Are Administrative Law Courts More Trouble Than They’re Worth?

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As touched upon in an earlier piece, administrative law courts (ALCs) are a threat to the separation of powers, in which the executive branch takes on judicial and legislative authority.

ALCs wield prosecutorial authority (executive), hand down court decisions through adjudication (judicial), and even determine what venue to process legal disputes (legislative). Recent and pending federal court cases have begun to challenge and curtail the formerly unchecked powers of administrative agencies.

Administrative law courts possess immense power. But do they provide more help or impose greater harm to the legal system? This post weighs some of the arguments on both sides.

Con: ALCs negate many constitutional guarantees

ALCs centralize control over certain legislative, executive and judicial functions. These properly belong in separate branches of government.

The Founding Fathers were famously wary of such centralized power, and designed our nation’s founding documents accordingly. The idea was to avoid replicating King George III’s invasive control of colonial courts, that displaced judiciary powers from the people.

Colonial judges were appointed and paid by the monarchy, receiving salaries that were raised from duties paid by the colonists. King George exercised sole authority to appoint colonial Governors to represent the Crown’s interests in royal colonies like Maryland and Virginia. And for legislative control, the monarchy possessed the powers of the purse and sword, stationing soldiers in the colonies, while requiring that colonists house, feed, and pay taxes for their imported supplies.

Likewise, modern administrative law courts have deprived private litigants of their access to basic constitutional privileges, including the right to a trial by jury and freedom to petition a case before an Article III court. ALCs also ensure that their designated agency rarely if ever loses in court disputes, since both the judge and the prosecutors are employed by the agency.

Pro: Article III Courts are overburdened and can benefit from a specialized court system

Administrative law courts can provide relief to state and federal courts. Particularly with federal appellate courts, ALCs provide a much-needed outlet for processing a subset of cases dealing with administrative agency matters. Between the 12 regional circuit courts of appeals, an average of 50,000 cases are processed each year, taken from among the many cases that are petitioned. Among these cases, about 5,000—7,000 (10-12 percent) are petitioned to the U.S. Supreme Court, which decides to accept about 75-100 of these cases every year. Roughly two thirds of all cases presented to the Supreme Court involve some form of administrative agency or governmental directive.

When creating ALCs, Congress intended to cut back the bulk of cases petitioned to federal appellate courts by equipping certain agencies and departments with their own in-house courts. Congress also intended to introduce specialized courts with the technical knowledge to resolve administrative controversies pertaining to the agency involved. The understanding was that certain administrative disputes comprising of technical or complex policy concerns were best addressed by the agency’s own in-house courts.

Administrative law judges are often legal specialists on an agency’s regulatory affairs, better suited than legal generalists in Article III courts to resolve the affairs of bureaucracies. ALCs are designed to satisfy an agency’s specialized needs, while federal appellate courts are better suited to address administrative matters only when they simultaneously affect issues of constitutional concern.

Con: Administrative Law Courts fail to fix many of the problems they were created to resolve

ALCs seem to provide a host of benefits to a beleaguered Article III court system. However, many of the perceived problems that ALCs were created to resolve still persist to this day. Many federal appellate courts still have overburdened dockets. The legal costs of adjudication for private litigants before ALCs are no cheaper or less time-consuming than federal court cases.

Since nongovernmental parties before an ALC typically lose, those who can afford to appeal a final order (and aren’t prohibited from doing so by the agency) often present their cases before the D.C. Circuit Court anyway. Cases like Lucia v. SEC (2018) and SEC v. Cochran (2022—) have shown that many administrative law judges are unequipped and legally incapable of properly managing select cases entirely in-house, which weakens the specialized knowledge argument.

The Supreme Court is now determining if the both the FTC and SEC’s in-house courts have been violating constitutional norms, including the right to petition an Article III court prior to adjudication before an ALC, the right to trial by jury, separation of powers, and equal application of justice under the law.

In recent decades, while the U.S. Supreme Court has found itself accepting fewer and fewer cases, this was not due to any caseload relief provided by ALC’s. The Court’s lower caseload stems from a separate trend that emerged during the 1980’s, where the Court once heardover 150 cases per term.

Forty years later, the Court has cut its docket down to an average of 85 cases per term. In fact, 2014 saw the lowest number of annual cases—71—that the Court agreed to hear since World War II. Adam Liptak of the New York Times surmised that the reason for the Court’s declining review in the 80’s is associated with each of the four Justices who were appointed after 1986—Antonin Scalia, Anthony Kennedy, David Souter, Thomas and Ruth Bader Ginsburg—seeming to bear less of an interest in granting certiorari than their predecessors.

With the above in mind, one must consider whether administrative law courts truly serve the purpose that Congress originally intended. Do ALCs provide relief to overburdened Article III courts, or do they only deprive litigants of their freedom of choice? Do ALCs manage cases that Article III courts are ill-equipped to address, or is it the other way around? Only time will tell if the perceived harms outweigh the benefits, as this year will see the Supreme Court address the legality of administrative law courts like never before.