Lucia v. SEC

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Administrative Law
  • Date Filed: June 21, 2018
  • Case #: 17-130
  • Judge(s)/Court Below: KAGAN, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, ALITO, and GORSUCH, JJ., joined. THOMAS, J., filed a concurring opinion, in which GORSUCH, J., joined. BREYER, J., filed an opinion concurring in the judgment in part and dissenting in part, in which GINSBURG and SOTOMAYOR, JJ., joined as to Part III. SOTOMAYOR, J., filed a dissenting opinion, in which GINSBURG, J., joined.
  • Full Text Opinion

The Security and Exchange Commission's administrative law judges are “Officers of the United States,” and are therefore subject to the Appointments Clause.

The Securities and Exchange Commission (SEC) charged Petitioner with violations of the Investment Advisors Act and assigned an administrative law judge (ALJ) to adjudicate the matter. The ALJ ruled against Petitioner. On appeal, Petitioner argued that the proceeding was invalid because the ALJ was an “Officer of the United States,” but was not constitutionally appointed as required by the Appointments Clause. The Commission disagreed with Petitioner, as did the Court of Appeals for the D.C. Circuit. The Supreme Court reversed holding that ALJs for the SEC are officers subject to the Appointments Clause.  The Court reasoned that ALJs occupy a “continuing position” and exercise “significant authority” making them more than “mere employees.” The Court compared the instant case to Freytag v. Commissioner, 501 U.S. 868, in which the Court held that “special trial judges” (STJs) were officers. ALJs and STJs have nearly identical duties, except that STJs lack the authority to impose a final decision in “major matters,” as review and final decision is left to a Tax Court judge. The Court reasoned that the ALJs have more power than STJs because their decisions are not automatically subject to review and are therefore officers. REVERSED and REMANDED.

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