Amicus Curiae Brief — Lucia v. SEC, 138 S. Ct. 2044 (2018) (No. 17-130)

No. 17-130

In the Supreme Court of the Anited States

——_—_—— a of 91 6 Jo au

RAYMOND J. LUCIA,

and RAYMOND J. LUCIA COMPANIES, INC.,

Petitioners,

—V —_

SECURITIES AND EXCHANGE COMMISSION,

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

BRIEF OF AMICUS CURIAE

THE FORUM OF UNITED STATES

ADMINISTRATIVE LAW JUDGES

IN SUPPORT OF NEITHER PARTY

=

GERALD MARVIN BOBER

COUNSEL OF RECORD FOR AMICUS CURIAE

THE FORUM OF UNITED STATES

ADMINISTATIVE LAW JUDGES

P.O. Box 14076

WASHINGTON, D.C. 20044-4076

(410) 833-6303

MBOBER@FORUMALJ.ORG

FEBRUARY 27, 2018

~TNNLLLLLL"" L_L_LLL_-__________________________________L___

SUPREME COURT PRESS ¢ (888)958-5705 ¢ BOSTON, MASSACHUSETTS

QUESTION PRESENTED

Whether administrative law judges of the

Securities and Exchange Commission are Officers

of the United States within the meaning of the

Appointments Clause.

il

TABLE OF CONTENTS

Page

Ie EIS © RIS IID rcrcciccccnstesswenccccenecicversenscess i

Se I ee I oacvcnccecscnccsincsasinctinecsacoedusais iv

STATEMENT OF INTEREST ..............00scccccscecessseres 1

SUMMARY OF THE ARGUMENT ..........00.0............. 2

IIE caietiniiinisitnsntinastihinds sins aiiieainitsciecdermidighiomisniseitaiaiaioneben 3

|. REGARDLESS OF WHETHER FEDERAL ALJS

ARE INFERIOR OFFICERS, THEY MUST

CONTINUE TO FUNCTION AS INDEPENDENT

A. The Remarkable History of the APA

Shows Clear Congressional Intent for

Independent Initial Adjudication............... 4

B. For Decades, This Court Has Recog-

nized That AlJs Have Independent

Adjudication Authority ..................2....0002<<00+ 9

C. Independent ALJ Adjudication Balances

Several Constitutional Interests ............. 11

ll. THe Court SHOULD Not DISTURB THE ALJ

TENURE PROTECTIONS ESTABLISHED BY

A. The Court Lacks Jurisdiction to Address

ALJ Tenure Protections Because There

Is No Case or Controversy About That

EBA oS Sa na SE 16

ill

TABLE OF CONTENTS — Continued

Page

B. Eliminating ALJ Independence Would

Cause — Not Solve — Constitutional

IE Ae Cae PNB bs sare 20

C. This Case Is Readily Distinguished

from Free Enterprise Fund....................:. 21

See itriitidanicnsLentlterudieisviginnsisassenaiantatessaniva 24

iv

TABLE OF AUTHORITIES

Page

CASES

Abbott Lab.’s v. Gardner,

I ssc. its ccthapicsepccnmmoundnabandeasedois 17

Adickes v. Kress & Co.,

ERE LES DERE Mime des lon Pee 18

Butz v. Economou,

NEES as ee ne 10, 12

Caperton v. A.T. Massey Coal Co., Inc.,

Be i: CII crccersencccerncccsesetccactuseseantenses 13

DaimlerChrysler Corp. v. Cuno,

ig tI ESS aS at Par 16

DeShaney v. Winnebago County Dep't of Soc.

