In Praise of the ALJ System

by John Holmes

No more appropriate time could be found to review the current status, demographics and trends among administrative law judges and the programs they work under than on the 50th anniversary of the APA. Indeed, the APA may be characterized as changing federal agency appointed "hearing examiners" from agency controlled fact finders to independent judges, albeit, housed in the executive branch. A primary purpose then and still today is to relieve the Article III federal judges of a burdensome number of disputed cases, while still maintaining agency expertise in the presiding judge. The concept, in my view, has worked well in the intervening years, and its application should be widened and strengthened rather than diluted.

Currently there are approximately 1,335 federal ALJs of which 1,082 (including 23 senior ALJs) are employed with the Social Security Administration. In 1947 there were a total of 196 ALJs of which 125 were categorized in the field of economic regulation. Forty years later, in 1987 this category contained 67 ALJs or 6.8% of the total. In the last year all but two of the 125 ALJs hired "off the register", i.e. new hires, were by the Social Security Administration. These statistics highlight the unmistakable trend in the function of ALJs away from economic regulation and toward compensation cases, particularly Social Security disability hearings. This disparity is further emphasized by the number and complexity of cases handled. Typically, a Social Security ALJ will hear and decide 50 cases monthly or over 500 annually. By way of contrast hearing and deciding 10 complex, hard fought, voluminous utility rate cases annually at the Federal Energy Regulatory Commission (FERC) may be an ambitious undertaking for an ALJ. An International Trade Commission (ITC) case may involve more than 30 attorneys, huge amounts of documents, hundreds of millions of dollars in remedies sought, requiring a prompt, thorough, written decision. The National Transportation Safety Board is the only agency that routinely permits bench decisions; all others require written decisions that must be explained sufficiently to stand appeal.

Historically, problems have existed between the Social Security Administration (now an entirely separate agency) and ALJs, for example, over production quotas and non-acquiescence to Circuit Court decisions. Legislation has been recently introduced with disturbingly significant support that would abolish or diminish the necessity for ALJs at that agency. A more constructive solution would seem to lie in the reform of the hearing procedures as has been proposed by several observers and supported by this Section.

As the number of women graduating from law schools has increased on an absolute and percentage basis, so too has there been an increase in female ALJs. Over 20% of the large number of recent ALJ appointees are women; about 10% are minorities. Illustrative of this trend is the Department of Labor which has lost 15 male judges to retirement in the last 2 « years and whose most recent five hires are all female judges. Moreover, women and minorities are assuming increasing leadership roles. The Chief Judges at the Securities and Exchange Commission and the Drug Enforcement Administration, as well as the recently retired Chief Judge at the ITC, are female. The current Chair of the Conference of Administrative Law Judges (CALJ) and the outgoing Chair of the Judicial Administrative Division(JAD) of the ABA are women, as are the Secretary and Treasurer of the Federal Administrative Law Judge Conference (FALJ). The incoming Chair of CALJ and the Chair of FORUM (an exclusively ALJ association) are Afro-Americans. While some contend the veteran's point requirement that adds five points to an ALJ applicant's final score still unduly restricts the hiring of more women as ALJs, the trend toward diversity in ALJ appointments and leadership seems firmly established.

An area of concern which seems so elemental as to require no explanation but which, nevertheless, continues to be misunderstood or misconstrued is the requirement of independence of ALJs as guaranteed by the APA. Especially because ALJs come under the Executive branch of government rather than the judiciary under the Constitution, the need to protect the perceived and substantive independence in our judicial role becomes increasingly important. This reality is understood, in my opinion, more readily by practitioners who appear before ALJs than by some critical observers who mistakenly allege that ALJs attempt to set agency policy. Practitioners recognize and appreciate the importance of maintaining the ALJ's independence to decide cases according to the law and facts in the individual case, including the policy of the agency as set out in its regulations. ALJs must continue to be insulated from pressures within the agency to decide cases on political or other non-legal bases. It was disconcerting, for example, when over 20 years ago while clerking for ALJ Ed Sweeney (since deceased) on the consolidated DDT cases, which took over a year of hearings with over 120 witnesses, to have the then head of EPA publicly declare his strong leanings on the desired outcome of the case, probably based on political realities rather than the law as set out by Congress and implemented by EPA's regulations, before Judge Sweeney had issued a thorough, compact 120 page decision. Congressmen take liberties they would never contemplate with Article III trial judges in relating their concern with the status and on occasion the desired outcome of individual cases. Such efforts, fortunately, are screened by every ALJ office I'm familiar with. Also, agency bodies reviewing ALJ decisions may be more politically than legally motivated. Whatever their philosophical leanings, I have found my fellow ALJs to be steadfast in upholding their judicial integrity to resist any pressures to abandon their independent evaluation and application of the law and facts in each individual case. The instances of abuse by ALJs of their independence such as bias or neglect of duty are extremely rare. Despite these praiseworthy efforts, ALJs have probably been more scrutinized than any group of its size, belying the former label of "the invisible judiciary."

