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Lucia v. SEC - 138 S. Ct. 2044 (2018)


The Appointments Clause prescribes the exclusive means of appointing officers to posts as ALJs. Only the President, a court of law, or a head of department can do so. 


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 concluding 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 appointed. 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 Departments” 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 not “Officers of the United States,” but are instead mere employees—officials with lesser responsibilities who are not subject to the Appointments Clause.


Was the appointment of Judge Elliot subject to the Appointment Clause?




The Court concluded that SEC ALJs qualified as officers under U.S. Const. art. II, § 2, cl. 2, where, similar to United States Tax Court special trial judges (STJs), they received career appointments, the appointments were created by statute, they exercised significant discretion to ensure fair and orderly adversarial hearings, they issued decisions containing factual findings, legal conclusions, and appropriate remedies, and those decisions became final if the SEC declined review. Considering the distinctions between the SEC's ALJs and the Tax Court's STJs, the ability to enforce discovery orders through contempt proceedings and a different standard of review, made no difference for purposes of officer status. Thus, Lucia  was entitled to a new hearing before another ALJ as the judge who heard his case did so without an appropriate appointment.

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