This is kind of complicated, so I apologize in advance.
Administrative Law Judges (ALJs) hear all kinds of important cases for agencies in the federal government, involving the application of complex laws to specific facts. Some cases implicate substantial amounts of taxpayer money, including claims before the two largest employers of ALJs: the Social Security Administration (SSA) and the Department of Health and Human Services (HHS). The cases before these agencies involve people claiming to be unable to work (SSA) and patients and providers seeking payment for medical care (HHS).
Generally the Executive Branch changes at the highest levels with each new President appointing a cabinet (a Secretary and a Commissioner in the case of HHS and SSA, respectively). Most of the other employees of an agency remain the same, with the exception of those appointed directly by the agency heads. A recent Supreme Court case, Lucia v. SEC – Supreme Court of the United States, held that ALJs at the SEC were subject to the Appointments Clause of the Constitution, and therefore have to be appointed directly by the head of an agency. This duty had often been delegated to others within the agency and so the legitimacy of the appointments of virtually all ALJs, and the validity of their decisions, was in question.
Luckily there was an easy solution — have the agency heads directly appoint existing and future ALJs. This has already been done by almost all agencies. The remedy the Lucia Court decided on for improper appointments, a new hearing with a new judge, is unlikely to cause a flood of appeals. So that should’ve been the end of it, but it wasn’t.
Supposedly because of the Lucia decision, the President issued an Executive Order changing the way all ALJs are selected from a competitive system run by the Office of Personnel Management (OPM) to hiring for an unclassified job like any other attorney. This significant change was not in any way required to resolve the problem of improper appointments, as discussed above. So why do it?
For a long time, agency heads have been frustrated with the independence of ALJs. ALJs are employed by agencies, but under the Administrative Procedures Act (APA) are required to make decisions free from influence from them. Imagine a job where you are paid to act independently of your employer’s wishes. The reason for this is so the public has confidence in a fair hearing of their appeals which may be considered to be adverse to government interests. So “judicial independence” (and it’s sister principle “rotational assignment”) have been rooted in the way agencies adjudicate cases from the start.
Why not just hear these cases in federal courts? Couple reasons: first because there are so many of them that they would instantly overwhelm the courts, and; second because it makes sense to have judges specialize in cases with such complicated regulatory schemes. Eventually, after exhausting administrative processes, a very small number of these cases do wind up in federal court.
The discarded OPM system for hiring ALJs was arduous to be sure, but it was also mostly divorced from agency politics and favoritism. OPM studied the characteristics and psychological makeup of successful ALJs and focused the process accordingly. It required 7 years of experience as an attorney and rewarded litigation experience. Many candidates were eliminated by an early examination and a rigorous background investigation and reference checks were required. If you were lucky to make it to the final round a written examination drafting an actual ALJ decision and panel interview of ALJs awaited you. The process was probably more rigorous than for any other position in the federal government and it was based on merit. More importantly, because it was an actual examination Veterans Preference points were added to an applicant’s final score.
Agencies were still free to choose who they wanted from amongst this register of highly qualified, vetted individuals. They interviewed the candidates directly, reviewed their credentials and picked the best ones for their jobs. The ALJ examination process did not prevent agency attorneys or political friends from becoming judges, it just made sure they met the same high standards as any other applicant. It was necessary to ensure full, fair and independent adjudications at the agency review level.
What will come next is still uncertain. It would seem that appointing judges in a less rigorous fashion would implicate the Lucia decision even more, unless the Supreme Court of the United States only intended to require a rubber stamp for these important appointments. Perhaps Congress will enter the fray by enforcing it’s method of selecting ALJs under the APA or insisting on hearings for each appointment as is required for Article III judges. Longer delays in getting to ALJ hearings seems like a given.