Too Cute?

     I don't know how, if at all, this ever impacts Social Security but the 9th Circuit Court of Appeals has issued an interesting opinion on remand from the Supreme Court in the case of CFPB v. Seila Law. The Court held that once the director of the Consumer Financial Protection Board knew that she could be removed from office by the President without cause, her tenure in office became constitutional. Moreover, she could ratify her prior actions taken before the Supreme Court opinion in Seila Law. Thus, the Supreme Court opinion in the Seila Law case becomes meaningless as far as Seila Law itself is concerned. I'm not sure how the Supreme Court will see this but it seems a bit too cute to me. How do you say that this is an important constitutional issue and then say, never mind, we're not going to let it have real world consequences?

     To this point, as far as I know, Andrew Saul hasn't acknowledged that Seila Law even applies to him, nor has the White House said anything on the subject. Has Social Security filed a brief on the Seila Law issue yet in federal court?

    

Supreme Court To Hear Social Security Cases Today

     The Supreme Court is scheduled to hear oral arguments at 10:00 today in two cases that present the issue of when a Social Security claimant must raise an issue. Must it have been raised before the agency in order to raise it before the federal courts? This is in the context of Lucia challenges to the authority of Administrative Law Judges to hear cases but the Court's ruling will certainly affect Seila Law litigation. 

     You can listen to live audio of the oral arguments.

"Acting" Commissioner?

      More and more questions are being asked about Andrew Saul's status. What is this "Acting Commissioner" business? If he's only Acting, why hasn't he been fired? Biden would surely prefer someone else as Commissioner. This cute business of trying to have it both ways -- Seila Law has nothing to do with the Social Security Administration yet its confirmed Commissioner is now only its "Acting Commissioner" so you can't apply Seila Law to us isn't going to last forever. This isn't clever. It just underlines the extent of the agency's Seila Law problem. The only solution is for Saul to leave voluntarily or be forced out.

What Just Happened?

      Below is the memo that came out yesterday about personnel changes at Social Security. Click on it to view it at full size.

 

     Andrew Saul, whose term as Social Security Commissioner has been marked by strident anti-union activity, bringing in a union official as his Chief of Staff? Mark Warshawsky ,who has apparently been a consistent advocate for right wing policies, replaced by a fellow at the left leaning Urban Institute?

     But that's not all. Yesterday afternoon, the White House released a list of acting heads of federal agencies and Andrew Saul was listed as the acting head of the Social Security Administration. I thought that Saul believed himself to be the confirmed Commissioner of Social Security, legally entitled to serve out his term of office which runs until January 2025. Unless Saul resigned and was then appointed Acting Commissioner, something which hasn't been announced, the White House announcement can't be technically accurate, although it may reflect the essential nature of the situation. By the way, the memo shown above indicates that it was signed by the Commissioner rather than the Acting Commissioner.

     I'm sure that many readers of this blog have tuned out what I've written about the Supreme Court opinion in Seila Law v. CFPB but it's key to understanding what's going on. In that case, the Supreme Court held that the position of the head of the Consumer Finance Protection Bureau was unconstitutional because the incumbent served a fixed term of years and could only be fired by the President for cause. That sounds exactly like the Commissioner of Social Security. The position of Commissioner of Social Security wasn't before the Court. The attorney for Seila Law argued that there was a distinction between the head of the CFPB and the Commissioner of Social Security but it seems doubtful that the Court will buy that argument once a case squarely presents the issue. 

     I think we may surmise that there was a negotiation between Andrew Saul and President Biden's transition team and yesterday's announcements were the result. I don't understand why Saul wants to hang around to do the bidding of an Administration whose policies he must disagree with but he does.

     So where does that leave the Seila Law litigation that the Social Security Administration is facing? What's Social Security's position? Seila Law totally doesn't apply to cases in the pipeline because Social Security is so much different than CFPB but it can't apply to any future cases because the White House now considers Andrew Saul the Acting Commissioner of Social Security even though Saul himself hasn't announced that he regards himself as serving at the pleasure of the President? That seems like an incoherent position.

