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SUPREME COURT OF THE UNITED STATES
_________________
Nos. 19–1442 and 20–105
_________________
WILLIE EARL CARR, et al.,
PETITIONERS
19–1442
v.
ANDREW M. SAUL, COMMISSIONER OF SOCIAL
SECURITY
on writ of certiorari to the united states
court of appeals for the tenth circuit
JOHN J. DAVIS, et al.,
PETITIONERS
20–105
v.
ANDREW M. SAUL, COMMISSIONER OF SOCIAL
SECURITY
THOMAS HILLIARD, PETITIONER
v.
ANDREW M. SAUL, COMMISSIONER OF SOCIAL
SECURITY
on writs of certiorari to the united states
court of appeals for the eighth circuit
[April 22, 2021]
Justice Sotomayor delivered the opinion of the
Court.
When the Social Security Administration (SSA)
denies a claim for disability benefits, a claimant who wishes to
contest that decision in federal court must first seek a hearing
before an administrative law judge (ALJ). The petitioners here did
just that: They each unsuccessfully challenged an adverse benefits
determination in ALJ proceedings, and they now ask for judicial
review. Specifically, petitioners argue that they are entitled to
new hearings before different ALJs because the ALJs who originally
heard their cases were not properly appointed under the
Appointments Clause of the U. S. Constitution. The question for the
Court is whether petitioners forfeited their Appointments Clause
challenges by failing to make them first to their respective ALJs.
The Court holds that petitioners did not forfeit their claims.
I
The six petitioners in these consolidated
cases each applied for disability benefits between 2013 and
2015.[
1] After their
applications were denied, petitioners followed the prescribed steps
for seeking administrative review. They sought reconsideration of
the agency’s initial determination, received a hearing before an
ALJ, and requested review by the SSA’s Appeals Council. See 20 CFR
§404.900(a). Petitioners were unsuccessful at every stage,
concluding with the Appeals Council, which denied discretionary
review.
This Court then held in
Lucia v.
SEC, 585 U. S. ___ (2018), that ALJs within the
Securities and Exchange Commission (SEC) had been
unconstitutionally appointed. Under the Appointments Clause, only
the President, “Courts of Law,” or “Heads of Departments” may
appoint “Officers of the United States.” Art. II, §2, cl. 2;
see
Lucia, 585 U. S., at ___ (slip op., at 5). The
Lucia Court determined that SEC ALJs were “Officers” rather
than mere employees because they held “a continuing office
established by law,” exercised “ ‘significant discretion’ when
carrying out . . . ‘important functions,’ ” and
often had the last word in SEC proceedings.
Id., at ___–___
(slip op., at 8–10). Consequently, the appointment of SEC ALJs by
SEC staff violated the Constitution.
Id., at ___, ___ (slip
op., at 3, 12).
Like the SEC ALJs at issue in
Lucia, SSA
ALJs had been selected by lower level staff rather than appointed
by the head of the agency. On July 16, 2018, a few weeks after
Lucia was decided, the SSA’s Acting Commissioner
pre-emptively “address[ed] any Appointments Clause questions
involving Social Security claims” by “ratif[ying] the appointments”
of all SSA ALJs and “approv[ing] those appointments as her own.” 84
Fed. Reg. 9583 (2019). The following year, the SSA issued a ruling
stating that the Appeals Council should, in response to timely
requests for Appeals Council review, vacate preratification ALJ
decisions and provide fresh review by a properly appointed
adjudicator.
Ibid. That remedy was only available, however,
to claimants who had raised an Appointments Clause challenge in
either their ALJ or Appeals Council proceedings.
Ibid.
Claimants who had not objected to the ALJs’ appointments in their
administrative proceedings would receive no relief. See
ibid.
Petitioners fell into this latter category. By
the time the SSA issued its ruling, their administrative
proceedings had concluded, and they were seeking review of the
SSA’s decisions in federal court. Following
Lucia, each
petitioner asked the Federal District Court (or, in some cases, the
Federal Magistrate Judge) for a new hearing before a
constitutionally appointed ALJ. The Commissioner did not dispute
that the ALJs who decided petitioners’ cases were
unconstitutionally appointed, but contended instead that
petitioners had forfeited their Appointments Clause challenges by
failing to raise them before the agency.
In three separate decisions (covering all six
petitioners), the U. S. Courts of Appeals for the Eighth and
Tenth Circuits adopted the Commissioner’s forfeiture argument. In
those Circuits’ view, petitioners could not obtain judicial review
of their Appointments Clause claims because they had not pressed
those challenges in their administrative proceedings. 963 F.3d 790,
793 (CA8 2020); 964 F.3d 759, 763 (CA8 2020);
Carr v.