Servs., 489 U.S. 189 (1989) ............0...0000cceeeeeeeee 18

Dothard v. Rawlinson,

IRIE Te cag RABAT 18

Duignan v. United States,

Tn ao 18

Fed. Mar. Comm'n v. S.C. State Ports Auth.,

4) & | SE ees 1, 10, 22

Free Enterprise Fund v. Public Company

Accounting Oversight Board,

Ie Te ie IE cicciceneieccenessecoscieceeee 21, 22, 23

Gibson v. Berryhill,

Oe I seuicdscccscdsicnacccdcaitnesssccdedocencue 11

Husty v. United States,

ARSENE PIER NE Te se Bade. 18

TABLE OF AUTHORITIES—Continued

Page

In re Murchison,

nn I aa 11

Irvine v. California,

gt PE PE eee om OE ee 18

Myers v. United States,

I ns 22

Nat! Park Hospitality Ass'n. v. Dep't of the

Interior, 538 U.S. 803 (2003).....................00.. 17, 19

Opp Cotton Mills v. Adm’r,

EERE RT RR Oe A Ae 1]

Ramspeck v. Federal Trial Examiners

Conference, 345 U.S. 128 (1953)......... 9, 10, 11, 12

Reno v. Catholic Soc. Servs., Inc.,

a 17

Republican Party of Minn. v. White,

De is Pe iiccncscscsncunecsancssacdnacibicsencsesons 13

Shapiro v. Soc. Sec. Admin.,

800 F.3d 1332 (Fed. Cir. 2015) ..0000.0......ccccecceeee. 22

Soc. Sec. Admin. v. Anyel,

By ee is Se Gia vcceindcicesskscccdsccesciveoccceiun 22

Tumey v. Ohio,

I 12

United Pub. Workers v. Mitchell,

I: I ii icco ccc initnicissedtassnntdnnseencsieai 14

United States Civil Serv. Comm’n v. Nat'l]

Ass'n of Letter Carriers,

es nl 14

19

Continental Congress 1774-1789, at 626 (Gaillard Hunt ed.,

1914). And the Minutes from a February 1778 session of

the Continental Congress described continental-level civil!

and military officers as “officer[s] of the United States.”

Minutes of Feb. 9, 1778, in 10 Journals of the Continental

Congress, supra, at 138-40 (Worthington Chauncey Ford

ed., 1908); see also generally Officers, supra, at 475-79

(providing more in-depth explanation of evidence from the

Journals of the Continental Congress and Series I of the

Readex Early American Newspapers database containing

340,000 newspaper issues from 1690 to 1876).

In addition, on a number of occasions the Founders

used a variety of distinct phrases to describe Article

II officers—suggesting that the descriptor “Officers of

the United States” was not considered a precise term of

art. See Officers, supra, at 474. For example, Alexander

Hamilton in Federalist No. 77 discussed removal and

appointment procedures for “officers of the government,”

the Anti-Federalist essayist writing as “The Federal

Farmer” described Article II officers as “officers of the

union,” and Representative Roger Sherman used the

phrases “officers of the United States” and “officers

of the Federal Government” interchangeably during a

1790 congressional debate on militia legislation. See The

Federalist No. 77, at 396; The Federal Farmer, Anti-

Federalist No. 76-77: An Anti-Federalist View of the

Appointing Power Under the Constitution (1788), in The

Anti-Federalist Papers, supra, at 293, 294 (Bill Bailey

ed., n.d.), https://perma.ce/X M7Q-X V4B; 14 Documentary

History of the First Federal Congress of the United

States of America, 4 March 1789-3 March 1791, at 120-21

(William Charles diGiacomantonio et al. eds., 1995).

20

Also, examination of every use of the phrase “officers

of the United States” in the drafting and ratification

debates, the Federalist Papers, and the Borden collection

of Anti-Federalist essays revealed no direct definition

of the precise scope of the phrase. See Officers, supra,

at 468 & n.131, 474-75. But see id. at 475 & n.164 (noting

one contradictory use of the phrase during the first

congressional debates). This may be because the term

“officer” had a “common and known acceptation” at the

time. See 4 The Debates in the Several State Conventions,

on the Adoption of the Federal Constitution 454-55

(Jonathan Elliot ed., Washington, Jonathan Elliot 2d

ed. 1836) (hereinafter Elliot’s Debates) (recording an

1806 congressional debate statement); see also 8 Annals

of Cong. 2294, 2306 (1799) (recording Rep. Harper’s

reference to the “universally received signification of the

term ‘office””).

