Constitutional Tensions in Agency Adjudication

• Author: Christopher J. Walker
• Position: Professor of Law, The Ohio State University Moritz College of Law
• Pages: 2679-2704

2679

Constitutional Tensions in Agency

Adjudication

Christopher J. Walker*

ABSTRACT: Last Term the Supreme Court decided two cases—Lucia v.

SEC and Oil States Energy Services v. Greene’s Energy Group—that

illustrate the potential constitutional tensions in mod ern agency

adjudication: the importance of political accountability, yet the dangers of

political control. As part of the Iowa Law Review’s Administering Patent

Law Symposium, this Essay examines these constitutional tensions and

assesses two ways the Supreme Court (or Congress) could attempt to resolve

them—i.e., by turning to Article III adjudication or by transforming agency

adjudicators into “true adjuncts” of Article III courts. The Essay concludes

by revisiting the patent adjudication proceedings at issue in Oil States to

explore how these constitutional tensions and potential solutions may play

out at the U.S. Patent and Trademark Office.

I.INTRODUCTION ........................................................................... 2680

II.CONSTITUTIONAL TENSIONS IN LUCIA & OIL STATES .................. 2681

A.THE NEED FOR POLITICAL ACCOUNTABILITY IN

AGENCY ADJUDICATION ......................................................... 2681

B.THE DANGERS OF POLITICS IN AGENCY ADJUDICATION ............ 2684

III. RECONCILING CONSTITUTIONAL TENSIONS ............................... 2687

A.REPLACE AGENCY ADJUDICATORS WITH ARTICLE

III JUDGES ............................................................................. 2688

B.TRANSFORM AGENCY ADJUDICATORS INTO ARTICLE

III ADJUNCTS ........................................................................ 2691

IV.THE FUTURE OF ADJUDICATION AT THE PATENT OFFICE ........... 2694

A.POLITICAL ACCOUNTABILITY IN PTAB ADJUDICATION ............ 2695

B.INSULATION FROM POLITICS IN PTAB ADJUDICATION ............. 2699

V.CONCLUSION .............................................................................. 2703

*

Professor of Law, The Ohio State University Moritz College of Law.

2680 IOWA LAW REVIEW [Vol. 104:2679

I. INTRODUCTION

Last Term the Supreme Court decided two cases that could potentially

shape the constitutional future of agency adjudication. First, in Lucia v. SEC,

the Court held that administrative law judges (“ALJ(s)”) at the Securities and

Exchange Commission (“SEC”) are unconstitutionally appointed because

they are, at minimum, inferior “officers of the United States,” yet were not

appointed by the President, the head of a department, or a federal court as

required by Article II.1 Second, in Oil States Energy Services v. Greene’s Energy

Group, the Court upheld the constitutionality of certain agency adjudications

at the U.S. Patent and Trademark Office (“Patent Office”) against challenges

that they unconstitutionally strip parties of property rights in issued patents.2

The separate opinions issued in these cases illustrate the constitutional

tensions in modern agency adjudication. On the one hand, the Court’s

treatment of the Appointments Clause and related constitutional removal

principles in Lucia seems to dictate that agency adjudicators must be

appointed and easily removed by the President or department heads in order

to provide for sufficient presidential control over federal regulatory activities.

One way to frame these appointment and removal concerns is in terms of

political accountability: The politically appointed and removable head of the

agency must have some form of final decision-making authority. As Justice

Thomas, joined by Justice Gorsuch, put it in his Lucia concurrence, “the

Appointments Clause maintains clear lines of accountability—encouraging

good appointments and giving the public someone to blame for bad ones.”3

On the other hand, such political control over agency adjudication that

implicates core life, liberty, or property interests potentially raises due process

concerns. One concern is that agencies function as both the enforcer and the

adjudicator.4 Another is the injection of politics into the adjudication of

disputes between private parties and/or those implicating private rights.

Insulating agency adjudicators from political influence thus becomes a

central objective. Indeed, Congress expressly addressed this issue of

adjudicative independence in the Administrative Procedure Act (“APA”).5 As

an administrative law professors’ amicus brief in Lucia underscored, “[o]ne of

the core features of the APA was a complicated set of statutory safeguards to

1. Lucia v. SEC, 138 S. Ct. 2044, 2049 (2018) (citing the Appointments Clause, U.S.

CONST. art. II, § 2, cl. 2).

2. Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365, 1375,

1379 (2018).

3. Lucia, 138 S. Ct. at 2056 (Thomas, J., concurring).

4. See, e.g., Kent H. Barnett, Due Process for Article III—Rethinking Murray’s Lessee, GEO.

MASON L. REV. (forthcoming 2019) (manuscript at 23), https://ssrn.com/abstract=3244637.

5. See, e.g., 5 U.S.C. § 7521(a) (2012) (“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 employed only for good cause established and determined by the Merit Syst ems

Protection Board on the record after opportunity for hearing before the Board.”).