Commissioner, SSA, 961 F.3d 1267, 1268 (CA10 2020). The
Third, Fourth, and Sixth Circuits have all held the opposite. In
those Circuits, claimants may challenge the constitutionality of an
SSA ALJ’s appointment for the first time in federal court. See
Cirko v.
Commissioner of Social Security, 948 F.3d
148, 152 (CA3 2020);
Probst v.
Saul, 980 F.3d 1015,
1020 (CA4 2020);
Ramsey v.
Commissioner of Social
Security, 973 F.3d 537, 546 (CA6 2020). The Court granted
certiorari to resolve this conflict. 592 U. S. ___ (2020).
II
Administrative review schemes commonly require
parties to give the agency an opportunity to address an issue
before seeking judicial review of that question. The source of this
requirement (known as issue exhaustion) varies by agency.[
2] Typically, issue-exhaustion rules
are creatures of statute or regulation.
Sims v.
Apfel,
530 U.S.
103, 107–108 (2000); see
United States v.
L. A.
Tucker Truck Lines, Inc.,
344 U.S.
33, 36, n. 6 (1952) (collecting statutes). Where statutes and
regulations are silent, however, courts decide whether to require
issue exhaustion based on “an analogy to the rule that appellate
courts will not consider arguments not raised before trial courts.”
Sims, 530 U. S., at 108–109. The Commissioner concedes
that no statute or regulation obligated petitioners to raise their
Appointments Clause challenges in administrative proceedings. See
Brief for Respondent 12, 35, n. 2; Tr. of Oral Arg. 39. Instead,
the Commissioner asks this Court to impose a judicially created
issue-exhaustion requirement in these cases.
A
“[T]he desirability of a court imposing a
requirement of issue exhaustion depends on the degree to which the
analogy to normal adversarial litigation applies in a particular
administrative proceeding.”
Sims, 530 U. S., at 109. In
conducting this inquiry, courts must take care not to “reflexively
‘assimilat[e] the relation of . . . administrative bodies
and the courts to the relationship between lower and upper
courts.’ ”
Id., at 110 (quoting
FCC v.
Pottsville Broadcasting Co.,
309 U.S.
134, 144 (1940)). Instead, “[t]he inquiry requires careful
examination of ‘the characteristics of the particular
administrative procedure provided.’ ” 530 U. S., at 113
(O’Connor, J., concurring in part and concurring in judgment)
(quoting
McCarthy v.
Madigan,
503
U.S. 140, 146 (1992)). The critical feature that distinguishes
adversarial proceedings from inquisitorial ones is whether
claimants bear the responsibility to develop issues for
adjudicators’ consideration.[
3]
With respect to the nature of the SSA
proceedings at issue here, our inquiry starts from the baseline set
by
Sims v.
Apfel. There, this Court held that issues
not raised before the Appeals Council (the final stage of
administrative review within the SSA) are nonetheless preserved for
judicial review. In so holding, the Court explained that “the
rationale for requiring issue exhaustion is at its greatest” when
“the parties are expected to develop the issues in an adversarial
administrative proceeding,” but “the reasons for a court to require
issue exhaustion are much weaker” when “an administrative
proceeding is not adversarial.” 530 U. S., at 110.
The plurality went on to explain that “[t]he
differences between courts and agencies are nowhere more pronounced
than in Social Security proceedings,” where administrative
“proceedings are inquisitorial rather than adversarial.”
Id., at 110–111. Regulations governing SSA proceedings
“expressly provide that the SSA ‘conduct[s] the administrative
review process in an informal, nonadversary manner’ ” and
assures claimants that the SSA “ ‘will consider at each step
of the review process any information you present as well as all
the information in our records.’ ”
Id., at 111 (quoting
20 CFR §404.900(b) (1999)). At the Appeals Council level, “the
Council’s review is plenary unless it states otherwise.”
Sims, 530 U. S., at 111 (plurality opinion). Rather
than appear “as a litigant opposing the claimant,” the Commissioner
serves “just as an adviser to the Council.”
Ibid. Claimants
are not required to file a brief; indeed, the SSA’s standard form
“provides only three lines for [a claimant’s] request for review.”
Id., at 112. A notice “accompanying the form estimates that
it will take only 10 minutes to ‘read the instructions, gather the
necessary facts and fill out the form.’ ”
Ibid. Thus,
in the context of Appeals Council review, the plurality observed
that the “adversarial development of issues by the parties
. . . on which [the judicial-proceedings] analogy depends
simply does not exist.”
Ibid.
Justice O’Connor concurred in the judgment. In
her view, “the agency’s failure to notify claimants of an issue
exhaustion requirement” provided a “sufficient basis” for refusing
to impose one by judicial decree.