     By the way, I've heard an anecdotal report from one attorney that Social Security has recently asked for voluntary remands in all the cases he had in federal court where he was arguing Seila Law. Has anyone else seen this?

Emergency Message On Seila Law

     From Emergency Message EW-21002:

This emergency message provides guidance to administrative law judges (ALJs) and Appeals Council (AC) members regarding objections and arguments based on a recent Supreme Court decision, Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020). This message also provides instructions in the Case Processing and Management System (CPMS) and the Appeals Review Processing System (ARPS) for flagging cases in which claimants or representatives raise such objections or arguments.

On June 29, 2020, the Supreme Court of the United States ruled on the constitutionality of the structure of the Consumer Financial Protection Bureau (CFPB). The Supreme Court held, based on circumstances regarding the CFPB, that the CFPB’s leadership by a single director, removable by the President only for inefficiency, neglect of duty, or malfeasance, violated constitutional separation of powers principles. The Supreme Court further held that the for-cause removal provision was severable from the remainder of the CFPB statute.

At our ALJ hearings and AC levels, although the Supreme Court’s decision did not directly address the Social Security Administration (SSA), some claimants and representatives have raised arguments citing Seila Law to challenge the constitutionality of SSA’s structure or the authority of the agency or adjudicator to act on their claim. Such constitutional contentions, when properly presented in agency proceedings, may be preserved for judicial review. Agency adjudicators facing objections that invoke Seila Law should consider and address whether the claimant wishes to withdraw his or her hearing request and whether the ALJ should disqualify himself or herself. We provide guidance on such issues in this EM. ...

 C. What should an adjudicator do if a claimant or representative raises an objection under Seila Law?

1. Challenge Made at the Hearing Level

If a claimant or representative presents an objection invoking Seila Law at the hearing level (whether orally at the hearing, in writing before or after the hearing, or both), the ALJ should consider several questions, set forth below, and document the ALJ’s consideration of these questions in the hearing decision as appropriate.

(1) Is the claimant seeking to withdraw his or her request for a hearing?
a. Under 20 C.F.R. §§ 404.957(a) and 416.1457(a), an ALJ may dismiss a request for a hearing at any time before the notice of the hearing decision is mailed, when the claimant withdraws the request orally on the record at the hearing or in writing.
b. The ALJ should consider whether the claimant’s objection seeks to withdraw his or her request for a hearing.
i. If the claimant’s objection expresses an intention to withdraw the request for a hearing, the ALJ should properly develop the request by following the guidance in HALLEX I-2-4-20.
ii. If the claimant’s objection does not express the intention to withdraw the request for a hearing, it would be appropriate to indicate in the hearing decision that, while the claimant objected to the proceeding based on separation of powers principles, the claimant did not ask to withdraw his or her request for a hearing as permitted under 20 C.F.R. § 404.957(a) or §416.1457(a) (or both); that the claimant appeared at the hearing; and that the ALJ accordingly issues a decision on the claim.
(2) Is the claimant asking the presiding ALJ to withdraw from the case in favor of another agency adjudicator?
a. ALJs have a duty to consider objections to the ALJ presiding in the case. See 20 C.F.R. §§ 404.940, 416.1440. Under the regulations, an ALJ shall not conduct a hearing if he or she is prejudiced or partial with respect to any party or has any interest in the matter pending for decision. See SSR 13-1p. If the ALJ finds withdrawal appropriate, another ALJ will be appointed to conduct the hearing.
b. The ALJ should consider whether the claimant’s objection seeks the ALJ’s disqualification and withdrawal in favor of another agency adjudicator.
i. If a claimant’s objection seeks the presiding ALJ’s disqualification and withdrawal on grounds specific to the presiding ALJ (such as prejudice or partiality), the ALJ shall either address the objection in the decision or withdraw, as appropriate under regulatory guidance. See HALLEX I-2-1-60.
ii. If a claimant’s objection does not seek the presiding ALJ’s disqualification and withdrawal on grounds specific to the presiding ALJ (such as prejudice or partiality), the ALJ should indicate in the hearing decision that the claimant has not challenged the presiding ALJ’s qualifications in a manner that is specific to the presiding ALJ (such as prejudice or partiality), and that the ALJ accordingly conducted the hearing and hereby issues a decision on the claim.
(3) Is the claimant objecting to the ALJ’s authority to render an unfavorable decision on the claim (but not to render a favorable decision on the claim)?
a. Governing regulations provide that the ALJ shall look fully into the issues at a hearing, and, based on a preponderance of the evidence offered at the hearing or otherwise included in the record, issue a written decision giving the findings of fact and the reasons for the decision. 20 C.F.R. §§ 404.944, 404.953(a), 416.1444, 416.1453(a).
b. If a claimant’s objection expresses a view that, because of separation of powers principles, the ALJ lacks authority to deny the claim, it would be appropriate for the ALJ to indicate in the hearing decision that regulations governing the ALJ’s duties and responsibilities require the ALJ to decide a claim, whether favorably or unfavorably, based on the evidence of record. ...

