IS THE ENVIRONMENTAL APPEALS BOARD UNCONSTITUTIONAL OR UNLAWFUL?

Author:Funk, William
 
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  1. INTRODUCTION 737 II. ARE EAB JUDGES OFFICERS OF THE UNITED STATES? 739 III. ARE THE MEMBERS OF THE EAB APPOINTED IN ACCORDANCE WITH 740 THE REQUIREMENTS OF THE APPOINTMENTS CLAUSE? IV. CONCLUSION 746 I. INTRODUCTION

    Under various statutes, the U.S. Environmental Protection Agency (EPA) conducts adjudications, some of which are formal adjudications under the Administrative Procedure Act (1) (APA) and some of which are informal adjudications under agency regulations. Administrative Law Judges (ALJs) decide formal adjudications and other officers or employees decide informal adjudications. A person unhappy with these initial decisions may appeal them within the agency. Prior to 1992, the Administrator of the EPA had delegated the authority to make the agency's final decision in certain cases to Judicial Officers and had retained final decision authority in other cases. (2) In 1992, however, he created the Environmental Appeals Board (EAB) by "internal agency action" to replace the Judicial Officers and to have final decisional authority for the agency in all cases. (3) The EAB consists of four Senior Executive Service career persons appointed by the Administrator of EPA. (4)

    In 2018 the Supreme Court decided Lucia v. Securities and Exchange Commission (5) (Lucia), in which it held that ALJs are constitutional officers, (6) despite a half century of characterization of ALJs as mere employees by Congress, (7) the Executive, (8) and the Supreme Court. (9) Believing ALJs to be employees, rather than officers, agencies had routinely provided for their appointment by persons other than the head of the agency. This, however, was at odds with the constitutional requirement that inferior officers be appointed by the President with the advice and consent of the Senate, unless "Congress... by law vest[s] 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." (10) Fortunately, the APA provides for agencies to appoint ALJs, (11) and that is easily construed to mean the head of the agency, so that, if an agency is a "department" for constitutional purposes, the head of the agency could appoint ALJs. Following Lucia, heads of agencies reappointed their ALJs. (12)

    If the half-century assumption that ALJs were mere employees could be overturned as unconstitutional, is it possible that administratively created agency appellate bodies of much shorter vintage could also be found to be unconstitutional or unlawful? This article addresses that question.

  2. ARE EAB JUDGES OFFICERS OF THE UNITED STATES?

    The initial issue is whether the EAB judges are constitutional officers. It seems that they clearly must be. In Lucia, the Court found ALJs to be officers because they were indistinguishable from the Special Trial Judges of the United States Tax Court, (13) who had been found to be officers in Freytag v. Commissioner of Internal Revenue (14) (Freytag). In Freytag, as described by the Court in Lucia, the Court looked to two cases to determine the line between employees and officers. (15) One case was United States v. Germaine (16) (Germaine). In Lucia, the Court said that Germaine "made clear that an individual must occupy a 'continuing' position established by law to qualify as an officer." (17) The members of the EAB hold a continuing position. (18) Whether that position is "established by law" is another issue to be addressed later.

    The second case the Court in Freytag relied upon was Buckley v. Valeo (19) (Buckley). There, the Court said that if a person "exercis[es] significant authority pursuant to the laws of the United States," the person must be an officer, not a mere employee. (20) Given the functions of the Federal Elections Commission at issue in Buckley, (21) there was little question that the Commissioners exercised significant authority, so the Court did not elaborate on what might be the line between exercising significant authority and not. In Freytag, the Court was forced to address that standard as applied to the Special Trial Judges of the U.S. Tax Court. (22) The Court found two different aspects of their job to compel the conclusion that they were officers. First, the Court said that "[t]hey take testimony, conduct trials, rule on the admissibility of evidence, and have the power to enforce compliance with discovery orders... [and i]n the course of carrying out these important functions, the special trial judges exercise significant discretion." (23) Second, the Special Trial Judges had to be officers because in certain cases they could make the final decision for the agency. (24) The opinion in Freytag was not crystal clear as to whether these two factors were individually sufficient to require an officer, or whether the two factors together were required. In Lucia, the Court clarified that these were alternative bases for finding a person to be an officer. (25) Therefore, the ALJs in Lucia, who could not make final decisions for the agency, were required to be officers because, like the Special Trial Judges in Freytag, they could take testimony, conduct trials, rule on the admissibility of evidence, and have the power to enforce compliance with discovery orders, and in the course of carrying out these important functions exercise significant discretion.