C. Founding-era dictionaries and commentaries

Because the phrase “Officers of the United States” is

not a term of art for especially important officials, it makes

sense to turn to the late eighteenth century meaning of

the standalone term “officer” to determine the scope of

federal officials under the Appointments Clause.

The majority of the ten Founding-era dictionaries

that amicus surveyed defined a civil “officer” to be

a “man employed by the public(k)” and described an

“office” as a “public employment” or a “public charge.”

See, e.g.,2 Samuel Johnson, A Dictionary of the English

Language (London, J.F. & C. Rivington 6th ed. 1785)

(“Officer”: “1. A man employed by the publick”; “2. A

commander in the army;” “3. One who has the power

21

of apprehending criminals, or man accountable to the

law”); see also Officers, supra, at 486-88 (cataloguing the

dictionary definitions). The only one of the ten Founding-

era dictionaries with a materially different definition

explained that the word “officer” “in general signifies any

person that has a peculiar post or business appointed him.”

See Thomas Dyche & William Pardon, A New General

English Dictionary (London, Toplis & Bunney 18th

ed. 1781); Officers, supra, at 486 & n.226. Chief Justice

Marshall recounted a similar definition several decades

later in an 1823 circuit court opinion, explaining: “An

office is defined to be ‘a public charge or employment,’

and he who performs the duties of the office, is an officer.

If employed on the part of the United States, he is an

officer of the United States.” United States v. Maurice, 26

F. Cas. 1211, 1214 (C.C.D. Va. 1823) (No. 15,747); see also

Noah Webster, An American Dictionary of the English

Language (New York, S. Converse 1828) (“officer”: a

“person commissioned or authorized to perform any

public duty”).

The ordinary-language dictionary definitions and

Chief Justice Marshall’s explanation are consistent with

eighteenth century legal dictionary definitions of “officer,”

which similarly incorporate the concept of a public charge

or duty. See Officers, supra, at 488-90. For example,

Matthew Bacon states that “the Word Officium principally

implies a Duty, and ... the Charge of such Duty.” 3 Matthew

Bacon, A New Abridgment of the Law *718-19 (London, C.

Bathurst 4th ed. 1778). He then observes that officer status

is not dependent on the significance or level of importance

of one’s duty: An officer “is not the less a Public Officer,

where his Authority is confined to narrow Limits; because

it is the Duty of his Office, and the Nature of that Duty,

22

which makes him a Public Officer, and not the Extent of his

Authority.” /d. at *719. Furt er underscoring that one’s

eighteenth century status as an “officer” was unrelated to

discretion or final decisionmaking, Bacon also describes

a class of “Ministerial Offices.” See id. This group

included positions like the “Office of Register of Policies

of Assurance,” which “required only the Skill of Writing

after a Copy,” and recordkeepers like chirographers who

kept records of court-imposed fines. See id. at *734; Dyche

& Pardon, supra (defining “Chirographer”).

The bestselling eighteenth century dictionary by

Nathan Bailey used the words “officer(s)” and “office(s)”

more than 500 times to define other terms. See Officers,

supra, at 485 (discussing the “officer” and “office”

references); Gregory E. Maggs, A Concise Guide to Using

Dictionaries from the Founding Era to Determine the

Original Meaning of the Constitution, 82 Geo. Wash. L.

Rev. 358, 361, 367-81 (2014) discussing Bailey’s dictionary).

Treating Bailey’s dictionary as a self-contained corpus,

amicus examined the context of each of those references.

See Officers, supra, at 485. The dictionary characterized

as “officers” numerous assistants, recordkeepers, and

other public officials engaged in menial tasks. See id. at

490; see generally N. Bailey, An Universal Etymological

English Dictionary (London, J. Murray 25th ed. 1783).