Id., at 113. “Requiring
issue exhaustion is particularly inappropriate,” she explained,
“where the regulations and procedures of the [SSA] affirmatively
suggest that specific issues need not be raised before the Appeals
Council.”
Ibid.
Much of what the
Sims opinions said about
Appeals Council review applies equally to ALJ proceedings. The
Sims plurality itself noted that “[i]t is the ALJ’s duty to
investigate the facts and develop the arguments both for and
against granting benefits” and that “[t]he Commissioner has no
representative before the ALJ to oppose the claim for benefits.”
Id., at 111. The SSA regulations that ensure informal,
nonadversarial proceedings and plenary review apply as much to ALJs
as to the Appeals Council. See 20 CFR §404.900(b). Regulations also
provide that ALJs will “loo[k ] fully into the issues”
themselves, §404.944, and may “raise a new issue” at “any time
. . . before mailing notice of the hearing decision,”
§404.946(b)(1). Like the form supplied by the SSA to request
Appeals Council review, the form to request an ALJ hearing provides
roughly three lines for claimants to explain their disagreement
with the agency’s determination, and the SSA “estimate[s]” that it
will take just “10 minutes to read the instructions, gather the
facts, and answer the questions” on that form. SSA, Request for
Hearing by Administrative Law Judge, Form HA–501–U5. Last, as with
the Appeals Council, SSA “regulations provide no notice that
claimants must . . . raise specific issues before” the
ALJ “to preserve them for review in federal court.”
Sims,
530 U. S., at 113 (opinion of O’Connor, J.).
B
The parallels between ALJ and Appeals Council
proceedings are many, but the Commissioner correctly notes several
differences that may make ALJ hearings relatively more adversarial.
For one, ALJ hearings are typically available as a matter of right,
while Appeals Council review is discretionary. Compare 20 CFR
§404.957 with §404.967. Most claimants thus submit no more than a
one-page request for review to the Appeals Council before having
their request denied. Mandatory ALJ proceedings, by contrast,
present far more opportunities for claimants to press issues, and
the SSA consequently relies more heavily on those proceedings to
“conduc[t the agency’s] principal and most thorough investigation
of . . . disability claim[s].” Brief for Respondent
35–36. Additionally, before every hearing, the SSA mails claimants
a “notice of hearing” that includes logistical information and
lists the “[t]he specific issues to be decided in [the] case.”
§404.938(b)(1). Claimants must notify the ALJ in writing if they
“object to the issues to be decided at the hearing.”[
4] §404.939. Similarly, SSA
conflict-of-interest regulations instruct claimants to “notify the
[ALJ] at [the] earliest opportunity” if they “object to the [ALJ]
who will conduct [their] hearing.” §404.940.
Even accepting that ALJ proceedings may be
comparatively more adversarial than Appeals Council proceedings,
the question nonetheless remains whether the ALJ proceedings at
issue here were adversarial enough to support the “analogy to
judicial proceedings” that undergirds judicially created
issue-exhaustion requirements.
Sims, 530 U. S., at 112
(plurality opinion). In the specific context of petitioners’
Appointments Clause challenges, two additional considerations tip
the scales decidedly against imposing an issue-exhaustion
requirement.[
5]
1
First, this Court has often observed that
agency adjudications are generally ill suited to address structural
constitutional challenges, which usually fall outside the
adjudicators’ areas of technical expertise. See,
e.g.,
Free Enterprise Fund v.
Public Company Accounting
Oversight Bd.,
561 U.S.
477, 491 (2010);
Califano v.
Sanders,
430 U.S.
99, 109 (1977);
Weinberger v.
Salfi,
422 U.S.
749, 765 (1975). As such, it is sometimes appropriate for
courts to entertain constitutional challenges to statutes or other
agency-wide policies even when those challenges were not raised in
administrative proceedings.[
6]
See,
e.g., Mathews v.
Diaz,
426 U.S.
67, 76–77 (1976). Thus, this Court observed in
Mathews
v.
Eldridge,
424 U.S.
319 (1976), that, so long as a Social Security claimant “had
exhausted the full set of available administrative review
procedures” (as petitioners did here), “failure to have raised his
constitutional claim would not bar him from asserting it later in a
district court.”
Id., at 329, n. 10.
Second, this Court has consistently recognized a
futility exception to exhaustion requirements. See,
e.g.,
Bethesda Hospital Assn. v.
Bowen,
485 U.S.
399, 405–406 (1988);
Montana Nat.
Bank of
Billings v.
Yellowstone County,
276
U.S. 499,
505
(1928). It makes little sense to require litigants to present
claims to adjudicators who are powerless to grant the relief
requested. Such a vain exercise will rarely “protec[t ]
administrative agency authority” or “promot[e] judicial
efficiency.”