    The members of the EAB, as an appellate body, do not take testimony, conduct trials, initially rule on the admissibility of evidence, or have the power to enforce compliance with discovery orders. Nevertheless, they do make final decisions for the agency, and under Freytag as clarified by Lucia, that is enough to require them to be officers. (26) Even if it were not, however, the fact that the EAB has the power to reverse the decisions of ALJs in the agency, who themselves are inferior officers, would seem to satisfy the requirement that the EAB exercises significant authority. (27)

    If members of the EAB must be officers, the question is then whether they must be principal officers or only inferior officers. An argument could be made that they are principal officers inasmuch as they have the authority to overrule the decisions of the agency's ALJs, who are inferior officers. Moreover, because they make the final decision for the agency in a vast swath of cases, they are acting at the same level as the Administrator of EPA, who without question is a principal officer. Nevertheless, in Edmond v. United States (28) (Edmond), the Court said that "the term 'inferior officer' connotes a relationship with some higher ranking officer or officers below the President: Whether one is an 'inferior' officer depends on whether he has a superior." (29) In Edmond, the Court noted that the judge in question was removable without cause, and the Court said the "[t]he power to remove officers... is a powerful tool for control." (30) The Administrator of EPA may remove members of the EAB if he believes they are not performing adequately. (31) In Edmond, the Court also noted that the judge in question was subject to rules of procedure adopted by the Judge Advocate General, which also suggested he was an inferior officer. (32) Similarly, the Administrator of EPA adopts procedural rules that govern the EAB, and which he may amend without the leave of the members of the EAB. (33) Therefore, it seems quite certain that EAB members are inferior officers, not principal officers.

  3. ARE THE MEMBERS OF THE EAB APPOINTED IN ACCORDANCE WITH THE REQUIREMENTS OF THE APPOINTMENTS CLAUSE?

    If the members of the EAB are inferior officers, then according to the Constitution they must be appointed by the President with the advice and consent of the Senate, unless "Congress... by law vest[s] the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in Heads of Departments." (34) The Court has held that if an agency is "a freestanding component of the Executive Branch, not subordinate to or contained within any other such component, it constitutes a 'Departmen[t]' for the purposes of the Appointments Clause." (35) Therefore, the Administrator of the EPA is deemed the head of a "department" for constitutional purposes, and the Administrator does appoint the members of the EAB. The Appointments Clause, however, states that Congress must vest this appointment power in the head of a department "by Law." (36) Inasmuch as Congress never created the EAB, much less provided for the appointment of members to it by the Administrator, there would seem to be a constitutional problem. But things are not so simple; after all Congress never created the EPA itself or the office of the Administrator. (37)

    President Nixon, pursuant to authority granted to him by the Reorganization Act of 1949, as amended, (38) adopted Reorganization Plan No. 3 of 1970 (39) (the Plan), creating EPA and establishing the Administrator as the head of the agency. (40) However, inasmuch as the Plan was not an act of Congress, one could argue that it could not create any office or vest the appointment of any officer in the Administrator. But that is not the end of the story.

    The Reorganization Act of 1949, as amended, provided that reorganization plans adopted by the President were subject to a legislative veto. (41) Consequently, in 1984, after the Supreme Court held that legislative vetoes were unconstitutional in Immigration and Naturalization Service v. Chadha, (42) Congress acted to ratify all existing reorganization plans. (43) Thus, it is fair to say that the terms of the Plan have been effectively passed by Congress.

    This still leaves the question: does the Plan establish the office filled today by the members of the EAB, authorize the Administrator to appoint officers, or to delegate his functions to subordinate officers? The Plan transferred functions from various agencies that had been performing them to the now created EPA. (44) In addition, the Plan authorized the...

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