For example, “Messengers [of the Exchequer]” were

“officers belonging to that Court, who attend the Lord

Treasurer, and carry his letters and orders.” Bailey,

supra, (Messengers). A sword-bearer was “an officer

who carries the sword of state before a magistrate.” See

id. (Sword). Satellites were “Life-Guards, or Officers

attending upon a Prince.” /d. (Satellites). A“Swabber” was

23

“an inferior officer on board a ship of war, whose office it

is to take care that the ship be kept clean.” Jd. (Swabber).

A “sewer” was “an officer who comes in before the meat

for a King or Nobleman, and places it upon the table.” /d.

(Sewer). A “Gauger” was “an officer employed in gaging,”

or measuring the contents of a vessel. /d. (Gager/Gauger;

Gage/Gauge). A Chafe-Wax was “an Officer belonging to

the Lord Chancellor, who fits the wax for [the] sealing of

writs.” Jd. (Chafe). An “Assay-Master” was “an officer of

the Mint, who weighs the bullion, and takes care that it

be according to the national standard.” Jd. (Assay). And

a butler was “an officer that provides the king’s wines.”

Id. (Botiler/Butler). See also Officers, supra, at 490-94

(detailing a lengthier list).

The dictionary’s characterization of these officials

as “officers” would have influenced the late eighteenth

century American understanding of the term even though

the new constitutional system embraced few of these

specific positions. See Officers, supra, at 492. But see Act

of Aug. 4, 1790, ch. 5, § 6, 1 Stat. 145, 154 (1790) (repealed

1799) (providing for gaugers); Act of Apr. 2, 1792, ch. 16,

§ 1, 1 Stat. 246, 246 (1792) (providing for an Assayer). The

Framers intentionally rejected the British approach for

creating offices and appointing officers, but no evidence

suggests the Constitution imported an altered meaning of

the word “officer” itself. See Officers, supra, at 493-94. One

complaint underlying the colonists’ war for independence

was that the King had “erected a multitude of New

Offices, and sent hither swarms of Officers to harrass

our people.” The Declaration of Independence para. 12

(U.S. 1776). Under British practice the King had power

to both create and fill public offices. See The Federalist

No. 69, at 360-61 (A. Hamilton); Officers, supra, at 492-

24

93 (further describing British practice). The Framers

rejected this potential for abuse, cleanly separating the

power to create offices from the power to appoint officers

to fill them. See Mascott, Constitutionally Conforming

Agency Adjudication, supra, at 28; Volokh, supra, at 769.

The Court should not acquiesce in resisting this safeguard

by ratifying the lower courts’ expansive creation of a

non-officer “employee” class free from separation-of-

powers limits that preserve accountable and transparent

governance.

D. Contextual uses of “Officer” and “Officers of

the United States” in Founding-era sources

debating the Constitution

The Federalist Papers, the Borden collection of

Anti-Federalist essays, and the drafting debates contain

hundreds of references to the terms “officer(s)” and

“office(s).” See Officers, supra, at 468 n.131. Examining

their context, as well as every reference to “Officers of

the United States” in the ratification debates, strongly

suggests that “officer” had a very broad scope in the

late eighteenth century. See Officers, supra, at 494-504

(detailing this analysis and explaining any potential

counter-examples). The Framers and ratifiers believed

that thousands of officials would qualify as “officers.” In

fact, their statements do not appear to account for any

class of ongoing non-officer positions other than a class of

“servants” and “attendants.” See Officers, supra, at 450,

503; see also, e.g., Federal Farmer XVIII, supra, in The

Anti-Federalist Papers, supra, at 162 (referring to the

parties who would work in the capital city as the federal

government’s “own members, officers, and servants”).

