Exposing America’s hidden judiciary

I have a new paper published with the Pacific Legal Foundation (PLF), How Interagency Borrowing of Administrative Law Judges Circumvents the Rule of Law. The paper exposes a hidden system of interagency sharing of administrative law judges (ALJs). “Often called the ‘hidden judiciary,’ ALJs often toil in the shadows of the executive branch agencies for which they preside,” according to an interview with Department of Transportation Judge J.E. Sullivan.

Federal agencies regularly employ ALJs to adjudicate disputes with private parties over a host of regulatory matters. The implied understanding has been that agencies appoint and employ their own judges to render decisions on regulatory policies. However, this is not always the case. As many as a third of all formal adjudications use ALJs who are either borrowed from elsewhere or have worked for another agency. Given that ALJs are considered specialist judges possessing technical policy knowledge, the process of lending ALJs weakens the perception of bureaucratic expertise. Through ALJ sharing, an agency may forgo specialized knowledge in favor of expediently resolving cases.

More than 200 ALJs have been lent to adjudicate for several agencies over their tenure, sometimes working for two or more agencies simultaneously. The borrowing agency is responsible for paying a stipend to the ALJ while they are on loan from their host agency, which continues to pay the judge’s regular salary.

In my paper, I explore nearly every known instance of interagency borrowing and lending of ALJs across the executive branch. This amounts to a sample of 960 ALJs representing 42 federal agencies that engage in ALJ sharing. The data reveals that independent agencies are the biggest borrowers and lenders of ALJs. The most frequent policy domains that borrowed judges adjudicate are transportation policy, financial policy, and labor policy disputes. My paper also examines the various forms of ALJ borrowing across formal (statutory) as well as informal arrangements.

While there are many problems with ALJ sharing, the most important one pertains to its insulation from constitutional accountability. There has been zero mention of borrowed judges in the annual budgets of agencies that rely on them. Nor has Congress directly appropriated funds for agencies to borrow judges, particularly those that never employed their own ALJs in the first place. This creates a form of administrative defiance against Congress if judges are loaned and borrowed without formal legislative approval.

According to Yale Law Professor Kate Stith,

“The Appropriations Clause would appear to categorically enjoin the President and federal agencies to spend funds only as appropriated by Congress. Even where the President believes that federal spending is urgently needed, spending in the absence of appropriations is constitutionally prohibited.”

Agencies have yet to justify how they are paying for their borrowed judges and whether these funds are being siphoned from other areas of their budget that Congress approved.

Another constitutional issue is that ALJ sharing can obstruct the president’s and appointing agency head’s ability to remove administrative judges. This introduces a legal gray area whereby agencies can transfer their ALJs to their peers to circumvent attempts to conduct mass layoffs. An ALJ may also become entrenched from executive removal when citing work for a separate agency that didn’t appoint them.

“Unelected and constitutionally unaccountable ALJs have exercised immense power for far too long,” according to a statement from Department of Justice Chief of Staff Chad Mizelle. “In accordance with Supreme Court precedent, the Department is restoring constitutional accountability so that Executive Branch officials answer to the President and to the people.”

Proponents of ALJ sharing rely on an obscure 2007 rule issued by the Office of Personnel Management (OPM). OPM oversees all agency requests for borrowed ALJs, but the rule exists separately from the Administrative Procedure Act (APA), the law that authorizes agencies to conduct adjudication. This means that Congress never formally approved of ALJ sharing. To make matters more complicated, my paper explores instances of ALJ borrowing at agencies, like the National Labor Relations Board, that predate the APA.

My new report for PLF is the first piece of research to examine the hidden system of ALJ sharing. This unconstitutional process warrants immediate attention from Congress and the Executive Office of the President. Agencies shouldn’t enjoy the luxury of borrowing and lending judges absent congressional authorization or in conflict with executive control. The time for accountability over America’s hidden judiciary is now.