivered the opinion of the Court, in which ROBERTS,

C. J., and KENNEDY, THOMAS, ALITO, and GORSUCH, JJ., joined. THOM-

AS, J., filed a concurring opinion, in which GORSUCH, J., joined. BREYER,

J., filed an opinion concurring in the judgment in part and dissenting in

part, in which GINSBURG and SOTOMAYOR, JJ., joined as to Part III.

SOTOMAYOR, J., filed a dissenting opinion, in which GINSBURG, J.,

joined.

Cite as: 585 U. S. ____ (2018) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash-

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 17–130

_________________

RAYMOND J. LUCIA, ET AL., PETITIONERS v.

SECURITIES AND EXCHANGE COMMISSION

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

[June 21, 2018]

JUSTICE KAGAN delivered the opinion of the Court.

The Appointments Clause of the Constitution lays out

the permissible methods of appointing “Officers of the

United States,” a class of government officials distinct

from mere employees. Art. II, §2, cl. 2. This case requires

us to decide whether administrative law judges (ALJs) of

the Securities and Exchange Commission (SEC or Com-

mission) qualify as such “Officers.” In keeping with Frey-

tag v. Commissioner, 501 U. S. 868 (1991), we hold that

they do.

I

The SEC has statutory authority to enforce the nation’s

securities laws. One way it can do so is by instituting an

administrative proceeding against an alleged wrongdoer.

By law, the Commission may itself preside over such a

proceeding. See 17 CFR §201.110 (2017). But the Com-

mission also may, and typically does, delegate that task to

an ALJ. See ibid.; 15 U. S. C. §78d–1(a). The SEC cur-

rently has five ALJs. Other staff members, rather than

the Commission proper, selected them all. See App. to

Pet. for Cert. 295a–297a.

2 LUCIA v. SEC

Opinion of the Court

An ALJ assigned to hear an SEC enforcement action has

extensive powers—the “authority to do all things neces-

sary and appropriate to discharge his or her duties” and

ensure a “fair and orderly” adversarial proceeding.

§§201.111, 200.14(a). Those powers “include, but are not

limited to,” supervising discovery; issuing, revoking, or

modifying subpoenas; deciding motions; ruling on the

admissibility of evidence; administering oaths; hearing

and examining witnesses; generally “[r]egulating the

course of ” the proceeding and the “conduct of the parties

and their counsel”; and imposing sanctions for

“[c]ontemptuous conduct” or violations of procedural re-

quirements. §§201.111, 201.180; see §§200.14(a), 201.230.

As that list suggests, an SEC ALJ exercises authority

“comparable to” that of a federal district judge conducting

a bench trial. Butz v. Economou, 438 U. S. 478, 513

(1978).

After a hearing ends, the ALJ issues an “initial deci-

sion.” §201.360(a)(1). That decision must set out “findings

and conclusions” about all “material issues of fact [and]

law”; it also must include the “appropriate order, sanction,

relief, or denial thereof.” §201.360(b). The Commission

can then review the ALJ’s decision, either upon request or

sua sponte. See §201.360(d)(1). But if it opts against

review, the Commission “issue[s] an order that the [ALJ’s]

decision has become final.” §201.360(d)(2). At that point,

the initial decision is “deemed the action of the Commis-

sion.” §78d–1(c).

This case began when the SEC instituted an adminis-

trative proceeding against petitioner Raymond Lucia and

his investment company. Lucia marketed a retirement

savings strategy called “Buckets of Money.” In the SEC’s

view, Lucia used misleading slideshow presentations to

deceive prospective clients. The SEC charged Lucia under

the Investment Advisers Act, §80b–1 et seq., and assigned

ALJ Cameron Elliot to adjudicate the case. After nine

Cite as: 585 U. S. ____ (2018) 3

Opinion of the Court

days of testimony and argument, Judge Elliot issued an

initial decision concluding that Lucia had violated the Act

and imposing sanctions, including civil penalties of

$300,000 and a lifetime bar from the investment industry.

In his decision, Judge Elliot made factual findings about

only one of the four ways the SEC thought Lucia’s

slideshow misled investors. The Commission thus re-

manded for factfinding on the other three claims, explain-

ing that an ALJ’s “personal experience with the witnesses”

places him “in the best position to make findings of fact”

and “resolve any conflicts in the evidence.” App. to Pet. for

Cert. 241a. Judge Elliot then made additional findings of

deception and issued a revised initial decision, with the

same sanctions. See id., at 118a.

On appeal to the SEC, Lucia argued that the adminis-

trative proceeding was invalid because Judge Elliot had

not been constitutionally appointed. According to Lucia,

the Commission’s ALJs are “Officers of the United States”

and thus subject to the Appointments Clause. Under that

Clause, Lucia noted, only the President, “Courts of Law,”

or “Heads of Departments” can appoint “Officers.” See

Art. II, §2, cl. 2. And none of those actors had made Judge

Elliot an ALJ. To be sure, the Commission itself counts as

a “Head[ ] of Department[ ].” Ibid.; see Free Enterprise

Fund v. Public Company Accounting Oversight Bd., 561

U. S. 477, 511–513 (2010). But the Commission had left

the task of appointing ALJs, including Judge Elliot, to

SEC staff members. See supra, at 1. As a result, Lucia

contended, Judge Elliot lacked constitutional authority to

do his job.

The Commission rejected Lucia’s argument. It held that

the SEC’s ALJs are not “Officers of the United States.”

Instead, they are “mere employees”—officials with lesser

responsibilities who fall outside the Appointments

Clause’s ambit. App. to Pet. for Cert. 87a. The Commis-

sion reasoned that its ALJs do not “exercise significant

4 LUCIA v. SEC

Opinion of the Court

authority independent of [its own] supervision.” Id., at

88a. Because that is so (said the SEC), they need no

special, high-level appointment. See id., at 86a.

Lucia’s claim fared no better in the Court of Appeals for

the D. C. Circuit. A panel of that court seconded the

Commission’s view that SEC ALJs are employees rather

than officers, and so are not subject to the Appointments

Clause. See 832 F. 3d 277, 283–289 (2016). Lucia then

petitioned for rehearing en banc. The Court of Appeals

granted that request and heard argument in the case. But

the ten members of the en banc court divided evenly,

resulting in a per curiam order denying Lucia’s claim. See

868 F. 3d 1021 (2017). That decision conflicted with one

from the Court of Appeals for the Tenth Circuit. See

Bandimere v. SEC, 844 F. 3d 1168, 1179 (2016).

Lucia asked us to resolve the split by deciding whether

the Commission’s ALJs are “Officers of the United States

within the meaning of the Appointments Clause.” Pet. for

Cert. i. Up to that point, the Federal Government (as

represented by the Department of Justice) had defended

the Commission’s position that SEC ALJs are employees,

not officers. But in responding to Lucia’s petition, the

Government switched sides.1 So when we granted the

petition, 583 U. S. ___ (2018), we also appointed an amicus

curiae to defend the judgment below.2 We now reverse.

——————

1 In

the same certiorari-stage brief, the Government asked us to add a

second question presented: whether the statutory restrictions on

removing the Commission’s ALJs are constitutional. See Brief in

Response 21. When we granted certiorari, we chose not to take that

step. See 583 U. S. ___ (2018). The Government’s merits brief now

asks us again to address the removal issue. See Brief for United States

39–55. We once more decline. No court has addressed that question,

and we ordinarily await “thorough lower court opinions to guide our

analysis of the merits.” Zivotofsky v. Clinton, 566 U. S. 189, 201 (2012).

2 We appointed Anton Metlitsky to brief and argue the case, 583 U. S.

___ (2018), and he has ably discharged his responsibilities.

Cite as: 585 U. S. ____ (2018)

5

Opinion of the Court

II

The sole question here is whether the Commission’s

ALJs are “Officers of the United States” or simply employ-

ees of the Federal Government. The Appointments Clause

prescribes the exclusive means of appointing “Officers.”