25

Following are several illustrative examples. During

the North Carolina ratification debate, Mr. Maclaine

described “inferior officers of the United States” as

“petty officers” who maintained “trifling” duties. 4

Elliot’s Debates, supra, at 43-44; see also Officers, supra,

at 496-97. Mr. Taylor observed that if the Constitution

were adopted, “we shall have a large number of officers

in North Carolina under the appointment of Congress”

because, for example, there would be “a great number of

tax-gatherers.” See 4 Elliot’s Debates, supra, at 36. During

the drafting debates, Gouverneur Morris observed that

the executive would have the duty to appoint “ministeral

officers of the administration of public affairs.” 2 Farrand’s

Records, supra, at 52. Later in the drafting process,

James Wilson observed that the appointing power would

encompass even “tide-waiter(s],” a position that Samuel

Johnson’s dictionary described as an “officer who watches

the landing of goods at the customhouse.” See Johnson,

supra (Tidewaiter).

The Anti-Federalist essayist known as the “Federal

Farmer” expressed concern that federal taxation powers

would lead to “many thousand officers solely created by,

and dependent upon the union.” The Federal Farmer, Anti-

Federalist No. 41-43 (Part I): The Quantity of Power the

Union Must Possess Is One Thing; The Mode of Exercising

the Powers Given is Quite a Different Consideration (1788),

in The Anti-Federalist Papers, supra, at 148, 149. James

Madison disagreed and believed the federal government

would have relatively few officers. See Officers, supra,

at 501-02 (discussing these various positions). But this is

because Madison believed that the federal government’s

“few and defined” powers would require it to have only one

officer for every “thirty or forty, or even more, officers” in

26

the states, which had “numerous and indefinite” powers.

The Federalist No. 45, at 241. In particular, Madison

concluded that state officers would exceed federal officers

“beyond all proportion, both in number and influence,” see

id. at 240, because he believed that state officers would

collect taxes on behalf of the federal government if it ever

imposed a federal internal revenue tax, see id. at 241.

Madison clearly believed, however, that the term

“officer” itself had a broad scope, embracing many

officials. See Officers, supra, at 502. In describing state

and local officers, he referred to “the justices of peace,

officers of militia, ministerial officers of justice, with

all the county, corporation, and town officers ... having

particular acquaintance with every class and circle of

people.” See The Federalist No. 45, at 240. Tellingly,

despite the strong disagreements between Federalists and

Anti-Federalists over whether the Constitution permitted

too strong a concentration of centralized power, writers

on both sides shared the same understanding of the broad

meaning of the term “officer.”

This understanding of “officer” also extended back

to the time of the Continental Congress. See generally

Officers, supra, at 537-45. For example, a 1778 resolution

regarding military hospitals characterized “apothecaries,

mates, stewards, [and] matrons” as “officers.” See

Minutes of Feb. 6, 1778, in 10 Journals of the Continental

Congress, supra, at 127, 130 (Worthington Chauncey

Ford ed., 1908). These individuals had nondiscretionary

duties far below the level that contemporary courts

have considered mandatory for “officer” status. A 1775

Continental Congress committee report indicated that the

role of mates and apothecaries was to “visit and attend

27

the sick.” See Minutes of July 27, 1775, in 2 Journals of

the Continental Congress, supra, at 210. The 1775 report

also characterized clerks and storekeepers as “officers,”

observing that storekeepers were “[tjo receive and

deliver the bedding and other necessaries by order of the

[hospital] director” and clerks were “[t]o keep accounts

for the director and store keepers.” See id. at 210-11

(discussing “the choice of officers”). But see Officers,

supra, at 539-40, 542 & nn.589, 599 (explaining that

the actual appointment methods used to fill a number of

these positions appeared to be in some tension with the

description of them as “office[s}”).

Several Continental Congress-Era handwritten lists

of “officers” on file at the National Archives also suggest

that officials with relatively insignificant responsibilities

were considered officers at that time. See Officers, supra,

at 540-41. A 1783 document titled “A List of the Officers”

listed positions as low-level as clerk and clerk/interpreter.