     This is an obvious attempt to intimidate claimants and their attorneys to prevent Seila Law objections. It implies, but doesn't state, that favorable decisions might be overturned if the Supreme Court holds that the position of Commissioner of Social Security is unconstitutional. It doesn't allow ALJs or the Appeals Council to actually consider Seila Law objections on the merits but if they don't raise such objections, the agency will argue in court that they waived them. This puts ALJs in the position of playing litigation games with claimants. This is unworthy of the Social Security Administration. 

     By the way, there was no need for this Emergency Message if Andrew Saul was about to resign as Commissioner.

Whither Saul?

      The nearest comparable situation to the one we have now with the Commissioner of Social Security holding over or not holding over into a new Administration was in 2008 after the election of Barack Obama. Then Commissioner Astrue was the first Commissioner confirmed to a fixed term in office. He had been nominated by a Republican President. Astrue's term extended into Obama's term. After Obama was elected I heard at least one person in a position to know say that there was no way Astrue could stay on after Obama took office. We didn't hear anything for more than a month after election day. However, on December 11, 2008 I was able to post about an interview that Astrue had given where he said he would stay in office during the Obama Presidency. We're further along than this in December and I have not heard a word aboutAndrew Saul's plans.

     This situation is not completely the same as before. Astrue was acknowledged by all as competent; Saul, not so much. Astrue had stepped on some toes but not nearly to the extent of Andrew Saul, who seems to have gone out of his way to offend, particularly to offend employee unions which are an important Democratic constituency. Democrats definitely want Saul out. There is the issue now of whether Saul can be fired without cause. That constitutional issue had not emerged in 2008.

     I don't know what's going to happen but it's surprising to me that Saul hasn't either said he's leaving soon or taken some action to let it be known that he's going to try to hang on.

Foreshadowing At The Supreme Court

      Yesterday the Supreme Court heard oral arguments in the case of Collins v. Mnuchin which concerns two quasi-governmental corporations. The issue was whether in the wake of the Court's Seila Law opinion there was a constitutional problem with the President's inability to remove the heads of these corporations. There is a similar issue affecting the position of Commissioner of Social Security. It was clear from the questions asked that at least two of the justices are already thinking about what they will do when the Social Security case reaches the Court. Below are a couple of excerpts from the transcript of the oral arguments. I'm not including the answers since I think those are much less important to us than the questions.

Justice Alito:  Suppose we were to agree with Mr. Nielson that this can't be distinguished from the -- the head of the Social Security Administration, or suppose we were to overrule Humphrey's Executor, as some members of the Court have suggested. Do you think it would follow that everything ever done by a Social Security administrator or everything ever done by the FCC or one of the other multi-member commissions was void ab initio, they would all be wiped off the books? 