Only the President, a court of law, or a head of depart-

ment can do so. See Art. II, §2, cl. 2.3 And as all parties

agree, none of those actors appointed Judge Elliot before

he heard Lucia’s case; instead, SEC staff members gave

him an ALJ slot. See Brief for Petitioners 15; Brief for

United States 38; Brief for Court-Appointed Amicus Cu-

riae 21. So if the Commission’s ALJs are constitutional

officers, Lucia raises a valid Appointments Clause claim.

The only way to defeat his position is to show that those

ALJs are not officers at all, but instead non-officer em-

ployees—part of the broad swath of “lesser functionaries”

in the Government’s workforce. Buckley v. Valeo, 424

U. S. 1, 126, n. 162 (1976) (per curiam). For if that is true,

the Appointments Clause cares not a whit about who

named them. See United States v. Germaine, 99 U. S. 508,

510 (1879).

Two decisions set out this Court’s basic framework for

distinguishing between officers and employees. Germaine

held that “civil surgeons” (doctors hired to perform various

physical exams) were mere employees because their duties

were “occasional or temporary” rather than “continuing

——————

3 That statement elides a distinction, not at issue here, between

“principal” and “inferior” officers. See Edmond v. United States, 520

U. S. 651, 659–660 (1997). Only the President, with the advice and

consent of the Senate, can appoint a principal officer; but Congress

(instead of relying on that method) may authorize the President alone,

a court, or a department head to appoint an inferior officer. See ibid.

Both the Government and Lucia view the SEC’s ALJs as inferior

officers and acknowledge that the Commission, as a head of depart-

ment, can constitutionally appoint them. See Brief for United States

38; Brief for Petitioners 50–51.

6 LUCIA v. SEC

Opinion of the Court

and permanent.” Id., at 511–512. Stressing “ideas of

tenure [and] duration,” the Court there made clear that an

individual must occupy a “continuing” position established

by law to qualify as an officer. Id., at 511. Buckley then

set out another requirement, central to this case. It de-

termined that members of a federal commission were

officers only after finding that they “exercis[ed] significant

authority pursuant to the laws of the United States.” 424

U. S., at 126. The inquiry thus focused on the extent of

power an individual wields in carrying out his assigned

functions.

Both the amicus and the Government urge us to elabo-

rate on Buckley’s “significant authority” test, but another

of our precedents makes that project unnecessary. The

standard is no doubt framed in general terms, tempting

advocates to add whatever glosses best suit their argu-

ments. See Brief for Amicus Curiae 14 (contending that

an individual wields “significant authority” when he has

“(i) the power to bind the government or private parties (ii)

in her own name rather than in the name of a superior

officer”); Reply Brief for United States 2 (countering that

an individual wields that authority when he has “the

power to bind the government or third parties on signifi-

cant matters” or to undertake other “important and dis-

tinctively sovereign functions”). And maybe one day we

will see a need to refine or enhance the test Buckley set

out so concisely. But that day is not this one, because in

Freytag v. Commissioner, 501 U. S. 868 (1991), we applied

the unadorned “significant authority” test to adjudicative

officials who are near-carbon copies of the Commission’s

ALJs. As we now explain, our analysis there (sans any

more detailed legal criteria) necessarily decides this case.

The officials at issue in Freytag were the “special trial

judges” (STJs) of the United States Tax Court. The au-

thority of those judges depended on the significance of the

tax dispute before them. In “comparatively narrow and

Cite as: 585 U. S. ____ (2018) 7

Opinion of the Court

minor matters,” they could both hear and definitively

resolve a case for the Tax Court. Id., at 873. In more

major matters, they could preside over the hearing, but

could not issue the final decision; instead, they were to

“prepare proposed findings and an opinion” for a regular

Tax Court judge to consider. Ibid. The proceeding chal-

lenged in Freytag was a major one, involving $1.5 billion

in alleged tax deficiencies. See id., at 871, n. 1. After

conducting a 14-week trial, the STJ drafted a proposed

decision in favor of the Government. A regular judge then

adopted the STJ’s work as the opinion of the Tax Court.

See id., at 872. The losing parties argued on appeal that

the STJ was not constitutionally appointed.

This Court held that the Tax Court’s STJs are officers,

not mere employees. Citing Germaine, the Court first

found that STJs hold a continuing office established by

law. See 501 U. S., at 881. They serve on an ongoing,

rather than a “temporary [or] episodic[,] basis”; and their

“duties, salary, and means of appointment” are all speci-

fied in the Tax Code. Ibid. The Court then considered, as

Buckley demands, the “significance” of the “authority”

STJs wield. 501 U. S., at 881. In addressing that issue,

the Government had argued that STJs are employees,

rather than officers, in all cases (like the one at issue) in

which they could not “enter a final decision.” Ibid. But

the Court thought the Government’s focus on finality

“ignore[d] the significance of the duties and discretion that

[STJs] possess.” Ibid. Describing the responsibilities

involved in presiding over adversarial hearings, the Court

said: STJs “take testimony, conduct trials, rule on the

admissibility of evidence, and have the power to enforce

compliance with discovery orders.” Id., at 881–882. And

the Court observed that “[i]n the course of carrying out

these important functions, the [STJs] exercise significant

discretion.” Id., at 882. That fact meant they were offi-

8 LUCIA v. SEC

Opinion of the Court

cers, even when their decisions were not final.4

Freytag says everything necessary to decide this case.

To begin, the Commission’s ALJs, like the Tax Court’s

STJs, hold a continuing office established by law. See id.,

at 881. Indeed, everyone here—Lucia, the Government,

and the amicus—agrees on that point. See Brief for Peti-

tioners 21; Brief for United States 17–18, n. 3; Brief for

Amicus Curiae 22, n. 7. Far from serving temporarily or

episodically, SEC ALJs “receive[ ] a career appointment.”

5 CFR §930.204(a) (2018). And that appointment is to a

position created by statute, down to its “duties, salary, and

means of appointment.” Freytag, 501 U. S., at 881; see 5

U. S. C. §§556–557, 5372, 3105.

Still more, the Commission’s ALJs exercise the same

“significant discretion” when carrying out the same “im-

portant functions” as STJs do. Freytag, 501 U. S., at 882.

Both sets of officials have all the authority needed to

ensure fair and orderly adversarial hearings—indeed,

nearly all the tools of federal trial judges. See Butz, 438

U. S., at 513; supra, at 2. Consider in order the four spe-

cific (if overlapping) powers Freytag mentioned. First, the

——————

4 The Court also provided an alternative basis for viewing the STJs as

officers. “Even if the duties of [STJs in major cases] were not as signifi-

cant as we . . . have found them,” we stated, “our conclusion would be

unchanged.” Freytag, 501 U. S., at 882. That was because the Gov-

ernment had conceded that in minor matters, where STJs could enter

final decisions, they had enough “independent authority” to count as

officers. Ibid. And we thought it made no sense to classify the STJs as

officers for some cases and employees for others. See ibid. JUSTICE

SOTOMAYOR relies on that back-up rationale in trying to reconcile

Freytag with her view that “a prerequisite to officer status is the

authority” to issue at least some “final decisions.” Post, at 5 (dissenting

opinion). But Freytag has two parts, and its primary analysis explicitly

rejects JUSTICE SOTOMAYOR’s theory that final decisionmaking authority

is a sine qua non of officer status. See 501 U. S., at 881–882. As she

acknowledges, she must expunge that reasoning to make her reading

work. See post, at 5 (“That part of the opinion[ ] was unnecessary to the

result”).

