SCOTUSblog has posted a summary of oral arguments in Seila Law v. CFPB. There appears to be a good chance that the position of head of the Consumer Financial Protection Bureau will be found to be unconstitutional or, at least, that its head serves at the pleasure of the President.
What would such a holding mean for Social Security? For one thing Andrew Saul would be gone by the end of next January at the latest if President Trump is not re-elected but, more important, there would probably be endless litigation on the validity of decisions made, regulations adopted and contracts granted at the Social Security Administration. These issues may require multiple Supreme Court opinions to resolve.
It's distressing to see that the case argued before the Supreme Court dealt only with a tiny agency and that there was virtually no briefing on how this might affect a vastly larger agency that pays benefits to one person in five in this country.
In retrospect, making Social Security an independent agency was a terrible idea. It's never really been at all independent but its theoretical independence is leading it toward pointless constitutional problems.
Having worked at SSA 20 years before independence, helped on independence and worked almost 20 years after it, my opinion is that it did a lot of good for SSA in ways too administrative for most folks to care. Having SSA as part of HEW/HHS (whatever the name over time was) was amazingly bureaucratic. HHS treated SSA like it treated all it's components, and budget and staffing were controlled and allocated by HHS. Contracts, regulations, policy changes, all required approval by HHS. HHS was at times as much an enemy of SSA as anyone, given SSA was in competition for HHS allocated resources with other HHS components large and small. You'd be called down to HHS HQ for budget briefing updates and advised on new HHS process and procedures, it seemed, monthly. Sure, HHS took some of the weight off; it handled all personnel stuff, so SSA didn't need as big a staff in that area, it handled payroll, it handled The Hill, but it certainly didn't seem to add value. It didn't protect when there was an across the board budget cut imposed on HHS.
ReplyDeleteBut that's just the view of one employee who was there before and after. Independence was never about some consumer driven advocate for pensions; it was about giving SSA some headroom and less overhead to work with to be able to do its job. Given the way the WH and Congress have gone since 1996, maybe independence didn't become all it was cracked up to be but it made SSA an agency better able to stand up on it's own, at least administratively.
Seems like this case will be decided with a pretty narrow scope. I think this is a lot of concern about nothing with regards to SSA.
ReplyDelete@9:35
ReplyDeleteI think a lot of people want it to be a narrow scope, or at least I think a majority of the Court does. The issue is, the main argument that the "at will" provisions applicable to the CFPB applies broadly, pretty much to any agency with a single agency head. That would impact the CFPB, SSA, and a few other agencies in theory. So the Court would have to find a way to limit the scope on its' own. The only proffered limiting principle offered at oral argument was that SSA doesn't engage in "enforcement actions" whereas the CFPB does. My understanding is, an enforcement action in the CFPB is pretty similar in concept to when SSA goes after an overpayment. You go through the administrative proceedings and ultimately can engage in litigation...so I'm not sure how it is different.
Maybe the CFPB doesn't rely on the OGC, like SSA does. That at least spreads out the enforcement powers.
10:14 here.
ReplyDeleteI meant "for cause," not "at will."
A lot of people did not think Lucia v SEC would apply to SSA and it did. The aftermath of Lucia included a reappointment of all ALJs on July 17, 2018, the implementation of SSR 19-1p and litigation in at least 60 Federal Districts. In those cases SSA, for the most part, conceded that the ALJs were appointed unconstitutionally. SSA did not, however, concede that Plaintiff could raise the issue in the District Court for the first instance.
ReplyDeleteSSA won most of those cases with the exception of two districts in Pennsylvania, one in North Carolina and the Northern District of Oklahoma. There are cases in the Appeals Courts (3rd, 4th, 6th, 8th, 10th and 11th) pending. The 3rd circuit recently ruled that the Appointments Clause issue can be raised for the first instance in the District Court.
And now a mass remand of all unfavorables that were appealed, regardless of whether the ALJ was properly appointed or not, yet the favorables were unaffected.
ReplyDelete@6:49
ReplyDeleteI don't see why SSA couldn't chose to redo the favorables. They chose not to.
There will not be a mass remand of Lucia cases. The only cases remanded are those that raised the issue at the Appeals Council or in the District Courts that ruled favorably. The issue is narrow in that after July 17, 2018 (the reappointment date) the ALJs are appointed constitutionally.
ReplyDeleteIn some of the Appeals briefs Social Security argued that this issue applied to several hundred thousand cases and that the Administration would face a deluge of cases. I argued that the number is actually in the hundreds or maybe low thousands. I noted that the 3rd Circuit decision made that same point, there is a dripping, not a deluge. My cases are in a different Circuit and are still pending.
Lucia will only include cases decided before July 17, 2018, the reappointment date. SSA conceded a long time ago that the ALJs were not appointed Constitutionally. The issue is when can the Appointments Clause be raised. The Court cases involve cases wherein the issue was raised for the first time in Federal Court.
There are five other attorneys who handle SSA Federal Court appeals in my city. I was the only one to raise the issue. I called around to the others when I received the first of five remands. Three of the attorneys did not know what I was talking about. One said his office decided not to raise it because they did not think it would go anywhere. The fifth one said that she did not raise it because it would only get a remand.
@ 2:59
ReplyDeleteyou're putting the cart before the horse. SCOTUS cowardly punted on the bigger question if other (all) ALJs are inferior officers and limited their opinion to only SEC ALJs. SSA and other agencies quickly did what the Court said SEC had to do to cure the problem to be safe, but it is not certain (until the Court gets another case where they can answer that bigger question) that any other ALJs will be found to be inferior officers.
And, of course, the million dollar, ultimate question is still live as SCOTUS also punted on it despite the Solicitor General asking that the question be addressed: for any ALJ who is an inferior officer, do any of the unique protections, etc. afforded to ALJs in the APA (namely "for cause" only removal) violate the president/Courts of Law/Agency head's Constitutional ability to direct and control the inferior officers they appoint?
The next ALJ case is going to be the consequential, potentially sea changing one. Lucia is such a small taste it isn't too helpful to guess how SCOTUS will come out on the much bigger and more important questions.