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Saturday, October 17, 2015

Article 2 Courts

Article 2 Judge

The Judicial Branch of the United States government is established in Article 3 of the Constitution. But most non-lawyers would be quite surprised to learn that most federal judges are not part of the Judiciary at all.

Only the United States Supreme Court, the United States Courts of Appeals, the United States District Courts, and a few small other specialized courts are part of the Judiciary branch (also known as Article 3 courts). While these are the most prominent federal courts and judges, they constitute only a minority of all federal officials styled judges. The majority are actually part of the Executive branch and ultimately answerable to the President. This has surprising and disturbing consequences.

Executive agencies, like SEC or FERC, often seek to bring legal actions against individuals or entities which they allege have violated some law within the jurisdiction of those agencies. The sanctions sought for such alleged violation can include civil penalties in the billions and other ruinous punishment.

But rather than bringing suit in a neutral legal forum, such as the Article 3 courts—something the Department of Justice, for example, does routinely in both civil and criminal matters and usually with success—these agencies instead turn to their own in-house or Administrative Law Judges (ALJs). These ALJs are not part of the Judiciary, or subject to Senate confirmation. ALJs are appointed by the agencies, draw their salary from the agency, work in the same building as the heads of the agency, and are subject to dismissal by the agency. So it should perhaps not come as a surprise that in high-profile ALJ trials the agency almost universally prevails, even on facts and theories that would have rendered such an outcome very dubious in an Article 3 court.

The procedural rules at ALJ trials are highly irregular. While the real courts are bound by inter alia the Federal Rules of Civil Procedure and the Federal Rules of Evidence, ALJs assert that they merely look to these as guides to good practice and remain at discretion to completely disregard them. So the agency will take depositions of its targets and sometimes deny the target even access to the transcripts of such depositions, often vital to refresh recollection or correct the inevitable transcription errors. In real trials, such transcripts are routinely shared as a matter of both courtesy and right. Even the presence of the accused’s lawyer at such questioning—otherwise deemed a constitutional right even for those most credibly accused of the most heinous crimes—agencies assert they grant only at their sufferance.

The only factor which usually prevents such proceedings from attaining the level of the kangaroo is that ALJs are lawyers and sometimes good ones with experience of practice in the real courts. As such they are culturally disinclined to fully walk down the road they assert they are free to wander. But cultural inclinations of judges are a thin reed to rests one’s rights on.

Of course there are appeals. But the first appeal from conviction by the agency’s judge on charges brought by the agency is to none other than…the agency! It is again perhaps unsurprising that the agency on hearing such an appeal very rarely finds that the charges the agency brought against the defendant and of which the agency’s judge convicted the defendant were utterly baseless and need to be reversed.

It is true that defendants usually, after many years and much expense, can obtain review in neutral Article 3 courts. But at that point the standard of review has become so lopsided in favor of the agency that almost anything it did must be upheld. The agency’s findings of fact must be upheld if they are supported by more than a scintilla of evidence and without regard to any mountain of evidence on the other side. The agency’s legal interpretations must be upheld unless they are arbitrary and capricious, another standard that is not difficult for any legally competent agency to meet.

The ultimate upshot is that Americans can be deprived of all their property and more on the basis of no more than the political desire of the President’s servants. If more people were subject to such a process, or were aware that they are, perhaps there would be more of a public outcry against such a rigged system.None of this is to suggest that it wouldn’t be lawful or useful for agencies to offer arbitration services for private disputes among those they regulate. The regulated could avail themselves of such services, either by contractual clause or at the time of the dispute, in order to save time and money. The objection here is only to mandatory use of agency adjudication, in particular in cases where the agency is one of the parties.

A final linguistic insult is that these courts are commonly called Article 1 courts, for the Legislative Branch (established in Article 1) created these courts. But the same is true of almost all regular courts (only the Supreme Court is established by the Constitution, all the others by Congressional act), and they are still rightly referred to as Article 3 courts. Similarly, the courts operating as parts of the Executive Branch should properly be termed Article 2 courts.