Cite as: 585 U. S. ____ (2018) 9

Opinion of the Court

Commission’s ALJs (like the Tax Court’s STJs) “take

testimony.” 501 U. S., at 881. More precisely, they

“[r]eceiv[e] evidence” and “[e]xamine witnesses” at hear-

ings, and may also take pre-hearing depositions. 17 CFR

§§201.111(c), 200.14(a)(4); see 5 U. S. C. §556(c)(4). Sec-

ond, the ALJs (like STJs) “conduct trials.” 501 U. S., at

882. As detailed earlier, they administer oaths, rule on

motions, and generally “regulat[e] the course of ” a hear-

ing, as well as the conduct of parties and counsel.

§201.111; see §§200.14(a)(1), (a)(7); supra, at 2. Third, the

ALJs (like STJs) “rule on the admissibility of evidence.”

501 U. S., at 882; see §201.111(c). They thus critically

shape the administrative record (as they also do when

issuing document subpoenas). See §201.111(b). And

fourth, the ALJs (like STJs) “have the power to enforce

compliance with discovery orders.” 501 U. S., at 882. In

particular, they may punish all “[c]ontemptuous conduct,”

including violations of those orders, by means as severe

as excluding the offender from the hearing. See

§201.180(a)(1). So point for point—straight from Freytag’s

list—the Commission’s ALJs have equivalent duties and

powers as STJs in conducting adversarial inquiries.

And at the close of those proceedings, ALJs issue deci-

sions much like that in Freytag—except with potentially

more independent effect. As the Freytag Court recounted,

STJs “prepare proposed findings and an opinion” adjudi-

cating charges and assessing tax liabilities. 501 U. S., at

873; see supra, at 7. Similarly, the Commission’s ALJs

issue decisions containing factual findings, legal conclu-

sions, and appropriate remedies. See §201.360(b); supra,

at 2. And what happens next reveals that the ALJ can

play the more autonomous role. In a major case like Frey-

tag, a regular Tax Court judge must always review an

STJ’s opinion. And that opinion counts for nothing unless

the regular judge adopts it as his own. See 501 U. S., at

873. By contrast, the SEC can decide against reviewing

10 LUCIA v. SEC

Opinion of the Court

an ALJ decision at all. And when the SEC declines review

(and issues an order saying so), the ALJ’s decision itself

“becomes final” and is “deemed the action of the Commis-

sion.” §201.360(d)(2); 15 U. S. C. §78d–1(c); see supra, at

2. That last-word capacity makes this an a fortiori case: If

the Tax Court’s STJs are officers, as Freytag held, then the

Commission’s ALJs must be too.

The amicus offers up two distinctions to support the

opposite conclusion. His main argument relates to “the

power to enforce compliance with discovery orders”—the

fourth of Freytag’s listed functions. 501 U. S., at 882. The

Tax Court’s STJs, he states, had that power “because they

had authority to punish contempt” (including discovery

violations) through fines or imprisonment. Brief for Ami-

cus Curiae 37; see id., at 37, n. 10 (citing 26 U. S. C.

§7456(c)). By contrast, he observes, the Commission’s

ALJs have less capacious power to sanction misconduct.

The amicus’s secondary distinction involves how the Tax

Court and Commission, respectively, review the factfind-

ing of STJs and ALJs. The Tax Court’s rules state that an

STJ’s findings of fact “shall be presumed” correct. Tax

Court Rule 183(d). In comparison, the amicus notes, the

SEC’s regulations include no such deferential standard.

See Brief for Amicus Curiae 10, 38, n. 11.

But those distinctions make no difference for officer

status. To start with the amicus’s primary point, Freytag

referenced only the general “power to enforce compliance

with discovery orders,” not any particular method of doing

so. 501 U. S., at 882. True enough, the power to toss

malefactors in jail is an especially muscular means of

enforcement—the nuclear option of compliance tools. But

just as armies can often enforce their will through conven-

tional weapons, so too can administrative judges. As

noted earlier, the Commission’s ALJs can respond to

discovery violations and other contemptuous conduct by

excluding the wrongdoer (whether party or lawyer) from

Cite as: 585 U. S. ____ (2018) 11

Opinion of the Court

the proceedings—a powerful disincentive to resist a court

order. See §201.180(a)(1)(i); supra, at 9. Similarly, if the

offender is an attorney, the ALJ can “[s]ummarily sus-

pend” him from representing his client—not something

the typical lawyer wants to invite. §201.180(a)(1)(ii). And

finally, a judge who will, in the end, issue an opinion

complete with factual findings, legal conclusions, and

sanctions has substantial informal power to ensure the

parties stay in line. Contrary to the amicus’s view, all

that is enough to satisfy Freytag’s fourth item (even sup-

posing, which we do not decide, that each of those items is

necessary for someone conducting adversarial hearings to

count as an officer).

And the amicus’s standard-of-review distinction fares

just as badly. The Freytag Court never suggested that the

deference given to STJs’ factual findings mattered to its

Appointments Clause analysis. Indeed, the relevant part

of Freytag did not so much as mention the subject (even

though it came up at oral argument, see Tr. of Oral Arg.

33–41). And anyway, the Commission often accords a

similar deference to its ALJs, even if not by regulation.

The Commission has repeatedly stated, as it did below,

that its ALJs are in the “best position to make findings of

fact” and “resolve any conflicts in the evidence.” App. to

Pet. for Cert. 241a (quoting In re Nasdaq Stock Market,

LLC, SEC Release No. 57741 (Apr. 30, 2008)). (That was

why the SEC insisted that Judge Elliot make factual

findings on all four allegations of Lucia’s deception. See

supra, at 3.) And when factfinding derives from credibility

judgments, as it frequently does, acceptance is near-

automatic. Recognizing ALJs’ “personal experience with

the witnesses,” the Commission adopts their “credibility

finding[s] absent overwhelming evidence to the contrary.”

App. to Pet. for Cert. 241a; In re Clawson, SEC Release

No. 48143 (July 9, 2003). That practice erases the consti-

tutional line the amicus proposes to draw.

12 LUCIA v. SEC

Opinion of the Court

The only issue left is remedial. For all the reasons we

have given, and all those Freytag gave before, the Com-

mission’s ALJs are “Officers of the United States,” subject

to the Appointments Clause. And as noted earlier, Judge

Elliot heard and decided Lucia’s case without the kind of

appointment the Clause requires. See supra, at 5. This

Court has held that “one who makes a timely challenge to

the constitutional validity of the appointment of an officer

who adjudicates his case” is entitled to relief. Ryder v.

United States, 515 U. S. 177, 182–183 (1995). Lucia made

just such a timely challenge: He contested the validity of

Judge Elliot’s appointment before the Commission, and

continued pressing that claim in the Court of Appeals and

this Court. So what relief follows? This Court has also

held that the “appropriate” remedy for an adjudication

tainted with an appointments violation is a new “hearing

before a properly appointed” official. Id., at 183, 188. And

we add today one thing more. That official cannot be

Judge Elliot, even if he has by now received (or receives

sometime in the future) a constitutional appointment.

Judge Elliot has already both heard Lucia’s case and

issued an initial decision on the merits. He cannot be

expected to consider the matter as though he had not

adjudicated it before.5 To cure the constitutional error,

——————

5 JUSTICE BREYER disagrees with our decision to wrest further pro-

ceedings from Judge Elliot, arguing that “[f]or him to preside once

again would not violate the structural purposes [of] the Appointments

Clause.” Post, at 13 (opinion concurring in judgment in part and

dissenting in part). But our Appointments Clause remedies are de-

signed not only to advance those purposes directly, but also to create

“[ ]incentive[s] to raise Appointments Clause challenges.” Ryder v.

United States, 515 U. S. 177, 183 (1995). We best accomplish that goal

by providing a successful litigant with a hearing before a new judge.

That is especially so because (as JUSTICE BREYER points out) the old

judge would have no reason to think he did anything wrong on the

merits, see post, at 13—and so could be expected to reach all the same

judgments. But we do not hold that a new officer is required for every

Cite as: 585 U. S. ____ (2018) 13

Opinion of the Court

another ALJ (or the Commission itself) must hold the new

hearing to which Lucia is entitled.6

We accordingly reverse the judgment of the Court of

Appeals and remand the case for further proceedings

consistent with this opinion.