An issue sometimes associated with independence is performance evaluation. Few would quarrel with the need for feedback as to judicial demeanor and handling of cases. How to accomplish improvement in ALJ performance where appropriate, however, presents difficult problems. ("The devil's in the details"). Some quick thoughts. I'm personally skeptical of committees formed outside the agency, since the composition can often determine which judges the members of the committee find politically acceptable. Witness, for example, ABA screening of Supreme Court nominees, which ratings often are determined more on philosophical leanings rather than judicial qualifications. The outcome of individual cases seems clearly to be best left in the reviewing authorities within the agency and in the courts. Those extremely rare cases where an ALJ "always" favors a claimant or a defendant is a more thorny issue, but should in my view be left for the individual ALJ's self analysis. Matters of consistent lateness in decisionmaking, slovenly or inattentive appearance while presiding, or abusive rulings should be referred to the Chief ALJ, where available, for informal remedy. When such conduct rises to the level of a formal complaint, a peer review by fellow ALJs, preferably within the same agency, such as currently established at the Department of Labor seems desirable. The current system of agencies referring allegations of ALJ misconduct to the Merit Systems Protection Board, while not unacceptable, has been too often used for sometimes petty reasons, including production quotas, and may be viewed as a threat for possible future intimidation. I do not believe lack of production should be a sole or primary basis for disciplinary action.

Selection of ALJs has been successfully administered for many years through the Office of Administrative Law Judges at the Office of Personnel Management. Eligibility requirements include: seven years of qualifying trial practice, written and oral examination, and numerous favorable references. An ominous recent development is the virtual elimination of this office, and reassignment of its former head, an action taken in the name of budget cutting without apparent consultation with those affected. While recent ALJ new hires have been nearly entirely with Social Security, other agencies historically have often hired from the "cream of the crop" of experienced Social Security ALJs for replacement of their retirees or because of increased caseload. Some observers express concern that even the best of Social Security ALJs will lack the expertise and flexibility to quickly assume, for example, a productive role at FERC. Others find this system of hiring and rotation preferable to the former "selective register" where certain agencies, such as the Federal Communications Commission and the former Interstate Commerce Commission would require at least two years experience in their area of law, thus ensuring hires from their own legal department. Indications are that perhaps after one more class of 25 or so hires at Social Security, the "register" will thereafter be "closed" for a period of time until more ALJs are deemed necessary.

A "Corps Bill" to house all ALJs under one roof has again been proposed in Congress but not acted on during the last session. Proponents allege that such a corps would assure independence from agency pressure, provide more efficient handling of caseloads since ALJs could be assigned on a gradual basis to those areas where more work has been generated, and would provide savings and efficiency through elimination of duplication of material and personnel. Opponents contend there would be a loss of expertise, alleged savings would be ephemeral, and that the proposed bill would shift political pressure to Congress. Some feel Social Security interests would eventually dominate such a "corps."

Ironically, while the use of federal ALJs other than in Social Security has somewhat diminished in recent years, in favor of other administrative judges, their use on a state level has significantly expanded. Twenty-two states now have ALJ "panels" roughly equivalent to the proposed "Corps". Thus the pioneering efforts of the use of administrative law judges on a federal level may soon be eclipsed by the states' progressive role.

A well trained, experienced cadre of ALJs exists which is well recognized and respected by practitioners for its judicial integrity, independence, and competence. Not all decisions rendered by federal agencies need be subject to ALJ jurisdiction. Indeed, most decisions do not require hearing. Others are amenable to non-judicial determination such as mediation or other alternative dispute resolution. However, where substantive rights of private parties are affected adversely by agency actions and/or controversy arises between private parties because of agency actions, a competent form of independent, impartial, final decision making is required. In my opinion, Congress should mandate and agencies should use more, rather than less, ALJs. The best manner of obtaining a settlement of a dispute is where all parties are aware that they will obtain a fair, impartial hearing and relatively prompt, analyzed decision on the merits.

The ALJ community is grateful to this Section's early efforts in establishing the APA safeguards. Without these efforts, hearings would still be conducted by agency officials subject to influences that might not go to the merits of the individual case. We look for your continued support as we attempt to provide the independent forum in an impartial and professional manner that has been proven successful. On a personal level, I have found serving on the Section's Council a richly rewarding experience. In turn, I have communicated to my fellow ALJs the historical assistance of the Section and the commonality of our future interests, as well as encouragement to participate in the Section's activities and deliberations.