Justice Kagan: I just go back to Justice Alito's question about the Social Security Administration. I'll put some scary sounding numbers on this. The SSA has been led by a single commissioner since 1994 and ever since then, it's rendered 650,000 decisions every year, so that's about 17 million decisions. Now you told Justice Alito, well, maybe there are some exceptions for lower-level employees. I'm not sure that ALJs would qualify as that, and even if they do, let's assume, which I think is probably true, that all of those decisions are rendered pursuant to guidance and rules that the SSA commissioner has enforced. So are we really going to void all of those decisions? ...  But, I mean, are you really making a good faith argument that if there were at --if there were for cause -- excuse me, if there were at will removal of the Social Security Administration that these 17 million decisions would come out differently or, indeed, that any of them would?

Update On Lucia

      In June of 2018 the Supreme Court held in Lucia v. SEC that Administrative Law Judges (ALJs) as of that date were unconstitutional because they had not been appointed by the agency head. Social Security and other agencies cured this defect by having the agency head officially appoint each of the ALJs but this left the problem of cases decided before the new appointments. Social Security has tried to reduce the scope of that problem by arguing that the issue had to have been raised before the ALJ or at least before the Appeals Council.

     The first Court of Appeals opinions in one of the post-Lucia Social Security cases was Cirko v. Commissioner, a Third Circuit case, last November. Social Security lost. The Court held that the issue could be raised for the first time on appeal in the U.S. District Court.

     We now have three newer opinions from Courts of Appeals. In Carr v. Commissioner, the Tenth Circuit held on June 15, 2020 that the Court could not consider the Lucia issue since it had not been raised administratively. In Davis v. Saul, the Eight Circuit held the same way on June 26, 2020. However, in Ramsey v. Commissioner, the Sixth Circuit held on September 1 that the issue could be considered even though it had not been raised administratively. There are cases pending in other Courts of Appeals as well.

     The claimants in the Carr and Davis cases have asked that the Supreme Court review their cases. The Court doesn't have to do so but since there's disagreement among the Circuits, the Court probably will agree to hear the cases.

     Note that a Supreme Court opinion on this issue may have implications for the litigation over the constitutionality of the position of Social Security Commissioner brought about by the Supreme Court opinion in Seila Law v. CFPB. The Social Security Administration is trying very hard to pretend this issue doesn't even exist but it does and it will be litigated. Probably, it's already being litigated. I think it's irresponsible that Andrew Saul is still carrying out the role of Commissioner of Social Security. The attitude that Seila Law doesn't apply to Social Security seems to be based upon the assumption that because Seila Law was only about the Administration's desire to knock down the Consumer Financial Protection Bureau, which they hate, that other agencies that they don't hate (or don't want to admit to hating) won't be affected.  That assumes that the majority of the Supreme Court was just as cynical as they are and was only using a constitutional justification to harass an agency that the Court's majority hates as much as they do. That's not a safe assumption. As a lawyer, you may safely assume that your adversary is as cynical as you are but you should never assume that about a Court. Result oriented, maybe, but cynical, no. There is a distinction. But maybe I'm being too harsh. Another possibility is that those involved don't really care what the Supreme Court ultimately does about the Social Security Commissioner position because they expect to be out of office long before the Court can take up the issue. I guess that's just a different form of cynicism, however.

A Couple Of Things I'm Wondering About

     I've been wondering about a couple of things. First, what is happening in Puerto Rico (and other U.S. territories) when claimants inquire about filing SSI claims? Second, is Social Security trying to track Seila Law objections?

     My general impression is that secretiveness has increased at Social Security since the 2016 election. If you want proof, look at Social Security's postings of Emergency Messages (EMs). The purpose of EMs is to let employees in the field know about significant changes in agency policy or practice. Through May 21 of this year at least 22 new EMs had been released to agency employees but only two had been released to the public. None has been released to the public since May 21. There might be some good reason to withhold a few of those but the vast majority of EMs aren't sensitive. My guess is that the logic behind withholding these from the public is that the agency can't be called to account for failing to follow its own policies when the public doesn't know what those policies are.