McCarthy, 503 U. S., at 145.
Both considerations apply fully here:
Petitioners assert purely constitutional claims about which SSA
ALJs have no special expertise and for which they can provide no
relief. Relying on
L. A. Tucker Truck Lines, the
Commissioner argues that it nevertheless would have been fruitful
for petitioners to raise Appointments Clause challenges in their
ALJ hearings because “ ‘[r]epetition of the objection’ in
multiple cases could have led ‘to a change of policy.’ ” Brief
for Respondent 45 (quoting
L. A. Tucker Truck Lines, 344
U. S., at 37). But the Commissioner misses a key distinction:
In
L. A. Tucker Truck Lines, the aggrieved litigant had the
opportunity to object to the relevant method of appointment before
the full Interstate Commerce Commission itself.
Id., at 34.
Repetition of such an objection in cases before the full Commission
might have persuaded it to change its “predetermined policy on
th[e] subject.”
Id., at 37. Here, by contrast, the SSA’s
administrative review scheme at no point afforded petitioners
access to the Commissioner, the one person who could remedy their
Appointments Clause challenges. Nor were the ALJs capable of
remedying any defects in their own appointments. After all, there
were no Commissioner-appointed ALJs to whom objecting claimants’
cases could be transferred, and the ALJs could not very well have
reappointed themselves.
Internal SSA guidance confirms as much. On
January 30, 2018, soon after this Court granted certiorari in
Lucia, the agency issued an “emergency message” to ALJs
advising them that “adjudicators may see challenges . . .
related to the constitutionality of the appointment of SSA’s ALJs.”
SSA, EM–18003: Important Information Regarding Possible Challenges
to the Appointment of Administrative Law Judges in SSA’s
Administrative Process, p. 2. The agency warned ALJs that, because
the “SSA lacks the authority to finally decide constitutional
issues such as these,” they should “not discuss or make any
findings related to the Appointments Clause issue on the record.”
Ibid. Instead, ALJs were directed to acknowledge any
Appointments Clause objections with standardized language
explaining that they “ ‘d[id] not have the authority to rule
on that challenge.’ ”
Ibid. The SSA reiterated these
instructions in a second emergency message issued shortly after
Lucia was decided.[
7]
See SSA, EM–18003 REV: Important Information Regarding Possible
Challenges to the Appointment of Administrative Law Judges in SSA’s
Administrative Process—UPDATE, pp. 1–2 (June 25, 2018). It was not
until March 2019 that the Acting Commissioner finally instructed
the Appeals Council on how to handle preratification Appointments
Clause challenges. See 84 Fed. Reg. 9582;
supra, at 3.
2
Taking a somewhat different tack, the
Commissioner contends that petitioners are not entitled to new
hearings before constitutionally appointed ALJs because they failed
to make “timely challenge[s]” to their adjudicators’ appointments.
Ryder v.
United States,
515 U.S.
177, 182 (1995);
Lucia, 585 U. S., at ___ (slip
op., at 12) (quoting
Ryder). That argument, however,
presumes what the Commissioner has failed to prove: that
petitioners’ challenges are, in fact, untimely. The Commissioner
relies on
Ryder and
Lucia, but neither of those
decisions had occasion to opine on what would constitute a “timely”
objection in an administrative review scheme like the SSA’s.
Ryder involved an appeal from a Coast Guard court-martial,
515 U. S., at 179, an adversarial proceeding in which
traditional forfeiture rules apply, see
United States v.
Gladue, 67 M.J. 311, 313 (C. A. Armed Forces 2009).
Lucia, meanwhile, arose from proceedings before the
Securities and Exchange Commission, 585 U. S., at ___–___
(slip op., at 2–3), in which a statutory issue-exhaustion
requirement applies, see 15 U. S. C. §78y(c)(1). Where,
as here, claimants are not required to exhaust certain issues in
administrative proceedings to preserve them for judicial review,
claimants who raise those issues for the first time in federal
court are not untimely in doing so.
* * *
Taken together, the inquisitorial features of
SSA ALJ proceedings, the constitutional character of petitioners’
claims, and the unavailability of any remedy make clear that
“adversarial development” of the Appointments Clause issue “simply
[did] not exist” (and could not exist) in petitioners’ ALJ
proceedings.
Sims, 530 U. S., at 112 (plurality
opinion). The Courts of Appeals therefore erred in imposing an
issue-exhaustion requirement on petitioners’ Appointments Clause
claims. The judgments of the Eighth and Tenth Circuits are
reversed, and the cases are remanded for further proceedings
consistent with this opinion.
It is so ordered.
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