Court Says SSA Applicants Need Not Raise Appointments Clause Challenges with Agency

Steven D. Schwinn, University of Illinois Chicago School of Law

The Supreme Court ruled last week that individuals whose applications for Social Security disability benefits were denied did not have to raise their Appointments Clause challenges with the agency; instead, they could raise those challenges for the first time in court. The ruling means that applicants who failed to raise constitutional challenges to the appointments of their administrative law judges could nevertheless raise those challenges in court.

The case, Carr v. Saul, arose when SSA ALJs rejected the appeals of certain applicants for SSA disability benefits. The applicants appealed to the agency's Appeals Council, but the Council denied review.

The Supreme Court then issued its ruling in Lucia v. SEC, holding that the appointment by SEC ALJs by lower-level staff violated the Appointments Clause. (The Court held that ALJs were "officers" under the Appointments Clause and thus couldn't be appointed by SEC staff.)

Based on Lucia, the applicants argued in federal court that the SSA ALJs who decided their cases were similarly invalidly appointed, and that the ALJs' decisions should be vacated. The SSA claimed that the applicants forfeited that argument, because they didn't raise it before the agency in the first place.

The Supreme Court agreed with the applicants. The Court held that ALJ proceedings weren't sufficiently adversarial to trigger an issue-exhaustion requirement. Moreover, it held that "agency adjudications are generally ill suited to address structural constitutional challenges," and that agency review would be futile, anyway.

The ruling's a victory for the applicants in this case, and for any other individuals who seek to challenge the appointment of an ALJ in the wake of Lucia.