It is so ordered.

——————

Appointments Clause violation. As JUSTICE BREYER suggests, we can

give that remedy here because other ALJs (and the Commission) are

available to hear this case on remand. See ibid. If instead the Ap-

pointments Clause problem is with the Commission itself, so that there

is no substitute decisionmaker, the rule of necessity would presumably

kick in and allow the Commission to do the rehearing. See FTC v.

Cement Institute, 333 U. S. 683, 700–703 (1948); 3 K. Davis, Adminis-

trative Law Treatise §19.9 (2d ed. 1980).

6 While this case was on judicial review, the SEC issued an order

“ratif[ying]” the prior appointments of its ALJs. Order (Nov. 30, 2017),

online at https://www.sec.gov/litigation/opinions/2017/33-10440.pdf (as

last visited June 18, 2018). Lucia argues that the order is invalid. See

Brief for Petitioners 50–56. We see no reason to address that issue.

The Commission has not suggested that it intends to assign Lucia’s

case on remand to an ALJ whose claim to authority rests on the ratifi-

cation order. The SEC may decide to conduct Lucia’s rehearing itself.

Or it may assign the hearing to an ALJ who has received a constitu-

tional appointment independent of the ratification.

Cite as: 585 U. S. ____ (2018) 1

THOMAS, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 17–130

_________________

RAYMOND J. LUCIA, ET AL., PETITIONERS v.

SECURITIES AND EXCHANGE COMMISSION

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

[June 21, 2018]

JUSTICE THOMAS, with whom JUSTICE GORSUCH joins,

concurring.

I agree with the Court that this case is indistinguishable

from Freytag v. Commissioner, 501 U. S. 868 (1991). If the

special trial judges in Freytag were “Officers of the United

States,” Art. II, §2, cl. 2, then so are the administrative

law judges of the Securities and Exchange Commission.

Moving forward, however, this Court will not be able to

decide every Appointments Clause case by comparing it to

Freytag. And, as the Court acknowledges, our precedents

in this area do not provide much guidance. See ante, at 6.

While precedents like Freytag discuss what is sufficient to

make someone an officer of the United States, our prece-

dents have never clearly defined what is necessary. I

would resolve that question based on the original public

meaning of “Officers of the United States.” To the Found-

ers, this term encompassed all federal civil officials “ ‘with

responsibility for an ongoing statutory duty.’ ” NLRB v.

SW General, Inc., 580 U. S. ___, ___ (2017) (THOMAS, J.,

concurring) (slip op., at 4); Mascott, Who Are “Officers

of the United States”? 70 Stan. L. Rev. 443, 564 (2018)

(Mascott).1

——————

1 I address only the dividing line between “Officers of the United

States,” who are subject to the Appointments Clause, and nonofficer

2 LUCIA v. SEC

THOMAS, J., concurring

The Appointments Clause provides the exclusive process

for appointing “Officers of the United States.” See SW

General, supra, at ___ (opinion of THOMAS, J.) (slip op.,

at 1). While principal officers must be nominated by the

President and confirmed by the Senate, Congress can

authorize the appointment of “inferior Officers” by “the

President alone,” “the Courts of Law,” or “the Heads of

Departments.” Art. II, §2, cl. 2.

This alternative process for appointing inferior officers

strikes a balance between efficiency and accountability.

Given the sheer number of inferior officers, it would be too

burdensome to require each of them to run the gauntlet of

Senate confirmation. See United States v. Germaine, 99

U. S. 508, 509–510 (1879); 2 Records of the Federal Con-

vention of 1787, pp. 627–628 (M. Farrand ed. 1911). But,

by specifying only a limited number of actors who can

appoint inferior officers without Senate confirmation, the

Appointments Clause maintains clear lines of accountabil-

ity—encouraging good appointments and giving the public

someone to blame for bad ones. See The Federalist No. 76,

p. 455 (C. Rossiter ed. 1961) (A. Hamilton); Wilson, Lec-

tures on Law: Government, in 1 The Works of James

Wilson 343, 359–361 (J. Andrews ed., 1896).

The Founders likely understood the term “Officers of the

United States” to encompass all federal civil officials who

perform an ongoing, statutory duty—no matter how im-

portant or significant the duty. See Mascott 454. “Officers

of the United States” was probably not a term of art that

the Constitution used to signify some special type of offi-

cial. Based on how the Founders used it and similar

terms, the phrase “of the United States” was merely a

——————

employees, who are not. I express no view on the meaning of “Office” or

“Officer” in any other provision of the Constitution, or the difference

between principal officers and inferior officers under the Appointments

Clause.

Cite as: 585 U. S. ____ (2018) 3

THOMAS, J., concurring

synonym for “federal,” and the word “Office[r]” carried its

ordinary meaning. See id., at 471–479. The ordinary

meaning of “officer” was anyone who performed a continu-

ous public duty. See id., at 484–507; e.g., United States v.

Maurice, 26 F. Cas. 1211, 1214 (No. 15,747) (CC Va. 1823)

(defining officer as someone in “ ‘a public charge or em-

ployment’ ” who performed a “continuing” duty); 8 Annals

of Cong. 2304–2305 (1799) (statement of Rep. Harper)

(explaining that the word officer “is derived from the Latin

word officium” and “includes all persons holding posts

which require the performance of some public duty”). For

federal officers, that duty is “established by Law”—that is,

by statute. Art. II, §2, cl. 2. The Founders considered

individuals to be officers even if they performed only

ministerial statutory duties—including recordkeepers,

clerks, and tidewaiters (individuals who watched goods

land at a customhouse). See Mascott 484–507. Early

congressional practice reflected this understanding. With

exceptions not relevant here,2 Congress required all fed-

eral officials with ongoing statutory duties to be appointed

in compliance with the Appointments Clause. See id., at

507–545.

Applying the original meaning here, the administrative

law judges of the Securities and Exchange Commission

easily qualify as “Officers of the United States.” These

judges exercise many of the agency’s statutory duties,

including issuing initial decisions in adversarial proceed-

ings. See 15 U. S. C. §78d–1(a); 17 CFR §§200.14, 200.30–

9 (2017). As explained, the importance or significance of

these statutory duties is irrelevant. All that matters is

that the judges are continuously responsible for perform-

——————

2 The First Congress exempted certain officials with ongoing statu-

tory duties, such as deputies and military officers, from the requirements

of the Appointments Clause. But these narrow exceptions do not

disprove the rule, as background principles of founding-era law explain

each of them. See Mascott 480–483, 515–530.

4 LUCIA v. SEC

THOMAS, J., concurring

ing them.

In short, the administrative law judges of the Securities

Exchange Commission are “Officers of the United States”

under the original meaning of the Appointments Clause.

They have “ ‘responsibility for an ongoing statutory duty,’ ”

which is sufficient to resolve this case. SW General, 580

U. S., at ___ (opinion of THOMAS, J.) (slip op., at 4). Be-

cause the Court reaches the same conclusion by correctly

applying Freytag, I join its opinion.

Cite as: 585 U. S. ____ (2018) 1

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

SUPREME COURT OF THE UNITED STATES

_________________

No. 17–130

_________________

RAYMOND J. LUCIA, ET AL., PETITIONERS v.

SECURITIES AND EXCHANGE COMMISSION

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

[June 21, 2018]

JUSTICE BREYER, with whom JUSTICE GINSBURG and

JUSTICE SOTOMAYOR join as to Part III, concurring in the

judgment in part and dissenting in part.

I agree with the Court that the Securities and Exchange

Commission did not properly appoint the Administrative

Law Judge who presided over petitioner Lucia’s hearing.

