The Supreme Court on Thursday ruled 7-2 that administrative law judges (ALJs) at federal agencies are “officers of the United States” who must be appointed by the president or department heads, holding that the ALJs at the Securities and Exchange Commission violate the Constitution’s Appointments Clause because those ALJs are appointed by staff employees. “The Appointments Clause of the Constitution lays out the permissible methods of appointing “Officers of the United States,” a class of government officials distinct from mere employees,” Justice Elena Kagan began for the Court. “This case requires us to decide whether administrative law judges (ALJs) of the Securities and Exchange Commission … qualify as such ‘Officers.’” The Appointments Clause of Article II says that top officers of the government must be nominated by the president and confirmed by the Senate, and that Congress can choose by law whether lower-ranking officers are appointed by the president without the Senate, by department heads, or by the courts. “The SEC has statutory authority to enforce the nation’s securities laws. One way it can do so is by instituting an administrative proceeding against an alleged wrongdoer” Kagan continued. “By law, the Commission may itself preside over such a proceeding. But the Commission also may, and typically does, delegate that task to an ALJ.” “An ALJ assigned to hear an SEC enforcement action has extensive powers,” such as gathering evidence, issuing subpoenas, examining witnesses, and imposing sanctions, she added. “As that list suggests, an SEC ALJ exercises authority comparable to that of a federal district judge conducting a bench trial.” “The Commission can then review the ALJ’s decision,” Kagan explained. If it does not, then the “decision is deemed the action of the Commission.” The Court held that these powers clearly qualify ALJs as officers of the United States. The Court also held that under the Appointments Clause, the SEC commissioners acting together qualify as a department head. “But the Commission had left the task of appointing ALJs, including Judge Elliot, to SEC staff members,” the Court noted. Therefore the rulings of ALJs at the SEC are illegal. This ruling would also apply to ALJs at any other agency where the ALJs are appointed by staff, though evidently most – if not all – other agencies have their department heads do so. (For example, the attorney general appoints immigration judges, which are ALJs, and all those rulings would remain intact.) Congress is likely to enact a law swiftly that authorizes the SEC to appoint ALJs to make the agency’s procedures and programs conform to the Constitution. The justices left broader constitutional questions – such as whether the Constitution always requires these officers to be removable at will by the president or department heads – open for future cases. Justice Sonia Sotomayor dissented, joined by Justice Ruth Bader Ginsburg. Justice Stephen Breyer concurred with the majority that the SEC’s ALJs were unconstitutional, but dissented from other parts of the Court’s decision. The case is Lucia v. SEC, No. 17-130 at the Supreme Court of the United States.