See A List of the Officers in the Department of Foreign

Affairs and Their Appointments (1783), microformed on

Microcopy No. 247, Roll 22 (Nat’l Archives & Records

Serv.). A 1775-76 document titled “Officers appointed”

listed an engineer, a storekeeper, and a surgeon along

with colonels, majors, and brigadier generals. See Officers

Appointed (n.d.), microformed on Microcopy No. 247,

Roll 195, Item No. 178 (Nat’l Archives & Records Serv.).

The reference to just “officers” in the titles of these two

records appears deliberate as several other archives

records instead used the label “officers & c.” when listing

lower-level non-officers like messengers. See Officers,

supra, at 540-41; see also id. at 513-15 (explaining that

Founding-era messengers and office-keepers likely were

not considered “officers” because their responsibilities

did not include any governmental tasks imposed by law).

28

E. Early appointment practices

Early appointment practices during the First

Congress confirm the understanding of Article II “officers”

as officials responsible for an ongoing statutory duty.

The only categories of civil executive officials in ongoing

positions cleanly excluded from Article II appointment

practices were “(i) positions more like those of ‘servants’

or ‘attendants’ and (ii) ‘deputies’ acting as agents in place

of an officer, where the officer was subject to personal legal

liability for the deputy’s actions.”* Officers, supra, at 450.

Clerks maintaining legislatively required records

were appointed by department heads in conformity with

Article Il. See, e.g., Act of Sept. 11, 1789, § 2, 1 Stat.

67, 68 (authorizing the heads of the three executive

departments to appoint clerks); see also Officers, supra,

at 508, 511-15. Officials as varied as internal revenue

inspectors and supervisors, lighthouse keepers and

superintendents, ship masters and first, second, and third

mates on revenue cutters (although not “mariners” and

“boys”), customs collectors, naval officers, and surveyors

also were selected in compliance with the Appointments

Clause. See Officers, supra, at 507-37 (further discussing

the First Congress’s appointment practices). But see id.

(noting possible counter-examples like certain officials in

3. These deputy marshals, collectors, surveyors, and naval!

officers constituted a relatively small category who carried out the

duties of their primary officer as his representative. Consequently,

they were not considered officers in their own right. See id. at 509,

515-20. Other early-level positions bearing the moniker “deputy”

were appointed in compliance with Article I] where they did not

have the same agent-principal liability relationship with a higher-

level officer. See id. at 520-22 (discussing, among other positions,

deputy apothecary generals charged with safekeeping medical

equipment and deputy postmasters).

29

the Territories, id. at 528 n.508, and the National Bank,

id. at 531). Contrary to the suggestion of some modern

judicial opinions that Congress can determine “officer”

status based on whether it chooses to directly tie statutory

duties to a particular official, see, e.g., Landry, 204 F.3d

at 1133, the original meaning of “officer” encompassed

every official who happened to carry out a statutory

task—whether Congress had explicitly assigned it to

them or not. For example, clerks who kept statutory

records were considered “officers” even where statutes

just generally required executive recordkeeping without

assigning clerks to the job. See Officers, supra, at 507-08,

513-15. Analogously, today if Congress were to authorize

an agency to promulgate rules, every official participating

in that task would be an “officer” under the statutory duty

standard.

In contrast, messengers and office-keepers did not

carry out legislative tasks authorized or required by

Congress, so they were not “officers” and Congress

consequently did not need to establish their positions

“by Law.” See U.S. Const. art. Il, § 2 (requiring that

Congress establish the appointments for officers “by

Law”). Individuals in these positions served more as

assistants and carried out nonstatutorily required

tasks like “arranging and preserving the newspapers,

and the printed copies of the laws and documents of

Congress,” as well as “putting up and packing despatches

and other papers for transmission by mail.” See Louis

McLane, The Following Arrangement of the Gentlemen

Employed, the Distribution of Their Duties, and Rules

for Their Performance, Are Directed to be Observed in

the Department of State, from and After the 30th June,

1833 (1833), microformed on M800, Roll 1, Vol. 1A (Nat’l

Archives & Records Serv.).