But I disagree with the majority in respect to two matters.

First, I would rest our conclusion upon statutory, not

constitutional, grounds. I believe it important to do so

because I cannot answer the constitutional question that

the majority answers without knowing the answer to a

different, embedded constitutional question, which the

Solicitor General urged us to answer in this case: the

constitutionality of the statutory “for cause” removal

protections that Congress provided for administrative law

judges. Cf. Free Enterprise Fund v. Public Company

Accounting Oversight Bd., 561 U. S. 477 (2010). Second, I

disagree with the Court in respect to the proper remedy.

I

The relevant statute here is the Administrative Proce-

dure Act. That Act governs the appointment of adminis-

trative law judges. It provides (as it has, in substance,

since its enactment in 1946) that “[e]ach agency shall

appoint as many administrative law judges as are neces-

2 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

sary for” hearings governed by the Administrative Proce-

dure Act. 5 U. S. C. §3105; see also Administrative Proce-

dure Act, §11, 60 Stat. 244 (original version, which refers

to “examiners” as administrative law judges were then

called). In the case of the Securities and Exchange Com-

mission, the relevant “agency” is the Commission itself.

But the Commission did not appoint the Administrative

Law Judge who presided over Lucia’s hearing. Rather, the

Commission’s staff appointed that Administrative Law

Judge, without the approval of the Commissioners them-

selves. See ante, at 1; App. to Pet. for Cert. 298a–299a.

I do not believe that the Administrative Procedure Act

permits the Commission to delegate its power to appoint

its administrative law judges to its staff. We have held

that, for purposes of the Constitution’s Appointments

Clause, the Commission itself is a “ ‘Hea[d]’ ” of a “ ‘De-

partmen[t].’ ” Free Enterprise Fund, supra, at 512–513.

Thus, reading the statute as referring to the Commission

itself, and not to its staff, avoids a difficult constitutional

question, namely, the very question that the Court an-

swers today: whether the Commission’s administrative

law judges are constitutional “inferior Officers” whose

appointment Congress may vest only in the President, the

“Courts of Law,” or the “Heads of Departments.” Art. II,

§2, cl. 2; see United States v. Jin Fuey Moy, 241 U. S. 394,

401 (1916) (“A statute must be construed, if fairly possible,

so as to avoid not only the conclusion that it is unconstitu-

tional but also grave doubts upon that score”).

I have found no other statutory provision that would

permit the Commission to delegate the power to appoint

its administrative law judges to its staff. The statute

establishing and governing the Commission does allow the

Commission to “delegate, by published order or rule, any

of its functions to a division of the Commission, an indi-

vidual Commissioner, an administrative law judge, or an

employee or employee board.” 15 U. S. C. §78d–1(a). But

Cite as: 585 U. S. ____ (2018) 3

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

this provision requires a “published order or rule,” and the

Commission here published no relevant delegating order

or rule. Rather, Lucia discovered the Commission’s ap-

pointment system for administrative law judges only when

the Commission’s enforcement division staff filed an affi-

davit in this case describing that staff-based system. See

App. to Pet. for Cert. 295a–299a. Regardless, the same

constitutional-avoidance reasons that should inform our

construction of the Administrative Procedure Act should

also lead us to interpret the Commission’s general delega-

tion authority as excluding the power to delegate to staff

the authority to appoint its administrative law judges, so

as to avoid the constitutional question the Court reaches

in this case. See Jin Fuey Moy, supra, at 401.

The analysis may differ for other agencies that employ

administrative law judges. Each agency’s governing stat-

ute is different, and some, unlike the Commission’s, may

allow the delegation of duties without a published order or

rule. See, e.g., 42 U. S. C. §902(a)(7) (applicable to the

Social Security Administration). Similarly, other agencies’

administrative law judges perform distinct functions, and

their means of appointment may therefore not raise the

constitutional questions that inform my reading of the

relevant statutes here.

The upshot, in my view, is that for statutory, not consti-

tutional, reasons, the Commission did not lawfully appoint

the Administrative Law Judge here at issue. And this

Court should decide no more than that.

II

A

The reason why it is important to go no further arises

from the holding in a case this Court decided eight years

ago, Free Enterprise Fund, supra. The case concerned

statutory provisions protecting members of the Public

Company Accounting Oversight Board from removal

4 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

without cause. The Court held in that case that the Exec-

utive Vesting Clause of the Constitution, Art. II, §1 (“[t]he

executive Power shall be vested in a President of the

United States of America”), forbade Congress from provid-

ing members of the Board with “multilevel protection from

removal” by the President. Free Enterprise Fund, 561

U. S., at 484; see id., at 514 (“Congress cannot limit the

President’s authority” by providing “two levels of protec-

tion from removal for those who . . . exercise significant

executive power”). But see id., at 514–549 (BREYER, J.,

dissenting). Because, in the Court’s view, the relevant

statutes (1) granted the Securities and Exchange Commis-

sioners protection from removal without cause, (2) gave

the Commissioners sole authority to remove Board mem-

bers, and (3) protected Board members from removal

without cause, the statutes provided Board members with

two levels of protection from removal and consequently

violated the Constitution. Id., at 495–498.

In addressing the constitutionality of the Board mem-

bers’ removal protections, the Court emphasized that the

Board members were “executive officers”—more specifically,

“inferior officers” for purposes of the Appointments

Clause. E.g., id., at 492–495, 504–505. The significance of

that fact to the Court’s analysis is not entirely clear. The

Court said:

“The parties here concede that Board members are

executive ‘Officers’, as that term is used in the Consti-

tution. We do not decide the status of other Govern-

ment employees, nor do we decide whether ‘lesser

functionaries subordinate to officers of the United

States’ must be subject to the same sort of control as

those who exercise ‘significant authority pursuant to

the laws.’ ” Id., at 506 (quoting Buckley v. Valeo, 424

U. S. 1, 126, and n. 162 (1976) (per curiam); citations

omitted).

Cite as: 585 U. S. ____ (2018) 5

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

Thus, the Court seemed not only to limit its holding to the

Board members themselves, but also to suggest that Gov-

ernment employees who were not officers would be distin-

guishable from the Board members on that ground alone.

For present purposes, however, the implications of Free

Enterprise Fund’s technical-sounding holding about “mul-

tilevel protection from removal” remain potentially dra-

matic. 561 U. S., at 484. The same statute, the Adminis-

trative Procedure Act, that provides that the “agency” will

appoint its administrative law judges also protects the

administrative law judges from removal without cause. In

particular, the statute says that an

“action may be taken against an administrative law

judge appointed under section 3105 of this title by the

agency in which the administrative law judge is em-

ployed only for good cause established and determined

by the Merit Systems Protection Board on the record

after opportunity for hearing before the Board.” 5

U. S. C. §7521(a).

As with appointments, this provision constituted an im-

portant part of the Administrative Procedure Act when it

was originally enacted in 1946. See §11, 60 Stat. 244.

The Administrative Procedure Act thus allows adminis-

trative law judges to be removed only “for good cause”

found by the Merit Systems Protection Board. §7521(a).

And the President may, in turn, remove members of the

Merit Systems Protection Board only for “inefficiency,

neglect of duty, or malfeasance in office.” §1202(d). Thus,

Congress seems to have provided administrative law

judges with two levels of protection from removal without

cause—just what Free Enterprise Fund interpreted the

Constitution to forbid in the case of the Board members.

The substantial independence that the Administrative

Procedure Act’s removal protections provide to adminis-

trative law judges is a central part of the Act’s overall

6 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

scheme. See Ramspeck v. Federal Trial Examiners Con-

ference, 345 U. S. 128, 130 (1953); Wong Yang Sung v.