     Because of the litigation over the constitutionality of current law that denies SSI to residents of most U.S. territories, there should be individuals attempting to file SSI claims in these territories. What's being done when that happens? How many people in the territories are attempting to file SSI claims? If I were representing clients in Puerto Rico who might be eligible for SSI, I'd certainly be telling them to try to file SSI claims but I'm not representing clients there.

     My expectation is that because of the Supreme Court opinion in the Seila Law case there will be litigation over the validity of actions taken by the Social Security Administration while headed by a Commissioner who can only be discharged by the President for cause. Shouldn't the agency be tracking cases where this sort of objection is made? That's what they did earlier in the run-up to and after the Supreme Court decision in Lucia v. SEC on the constitutionality of ALJ appointments.

SSA Starting To Track Seila Law Objections

     I can't confirm it but there's a report that Social Security is starting to track Seila Law objections to ALJs holding hearings and issuing decisions. This is going to be a nightmare if the Commissioner doesn't resign. Gambling on the Supreme Court finding that it's much more important for the President to manage the Consumer Financial Protection Bureau, an agency that most people have never heard of, than the Social Security Administration which sends a monthly check to one person in five in this country sounds insane to me.
     If you're an attorney representing Social Security claimants and you're not filing Seila Law objections you must have paid no attention to what happened with Lucia. I got a bunch of cases remanded because of Lucia. Did you? Don't miss the boat again.

I Predict This Will Come To Pass If Biden Is Elected

     From Regulating Impartiality In Agency Adjudication by Kent Barnett, 69 Duke L.J.1695-1748 (2020):

... [T]he majorities in Lucia v. SEC and Free Enterprise Fund v. PCAOB expressly declined to resolve whether the U.S. Constitution condones SEC administrative law judges’ and other similarly situated agency adjudicators’ current statutory protection from at-will removal. The crux of the problem is that, on one hand, senior officials may use at-will removal to pressure agency adjudicators [such as Administrative Law Judges] and thereby potentially imperil the impartiality that due process requires. On the other hand, Article II limits Congress’s ability to cocoon executive officers, including potentially agency adjudicators, from at-will removal.

This Article argues that the executive branch itself can and should moot or mitigate this constitutional clash. Nothing in Article II prevents the president from issuing executive orders and agencies from promulgating regulations—collectively, what I refer to as “impartiality regulations”—that require good cause for disciplining and removing agency adjudicators, as well as other means of protecting adjudicator impartiality. Indeed, the executive branch has a long-standing yet overlooked practice of using executive orders and regulations for similar purposes. Impartiality regulations are but one form of the executive branch’s internal separation of powers. Such self-imposed separation provides a strong theoretical and practical solution for the agency-adjudicator dilemma. ...

    This may be the rare law review article that has an effect on the real world.
     By the way, my assumption here is that in Seila Law v. CFPB the Supreme Court will find the position of director of the Consumer Finance Protection Board to be unconstitutional because the incumbent may only be discharged for cause. Perhaps, I should say I expect that the Supreme Court will hold that while the position itself is constitutional, that the incumbent no longer has protection against being discharged without cause. The same would be the case for the position of Commissioner of Social Security. Administrative Law Judges would be next in line and I expect the same for them. I don't think Seila Law is getting as much attention as it should. Lucia was easily dealt with. Seila Law is a much larger threat to federal administrative law. Probably, the only way to deal with it is what the author of this article suggests, that is assuming that one cares about administrative justice. I think that Democrats care about administrative justice. I think that Republicans are enthralled with the idea of "deconstructing the administrative state." I think the only possible result of that is anarchy but judging by the Trump Presidency, Republicans like anarchy.