30

In apparent contrast to the clerk/messenger dividing

line, one set of positions that at least initially did not

conform with the statutory-duty “officer” construct is

lower-level customs officials like weighers, measurers,

gaugers, and inspectors. See Officers, supra, at 523-27.

Numerous Founding-era writings described them as

“officers,” but they were not selected in compliance with

the Appointments Clause in 1789. They were instead

subject to hiring by customs collectors who did not head a

department. Compare, e.g., Letter from Nathaniel Smith

to George Washington (July 10, 1789), in 3 The Papers

of George Washington 176 (Dorothy Twohig ed., 1989)

(requesting to be considered for the “office” of gauger),

and Notes on the Collection Bill (HR-11) (n.d.), in 16

Documentary History of the First Federal Congress,

4 March 1789-3 March 1791, at 1052 (Charlene Bangs

Bickford et al. eds., 2004) (describing an inspector as

an “officer” in notes on draft legislation), with Act of

July 31, 1789, ch. 5, § 5, 1 Stat. 29, 36-37 (repealed 1790)

(authorizing appointment by collectors); see also Officers,

supra, at 523-27. But Congress addressed this situation in

1799, requiring the “approbation” of the Secretary of the

Treasury for the appointment of these customs officials.

See Act of Mar. 2, 1799, ch. 22, § 21, 1 Stat. 627, 642

(amended 1811). And, an Attorney General opinion issued

in 1843 concluded that customs inspectors are Article I]

officers, observing that any statute permitting customs

collectors to appoint inspectors would be “null and void

under the constitution.” See Appointment & Removal of

Inspectors of Customs, 4 Op. Att’y Gen. 162, 164-65 (1843).

Measurers, gaugers, and weighers carried out the

statutory duties of measuring imported goods for the

purposes of calculating customs duties. See Tariff Act of

1789, ch. 2, § 1, 1 Stat. 24, 24-26 (repealed 1790); Act of Aug.

31

4, 1790, § 53, 1 Stat. 145, 172 (repealed 1799). Inspectors

carried out the statutory duties of preventing ships from

unloading goods without a permit and searching ships

suspected of smuggling. See Act of Aug. 4, 1790, §§ 30-31,

1 Stat. at 164-65; Officers, supra, at 524 & n.178. Perhaps

Congress did not initially provide for these positions by

statute because their payment-for-service compensation

structures mimicked aspects of non-officer government

contracting positions, a category involving irregular

government work existing at the time of the Founding

just like today. See Act of Aug. 4, 1790, § 53, 1 Stat.

at 172 (providing for payment in accordance with the

amount of goods measured); Officers, supra, at 534-37.

But see Nicholas R. Parrillo, Against the Profit Motive:

The Salary Revolution in American Government 1-48

(2013) (explaining that fees for services were a routine

compensation mechanism for many governmental officials

in the eighteenth century).

Ill. The Court should not distort the meaning of the

Appointments Clause based on alleged practical

implementation concerns.

In its decision here, the D.C. Circuit suggested that

keeping ALJs from the reach of the Appointments Clause

is a necessary protection to maintain independence in

agency adjudicative proceedings. See Lucia, 832 F.3d at

288-89 (discussing “independence” through “tenure and

compensation” and declining to “cast aside a carefully

devised scheme” by concluding that ALJs are “officers”).

But when considering the Appointments Clause in

Buckley, this Court clearly instructed that practical

fears such as the potential partiality of government

decisionmakers “do not by themselves warrant a distortion

of the Framers’ work.” See 424 U.S. at 134 (refusing to

32

reject constitutional appointment requirements based

on the fear that presidential appointment would unduly

influence federal election com”iissioners who administer

presidential campaign rules).