McGrath, 339 U. S. 33, 46 (1950). Before the Administra-

tive Procedure Act, hearing examiners “were in a depend-

ent status” to their employing agency, with their classifi-

cation, compensation, and promotion all dependent on how

the agency they worked for rated them. Ramspeck, 345

U. S., at 130. As a result of that dependence, “[m]any

complaints were voiced against the actions of the hearing

examiners, it being charged that they were mere tools of

the agency concerned and subservient to the agency heads

in making their proposed findings of fact and recommen-

dations.” Id., at 131. The Administrative Procedure Act

responded to those complaints by giving administrative

law judges “independence and tenure within the existing

Civil Service system.” Id., at 132; cf. Wong Yang Sung,

supra, at 41–46 (referring to removal protections as among

the Administrative Procedure Act’s “safeguards . . . in-

tended to ameliorate” the perceived “evils” of commingling

of adjudicative and prosecutorial functions in agencies).

If the Free Enterprise Fund Court’s holding applies

equally to the administrative law judges—and I stress the

“if ”—then to hold that the administrative law judges are

“Officers of the United States” is, perhaps, to hold that

their removal protections are unconstitutional. This

would risk transforming administrative law judges from

independent adjudicators into dependent decisionmakers,

serving at the pleasure of the Commission. Similarly, to

apply Free Enterprise Fund’s holding to high-level civil

servants threatens to change the nature of our merit-

based civil service as it has existed from the time of Presi-

dent Chester Alan Arthur. See Free Enterprise Fund, 561

U. S., at 540–542 (BREYER, J., dissenting).

I have stressed the words “if ” and “perhaps” in the

previous paragraph because Free Enterprise Fund’s hold-

ing may not invalidate the removal protections applicable

Cite as: 585 U. S. ____ (2018) 7

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

to the Commission’s administrative law judges even if the

judges are inferior “officers of the United States” for pur-

poses of the Appointments Clause. In my dissent in Free

Enterprise Fund, I pointed out that under the majority’s

analysis, the removal protections applicable to administra-

tive law judges—including specifically the Commission’s

administrative law judges—would seem to be unconstitu-

tional. Id., at 542, 587. But the Court disagreed, saying

that “none of the positions [my dissent] identifie[d] are

similarly situated to the Board.” Id., at 506.

The Free Enterprise Fund Court gave three reasons why

administrative law judges were distinguishable from the

Board members at issue in that case. First, the Court said

that “[w]hether administrative law judges are necessarily

‘Officers of the United States’ is disputed.” Id., at 507,

n. 10. Second, the Court said that “unlike members of the

Board, many administrative law judges of course perform

adjudicative rather than enforcement or policymaking

functions, see [5 U. S. C.] §§554(d), 3105, or possess purely

recommendatory powers.” Ibid. And, third, the Court

pointed out that the civil service “employees” and adminis-

trative law judges to whom I referred in my dissent do not

“enjoy the same significant and unusual protections from

Presidential oversight as members of the Board.” Id., at

506. The Court added that the kind of “for cause” protec-

tion the statutes provided for Board members was “un-

usually high.” Id., at 503.

The majority here removes the first distinction, for it

holds that the Commission’s administrative law judges are

inferior “Officers of the United States.” Ante, at 1. The

other two distinctions remain. See, e.g., Wiener v. United

States, 357 U. S. 349, 355–356 (1958) (holding that Con-

gress is free to protect bodies tasked with “ ‘adjudicat[ing]

according to law’ . . . ‘from the control or coercive influ-

ence, direct or indirect,’ . . . of either the Executive or

Congress”) (quoting Humphrey’s Executor v. United States,

8 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

295 U. S. 602, 629 (1935)). But the Solicitor General has

nevertheless argued strongly that we should now decide

the constitutionality of the administrative law judges’

removal protections as well as their means of appoint-

ment. And in his view, the administrative law judges’

statutory removal protections violate the Constitution (as

interpreted in Free Enterprise Fund), unless we construe

those protections as giving the Commission substantially

greater power to remove administrative law judges than it

presently has. See Merits Brief for Respondent 45–55.

On the Solicitor General’s account, for the administra-

tive law judges’ removal protections to be constitutional,

the Commission itself must have the power to remove

administrative law judges “for failure to follow lawful

instructions or perform adequately.” Id., at 48. The Merit

Systems Protection Board would then review only the

Commission’s factfinding, and not whether the facts (as

found) count as “good cause” for removal. Id., at 52–53.

This technical-sounding standard would seem to weaken

the administrative law judges’ “for cause” removal protec-

tions considerably, by permitting the Commission to re-

move an administrative law judge with whose judgments it

disagrees—say, because the judge did not find a securities-

law violation where the Commission thought there

was one, or vice versa. In such cases, the law allows the

Commission to overrule an administrative law judge’s

findings, for the decision is ultimately the Commission’s.

See 15 U. S. C. §78d–1(b). But it does not allow the Com-

mission to fire the administrative law judge. See 5

U. S. C. §7521.

And now it should be clear why the application of Free

Enterprise Fund to administrative law judges is im-

portant. If that decision does not limit or forbid Congress’

statutory “for cause” protections, then a holding that the

administrative law judges are “inferior Officers” does not

conflict with Congress’ intent as revealed in the statute.

Cite as: 585 U. S. ____ (2018) 9

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

But, if the holding is to the contrary, and more particularly

if a holding that administrative law judges are “inferior

Officers” brings with it application of Free Enterprise

Fund’s limitation on “for cause” protections from removal,

then a determination that administrative law judges are,

constitutionally speaking, “inferior Officers” would directly

conflict with Congress’ intent, as revealed in the statute.

In that case, it would be clear to me that Congress did not

intend that consequence, and that it therefore did not

intend to make administrative law judges “inferior Offi-

cers” at all.

B

Congress’ intent on the question matters, in my view,

because the Appointments Clause is properly understood

to grant Congress a degree of leeway as to whether partic-

ular Government workers are officers or instead mere

employees not subject to the Appointments Clause. The

words “by Law” appear twice in the Clause. It says that

the President (“with the Advice and Consent of the Sen-

ate”) shall appoint “Ambassadors, other public Ministers

and Consuls, Judges of the supreme Court, and all other

Officers of the United States, . . . which shall be estab-

lished by Law.” Art. II, §2, cl. 2 (emphasis added). It then

adds that “Congress may by Law vest the Appointment of

such inferior Officers, as they think proper, in the Presi-

dent alone, in the Courts of Law, or in the Heads of De-

partments.” Ibid. (emphasis added).

The use of the words “by Law” to describe the estab-

lishment and means of appointment of “Officers of the

United States,” together with the fact that Article I of the

Constitution vests the legislative power in Congress,

suggests that (other than the officers the Constitution

specifically lists) Congress, not the Judicial Branch alone,

must play a major role in determining who is an “Office[r]

of the United States.” And Congress’ intent in this specific

10 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

respect is often highly relevant. Congress’ leeway is not,

of course, absolute—it may not, for example, say that

positions the Constitution itself describes as “Officers” are

not “Officers.” But given the constitutional language, the

Court, when deciding whether other positions are “Officers

of the United States” under the Appointments Clause,

should give substantial weight to Congress’ decision.

How is the Court to decide whether Congress intended

that the holder of a particular Government position count

as an “Office[r] of the United States”? Congress might, of

course, write explicitly into the statute that the employee

“is an officer of the United States under the Appointments

Clause,” but an explicit phrase of this kind is unlikely to

appear. If it does not, then I would approach the question

like any other difficult question of statutory interpreta-

tion. Several considerations, among others, are likely to

be relevant. First, as the Court said in Freytag v. Com-

missioner, 501 U. S. 868, 881 (1991), and repeats today,

ante, at 6, where Congress grants an appointee “ ‘signifi-

cant authority pursuant to the laws to the United States,’ ”

that supports the view that (but should not determinatively

decide that) Congress made that appointee an “Office[r] of

the United States.” Freytag, supra, at 881 (quoting Buck-

ley, 424 U. S., at 126); see also United States v. Germaine,

99 U. S. 508, 511 (1879) (holding that the term “officer”

“embraces the ideas of tenure, duration, emolument, and

duties”). The means of appointment that Congress chooses

is also instructive. Where Congress provides a method

of appointment that mimics a method the Appointments

Clause allows for “Officers,” that fact too supports the

view that (but does not determinatively decide that) Con-

gress viewed the position as one to be held by an “Officer,”

and vice versa. See id., at 509–511. And the Court’s

decision in Free Enterprise Fund suggests a third indica-

tion of “Officer” status—did Congress provide the position

with removal protections that would be unconstitutional if

Cite as: 585 U. S. ____ (2018) 11

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

provided for an “Officer”? See 561 U. S., at 514. That fact

would support (but again not be determinative of) the

opposite view—that Congress did not intend to confer

“inferior Officer” status on the position.

