Developing the Duffy defect: identifying which government workers are constitutionally required to be appointed.

• Author: Lindstedt, Stacy M.

1. Introduction

   In 2007, a brief article by Professor John Duffy questioned the constitutionality of the appointment method for Administrative Patent Judges. (1) Duffy argued that Administrative Patent Judges were at least inferior officers under the Appointments Clause due to the substantial power they held--and with that contention, questioned the validity of eight years of Board of Patent Appeals and Interferences determinations. (2) The article made such an impact that Congress enacted a statutory patch to correct the issue. (3) But the spark didn't die there--a series of articles followed "The Duffy Defect," (4) questioning the applicability of the Appointments Clause to a range of government actors, from Bankruptcy Judges to the Pay Czar. (5) The impact of Duffy's article reached courtrooms as well, prompting an Appointments Clause challenge in Tucker v. Commissioner (6) In the United States Tax Court, Tucker argued that Appeals Officers or their managers within the Internal Revenue Service (IRS) are inferior officers of the United States because they provide statutorily required Collection Due Process (CDP) hearings. (7) In 2010, the IRS Office of Appeals received over 49,000 CDP hearing requests to determine whether it would move forward with proposed liens or levies on delinquent taxes, and that number increases each year. (8) A determination that CDP conductors are officers could halt compelled tax collection until appropriate personnel are appointed. Even more concerning, such a holding could compel the same result for similarly situated personnel in other federal agencies. A prime example is the Social Security Administration, which received 408,314 requests for benefit-determination hearings in the six months ending in March 2011. (9)

   The Appointments Clause requires that officers of the United States be appointed by one of its specified methods. Principal officers must be appointed by the President with the advice and consent of the Senate. (10) With statutory permission, inferior officers may be appointed directly by the President alone, the Courts of Law, or Heads of Departments. (11) But the Constitution provides little guidance on the characteristics that define an officer. In one of the most thorough opinions to address the distinction between constitutional officers and mere employees, the Tax Court rejected Tucker's arguments, ruling that neither Appeals Officers nor their managers are officers in the constitutional sense and therefore need not be appointed. (12) The court first found the position of Appeals Officer was not "established by Law." (13) The court then found that IRS agents were mere employees because their decisions were not the "last word" of the agency. (14) The court further determined that the statutes establishing CDP hearings assigned those duties to the entire Office of Appeals, rather than to the named position of Appeals Officer, thus precluding the application of the Appointments Clause. (15) The Tax Court concluded that finding Appeals Officers to be constitutional officers would be an inappropriate singling out, because a myriad of other administrative government actors who perform similar duties were not appointed. (16) This Article concludes that, in so holding, the Tax Court provides Congress with a blueprint on how to circumvent the Appointments Clause. (17)

   The Tax Court decision is on appeal to the Court of Appeals for the District of Columbia Circuit. (18) But even if Tucker settles his appellate case, the spark ignited by Duffy's article suggests that this issue will resurface, in and out of the tax context, and in every circuit. This Article goes beyond Duffy's brief analysis to explore the officer-versus-employee distinction that Tucker highlighted and that is bound to become a common challenge to agency action. Duffy looked at the question for patent judges, but this Article sets forth a broader framework that can be applied to any government personnel. In particular, this Article will focus on the requirement that an Office be established by law and what it means for a government actor to exercise significant or sovereign authority. (19)

   To that end, Part I of this Article reviews the Appointments Clause, its history and purposes, and relevant legal precedent leading up to Tucker. To lend the reader context, Part II summarizes the current CDP process and describes the power the IRS Appeals Office holds. Part III summarizes the reasoning and holding in Tucker and analyzes the Tax Court's decision. Part Iv suggests an alternative analysis and, applying that framework, concludes that Appeals personnel should be appointed. Finally, the Article discusses the effects of such a holding and reviews the importance of the issue in context of our current government structure and political state.

2. The Appointments Clause

   1. The Text, History, and Purposes

      The Appointments Clause, article II, section two of the United States Constitution, provides:

      [The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. (20) Officers of the United States must be appointed by one of these methods if their appointment method isn't provided by the Constitution itself. (21)

      The clause serves several important purposes. First, colonists were tired of dealing with offices the King created and filled that did no more than strip them of resources. (22) If legislative and executive powers are vested in the same body, James Madison wrote, "there can be no liberty, because apprehensions may arise lest the same monarch or senate should enact tyrannical laws to execute them in a tyrannical manner." (23) Thus the Appointments Clause divides the powers to enact and to execute laws in order to prevent the possibility that one branch of government could single-handedly create an office and then fill it. Additionally, the legislative branch, with the bulk of the law-making power, would not be tempted to create unnecessarily intrusive and powerful offices, because these offices would only strengthen a different branch, most often the executive. (24)

      The Framers also recognized that "widely distributed appointment power subverts democratic government." (25) The Appointments Clause prevents this diffusion of the appointment power by keeping responsibility for officers close to the top of the political chain within a limited number of identifiable positions. (26) The Framers vested this "most insidious and powerful weapon" (27) in the Executive because one identifiable appointer (or a limited number of Heads of Departments) was thought to be held accountable more easily than a blurred, multimember body. (28) Therefore, as Tucker states, "when Congress establishes an 'inferior Officer' in the Executive Branch, it can vest the appointment power for that officer no further from the President than the Head of a Department whom the President himself has appointed." (29) This restriction prevents Congress from "grant[ing] the appointment power to inappropriate members of the Executive Branch," (30) or in other words, from watering down the appointment power.

      Finally, this structure allows the American people to see which party is responsible if officers go awry. The Framers understood that the President would need help when taking care that the laws were executed faithfully but insisted that he maintain political accountability for the actions of those individuals who aided him. (31) Presumably, such transparency would increase the quality of appointees. As another byproduct, it may encourage the President and Congress to work together when the public tires of delays in appointment confirmations. (32)

      The text of the clause delineates between "inferior Officers" and officers impliedly grander, which courts and scholars have dubbed "principal officers." (33) Principal officers must be appointed by the President with the advice and consent of the Senate; however Congress, as it thinks proper, may direct a less onerous appointment method for inferior officers. If Congress chooses to do so, its choices are limited to removing the Senatorial advice-and-consent requirement and allowing the President alone, Heads of Departments, or the Courts of Law to appoint inferior officers. In essence, Congress's only choice to simplify the process is to enhance the power of another government branch. If Congress does not explicitly provide for an alternative appointment method, an inferior officer must be appointed by the full principal-officer method. (34)

      The Supreme Court and scholars have addressed the distinction between a principal and an inferior officer. (35) But a second distinction is at issue in Tucker--whether Appeals Officers or Appeals Team Managers are officers at all, and consequently, whether the Appointments Clause applies. (36) Beyond the phrase "established by Law" the constitutional text does not provide any clues to what constitutes an officer. (37)

   2. Defining Characteristics of an Officer

      An officer under English common law was one the King enabled to conduct the affairs of the government, becoming involved in the affairs of his subjects without their consent. (38) United States Supreme Court decisions, colonial commentary, and the Constitution reflect a similar understanding. In 1926, the Supreme Court noted:

      The vesting of the executive power in the President was essentially a grant of the power to execute the laws. But the President alone and unaided could not execute the laws. He must execute them by the assistance of subordinates.... As he is charged...