In any event, the politically appointed SEC

Commissioners have the last word on whether an ALJ’s

initial decision stands as the agency’s final determination,

or whether the Commissioners will instead review the

decision. See 15 U.S.C. § 78d-1(b). But see id. (giving

a party a right to Commission review in certain

circumstances). When choosing to review, the SEC may

consider the matter de novo. See Lucia, 832 F.3d at 286.

Further, the SEC Commissioners have statutory authority

to adjudicate matters in the first instance if they so choose.

See 15 U.S.C. § 78d-1(a).

To be sure, an ALJ’s initial determination, as a

practical matter, often is the last word from the agency in

adjudication. See 15 U.S.C. § 78d-1(¢) (providing for ALJ

decisions to be deemed “the action of the Commission” if

there is no review). And when presiding over cases, ALJs

have the power to take final action with respect to many

matters that impact private rights like issuing subpoenas

and ruling on offers of proof. See 17 C.F.R. § 200.14(a). But

at the end of the day, whether ALJs meet a theoretical non-

Article III standard of independence is immaterial in the

sense that the politically appointed Commissioners have

the final say over adjudication. If this Court believes that

democratically accountable, constitutional appointment

of adjudicative officials raises independence concerns,

the Court should revisit the proper scope of matters that

can be resolved by non-Article III adjudication in the first

place. See Stern v. Marshall, 564 U.S. 462, 482-83 (2011);

see also Mascott, Constitutionally Conforming Agency

Adjudication, supra, at 42-51. The Court should not

33

compound any potential concerns over agency adjudicators

lacking impartiality and improperly exercising judicial

power with the additional error of insulating executive

branch adjudicators from the Appointments Clause.

The Framers instituted the Appointments Clause

as the mechanism to ensure excellence in government

service and democratic accountability in the exercise

of government power. See Freytag, 501 U.S. at 883-84.

Permitting agency staff to hire ALJs enables department

heads to distance themselves from public responsibility

for adjudicative decisions issued from their agency. Cf

Free Enterprise Fund, 561 U.S. at 497-98 (tying public

accountability to “a clear and effective chain of command”).

Commissioners and department heads have the power to

issue adjudicative decisions in line with their priorities.

They should also bear the public responsibility—and, if

necessary, the blame—for decisions issued by adjudicators

appointed under their headship.

If this Court concludes consistent with Article II’s

original meaning that ALJs are “officers,” aspects of

the competitive-based selection of ALJs may remain

permissible, at least in some form. See Officers, supra, at

550-56 (explaining potential constitutional concerns with

aspects of the competitive service system as currently

structured). Article II assigns Congress the power of

establishing offices “by Law.” U.S. Const. art. II, § 2, el. 2.

Since the Founding, that power to create offices has been

interpreted to carry with it the authority to stipulate at

least some credentials that must be held by the inferior

officers filling those posts. See, e.g., Volokh, supra, at 747;

Officers, supra, at 551; see also Edward S. Corwin, The

President: Office and Powers, 1787-1948; History and

Analysis of Practice and Opinion 88-89 (3d ed. 1948).

34

These issues are multi-faceted and should be further

briefed and vetted in an appropriate case. Here, a finding

that the SEC’s ALJs are “Officers of the United States”

under the historical “statutory duty” standard—and thus,

department head appointment is required—would answer

the appointments-related aspect of the specific question

presented to the Court.

CONCLUSION

For the reasons stated, this Court should reverse the

D.C. Cireuit’s judgment.

Respectfully submitted,

WILuiaM 8. Consovoy

Counsel of Record

J. MICHAEL CONNOLLY

Consovoy McCartuy Park PLLC

GEORGE Mason UNIVERSITY

ANTONIN SCALIA Law SCHOOL

SuPREME Court CLINIC

3033 Wilson Blvd., Suite 700

Arlington, VA 22201

(703) 243-9423

will@consovoymecarthy.com

Attorneys for Amicus Curiae

February 28, 2018