As I said, these statutory features, while highly rele-

vant, need not always prove determinative. The vast

number of different civil service positions, with different

tasks, different needs, and different requirements for

independence, mean that this is not the place to lay down

bright-line rules. Rather, as this Court has said, “[t]he

versatility of circumstances often mocks a natural desire

for definitiveness” in this area. Wiener, 357 U. S., at 352.

No case from this Court holds that Congress lacks this

sort of constitutional leeway in determining whether a

particular Government position will be filled by an “Of-

fice[r] of the United States.” To the contrary, while we

have repeatedly addressed whether particular officials are

“Officers,” in all cases but one, we have upheld the ap-

pointment procedures Congress enacted as consistent with

the Appointments Clause. See, e.g., Edmond v. United

States, 520 U. S. 651, 666 (1997) (holding that Congress’

appointment procedure for military court judges “is in

conformity with the Appointments Clause of the Constitu-

tion”); Freytag, supra, at 888–891 (same as to special trial

judges of the Tax Court); Rice v. Ames, 180 U. S. 371, 378

(1901) (same as to district court “commissioners”); Ex

parte Siebold, 100 U. S. 371, 397–398 (1880) (same as

to “supervisors of election”). But see Buckley, supra, at

124–137.

The one exception was Buckley, 424 U. S., at 124–137, in

which the Court set aside Congress’ prescribed appoint-

ment method for some members of the Federal Election

Commission—appointment by Congress itself—as incon-

sistent with the Appointments Clause. But Buckley in-

volved Federal Election Commission members with enor-

mous powers. They had “primary and substantial

12 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

responsibility for administering and enforcing the” Federal

Election Campaign Act of 1971, id., at 109, an “intricate

statutory scheme . . . to regulate federal election cam-

paigns,” id., at 12. They had “extensive rulemaking and

adjudicative powers,” id., at 110; the power to enforce the

law through civil lawsuits, id., at 111; and the power to

disqualify a candidate from running for federal office, id.,

at 112–113. Federal Election Commissioners thus had

powers akin to the “principal Officer[s]” of an Executive

Department, whom the Constitution expressly refers to as

“Officers,” see Art. II, §2, cl. 1. It is not surprising that

Congress exceeded any leeway the Appointments Clause

granted when it deviated from the Clause’s appointments’

methods in respect to an office with powers very similar to

those of the Officers listed in the Constitution itself.

Thus, neither Buckley nor any other case forecloses an

interpretation of the Appointments Clause that focuses

principally on whether the relevant statutes show that

Congress intended that a particular Government position

be held by an “Office[r] of the United States.” Adopting

such an approach, I would not answer the question whether

the Securities and Exchange Commission’s administrative

law judges are constitutional “Officers” without first decid-

ing the pre-existing Free Enterprise Fund question—

namely, what effect that holding would have on the statu-

tory “for cause” removal protections that Congress provided

for administrative law judges. If, for example, Free Enter-

prise Fund means that saying administrative law judges

are “inferior Officers” will cause them to lose their “for

cause” removal protections, then I would likely hold that

the administrative law judges are not “Officers,” for to say

otherwise would be to contradict Congress’ enactment of

those protections in the Administrative Procedure Act. In

contrast, if Free Enterprise Fund does not mean that an

administrative law judge (if an “Office[r] of the United

States”) would lose “for cause” protections, then it is more

Cite as: 585 U. S. ____ (2018) 13

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

likely that interpreting the Administrative Procedure Act

as conferring such status would not run contrary to Con-

gress’ intent. In such a case, I would more likely hold

that, given the other features of the Administrative Proce-

dure Act, Congress did intend to make administrative law

judges inferior “Officers of the United States.”

III

Separately, I also disagree with the majority’s conclu-

sion that the proper remedy in this case requires a hearing

before a different administrative law judge. Ante, at 12–

13. The Securities and Exchange Commission has now

itself appointed the Administrative Law Judge in ques-

tion, and I see no reason why he could not rehear the case.

After all, when a judge is reversed on appeal and a new

trial ordered, typically the judge who rehears the case is

the same judge who heard it the first time. The reversal

here is based on a technical constitutional question, and

the reversal implies no criticism at all of the original judge

or his ability to conduct the new proceedings. For him to

preside once again would not violate the structural pur-

poses that we have said the Appointments Clause serves,

see Freytag, 501 U. S., at 878, nor would it, in any obvious

way, violate the Due Process Clause.

Regardless, this matter was not addressed below and

has not been fully argued here. I would, at a minimum,

ask the Court of Appeals to examine it on remand rather

than decide it here now. That is especially so because the

majority seems to state a general rule that a different

“Officer” must always preside after an Appointments

Clause violation. In a case like this one, that is a relatively

minor imposition, because the Commission has other

administrative law judges. But in other cases—say, a case

adjudicated by an improperly appointed (but since reap-

pointed) Commission itself—the “Officer” in question may

be the only such “Officer,” so that no substitute will be

14 LUCIA v. SEC

BREYER, J., concurring

Opinioninofpart and, dissenting

BREYER J. in part

available. The majority suggests that in such cases, the

“rule of necessity” may excuse compliance with its new-

found different-“Officer” requirement. Ante, at 12–13,

n. 5. But that still does not explain why the Constitution

would require a hearing before a different “Officer” at all.

* * *

The Court’s decision to address the Appointments

Clause question separately from the constitutional removal

question is problematic. By considering each question in

isolation, the Court risks (should the Court later extend

Free Enterprise Fund) unraveling, step-by-step, the foun-

dations of the Federal Government’s administrative adju-

dication system as it has existed for decades, and perhaps

of the merit-based civil-service system in general. And the

Court risks doing so without considering that potential

consequence. For these reasons, I concur in the judgment

in part and, with respect, I dissent in part.

Cite as: 585 U. S. ____ (2018) 1

SOTOMAYOR, J., dissenting

SUPREME COURT OF THE UNITED STATES

_________________

No. 17–130

_________________

RAYMOND J. LUCIA, ET AL., PETITIONERS v.

SECURITIES AND EXCHANGE COMMISSION

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

[June 21, 2018]

JUSTICE SOTOMAYOR, with whom JUSTICE GINSBURG

joins, dissenting.

The Court today and scholars acknowledge that this

Court’s Appointments Clause jurisprudence offers little

guidance on who qualifies as an “Officer of the United

States.” See, e.g., ante, at 6 (“The standard is no doubt

framed in general terms, tempting advocates to add what-

ever glosses best suit their arguments”); Plecnik, Officers

Under the Appointments Clause, 11 Pitt. Tax Rev. 201,

204 (2014). The lack of guidance is not without conse-

quence. “[Q]uestions about the Clause continue to arise

regularly both in the operation of the Executive Branch

and in proposed legislation.” 31 Opinion of Office of Legal

Counsel 73, 76 (2007) (Op. OLC). This confusion can

undermine the reliability and finality of proceedings and

result in wasted resources. See ante, at 12–13 (opinion of

the Court) (ordering the Commission to grant petitioners a

new administrative hearing).

