The latest variant of the epidemic of constitutional challenges to federal administrative adjudicators was blocked by the Court of Appeals for the Federal Circuit (CAFC) when it rebuffed a series of arguments challenging the appointment of Administrative Judges (AJs) of the Merit Systems Protection Board (MSPB). McIntosh v. Department of Defense, 53 F. 4th 630 (Fed. Cir., 2022).

The case was brought by a former employee of the Department of Defense who had appealed her removal to the MSPB on the grounds that it had been a reprisal for whistleblowing activities. When the MSPB AJ ruled against her, and she failed to file an appeal to the Board, the AJ decision became final, so she appealed to the CAFC, challenging both the constitutionality of the AJ’s appointment and the lack of substantial evidence for the decision.

McIntosh made several arguments in support of her constitutional challenge. Her primary argument was that, based on the Supreme Court’s decision in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021), the Board’s AJs are principal officers of the United States under the Appointments Clause of the Constitution, and thus must be nominated by the President and confirmed by the Senate. Secondly, she argued that even if the AJs were “inferior officers,” they were still unconstitutionally appointed because they were not actually appointed by the MSPB’s Board

In Arthrex, the Court had determined that the administrative patent judges (APJs) of the Patent Trial and Appeal Board (PTAB), who are appointed by the Secretary of Commerce, were improperly appointed principal officers because they had the “‘power to render a final decision on behalf of the United States’ without any . . . review by their nominal superior or any other principal officer in the Executive Branch.” 141 S. Ct. 1981. McIntosh contended that the same problem existed with the MSPB AJs, but the court disagreed.

The court found that the MSPB’s structure and decisional process was different from the PTAB’s:

An administrative judge’s initial decision becomes the final decision of the Board unless a party appeals or the Board reopens the case on its own motion. § 7701(e)(1). Thus, unlike the PTAB, an administrative judge’s decision is subject to review by a principal officer, in this case, the three member MSPB.

Slip. Op. at 9; 53 F.4th at 639.

In Arthrex, the CAFC had remedied the Appointments Clause violation by severing the APJs’ ordinary civil service protection from removal, thus making them at-will employees and thereby transforming them into constitutionally appointed inferior officers. McIntosh argued that the MSPB AJs similarly had the kind of protection from removal that was a key factor in the CAFC’s finding that the APJs were principal officers. But, as the McIntosh court emphasized, the Supreme Court in Arthrex had taken a different remedy tack by reading the patent statute to allow review by the PTO Director while also restoring the APJs’ civil service protection. In other words, the MSPB AJs were in the same position as the post-Arthrex APJs.

McIntosh also argued that due to the Board’s lack of a quorum when her case was decided (it had lacked a quorum for over five years, between January 7, 2017, and March 3, 2022), there was, in effect, no Board to review (or remove) AJs. The court was not persuaded, pointing out that she “could have still petitioned for Board review and had her decision reviewed once a quorum was established, as explained at the end of the administrative judge’s decision.” (slip op at 12; 53 F.4th at 641). The court cited an earlier decision holding that a temporary delay in review due to a quorum problem “does not convert a constitutionally valid review process into a violation of the Appointments Clause.” [Rodriguez v. Dep’t of Veterans Affs., 8 F.4th 1290, 1309 (Fed. Cir. 2021)].

Finally, McIntosh argued that even if the AJs were inferior officers they were not appointed by the Board. Her corrected supplemental reply brief [2021 WL 4148964 at *4] argued that they were instead appointed by an employee of the Board, the Director of Financial and Administrative Management. This would arguably be a violation of Lucia v. SEC, 138 S. Ct. 2044 (2018)—although that case involved ALJs rather than AJs, its rationale would seem to apply at least to MSPB AJs. However, the court found that McIntosh had failed to raise this point in her opening brief to the court. More importantly, though, the court also relied on the fact that once the MSPB’s first post-Lucia quorum was installed, the Board ratified the appointment of all its AJs. This is may be dicta, but it is still noteworthy because after Lucia, the SEC and many agency heads that had delegated the appointment of their judges to other officials also moved to ratify those appointments, so this is a helpful precedent for them. It would presumably also apply to any other appeals that are still in the pipeline, based on this argument about the MSPB AJs.

The court ended its opinion by rejecting all of McIntosh’s substantial-evidence arguments and affirming the MSPB. Rehearing en banc has since been denied, so her last resort would be the Supreme Court.

The importance of this case lies in what would have happened if her challenge had succeeded. The Board has 57 AJs (according to its ratification order), and it hears thousands of appeals from career civil servants across the government. If the AJs’ appointment had been ruled unconstitutional, many prior decisions could have been called into question, and, going forward, AJs could have been stripped of even the basic tenure protections that rank-and-file civil servants have had for many years. Such a result would have undercut the fairness of the civil service appeals system and could have turned AJs into political footballs—to be punted away whenever the Board or an influential agency litigant was unhappy with a decision.

Fortunately though, the CAFC followed the latest cue of the Supreme Court in Arthrex, which bent over backwards to preserve the APJs’ civil service protection. Will the Supreme Court follow that approach when, inevitably, the question of ALJs’ for-cause protection comes before it? We will likely learn the answer next term.

Jeffrey S. Lubbers is Professor of Practice in Administrative Law at American University, Washington College of Law.