New York Times
April 24, 2018
by Adam Liptak
WASHINGTON — On Monday morning, the Supreme Court heard an argument that touched on the president’s power to fire subordinates. In the afternoon, Deputy Attorney General Rod J. Rosenstein, who has been the subject of reports that President Trump wants to fire him, argued before the justices.
The morning argument examined how to balance independence against accountability within the executive branch. The specific question for the court was whether in-house judges at the Securities and Exchange Commission had decided cases without constitutional authorization. But several justices acknowledged that their ruling in the case could have broad implications.
“There are different ways to interfere with decisional independence,” Justice Elena Kagan said. “One is by docking somebody’s pay. One is by having a removal power hang over your head. And another is by being the person who gets to decide who gets the job or not.”
But Chief Justice John G. Roberts Jr. said responsibility within the executive branch must ultimately belong to the president rather than “the administrative bureaucracy, which operates as insulation from the political accountability that the drafters of the Constitution intended.”
The in-house judges, known as administrative law judges, were appointed by the commission’s personnel office and a chief judge rather than by the five-member commission itself. That may have run afoul of the Constitution’s appointments clause, which requires “inferior officers” to be appointed by the president, the courts or “heads of departments.” The commission itself is a “head of department,” but the personnel office and chief judge are not.
If the in-house judges were “inferior officers,” their appointments were unconstitutional. If they were mere employees, there is no constitutional problem.
The Justice Department, which had long contended that the in-house judges were employees and not officers, switched positions in the Supreme Court in November 2017. In an unusual move, it urged the justices to grant review in the case, Lucia v. Securities and Exchange Commission, No. 17-130, even though it had won in the appeals court.
The Justice Department also asked the court to consider the separate issue of whether statutory restrictions on removing the judges from office are permissible. On Monday, Jeffrey B. Wall, a deputy solicitor general, urged the court to insist on a “clear line of accountability.”
Were the court to address that issue, Justice Stephen G. Breyer said, many officials could be affected. “There are a lot of civil servants who have fit within that definition,” he said.
“One thing I’m certain of, or fairly certain, moderately certain,” Justice Breyer said, is “that the Constitution does not inhibit the creation of a merit-based civil service.”
Mr. Wall urged the court to decide both whether the judges had been properly appointed and how they may be removed, and he suggested that the second question was the more important one, as it gave rise to separation-of-powers concerns.
On “the appointments side, what we’re dealing with is largely executive practice,” Mr. Wall said. “The restrictions on removal are statutory. We’re limited in our ability to get our own house in order there.”
Since the two sides agreed that the in-house judges had not been properly appointed, the court invited Anton Metlitsky, a New York lawyer who had served as a law clerk to Chief Justice Roberts, to argue the opposite position.
The case arose from charges that Raymond J. Lucia and his firm had made misleading presentations to prospective clients about a retirement strategy they called “Buckets of Money.”
Mr. Lucia lost before an administrative law judge and the S.E.C., and a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit rejected a challenge to the judge’s authority. The full appeals court agreed to rehear the case, but its judges deadlocked 5 to 5.
After the solicitor general switched positions in the case, the commission issued an order ratifying the appointments of the in-house judges. Mark Perry, a lawyer for Mr. Lucia, said his client nonetheless deserved a new chance to argue his case, saying that he had been the subject of “an unconstitutional proceeding.”
On this point, Mr. Wall, arguing for the administration, parted ways with Mr. Perry, saying the commission’s order “solves the problem.”
Several justices expressed concern that a ruling for Mr. Lucia would have vast implications for countless executive branch employees, including ones who consider claims for social security and veterans’ benefits.
Justice Kagan said that there was something odd about Mr. Lucia’s insistence that the in-house judges be accountable to executive branch officials.
“This is a situation where we have adjudications, where we typically think we want the decision maker to be insulated from political pressures,” she said. “So wouldn’t putting those decision makers even closer to the political body only exacerbate the problem that you’re complaining of?”
Justice Anthony M. Kennedy echoed the point. “It’s important to the perception of justice that the adjudicator be independent,” he said.
Mr. Rosenstein’s argument came in a minor and technical sentencing case. His presentation was crisp and polished, and he navigated a complicated statute and a web of precedents with confidence.
The question in the case, Chavez-Meza v. United States, No. 17-5639, was how much explanation federal judges must give for their determinations at resentencing proceedings.
Several justices indicated that appeals courts would be aided by knowing the judges’ reasons. Justice Sonia Sotomayor said that requiring a statement of reasons could, for instance, help root out bias.
Mr. Rosenstein responded that judges would be unlikely to disclose illicit motives. In general, he said, appeals courts should “presume that district courts know the law and apply it faithfully.”
Mr. Rosenstein’s appearance was somewhat unusual, as Supreme Court arguments on behalf of the federal government are usually presented by members of the solicitor general’s office, the Justice Department’s elite appellate unit.
But senior Justice Department officials have occasionally argued before the court. Among the attorneys general who did so were Michael B. Mukasey and Janet Reno. In 2004, James B. Comey, then the deputy attorney general, argued before the court in a Fourth Amendment case.