As the majority notes, see ante, at 5–6, this Court’s

decisions currently set forth at least two prerequisites to

officer status: (1) an individual must hold a “continuing”

office established by law, United States v. Germaine, 99

U. S. 508, 511–512 (1879), and (2) an individual must

wield “significant authority,” Buckley v. Valeo, 424 U. S. 1,

126 (1976) (per curiam). The first requirement is relatively

2 LUCIA v. SEC

SOTOMAYOR, J., dissenting

easy to grasp; the second, less so. To be sure, to exercise

“significant authority,” the person must wield considerable

powers in comparison to the average person who works for

the Federal Government. As this Court has noted, the

vast majority of those who work for the Federal Govern-

ment are not “Officers of the United States.” See Free

Enterprise Fund v. Public Company Accounting Oversight

Bd., 561 U. S. 477, 506, n. 9 (2010) (indicating that well

over 90% of those who render services to the Federal

Government and are paid by it are not constitutional

officers). But this Court’s decisions have yet to articulate

the types of powers that will be deemed significant enough

to constitute “significant authority.”

To provide guidance to Congress and the Executive

Branch, I would hold that one requisite component of

“significant authority” is the ability to make final, binding

decisions on behalf of the Government. Accordingly, a

person who merely advises and provides recommendations

to an officer would not herself qualify as an officer.

There is some historical support for such a requirement.

For example, in 1822, the Supreme Judicial Court of

Maine opined in the “fullest early explication” of the

meaning of an “ ‘office,’ ” that “ ‘the term “office” implies a

delegation of a portion of the sovereign power to, and

possession of it by the person filling the office,’ ” that “ ‘in

its effects[,] . . . will bind the rights of others.’ ” 31 Op.

OLC 83 (quoting 3 Greenl. (Me.) 481, 482). In 1899, a

Report of the Judiciary Committee of the House of Repre-

sentatives noted that “the creation and conferring of an

office involves a delegation to the individual of . . . sover-

eign functions,” i.e., “the power to . . . legislate, . . . execute

law, or . . . hear and determine judicially questions sub-

mitted.” 1 A. Hinds, Precedents of the House of Repre-

sentatives of the United States 607 (1907). Those who

merely assist others in exercising sovereign functions but

who do not have the authority to exercise sovereign pow-

Cite as: 585 U. S. ____ (2018) 3

SOTOMAYOR, J., dissenting

ers themselves do not wield significant authority. Id., at

607–608. Consequently, a person who possesses the “mere

power to investigate some particular subject and report

thereon” or to engage in negotiations “without [the] power

to make binding” commitments on behalf of the Govern-

ment is not an officer. Ibid.

Confirming that final decisionmaking authority is a

prerequisite to officer status would go a long way to aiding

Congress and the Executive Branch in sorting out who is

an officer and who is a mere employee. At the threshold,

Congress and the Executive Branch could rule out as an

officer any person who investigates, advises, or recom-

mends, but who has no power to issue binding policies,

execute the laws, or finally resolve adjudicatory questions.

Turning to the question presented here, it is true that

the administrative law judges (ALJs) of the Securities and

Exchange Commission wield “extensive powers.” Ante, at

2. They preside over adversarial proceedings that can lead

to the imposition of significant penalties on private par-

ties. See ante, at 2–3 (noting that the proceedings in the

present case resulted in the imposition of $300,000 in civil

penalties, as well as a lifetime bar from the investment

industry). In the hearings over which they preside, Com-

mission ALJs also exercise discretion with respect to

important matters. See ante, at 2 (discussing Commission

ALJs’ powers to supervise discovery, issue subpoenas, rule

on the admissibility of evidence, hear and examine wit-

nesses, and regulate the course of the proceedings).

Nevertheless, I would hold that Commission ALJs are

not officers because they lack final decisionmaking author-

ity. As the Commission explained below, the Commission

retains “ ‘plenary authority over the course of [its] admin-

istrative proceedings and the rulings of [its] law judges.’ ”

In re Raymond J. Lucia Companies, Inc. & Raymond J.

Lucia, Sr., SEC Release No. 75837 (Sept. 3, 2015). Com-

mission ALJs can issue only “initial” decisions. 5 U. S. C.

4 LUCIA v. SEC

SOTOMAYOR, J., dissenting

§557(b). The Commission can review any initial decision

upon petition or on its own initiative. 15 U. S. C. §78d–

1(b). The Commission’s review of an ALJ’s initial decision

is de novo. 5 U. S. C. §557(c). It can “make any findings

or conclusions that in its judgment are proper and on the

basis of the record.” 17 CFR §201.411(a) (2017). The

Commission is also in no way confined by the record ini-

tially developed by an ALJ. The Commission can accept

evidence itself or refer a matter to an ALJ to take addi-

tional evidence that the Commission deems relevant or

necessary. See ibid.; §201.452. In recent years, the Com-

mission has accepted review in every case in which it was

sought. See R. Jackson, Fact and Fiction: The SEC’s

Oversight of Administrative Law Judges (Mar. 9, 2018),

http://clsbluesky.law.columbia.edu/2018/03/09/fact-and-fiction-

the-secs-oversight-of-administrative-law-judges/ (as last

visited June 19, 2018). Even where the Commission does

not review an ALJ’s initial decision, as in cases in which

no party petitions for review and the Commission does not

act sua sponte, the initial decision still only becomes final

when the Commission enters a finality order. 17 CFR.

§201.360(d)(2). And by operation of law, every action

taken by an ALJ “shall, for all purposes, . . . be deemed the

action of the Commission.” 15 U. S. C. §78d–1(c) (empha-

sis added). In other words, Commission ALJs do not

exercise significant authority because they do not, and

cannot, enter final, binding decisions against the Govern-

ment or third parties.

The majority concludes that this case is controlled by

Freytag v. Commissioner, 501 U. S. 868 (1991). See ante,

at 6. In Freytag, the Court suggested that the Tax Court’s

special trial judges (STJs) acted as constitutional officers

even in cases where they could not enter final, binding

decisions. In such cases, the Court noted, the STJs pre-

sided over adversarial proceedings in which they exercised

“significant discretion” with respect to “important func-

Cite as: 585 U. S. ____ (2018) 5

SOTOMAYOR, J., dissenting

tions,” such as ruling on the admissibility of evidence and

hearing and examining witnesses. 501 U. S., at 881–882.

That part of the opinion, however, was unnecessary to the

result. The Court went on to conclude that even if the

STJs’ duties in such cases were “not as significant as [the

Court] found them to be,” its conclusion “would be un-

changed.” Id., at 882. The Court noted that STJs could

enter final decisions in certain types of cases, and that the

Government had conceded that the STJs acted as officers

with respect to those proceedings. Ibid. Because STJs

could not be “officers for purposes of some of their duties

. . . , but mere employees with respect to other[s],” the

Court held they were officers in all respects. Ibid. Freytag

is, therefore, consistent with a rule that a prerequisite to

officer status is the authority, in at least some instances,

to issue final decisions that bind the Government or third

parties.*

Because I would conclude that Commission ALJs are not

officers for purposes of the Appointments Clause, it is not

necessary to reach the constitutionality of their removal

protections. See ante, at 1 (BREYER, J., concurring in

judgment in part and dissenting in part). In any event, for

at least the reasons stated in JUSTICE BREYER’s opinion,

Free Enterprise Fund is readily distinguishable from the

circumstances at play here. See ante, at 3–9.

As a final matter, although I would conclude that Com-

mission ALJs are not officers, I share JUSTICE BREYER’s

concerns regarding the Court’s choice of remedy, and so I

join Part III of his opinion.

For the foregoing reasons, I respectfully dissent.

——————

* Even the majority opinion is not inconsistent with such a rule, in

that it appears to conclude, wrongly in my view, that Commission ALJs

can at times render final decisions. See ante, at 10.